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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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DATE OF REPORT: JULY 10, 1996
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INSILCO CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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Delaware 0-22098 06-0635844
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(STATE OR OTHER (COMMISSION FILE NO.) (IRS EMPLOYER
JURISDICTION OF IDENTIFICATION NUMBER)
INCORPORATION OR
ORGANIZATION)
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425 Metro Place North
Fifth Floor
Dublin, Ohio 43017
(614) 792-0468
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER
INCLUDING AREA CODE OF REGISTRANT'S
PRINCIPAL EXECUTIVE OFFICES)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On July 10, 1996, Insilco Corporation (the "Company") announced that it
acquired the automotive aluminum tube business of Helmut Lingemann GmbH & Co.
("Lingemann") of Dortmund, Germany. The Company acquired the stock of
Lingemann's German subsidiary, ARUP Alu-Rohr und Profil GmbH ("ARUP"), and
technology rights from Lingemann pursuant to the terms of a Share Purchase
Agreement, dated June 28, 1996. The Company also acquired certain assets of
Lingemann's United States subsidiary, Helima-Helvetion International, Inc.,
based in Duncan, South Carolina, consisting of the automotive aluminum tube
business assets, pursuant to an Asset Purchase Agreement, dated July 1, 1996.
The aggregate purchase price under both agreements is approximately US $31
million, plus transaction fees and expenses. A portion of the purchase price was
placed in escrow to cover post-closing adjustments and possible claims as
specified in the agreements.
The aggregate purchase price was arrived at by arm's-length
negotiations between the Company and Lingemann. There was no material
relationship between Lingemann and the Company or any of the Company's
affiliates, directors or officers, or any associate of any director or officer
of the Company. The Company financed payment of the purchase price with cash on
hand and borrowings available to it pursuant to the terms of its Credit
Agreement, dated as of October 21, 1994, as amended, among the Company and
Citicorp USA, Inc., as Administrative Agent for the Lenders named therein.
The Company's press release issued July 10, 1996 regarding these
transactions is attached as an exhibit to this report and is incorporated herein
by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(A) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
It is impracticable to provide the information called for herein at the
time this report is being filed. Such information will be filed as soon as
practicable, but not later than sixty (60) days after the date upon which this
report is required to be filed.
(B) PRO FORMA FINANCIAL INFORMATION.
It is impracticable to provide the information called for herein at the
time this report is being filed. Such information will be filed as soon as
practicable, but not later than sixty (60) days after the date upon which this
report is required to be filed.
(C) EXHIBITS.
Exhibit No. Description
2(g) Share Purchase Agreement, dated as of June 28,
1996, between the Company's subsidiary, GUVAB
Gesellschaft fur
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Unternehmensbeteililgungen und
Vermogensverwaltung im aluminiumverarbeitenden
Bereich mbH ("GUVAB"), and Lingemann.
2(h) Asset Purchase Agreement, dated as of July 1,
1996, among the Company's subsidiary, HHI
Acquisition Corp., Lingemann, and Helima-
Helvetion International, Inc.
4(g) Fourth Amendment to Credit Agreement, dated as of
June 21, 1996, among the Company, the
institutions from time to time parties thereto as
Lenders, the institutions from time to time
parties thereto as Issuing Banks, Citicorp USA,
Inc. and Pearl Street L.P., as Co-Agents, and
Citicorp USA, Inc., as Administrative Agent.
20 Press release of the Company issued July 10,
1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INSILCO CORPORATION
Date: July 24, 1996 By: /s/ Kenneth H. Koch
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Kenneth H. Koch, Vice President, General
Counsel, and Secretary
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EXHIBIT INDEX
Exhibit No. Description Page
2(g) Share Purchase Agreement, dated as of June 28,
1996, between GUVAB and Lingemann.
2(h) Asset Purchase Agreement, dated as of July 1,
1996, among HHI Acquisition Corp., Lingemann,
and Helima-Helvetion International, Inc.
4(g) Fourth Amendment to Credit Agreement, dated as
of June 21, 1996, among the Company, the
institutions from time to time parties thereto as
Lenders, the institutions from time to time parties
thereto as Issuing Banks, Citicorp USA, Inc. and
Pearl Street L.P., as Co-Agents, and Citicorp
USA, Inc., as Administrative Agent.
20 Press release of the Company issued July 10,
1996.
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EXHIBIT 2(g)
SHARE PURCHASE AGREEMENT
regarding
ARUP ALU-ROHR UND -PROFIL GMBH, DORTMUND
among
Helmut Lingemann GmbH & Co.
Statutory Seat Wuppertal
Am Deckershauschen 62, 42010 Wuppertal
("Seller")
and
GUVAB Gesellschaft fur Unternehmensbeteiligungen und Vermogensverwaltung im
aluminumverarbeitenden Bereich mbH
Statutory Seat Berlin
("Purchaser")
PRELIMINARY REMARKS:
The Seller is doing business in the areas of heat exchanger tubes as explained
in sec. 1.2 and windows (stay tubes and rails). The Seller intends to sell its
entire business division heat exchanger tubes. The Seller will therefore sell to
the Purchaser all shares of ARUP Alu-Rohr und -Profil GmbH, Dortmund. The
transfer of the business division heat exchanger tubes will also include an
agreement concerning licenses and transfer of intellectual property rights and
know-how between the Seller and its wholly owned subsidiary Helmut Lingemann
Maschinenbau GmbH on the one hand and ARUP Alu-Rohr and -Profil GmbH on the
other hand. In addition, the Seller's wholly owned subsidiary Helima-Helvetion
International Inc., Duncan, South Carolina, and an affiliate of the Purchaser's
parent company Insilco Corporation, Dublin, Ohio, have entered into an asset
deal agreement on the sale and transfer of the asset related to the US business
division heat exchanger tubes (the "Helima Agreement") which shall become
effective upon notarization of the transfer of the shares of ARUP Alu-Rohr und
- -Profil GmbH, Dortmund. Likewise, this agreement shall become effective once the
Helima-Agreement has been entered into.
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Now, therefore, the parties hereto agree as follows:
SEC. 1
SHAREHOLDINGS; ACCOUNT PAYABLE TO SELLER
1.1 The Seller is the sole shareholder of ARUP Alu-Rohr und -Profil GmbH
with its statutory seat in Dortmund registered with the Commercial
Register of the Lower Court Dortmund in section B under number 10308
with a fully paid-up share capital of DM 100,000 divided into two fully
paid-up shares with a stated value per share of DM 50,000 (hereinafter
referred to as "ARUP");
1.2 In accordance with its business objectives ARUP produces and sells
tubes, profiles and accessories made of non-precious metals. These
activities of ARUP shall constitute the business division heat
exchanger tubes of the Seller for purposes of this agreement
(hereinafter referred to as "Heat Exchanger Tube Business").
1.3 Enclosure 1.3 is an excerpt from the commercial register of ARUP
reflecting all matters subject to registration; no application for
further registrations have been filed.
1.4 After deduction of accounts payable by the Seller to ARUP, the Seller
has still claims against ARUP (the "Seller Receivable").
SEC. 2
ACTIONS UP UNTIL THE EFFECTIVE DATE
2.1 On or before July 7, 1996, 12.00 p.m., (hereinafter referred to as the
"Effective Date"), the Seller shall have completed the separation of
the Heat Exchanger Tube Business from the business division window and
shall have transferred all business activities related to the Heat
Exchanger Tube Business to ARUP and shall have transferred all business
activities related to the business division window (stay tubes and
rails) to the Seller itself.
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2.2 The Seller undertakes and represents that the registered powers of
attorney granted by ARUP to Messrs. Michael Even, Jorg Engelmeyer shall
have been revoked as of the Effective Date and that the revokation of
said registered powers of attorney shall have been filed for
registration with the commercial register of ARUP.
SEC. 3
SALE AND TRANSFER, CLOSING
3.1 As of the Effective Date, the Seller hereby sells and transfers to the
Purchaser the two ARUP shares each with a stated value of DM 50,000;
the Purchaser accepts sale and transfer. The transfer of the two shares
shall be duly notarized in a separate notarial deed.
As of the Effective Date, the Seller sells and transfers to the
Purchaser the Seller Receivable plus interest accrued thereon, if any,
up until the Effective Date.
3.2 The ARUP shares sold and transferred pursuant to sec. 3.1 of this
agreement are sold and transferred together with all profit
entitlements. The surplus derived by ARUP from its operations during
the period from December 31, 1995 up until the Effective Date as
reflected in the audited financial statements as of the Effective Date
pursuant to sec. 5.2 of this agreement shall belong to the Purchaser.
The ARUP shares shall be sold and transferred with the effect that the
liabilities of ARUP as of the Effective Date towards Stadtsparkasse
Dortmund pursuant to sec. 4.2 of this agreement and towards the Seller
pursuant to sec. 4.3 of this agreement shall have been repaid.
3.3 The transaction contemplated for consummation in this agreement shall
be closed on the Effective Date or such other date as mutually agreed
by the Seller and the Purchaser as soon as practicable after the
Effective Date (the "Closing Date") at such place as mutually agreed by
the Seller and the Purchaser.
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SEC. 4
PURCHASE PRICE/SETTLEMENT OF ACCOUNTS
4.1 The aggregate purchase price for all shares and the Seller Receivable
sold hereunder shall amount to DM 24,000,000. The aggregate purchase
price includes the following items: All bank debt of ARUP as of the
Effective Date (sec. 4.2 of this agreement), the Seller Receivable
payable by ARUP to the Seller as of the Effective Date (sec. 4.3 of
this agreement) minus a valuation deduction of DM 6,000,000, and the
excess of DM 24,000,000 over the sum of bank debt pursuant to sec.
4.2 of this agreement plus the accounts payable of ARUP to the Seller
pursuant to sec. 4.3 of this agreement.
4.2 The bank debt of ARUP as of the Effective Date amounts to approx. DM
15,535,000.
The bank debt of ARUP relates to the following loan agreements, in
particular entered into with Stadtsparkasse Dortmund:
a) Loan agreement no. 071 016 668 including the ancillary account
071 001 652 with a principal amount of DM 3,000,000 granted as a
working capital line; the loan balance outstanding as of June 19,
1996 amounts to DM 2,932,000;
b) Refinancing loan account no. 446 033 972 with a principal amount
of DM 2,316,000 granted on April 13, 1992 for purposes of
financing additional machines in connection with the expansion of
the operations; the loan principal outstanding as of June 30,
1996 amounts to DM 1,448,279.00; in conjunction with
c) the loan with a principal amount of DM 2,000,000 granted on April
27, 1993 in accordance with article 56 of the Agreement on the
European Community of Coal and Steel to create new employments
for terminated coal and steel employees; the loan was granted for
purposes of financing the acquisition of additional machines in
connection with the expansion of the operations and the loan
principal outstanding as of June 30, 1996 amounts to DM
2,000,000.00;
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d) loan agreement no. 446 049 127 with a principal amount of DM
3,500,000 granted on June 8, 1994 for purposes of financing the
erection of a new production hall and the acquisition of
additional machines; the loan principal outstanding as of June
30, 1996 amounts to DM 3,215,450.00;
e) the loan agreement 446 049 135 with a principal amount of DM
3,930,000 granted on June 8, 1994 for purposes of financing the
erection of a new production hall and the acquisition of new
machines; the loan principal outstanding as of June 30, 1996
amounts to DM 3,678,298.00;
f) the capital investment loan no. 446 065 734 of Stadtsparkasse
Dortmund granted on January 6, 1995 with a principal amount of DM
3,000,000; the loan principal outstanding as of June 30, 1996
amounts to DM 2,260,324.00. .
Sparkasse Dortmund has been provided with the following collaterals as
security for its claims arising out of the agreements pursuant to sec.
4.2 of this agreement:
a) ARUP is registered with the land register Dortmund of the lower
court Dortmund on the sheet 88050 as legal owner of the following
pieces of land
- Flur 1, parcel of land 2830, 3048 square meters
- Flur 1, parcel of land 3186, 10 square meters
- Flur 1, parcel of land 3184, 4953 square meters.
The pieces of land described above have been encumbered jointly
and severally in section III. of the land register with three (3)
mortgages (Grundschulden) of DM 2,454,600, DM 3,500,000 and DM
5,900,000, in aggregate DM 11,854,600, in favour of
Stadtsparkasse Dortmund;
b) ARUP has transferred on February 2, 1995 to Stadtsparkasse
Dortmund by way of security equipment and machines owned by ARUP;
ARUP has assigned on December 6, 1995 to Stadtsparkasse Dortmund
by way of security accounts receivable;
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c) The Seller has entered on April 13, 1992 with Stadtsparkasse
Dortmund into a guarantee agreement related to all claims of
Stadtsparkasse Dortmund against ARUP; upon performance under the
guarantee, the Seller has entered on June 21, 1996 with ARUP into
an agreement on the subordination of claims of the Seller against
ARUP up to the maximum amount of DM 3,800,000.
4.3 The Seller has claims against ARUP after deduction of ARUP's accounts
receivable from the Seller (the "Seller Receivable" pursuant to sec.
1.4). The purchase price attributable to the Seller Receivable equals
the principal amount as of the Effective Date minus a valuation
deduction of DM 6,000,000.
4.4 The aggregate purchase price pursuant tosec.4.1 of this agreement shall
be settled as of the Effective Date as follows:
a) Under a loan agreement dated May 31, 1996 Insilco Corporation
granted a loan to the Seller with a principal amount of US Dollar
1,300,000. All claims arising out of, and in connection with, the
loan agreement were assigned to the Purchaser. The principal
amount of the loan plus accrued interest up until the Effective
Date shall be set off against the purchase price pursuant to sec.
4.1 of this agreement.
b) The creditors pursuant to sec. 4.2 shall submit to the Seller on
the Effective Date, at the latest, in writing a schedule listing
all claims of the creditors against ARUP as of the Effective Date
(principal amount plus interest accrued thereon up until the
Effective Date; the "Bank Debt") together with a confirmation
that upon unconditional receipt of payment as of the Effective
Date of the amount as specified in the schedule all claims of the
creditors against ARUP as of the Effective Date shall have been
fully satisfied. If ARUP maintains a current bank account with a
creditor, the respective creditor shall submit to the Seller
without undue delay a confirmation of the debit balance on ARUP'S
current bank account as of the Effective Date (the "Current
Account Payable").
The Purchaser shall transfer as of the Effective Date to the bank
accounts designated by the creditors the amount of Bank Debt
specified by each creditor in the schedule
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against release of all collaterals provided as security pursuant to
sec. 4.2 of this agreement. The Purchaser shall transfer the
aggregate Current Account Payable to the bank accounts designated by
the respective creditors as of the [third bank day] following the
notification of the Current Account Payable.
c) Subject to the provisions under subsection d) hereof, the Purchaser
shall transfer as of the Effective Date to the bank account designated
by the Seller an instalment of the Seller Receivable equal to one half
of the Seller Receivable to be determined on the basis of the
management accounts of ARUP as of May 31, 1996. Per May 31,1996 the
management accounts state an amount of DM 10,614,000.00.
d) The balance of the purchase price pursuant to sec. 4.1 of this
agreement minus the set-off pursuant to sec. 4.4 a) of this
agreement, minus the Bank Debt and Current Account Payable pursuant
to sec. 4.4 b) of this agreement and minus the instalment of the
Seller Receivable pursuant to sec. 4.4 c) of this agreement shall be
transferred by the Purchaser as of the Effective Date to a lawyer's
escrow account number 281204 at Delbruck & Co. which shall be managed
jointly by attorney-at-law Dr. Ulrich Jungst as representative of the
Seller and attorney-at-law Dr. Andreas Rodin as representative of the
Purchaser (jointly the "Escrow Agents"). Any credit balance on the
escrow account shall be invested by the Escrow Agents in an
interest-bearing short-term deposit for one week terms and shall be
released als follows:
(i) Subject to the provisions of para 2 through 4 of this (i), the
balance of the Seller Receivable pursuant to sec. 4.3 of this
agreement minus the instalment pursuant to sec. 4.4 c) of this
agreement (the "Seller Receivable Balance") shall be transferred
by the Escrow Agents to the bank account designated by the Seller
as of the date of expiration of the one week investment period
running when the Seller Receivable Balance has been notified to
the Escrow Agents. The Seller and the Purchaser shall jointly
notify the Escrow Agents in writing, duly undersigned by them,
that the amount of the Seller Receivable Balance has been
reflected in the Audited Effective Date Financial Statements
pursuant to sec. 5 of this agreement.
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The Seller guarantees that - subject to consistently applied
valuation principles - (i) the inventory of ARUP as of the
Effective Date is not less than the inventory reflected in
the audited financial statements as of December 31, 1995,
and (ii) the balance of accounts receivable from unrelated
third parties minus accounts payable to unrelated third
parties as of the Effective Date is not less than the
balance as of March 31, 1996 pursuant to the management
accounts of ARUP. If and to the extent the respective
Effective Date figure falls short vis-a-vis the respective
figure as of December 31, 1996, as the case may be, the
shortfall shall be deducted from the Seller Receivable
Balance. The Escrow Agent shall transfer the respective
shortfall to the bank account designated by the Purchaser
upon written notice - to be duly undersigned by the
Purchaser and the Seller - of the amount of the shortfall as
of the end of the weekly investment period running on the
date of notification. The maximum amount by which the Seller
Receivable Balance shall be reduced hereunder shall exceed
the amount by which the balance of inventory, plus accounts
receivable from third parties, minus accounts payable to
third parties as of the Effective Date fall short vis-a-vis
the balance of DM 6.6 million, plus accounts receivable from
third parties, minus accounts payable to third parties as of
March 31, 1996.
If the credit balance on the escrow account after transfer
of the Seller Receivable Balance as adjusted pursuant to
para 2 of this (i) would fall below DM 3,000,000 the amount
of the Seller Receivable Balance as adjusted pursuant to
para 2 of this (i) to be transferred shall be reduced
correspondingly so that the escrow account continues to
reflect a credit balance of DM 3,000,000.
If the credit balance on the escrow account after transfer
of the Seller Receivable Balance as adjusted pursuant to
para 2 of this (i) exceeds DM 3,000,000 the excess of the
credit balance over DM 3,000,000 shall be transferred by
the Escrow Agents together with the Seller Receivable
Balance as adjusted pursuant to para 2 of this (i) to the
bank account designated by the Seller.
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(ii) The credit balance of DM 3,000,000 on the escrow account
shall be withheld as collateral for warranty claims
under sec. sec. 6 and 7 of this agreement and under the
Helima-Agreement, for a purchase price adjustment under the
Helima-Agreement if and to the extent the adjustment in
favour of the acquiring affiliate of Insilco Corporation
exceeds US Dollar 500,000, and for claims of the Purchaser
under the tax indemnification pursuant to sec. 7.5 of this
agreement. If and to the extent the purchaser and the Seller
jointly notify the Escrow Agents in writing that the
purchase price under the Helima-Agreement shall be adjusted
in favour of the acquiring affiliate of Insilco Corporation,
such purchase price adjustment shall be transferred by the
Escrow Agents to the bank account designated by the
Purchaser. If the Purchaser notifies the Escrow Agents in
writing as of the first anniversary of the Effective Date
that no warranty claims have been brought up, the Escrow
Agents shall transfer as of the first anniversary of the
Effective Date to the bank account designated by the Seller
an amount equal to DM 1,500,000.00 minus payment of purchase
price adjustments under the Helima-Agreement, if any.
If and to the extent the Purchaser notifies the Escrow
Agents in writing as of the first anniversary of the
Effective Date that warranty claims have been brought up,
the Escrow Agents shall transfer as of the first anniversary
of the Effective Date to the bank account designated by the
Seller an amount equal to DM 1,500,000.00 minus payments of
purchase price adjustments under the Helima-Agreement, if
any, and minus the amounts subject to warranty claims. The
amounts subject to warranty claims shall be released by the
Escrow Agents upon written confirmation, duly undersigned by
the Seller and the Purchaser, on the final settlement of the
warranty claims brought up by the Purchaser.
The remaining credit balance on the Escrow Account shall be
transferred by the Escrow Agents to the Purchaser or the
Seller, as the case may be, upon written confirmation - to
be duly undersigned by the Purchaser and the Seller - on the
final settlement of claims of the Purchaser, if any, under
the tax indemnification pursuant to sec. 7.5 of this
agreement.
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(iii) Interest accruing on the escrow account shall be
released to the respective beneficiary together with
the principal amount pursuant to (i) and (ii) above.
SEC. 5
EFFECTIVE DATE
5.1 The Seller has already submitted to the Purchaser the audited financial
statements of ARUP for the fiscal years 1994 and 1995 certified by the
auditors without qualification and prepared in accordance with the
principles set forth in sec. 5.2 lit. b).
5.2 The Purchaser and the Seller shall jointly arrange for the following:
a) ARUP shall conduct without undue delay a physical stock
taking as of the Effective Date and shall reconcile the
account balances with its creditors and debtors;
b) ARUP shall prepare without undue delay interim financial
statements as of the Effective Date in accordance with the
legal provisions under the commercial code and in accordance
with generally accepted accounting principles as
consistently applied in the past (hereinafter referred to as
"Preliminary Effective Date Financial Statements");
c) The accounting firm Arthur Andersen, Koln, shall be jointly
engaged by Purchaser and Seller to audit without undue delay
ARUP's Preliminary Effective Date Financial Statements and
shall make such adjustments as necessary to meet the
standards as set forth in sec. 5.2 lit. b) (the "Audited
Effective Date Financial Statements") and shall certify
without qualification that the Audited Effective Date
Financial Statements comply with the standards set forth
in sec. 5.2 lit. b); a copy of the Audited Effective Date
Financial Statements together with the unqualified
certification shall be submitted by Arthur Andersen to the
Purchaser and the Seller; and
d) ARUP shall allow representatives of the Purchaser (including
Purchaser's auditors) and representatives of the Seller to
attend when actions as set forth in sec. 5.2 lit. a) through
c) shall be performed.
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5.3 The Purchaser and the Seller shall notify each other in writing within
one month after receipt of the Audited Effective Date Financial
Statements if and to what extent from their respective perspective the
Audited Effective Date Financial Statements are not consistent with the
principles set forth in sec. 5.2 lit. b). Any dispute among the
Purchaser and the Seller in connection with objections raised which
cannot be amicably solved shall be finally decided upon request of the
Purchaser or the Seller by an independent accounting firm as arbitrator
within the meaning of sec. 317 German Civil Code. If the Seller and the
Purchaser cannot agree on the arbitrator within two weeks after one
party has asked for the appointment of an arbitrator, it shall be
appointed by the Institute of Certified Public Accountants e.V.,
Dusseldorf. The decision taken by the arbitrator shall be binding for
the parties hereto to the extent legally permitted (sec. 319 German
Civil Code); the fees charged by the arbitrator shall be equally borne
by the Purchaser and the Seller. If no objections have been raised
pursuant to sec. 5.3 clause 1, the Audited Effective Date Financial
Statements shall constitute the "Effective Date Financial Statements"
for purposes of this agreement. If objections have been raised pursuant
to sec. 5.3 clause 1, the Audited Effective Date Financial Statements
as adjusted in accordance with the amicable settlement between the
Purchaser and the Seller or as adjusted in accordance with the decision
taken by the arbitrator, as the case may be, shall constitute the
"Effective Date Financial Statements" for purposes of this agreement.
SEC. 6
GUARANTEES OF THE SELLER AND ITS PARTNERS
The Seller guarantees and represents to the Purchaser that the following
statements are true and correct as of signing hereof, the Effective Date and the
Closing Date.
6.1 Legal Matters
a) ARUP has been established as a corporation under the laws of the
Federal Republic of Germany, is validly existing and in good standing.
The ARUP shares are fully paid-up and have not been repaid to the
shareholder.
b) The Seller is the sole owner of the shares sold pursuant to sec. 3.1
of this agreement and is unrestrictedly authorized to dispose of such
shares together with all rights and
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benefits deriving therefrom. Execution and performance of this
purchase agreement do not violate any agreement entered into by
the shareholder, the Seller or ARUP. The ARUP shares are free of
any liens or encumbrances in favour of third parties.
c) ARUP does not own shares of other subsidiaries.
d) The articles of association of ARUP dated April 14, 1992 have not
been terminated or amended. There are no side agreements or other
arrangements related to the articles of association. There exist
with regard to the shares sold hereunder no voting trust
agreements, sub-participations, silent partnerships, profit
sharing loans, trust agreements or similar arrangements.
e) ARUP has not entered into a profit and loss transfer agreement or
a similar agreement within the meaning of sec. sec. 291 et seq.
of the Stock Corporation Act.
6.2 FINANCIAL MATTERS
a) The audited financial statements of ARUP for the fiscal years
1994 and 1995 as well as the Audited Effective Date Financial
Statements pursuant to sec. 5.2 lit. c) have been or shall be
prepared in accordance with the legal provisions under the
commercial code and, to the extent legally permitted, in
accordance with generally accepted accounting principles as
consistently applied in the past; fixed assets acquired by ARUP
since January 1, 1995 have been depreciated on a straight line
basis. All financial statements are true and correct and present
a true and fair view of the financial position, the networth and
earnings position of ARUP as of the respective date and for the
respective period. The negative equity of ARUP as of the
Effective Date shall not exceed DM 3,100,000. Upon determination
of the negative equity of ARUP, the "Sonderposten fur
Investitionszuschusse" shall not reduce the negative equity.
b) As of the Effective Date ARUP does not have liabilities,
contingent liabilities or threatening losses deriving from
pending transactions other than those reflected in the Effective
Date Financial Statements or for which sufficient provisions have
been established in the Effective Date Financial Statements.
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c) ARUP has not granted any pension promises.
d) Enclosure 6.2 d) completely reflects all bank accounts maintained
by ARUP as of the Effective Date, the account numbers and the
signatories authorized to manage the bank accounts.
6.3 ASSETS
a) ARUP is the owner of all assets reflected in the financial
statements 1995 and the Effective Date Financial Statements
unless subsequently disposed of in the ordinary course of
business. ARUP has the unrestricted right to fully dispose of
such assets. The assets are free and clear of all liens or
encumbrances, except for the following: legal pledges and
customary retention of title by suppliers for deliveries properly
recorded in the books and records of ARUP; transfer of title to
equipments and machines to Stadtsparkasse Dortmund by way of
security dated February 2, 1995; assignment of claims to
Stadtsparkasse Dortmund by way of security dated February 2,
1995; the mortgages in favour of Stadtsparkasse Dortmund as set
forth in sec. 4.2 of this agreement. These collaterals shall be
released in accordance with the provisions of sec. 4.4 of this
agreement.
b) The accounts receivable reflected in the Effective Date Financial
Statements do exist and have the value assigned to them in the
Effective Date Financial Statements. Unless already paid they
will be paid when due in the amount as reflected less the
reserves for uncollectible receivables as reflected.
c) The stock and inventory of ARUP is not obsolete or unsellable and
can be sold or used in the ordinary course of business at the
value assigned to them in the Effective Date Financial Statements
after taking into consideration depreciation as reflected in the
Effective Date Financial Statements.
d) ARUP is the legal owner of the premises in Breisenbachstra e 87
in Dortmund consisting of the pieces of land as explained in sec.
4.2 of this agreement. The site is fully developed and is
reflected in the non-appealable zoning plan of the city of
Dortmund as an industrial area within the meaning of sec. 9 of
the Baunutzungsverordnung. The outdoor installations, the
building and other fittings
<PAGE> 14
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have been erected and are maintained in accordance with
applicable construction law. All necessary building permits and
other governmental approvals have been obtained. All development
costs and adjoining property assessments have been paid except
for development costs in the amount of approx. DM 160,000 which
have been fully reserved in the Effective Date Financial
Statements. The pieces of land have not been encumbered with an
easement or other restrictions in favour of neighbours except as
set forth in the land register. Except for the three mortgages
registered in section III. of the land register as set forth in
sec. 4.2 of this agreement no mortgages exist.
e) The piece of land of ARUP including the outdoor installations,
the building and fittings, as well as the fixed assets of ARUP
and assets owned by third parties but used by ARUP have been
properly maintained and repaired and are in good condition.
f) The piece of land, including the outdoor installations, the
building and fittings, the machines and the equipment of ARUP
comply with safety regulations, environmental regulations and
other legal provisions applicable to the operations of ARUP.
Except for instructions regarding the measure of noise upon the
operation of the machines, the installation of safety devices and
ventilation for which sufficient reserves have been established
in the Effective Date Financial Statements, there are no
instructions pending imposed by the Technical Supervisory
Association or other governmental entities. No such instructions
have been announced or are to be expected.
6.4 SIGNIFICANT ARRANGEMENTS
Except as disclosed in Enclosure 6.4 ARUP is not a party to any of the following
agreements:
a) Agreements on, or commitments to grant, profit or turnover
related payments (except for customary agreements with commercial
agents or brokers);
<PAGE> 15
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b) agreements or other arrangements with members of the board of
directors, employees or consultants providing for annual payments
of DM 80,000 or more per individual case or providing for a fixed
term expiring after December 31, 1997;
c) agreements on the sale, purchase or other disposition of real
estate; rental agreements related to real estate;
d) guarantee agreements, letters of comfort, indemnification
agreements or similar arrangements by which ARUP assumes
liability for the repayment of third party debt;
e) liabilities deriving from bills of exchange, except for trade
bills of exchange with an aggregate value of not more than
approximately DM 100,000;
f) loan agreements, leasing agreements, factoring agreements and
joint venture agreements;
g) agreements with commercial agents, distributor agreements or
agreements with brokers;
h) supply agreements, delivery agreements or service agreements
involving an amount of DM 50,000 or more per individual case or
providing for a remaining fixed term of more than 12 months after
the Effective Date;
i) agreements limiting the business operations of ARUP or limiting
its competition;
j) utilization of, or applications for, governmental subsidies;
k) direct or indirect pension commitments, group life insurance
policies or similar arrangements providing for benefits in case
of sickness, death, disability or old age;
l) agreements with a workers' council or other collective bargaining
agreements;
m) unsettled severance payments in favour of employees whose
employment has been terminated;
<PAGE> 16
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n) agreements which can be terminated or amended due to a change of
control over ARUP or which provide for other disadvantages in
case of a change of control over ARUP;
o) agreements with the Seller or its affiliates within the meaning
of sec. 15 Stock Corporation Act.
6.5 INTELLECTUAL PROPERTY RIGHTS
a) ARUP has the exclusive right to use all patents, utility models,
trade marks, copyrights and other intellectual property rights
including intellectual property rights applications as well as
licenses granted to it as presently used by it. To the best
knowledge of the Seller, there are no intellectual property
rights of third parties or applications of third parties for
registration of intellectual property rights which ARUP violates
when using its machines and equipments or when producing or
selling any of its present products. No actions have been brought
up against ARUP during the past five years claiming that ARUP is
violating intellectual property rights of third parties. No
patents, utility models, trademarks, copyrights, other
intellectual property rights including intellectual property
right applications and know-how is necessary to conduct the Heat
Exchanger Tube Business of ARUP as presently conducted other than
those transferred by the Seller and Helmut Lingemann Maschinenbau
GmbH to ARUP under the intellectual property right and know-how
agreement of today.
b) Exept for the intellectual property rights and the applications
for registration of intellectual property rights acquired by ARUP
under the intellectual property right and know-how agreement of
today, the Seller and its affiliates do not hold other
intellectual property rights or applications for registration of
intellectual property rights exclusively related to the Heat
Exchanger Tube Business.
c) Except for the licence and other agreements, including inventions
of employees, as disclosed in Enclosure 6.5, there are no
agreements of ARUP related to intellectual property rights or
technical know-how entered into by ARUP as licensee or licensor;
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d) Except for restrictions included in license agreements as
disclosed in Enclosure 6.5, ARUP has the unrestricted right to
dispose of the software used by it.
6.6 OTHER MATTERS
a) ARUP is operated in accordance with all applicable legal
provisions and approvals. ARUP has all permits, approvals,
consents, concessions or other public or civil rights necessary
to conduct its operations as presently conducted. The execution
of this purchase agreement does not adversely affect such rights.
The conduct of its present operations does not give rise to
concerns that any such rights shall not be renewed or extended.
b) Except as disclosed in Enclosure 6.6 b), there are no pending
litigations, arbitration proceedings, proceedings for the
imposition of administrative fines, administrative proceedings or
administrative investigations related to ARUP. Product liability
claims of third parties have not yet been brought up against
ARUP. To the best knowledge of the Seller, there is no concern
that any such proceedings or investigations will be initiated.
c) The books, records and other documents related to ARUP have been
properly maintained and are available to the company.
d) ARUP maintains the insurance policies as listed in Enclosure 6.6
d).
e) Since January 1, 1996, ARUP did not make any payment and did not
grant any benefit to the Seller except for services and
deliveries agreed upon at arms' length terms and conditions.
f) Upon execution and performance of this agreement and the
Helima-Agreement all business activities related to the Heat
Exchanger Tube Business of the Seller have been transferred by
the Seller to the Purchaser.
g) The shares sold hereunder do no constitute all or almost all of
the Seller's networth.
<PAGE> 18
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h) Enclosure 6.6 h) reflects all employees employed by ARUP as of
the Effective Date and the significant terms and conditions of
their employment; the employment agreements have not been
terminated.
i) To the best of Seller's knowledge, the backlog of ARUP as of the
Effective Date has been calculated by ARUP on a loss-free basis.
No threatening losses are deriving from supply agreements of ARUP
pending as of the Effective Date other than those for which
reserves have been established in the Audited Effective Date
Financial Statements.
j) From the date of signing hereof until the Closing Date, the Heat
Exchanger Tube Business shall be conducted by ARUP in the
ordinary course of business. Business transactions of ARUP for
which the Seller makes representations and gives warranties under
this ss. 6 shall not be performed without the prior written
consent of the Purchaser.
SEC. 7
REMEDIES, INDEMNIFICATION
7.1 In case of a breach or violation of a representation or guarantee as
listed in sec. 6, the Seller shall indemnify the Purchaser or ARUP, if
so requested by the Purchaser, against all damage, loss, liability or
other disadvantages irrespective of their nature and irrespective of
their legal ground up to an aggregate maximum amount of DM 3,000,000
resulting from such breach or violation of a representation or
guarantee. No claim against the Seller shall exist unless the
aggregate amount of all claims against the Seller is DM 100,000 or
more.
7.2 If and to the extent a representation or guarantee as listed in sec. 6
is subject to the best knowledge of the Seller, the Seller shall only
be liable if it was aware of the incorrectness or incompleteness of
the representation made or guarantee given or if it was unaware of the
incorrectness or incompleteness due to gross negligence. The Seller is
only liable for awareness or unawareness due to gross negligence of
the managing directors of ARUP.
7.3 No right to rescind this agreement shall exist after the Closing Date.
<PAGE> 19
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7.4 Unless a longer period of limitation is mandatorily provided for under
the code, claims of the Purchaser arising out of, or in connection
with, this agreement are subject to limitation twelve months after the
Effective Date. However, claims in connection with, or arising out of,
the indemnification pursuant to sec. 7.5 of this agreement shall be
subject to limitation 6
months after the assessment of taxes, contributions or other duties
pursuant to sec. 7.5 of this agreement related to time periods up
until the Effective Date has become non-appealable. After execution
of this agreement, the Purchaser shall use its best efforts that a
tax field audit shall be conducted for ARUP for time periods up until
the Effective Date in order to determine as quickly as possible
whether claims against the Seller exist.
7.5 INDEMNIFICATION REGARDING TAXES AND OTHER DUTIES
a) ARUP has properly filed all tax returns related to time periods
up until the Effective Date when due and has paid all taxes,
contributions and other duties, including prepayments, when due.
b) Sufficient reserves or Liabilities will be reflected in the
Effective Date Financial Statements for unpaid taxes,
contributions (including social security contributions) and other
duties related to time periods up until the Effective Date.
c) The Seller shall indemnify ARUP against all taxes, contributions,
and other duties related to time periods up until the Effective
Date if and to the extent the amounts finally assessed exceed the
liability items and reserves for taxes, contributions or other
duties as reflected in the Effective Date Financial Statements.
If and to the extent the assessment of excess taxes for time
periods up until the Effective Date results in corresponding tax
savings for time periods after the Effective Date, the Seller
shall indemnify ARUP only for the balance of excess taxes minus
the corresponding tax savings.
If and to the extent an increase of the tax basis of ARUP as
assessed for time periods up until the Effective Date - reduced
by a corresponding reduction of the tax basis, if any, for time
periods after the Effective Date - vis-a-vis the tax basis
underlying the tax returns of ARUP for time periods up until the
Effective Date
<PAGE> 20
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results in a reduction of ARUP's tax loss carry forward as of the
Effective Date below DM 3,100,000 for corporate income tax
purposes or below the amount reflected in the tax returns as of
December 31, 1991 for local business tax purposes, the Seller
shall reimburse ARUP for the after-tax amount of such reduction
of the tax loss carry forward.
d) Mr. Horst Lingemann and Ms Heidrun Ulbrich undertake to assign to
ARUP in the legally required form claims on refunds of corporate
income tax and dividend withholding tax resulting from a
constructive dividend deemed to have been distributed by ARUP to
the Seller pursuant to the non-appealable findings in a tax field
audit of ARUP or shall pay over to ARUP the aggregate amount of
creditable corporate income tax and dividend withholding tax.
7.6 No limitation of the liability of the Seller pursuant to sec.
sec. 7.1, 7.3 or 7.4 shall exist in case of bad faith or willful
misconduct.
SEC. 8
COOPERATION AFTER THE EFFECTIVE DATE
8.1 The computer stations of ARUP are presently connected with the main
computer of the Seller in Wuppertal. The parties understand that the
separation of ARUP's EDP system from the system of the Seller will
take some time. The Seller, therefore, grants ARUP access to the main
computer of the Seller in Wuppertal until December 31, 1996, at the
latest, and to use the software as in the past. The Seller further
grants the right to ARUP to use the software of the main computer of
the Seller for ARUP's new EDP system after December 31, 1996 against
payment of an arms' length consideration.
8.2 The production of Heat Exchanger Tubes which are presently produced in
the production facilities of the Seller in Wuppertal significantly
requires specific know-how and specific knowledge how to operate the
machines (in particular with regard to speed and voltage). Only
employees of the Seller do have such knowledge and the production
know-how. The Seller will transfer to ARUP on or before December 31,
1996 all equipment embodied in the production of such round tubes and
the Seller grants the right to ARUP to call upon one
<PAGE> 21
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employee of the Seller having such knowledge and know-how to assist
ARUP for such time as is necessary to effectively transfer such
knowledge and production know-how to the employees of ARUP. The Seller
transfers to the Purchaser legal title of the tube mill finished in
June 1996 and presently located at the production facilities of the
Seller in Wuppertal and undertakes to relocate the the tube mill at
Seller's expense without undue delay to the production facilities of
ARUP in Dortmund.
8.3 The details related to the assistance of the Seller pursuant to sec.
8.1 and sec. 8.2 of this agreement as well as the details of the
production of those round tubes which are presently produced at the
facilities of the Seller have been agreed upon by the Seller and the
Purchaser in a separate agreement of today.
8.4 The Seller hereby specifically agrees that the name "ARUP" can be used
in the future. In addition, ARUP shall be entitled to use the name
"Helima" or "Lingemann" with a design specification disclosing the
succession upon production and sale of heat Exchanger tubes.
SEC. 9
COVENANT NOT TO COMPETE
9.1 The Seller, the companies related with the Seller within the meaning
of sec. sec. 15 et seq. Stock Corporation Act and the partners of the
Seller, Mr. Horst Lingemann and Ms Heidrun Ulbrich (jointly the
"Obligated Persons"), undertake not to compete with ARUP for a period
of five years after the Effective Date. In particular,
a) they shall not produce or sell (i) products as presently produced
and sold or developed by ARUP or (ii) similar products related to
the Heat Exchanger Tube Business (hereinafter referred to as
"Competitive Products");
b) they shall not establish or acquire, or hold participations in,
or support in any respect, another company producing or selling
Competitive Products;
<PAGE> 22
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c) they shall not directly or indirectly in any manner produce or
sell Competitive Products and shall not support any competition
by a third party.
9.2 The covenant not to compete pursuant to sec. 9.1 shall relate to all
countries in which ARUP is presently doing business or is about to do
business, and shall further relate to all countries in which ARUP was
doing business during the four year period preceding the Effective
Date.
9.3 The Obligated Persons further undertake to keep strictly confidential
for a period of five years after the Effective Date all business
secrets related to ARUP, except for business secrets related only to
the business division windows; such secrets shall not be used by the
Obligated Persons for their own purposes and shall not be directly or
indirectly disclosed to third parties. Any assistance in favour of
third parties to get access to such secrets shall be prohibited as
well. If the Seller disposes of its business division windows, the
Seller shall subject the acquisor of the business division windows to
a covenant not to compete with the Heat Exchanger Tube Business for
the remaining term of the Seller's covenant not to compete and the
scope of the aquiror's covenant not to compete shall be the same as
set forth in sec. 9 of this agreement. If the Purchaser exercises the
option to be granted to it pursuant to sec. 11.1 f) of this agreement,
the Seller undertakes not to compete with Helmut Lingemann
Maschinenbau GmbH and the business conducted by it for a period of
five years after exercise of the option.
9.4 The Obligated Persons undertake not to entice away employees of ARUP
during the five year period after the Effective Date.
SEC. 10
EXPENSES AND TAXES
10.1 Notarial fees and other public duties levied upon execution and
performance of this agreement shall be equally borne by the Seller and
the Purchaser; provided, however, that the Seller's share in such fees
and duties shall be limited to a maximum amount of DM 10,000. All
other expenses shall be borne by the Purchaser. Personal income taxes,
however, shall be borne by the Seller.
<PAGE> 23
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10.2 Fees for consultancy services (including services of tax advisers and
certified public accountants) shall be borne by the respective
principal.
SEC. 11
CONDITIONS PRECEDENT
11.1 This agreement shall become enforceable and binding once the following
conditions precedent have been met:
a) the agreement of today with ARUP on transfer and license of
know-how, intellectual property rights and intellectual property
rights applications as well as the agreement pursuant to sec. 8.3
of this agreement has become enforceable and binding;
b) the Helima-Agreement has become enforceable and binding;
c) the board of directors of the Purchaser has approved this
agreement;
d) The existing employment contract of Mr. Peter Brede with ARUP has
been terminated as of the Effective Date without a severance
payment payable by ARUP and Mr. Peter Brede has entered into a
consultancy agreement with ARUP at terms and conditions as agreed
with the Purchaser;
e) the Employees presently employed by Helmut Lingemann Maschinenbau
GmbH who shall transfer to ARUP have agreed in writing to a
transfer of their existing employment agreements to ARUP;
f) the Seller has written in duly notarized form a call option to
the Purchaser on (i) all shares of the share capital of Helmut
Lingemann Maschinenbau GmbH exercisable by the Purchaser upon
transfer by the Seller of its business division windows (directly
or indirectly through a sale of the Seller itself) against
payment of a strike price equal to [the net equity of Helmut
Lingemann Maschinenbau GmbH at book value], and against entering
with the aquiror of the business division windows into
<PAGE> 24
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a license agreement on know-how and intellectual property rights
owned by Helmut Lingemann Maschinenbau GmbH to the extent related
to the business division windows for the exclusive use by the
acquiror of the business division windows for the manufacture and
sale of products of the business division windows.
The Seller and the Purchaser undertake to inform each other as soon as
any of the above conditions precedent has been fulfilled.
11.2 The parties undertake to file without undue delay with the Anti-Trust
Office a post-acquisition notification pursuant to sec. 23 Anti-Trust Act.
Each party undertakes to fully disclose - correct and complete - to the
Anti-Trust Office all matters of fact as listed in sec. 23 para. 5 and 6
Anti-Trust Act. In addition, the parties shall jointly cooperate to obtain
as soon as possible a positive decision from the Anti-Trust Office.
SEC. 12
UNDERTAKINGS OF MR. HORST LINGEMANN AND MS HEIDRUN ULBRICH
Mr. Horst Lingemann and Ms Heidrun Ulbrich agree to become a party to this
agreement as far as the provisions in sec. 7.5 d) of this agreement and in sec.
9 of this agreement related to the covenant not to compete are concerned.
SEC. 13
MISCELLANEOUS
13.1 (Standard Severability Clause which has not been translated.)
13.2 This agreement shall be governed by the laws of the Federal Republic of
Germany.
13.3 The headings in this agreement are for convenience purposes only and
shall not affect the construction hereof.
13.4 Amendments and modifications of this agreement shall only be valid if
made in writing, unless a stricter form is required under the code.
<PAGE> 25
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13.5 All disputes arising out of, or in connection with, this agreement,
including disputes related to the validity of this agreement itself,
shall be settled in arbitration proceedings pursuant to the arbitration
agreement in Enclosure 8 and shall not be litigated at a regular civil
court.
Cologne this 28th day of June 1996
/s/ HORST LINGEMANN /s/ ANDREAS RODIN
.......................... ......................................
Helmut Lingemann GmbH & Co. GUVB Gesellschaft fur Unternehmens-
beteililgungen und Vermogensverwaltung
im aluminiumverarbeitenden Bereich
mbH i.Gr.
Dr. Andreas Rodin
/s/ HORST LINGEMANN /s/ HEIDRUN ULBRICH
........................... .....................................
Horst Lingemann Heidrun Ulbrich
Notorial cofirmation in accordance with German law.
<PAGE> 1
Exhibit 2 (h)
ASSET PURCHASE AGREEMENT
------------------------
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of the 1st
day of July, 1996, among HHI ACQUISITION CORP., a Delaware corporation
("Buyer"), HELIMA-HELVETION INTERNATIONAL, INC., a New York corporation
("Seller"), and, as to certain matters, HELMUT LINGEMANN GmbH & CO., a limited
partnership formed under the laws of Germany ("Shareholder").
RECITALS:
---------
A. Buyer is a wholly owned subsidiary of Insilco Corporation, a Delaware
corporation ("Insilco").
B. Shareholder is the sole shareholder of Seller.
C. Shareholder is also the sole shareholder of ARUP Alu-Rohr und Profil
GmbH, a German corporation ("ARUP").
D. Seller is engaged in the business of manufacturing and distributing
rollformed products (collectively, the "Businesses"), including (i) high
frequency welded radiator tubing for the automotive industry (the "Automotive
Business") and (ii) high frequency welded spacer bars, muntin bars, and other
related products for the insulated glass industry (the "Window Business") at a
plant located at 175 Spartangreen Boulevard, Duncan, Spartanburg County, South
Carolina (the "Plant").
E. ARUP is also engaged in the business of manufacturing and distributing
rollformed products at a plant located in Dortmund, Germany.
F. Shareholder leases to Seller certain rollformers and related equipment
used by Seller in the Automotive Business (collectively, the "Rollformers," as
such term is defined in Section 1.2 (dd).
G. Shareholder desires to sell to Buyer, and Buyer desires to purchase from
Shareholder, the Rollformers, upon the terms and conditions hereinafter set
forth.
H. Seller desires to sell to Buyer, and Buyer desires to purchase from
Seller, substantially all of the tangible and intangible assets and properties
owned or used by Seller in connection with the Automotive Business, upon the
terms and conditions hereinafter set forth.
I. Simultaneously with the execution of this Agreement, Shareholder has
entered into an agreement with Insilco NewCo GmbH, a German corporation and a
wholly owned subsidiary of Insilco, for the purchase of all of the outstanding
shares of capital stock of ARUP (the "ARUP Stock Purchase Agreement").
TERMS OF AGREEMENT:
-------------------
In consideration of the foregoing Recitals and the mutual promises
contained herein, and intending to be legally bound hereby, Buyer, Seller, and
Shareholder hereby agree as follows:
1
<PAGE> 2
ARTICLE I
DEFINITIONS
-----------
SECTION 1.1 DEFINITIONS CONTAINED IN THE PREAMBLE AND RECITALS. For
purposes of this Agreement, the following terms shall have the meanings assigned
to them in the preamble and Recitals of this Agreement:
(a) this "Agreement"; provided, however, that any reference herein to this
Agreement shall include any and all schedules and exhibits attached hereto,
which shall be incorporated by reference herein, and any and all subsequent
amendments or supplements to this Agreement or such schedules and exhibits;
(b) "ARUP";
(c) the "ARUP Stock Purchase Agreement";
(d) the "Automotive Business";
(e) the "Businesses";
(f) "Buyer";
(g) "Insilco";
(h) the "Plant";
(i) "Seller"; provided, however, that, for purposes of paragraphs
1.2(cc)(7) and 5.18 hereof, "Seller" shall include Seller as well as and any
trade or business, whether or not incorporated, whose employees are, or at any
time within six years prior to the Closing Date were, treated as employed by
Seller pursuant to Section 414(b), (c), (m), or (o) of the Code;
(j) "Shareholder"; and
(k) the "Window Business."
SECTION 1.2 OTHER DEFINITIONS. For purposes of this Agreement, the
following terms shall be defined as follows:
(a) an "Acquisition Proposal" shall mean an inquiry received from, or an
offer or proposal made by or on behalf of, any other corporation, firm,
association, person, or other entity relating to any possible merger involving
Seller, any possible sale of any of the Purchased Assets other than in the
ordinary course of business, any possible sale of an equity interest in Seller,
or any possible other business combination involving Seller or any of the
Purchased Assets;
(b) the "Assumed Liabilities" shall mean:
(1) all accounts payable to third party trade creditors (other than
Shareholder or any affiliates of Shareholder, or otherwise as excepted on
Schedule 1.2 (b)) incurred in the ordinary course of the operation of
either of the Businesses, as the same are reflected in the
2
<PAGE> 3
Financial Statements or otherwise listed and described on the books and
records of Seller, to the extent the same have not been paid, satisfied,
discharged, or released prior to the Closing Date;
(2) all Liabilities of Seller arising after the Closing Date and
incurred in the operation of the Automotive Business after the Closing Date
under contracts, leases, agreements, licenses, commitments, and orders
listed on Schedule 1.2(ff) hereto and validly assigned to Buyer; and
(3) all Liabilities of Seller specifically identified as being assumed
by Buyer on Schedule 1.2(b) hereto, to the extent the same have not been
paid, satisfied, discharged, or released prior to the Closing Date.
(c) the "Audited 1995 Financial Statements" shall mean the balance sheets
of Seller as of December 31, 1995 and December 31, 1994, and the related
statements of revenue, expenses, and retained earnings (deficit) and cash flows
for the year ended December 31, 1995, together with related notes, schedules,
and supplementary information, each of which statements shall have been audited
by independent certified public accountants acceptable to Buyer, to the extent
the same are finalized and delivered to Seller prior to the Closing;
(d) the "Bulk Sales Escrow Amount" shall mean the amount to be held in
escrow pursuant to paragraph 3.3(b) hereof;
(e) "CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601, et seq.;
(f) the "Closing" shall mean the consummation of the transactions
contemplated by this Agreement;
(g) the "Closing Date" shall mean July 8, 1996, or such other date as the
parties shall agree upon in writing;
(h) the "Closing Inventory" shall mean the total value of the inventory
items, including related supplies, raw materials, work-in-process, and finished
goods, included in the Purchased Assets as of the Closing Date, determined by
the inventory of such items to be performed by Arthur Andersen LLP as of the
Closing Date pursuant to Section 3.2 hereof and in accordance with the
directions and standards referred to therein;
(i) the "Code" shall mean the Internal Revenue Code of 1986, as amended
through the date hereof;
(j) "Employee Benefit Plans," shall mean any and all "employee benefit
plans," as defined in Section 3(3) of ERISA, "employee pension benefit plans,"
as defined in Section 3(2) of ERISA, "employee welfare benefit plans," as
defined in Section 3(1) of ERISA, and "multiemployer plan" (as defined in
Section 3(37) and 4001(a)(3) of ERISA), and any trusts related thereto, as well
as any deferred compensation plan, bonus or profit sharing plan, stock option
plan, stock appreciation rights plan, employee stock purchase plan, or any other
employee benefit plan, agreement, arrangement, commitment, or policy, and any
trusts related thereto, including without limitation any employee benefit plan,
agreement, arrangement, commitment, or policy that provides for either (i)
3
<PAGE> 4
health, pension, or life insurance coverage or benefits for retirees or former
employees of Seller, or (ii) benefits payable upon the occurrence of the
transactions contemplated by this Agreement or upon a change of control of
Seller;
(k) the "Environmental Laws" shall mean any and all federal, state, local,
and foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements, or
governmental restrictions relating to (i) the environment, (ii) protection of
human health from chemicals, wastes, pollution, or environmental contamination,
or (iii) the generation, treatment, storage, recycling, transportation,
disposal, Release, or containment of any materials, waste products, or
substances, including oil and other petroleum products, contaminants, and
pollutants;
(l) "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended;
(m) the "Escrow" shall mean the escrow created pursuant to the ARUP Stock
Purchase Agreement and Section 3.3 of this Agreement for the purpose of holding
and disbursing the Holdback Amount, the Post-Closing Adjustment Escrow Amount,
and the Bulk Sales Escrow Amount;
(n) the "Escrow Agent" shall mean the escrow agent designated in the ARUP
Stock Purchase Agreement to hold and disburse the Holdback Amount, the
Post-Closing Adjustment Escrow Amount, and the Bulk Sales Escrow Amount;
(o) the "Financial Statements" shall mean the 1994 Financial Statements,
the Unaudited 1995 Financial Statements, the Audited 1995 Financial Statements,
and the Unaudited March 31, 1996 Balance Sheet;
(p) "FIRPTA" shall mean the Foreign Investment in Real Property Tax Act, as
amended, 26 U.S.C. Section 1445;
(q) "Hazardous Material" shall mean any substance regulated under the
Environmental Laws;
(r) the "Holdback Amount" shall mean the amount to be held in escrow under
the terms of the ARUP Stock Purchase Agreement to fund certain obligations of
Shareholder under the ARUP Stock Purchase Agreement and certain obligations of
Seller and Shareholder under this Agreement, in accordance with paragraph
13.2(d) hereof;
(s) "Liabilities" (or, individually, a "Liability") shall mean any and all
debts, liabilities, indebtedness, payments, and other obligations accrued,
accruing, due, owed, owing, or payable by a particular person or entity,
including all costs and expenses associated therewith and specifically
including, without limitation:
(1) any right against such person to payment, whether or not
such right is reduced to judgment, liquidated, unliquidated,
fixed, undisputed, legal, equitable, secured, or unsecured;
(2) any right against such person to an equitable remedy for
breach of performance if such breach gives rise to a right to
payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured, unmatured,
disputed, undisputed, secured, or
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unsecured; and
(3) any obligation of such person for the performance of any
covenant or agreement, whether for the payment of money or
otherwise);
(t) the "1994 Financial Statements" shall mean, collectively, the balance
sheets of Seller as of December 31, 1994 and December 31, 1993, and for the year
ended December 31, 1994 the related statements of revenue, expenses, and
retained earnings (deficit) and cash flows, together with related notes,
schedules, and supplementary information, each of which statements has been
audited by Kornelia M. Seyfried, Certified Public Accountant, P.C., which audit
opinion has subsequently been withdrawn;
(u) the "Post-Closing Adjustment" shall mean the adjustment to the Purchase
Price determined pursuant to Section 3.2 hereof;
(v) the "Post-Closing Adjustment Escrow Amount" shall mean the amount to be
held in escrow pursuant to paragraph 3.3(a) hereof;
(w) the "Priorities List" shall mean the National Priorities List
promulgated by the United States Environmental Protection Agency pursuant to
CERCLA or an any similar state list.
(x) the "Purchased Assets" shall mean all right, title, interest, and
claims of Seller in, to, relating to, or arising under the business, franchises,
rights, privileges, claims, choses in action, judgments, properties, and assets
of Seller, of every nature and description whatsoever, tangible and intangible,
wherever located, together with any replacements, additions, and modifications
thereof or thereto, with the exception of the Retained Assets and less any items
sold, otherwise disposed of, or consumed in the ordinary course of business
prior to the Closing Date, and specifically including, without limitation, the
following assets:
(1) all inventories of raw materials, supplies, purchased
parts to be incorporated in finished products, work-in-process,
and finished products used in connection with the Automotive
Business, including, but not limited to, the assets listed or
described on Schedule 1.2(w)(1) hereto, but excluding the
Retained Assets;
(2) all equipment owned or leased (to the extent of such
leasehold interest) by Seller and used in the operation of the
Businesses, including furniture, fixtures, machinery, tools,
shelving, material handling equipment, motor vehicles, computer
hardware and peripheral equipment, computer software, telephone
equipment, and all manufacturers' warranties, builders'
warranties, and related or similar claims including, without
limitation, the items listed or described on Schedule 1.2(w)(2)
hereto, but excluding the Retained Assets;
(3) all of Seller's Contracts, together with all rights,
interests, and claims of Seller thereunder of every nature and
description;
(4) all rights, interests, and claims in, to, or under all
of Seller's patents, copyrights, trademarks, service marks, trade
names, brand names, computer software, and all licenses,
agreements,
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registrations, and applications with respect to any of the foregoing,
and all rights of Seller to obtain renewals or extensions thereof,
together with any goodwill associated with any of the foregoing, in
perpetuity, whether existing on the date hereof or arising or acquired
by Seller subsequent to the date hereof, including, without limitation,
the items listed on Schedule 1.2(w)(4) hereto, together will all
rights, interests, and claims of Seller of every nature and description
heretofore accrued or hereafter accruing with respect thereto, but
excluding the Retained Assets;
(5) all trade secrets, know-how, processes, designs, and
drawings associated with the products manufactured or otherwise
produced in the operation of the Businesses, including all documents
relating thereto, including, without limitation, those listed or
described in Schedule 1.2(w)(5) hereto, but excluding the Retained
Assets;
(6) all other intangible assets and all rights, interests, and
claims in, to, or under such intangible assets, including, without
limitation all of Seller's customer lists, relationships and
arrangements with customers and suppliers, together with any goodwill
associated with any of the foregoing, in perpetuity, whether existing
on the date hereof or arising or acquired by Seller subsequent to the
date hereof, together will all rights, interests, and claims of Seller
of every nature and description heretofore accrued or hereafter
accruing with respect thereto, but excluding the Retained Assets;
(7) all transferable licenses, authorizations, and permits
issued by any governmental agency relating to the Automotive Business,
whether presently or hereafter obtained, and all applications therefore
whether pending or hereafter filed, including, but not limited to,
those listed on Schedule 1.2(w)(7) hereto;
(8) any and all accounts receivable arising out of or
attributable to the operation of the Automotive Business, and any and
all claims, demands, judgments, rights, choses in action, bills and
notes receivable, documents, contracts, instruments, credits, refunds,
security and utility deposits, deferred items and prepaid expenses,
advances, bank accounts, cash on hand, and cash equivalents held or
owned by Seller, but excluding the Retained Assets;
(9) all other assets and property of Seller reflected in the
Financial Statements or otherwise recorded on the books and records of
Seller or acquired by Seller in the ordinary course of business or
through contribution by Shareholder subsequent to March 31, 1996, and
prior to the Closing Date, but excluding the Retained Assets; and
(10) all books, records, and files of Seller relating to the
Automotive Business for all periods prior to the Closing Date owned by
Seller and used in connection with the Automotive Business, except any
and all personnel files for any employees of Seller who are not
retained or hired by Buyer immediately after the Closing;
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(y) the "Purchase Price" shall mean the total purchase price for the
Purchased Assets, as set forth in Section 3.1 hereof;
(z) the "Real Property" shall mean the real property listed and described
on Schedule 1.2(y) hereto;
(aa) a "Release" shall mean a release as defined in 42 U.S.C. Section
9601(22);
(bb) the "Retained Assets" shall mean the following assets of Seller:
(1) original tax returns, corporate minutes, seals, and
capital stock books of Seller and any and all personnel files for any
employees of Seller who are not retained or hired by Buyer immediately
after the Closing; provided, however, that all of the foregoing shall
be made available to Buyer as provided in paragraph 8.2 hereof;
(2) any and all accounts receivable attributable to or
arising out of the operation of the Window Business;
(3) any and all other assets of Seller used exclusively in
connection with and in relation to the Window Business and not used in
connection with or related in any way to the Automotive Business, and
specifically including, without limitation, all of the types and kinds
of assets listed in clauses 1.2(x)(1) through (9) hereof that are used
in the Window Business and are not currently being used and cannot be
used in the Automotive Business; and
(4) the specific assets listed on Schedule 1.2(bb) hereto;
(cc) the "Retained Liabilities" shall mean any and all Liabilities of
Seller not specifically included in the Assumed Liabilities being assumed by
Buyer pursuant to Section 2.3 hereof, regardless of whether any such Liabilities
may be disclosed to Buyer pursuant to Article V hereof or otherwise or whether
Buyer may have knowledge of the same, specifically including, but not limited
to, the following:
(1) Liabilities for federal, state, local, or foreign taxes,
or any interest, penalties, or additions to tax with respect thereto
relating to the business and operations of Seller on or before the
Closing Date, including, without limitation, any tax liability of
Seller or Shareholder arising out of or resulting from the consummation
of the transactions contemplated hereby;
(2) Liabilities required by this Agreement to be disclosed by
Seller to Buyer and not so disclosed or which arise out of a breach of
any representation, warranty, or covenant made by Seller under or
pursuant to this Agreement;
(3) Liabilities for any civil or criminal penalties (including
interest), or any payments in the nature thereof, imposed upon Seller,
or sought to be imposed upon Buyer or any of the shareholders,
directors, officers, employees, or agents of Buyer, on account of any
fraudulent,
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criminal, intentional, willful, or negligent act or omission or any
violation of law by Seller or any of their respective directors,
officers, employees, or agents;
(4) without limiting the generality of clause (3) above,
Liabilities for any civil or criminal penalties or liabilities
(including interest), or any payments in the nature thereof, or any
damages or remedial or clean-up costs, under any Environmental Laws or
under any federal, state, or local law, rule, regulation, or policy
governing occupational health and safety matters, or founded upon any
private right of action or other third party claim in respect of
environmental or occupational health or safety matters, imposed upon,
or sought to be imposed upon, Buyer on account of any act or omission
(in each case occurring in whole or in part on or prior to the Closing
Date) of Seller or any of the directors, officers, employees, or agents
of Seller;
(5) Liabilities arising out of, based upon, or resulting from
any actions, suits, claims, or proceedings, whether in law or equity,
pending or threatened, based upon any transactions or occurrences or
acts or omissions on or prior to the Closing Date including, without
limitation, any liability or judgment resulting from the matters which
are the subject of any of the lawsuits, proceedings, or claims listed
or described on Schedules 5.8 and 6.3 hereto;
(6) Liabilities for any loans, accounts, or other obligations
payable or owing to Shareholder, any affiliates of Shareholder, or any
other present or former stockholders of Seller;
(7) any Liability with respect to any Employee Benefit Plans
which Seller maintains or has maintained or to which Seller
contributes, to which Seller has contributed, to which Seller is
obligated to contribute, or with respect to which Seller may have any
potential liability;
(8) Liabilities for the following, to the extent that such
items are not reflected in the Financial Statements:
(A) all of the employee benefit claims (including
long-term disability) and worker's compensation claims for all
employees of Seller arising from any accident, illness, or
injury existing or occurring on or before the Closing Date;
(B) all back pay, vacation or holiday pay, severance
payments, disability payments, unemployment insurance
payments, and health insurance payments, or reimbursement of
medical expenses, including any such payments, reimbursements,
and expenses relating to covered dependents, disability,
illness, or other facts, whether occurring before or after the
Closing Date, for all employees of Seller who are terminated,
laid off, or
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retired on or before the Closing Date; and
(C) all future claims arising from any disability,
illness, or other facts existing or occurring on or before the
Closing Date for the duration of such disability, illness, or
other facts for all employees of Seller and their eligible
dependents;
(dd) "Rollformers" shall mean all of Shareholder's right, title, and
interest in and to the rollformers and related equipment that are currently
leased by Seller from Shareholder pursuant to (i) a certain Lease Agreement
between Shareholder and Seller, dated June 1, 1993, and (ii) a certain Assembly
and Lease Agreement between Shareholder and Seller, dated January 1, 1994.
(ee) "Rollformers Purchase Price" shall mean $2,381,380 (U.S.).
(ff) "Seller's Contracts" shall mean any and all contracts, agreements,
leases, debt instruments, security agreements, franchises, licenses,
commitments, orders, understandings, arrangements, and other items listed on
Schedule 1.2(ff) hereto, and any and all other such items (i) relating to or
affecting any of the Purchased Assets, or (ii) to which Seller is a party or is
bound and which relate in any way to the Automotive Business, but excluding the
Retained Assets;
(gg) the "Unaudited March 31, 1996 Balance Sheet" shall mean the
internal, unaudited balance sheet of Seller as of March 31, 1996, a copy of
which is attached as Exhibit A hereto; and
(hh) the "Unaudited 1995 Financial Statements" shall mean the unaudited
balance sheet of Seller as of December 31, 1995, and December 31, 1994, and the
related unaudited statements of revenue, expenses, and retained earnings
(deficit) and cash flows for the fiscal years then ended, a copy of which has
been delivered to Buyer prior to the execution of this Agreement.
ARTICLE II
ASSETS AND LIABILITIES
----------------------
SECTION 2.1 PURCHASE AND SALE OF THE PURCHASED ASSETS. On and as of the
Closing Date, on the terms and subject to the conditions herein expressed, Buyer
agrees to buy and Seller agrees to sell, convey, transfer, set over, and deliver
to Buyer, its successors and assigns, forever, all of the Purchased Assets, free
and clear of all pledges, liens, charges, claims, encumbrances, licenses,
covenants, leases, security interests, agreements, and rights of other persons
(other than rights of third parties under contracts, including leases, to be
assumed by Buyer under this Agreement) of every nature and description
whatsoever. Buyer understands and agrees that certain liens on some or all of
the Purchased Assets will be released at the time of the Closing upon receipt by
the lienholders of payments to be made out of the proceeds of the Closing.
SECTION 2.2 RETAINED ASSETS. Seller shall retain all right, title, and
interest in and to the Retained Assets following the Closing Date. The parties
agree to make mutually agreeable arrangements for the removal or other
disposition of the Retained Assets within a reasonable time after the Closing
Date; provided, however, that if Seller has not removed or arranged for the
disposal of all of the Retained Assets within 30 days after the Closing Date,
Buyer shall be entitled to charge Seller a reasonable amount for the continued
storage of any such assets which remain on the Real Property or otherwise in
Buyer's custody or control after such 30-day period.
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SECTION 2.3 ASSUMED LIABILITIES. Effective as of the Closing Date,
Buyer shall assume and agree to pay, satisfy, and discharge, all of the Assumed
Liabilities, in accordance with their respective terms, subject to the
occurrence of the Closing and to any defenses or claimed offsets asserted in
good faith against the obligee to whom such Liabilities are owed.
SECTION 2.4 RETAINED LIABILITIES. Buyer shall not assume any of the
Retained Liabilities and Seller shall retain responsibility for, and pay when
due, all such Liabilities following the Closing.
SECTION 2.5 PURCHASE AND SALE OF THE ROLLFORMERS. On and as of the
Closing Date, on the terms and subject to the conditions herein expressed, Buyer
agrees to buy and Shareholder agrees to sell, convey, transfer, set over, and
deliver to Buyer, its successors and assigns, forever, all of the Rollformers,
free and clear of all pledges, liens, charges, claims, encumbrances, licenses,
covenants, leases, security interests, agreements, and rights of other persons
of every nature and description whatsoever. Buyer understands and agrees that
certain liens on some or all of the Rollformers will be released at the time of
the Closing upon receipt by the lienholders of payments to be made out of the
proceeds of the Closing.
ARTICLE III
PURCHASE PRICE
--------------
SECTION 3.1 PURCHASE PRICE. The Purchase Price for the Purchased Assets
shall be $8,977,299 (U.S.), plus an amount of $645,628 (U.S.)(the "Purchase
Price Supplement"), which represents one-half of the estimated reduction in the
net current assets of the Window Business since March 31, 1996, less the amount
of the Post-Closing Adjustment determined in accordance with Section 3.2 below
and plus the amount, if any, of the adjustment to be made under paragraph 3.3(d)
hereof.
SECTION 3.2 DETERMINATION OF THE POST-CLOSING ADJUSTMENT.
(a) As soon as practicable following the Closing Date, Seller will
cause its independent certified public accountants, Arthur Andersen LLP, to
determine the amount of the Post-Closing Adjustment, if any, and to prepare and
furnish to Buyer and Seller a written report detailing the calculation of the
amount of such Post-Closing Adjustment. In order to determine the amount of the
Closing Inventory, Arthur Andersen LLP shall be directed to perform a complete
physical count of the inventory items included in the Purchased Assets and to
make appropriate adjustments, in accordance with generally accepted accounting
principles, for any such items that are not merchantable, are nonconforming, are
not suitable or usable for the production or completion of merchantable
products, for sale in the ordinary course of business as first quality goods at
normal mark-ups, or are obsolete or below standard quality. Upon request by
either party, such accountants shall make their "work papers" in connection with
such determination available for review by such party's accountants, at such
party's expense, during normal business hours and on reasonable advance notice.
(b) The amount of the Post-Closing Adjustment shall be equal to the sum
of the following amounts:
(i) the Purchase Price Supplement; and
(ii) the amount, if any, by which the amount of the
net inventory (i.e., the total inventory less appropriate reserves for
obsolete
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or defective inventory) relating to the Automotive Business, as shown
on the Unaudited 1995 Financial Statements, exceeds the total amount of
the Closing Inventory; plus
(iii) the amount, if any, by which (A) the difference
obtained by subtracting the total amount of the accounts receivable
arising out of or attributable to the operation of the Automotive
Business, FROM the total amount of the accounts payable arising out of
or attributable to the operation of both of the Businesses, as the same
are determined by Arthur Andersen LLP as of the Closing Date pursuant
to paragraph 3.2(a) hereof, EXCEEDS (B) the difference obtained by
subtracting the total amount of the accounts receivable arising out of
or attributable to the operation of the Automotive Business, FROM the
total amount of the accounts payable arising out of or attributable to
the operation of both of the Businesses,, as such amounts are shown on
the Unaudited March 31, 1996 Balance Sheet, it being recognized that
Seller receives no credit if the amount determined in (A) above is less
than the amount determined in (B) above;
(iv) PROVIDED HOWEVER, that the sum of the amounts
determined under (ii) and (iii) of this section shall not exceed the
amount by which (A) the net inventory relating to the Automotive
Business, plus the total accounts receivable of the Automotive
Business, less the total accounts payable of the Businesses as each of
such amounts are shown on the Unaudited March 31, 1996 Balance Sheet,
exceeds (B) the Closing Inventory, plus the total accounts receivable
of the Automotive Business, less the total accounts payable of the
Businesses each as of the Closing, as the same are determined by Arthur
Andersen LLP pursuant to paragraph 3.2(a) hereof.
(c) Buyer and Seller shall have 30 days after receipt of the initial
determination of the amount of the Post-Closing Adjustment within which to
object to such determination. If neither party objects by written notice to the
other party within such 30-day period, each party will be deemed to have
accepted and agreed to such determination, whereupon such determination shall be
final and binding upon all parties. If a party objects to such determination,
then the parties agree to meet within ten days after the other party has
received notice of the objection to discuss such objection. At the conclusion of
such meeting, the parties will either (i) agree to accept the initial
determination of the amount of the Post-Closing Adjustment, whereupon such
determination shall be final and binding on all parties, (ii) agree to accept a
revised amount of the Post-Closing Adjustment, whereupon such determination
shall be final and binding on all parties, or (iii) direct the accountants to
review their initial determination of the Post-Closing Adjustment in light of
the specific calculations or methodologies that are in dispute, and to report to
Buyer and Seller the results of such review, such accountants' conclusions with
respect thereto, and a final determination of the amount of the Post-Closing
Adjustment, whereupon such determination shall be final and binding on all
parties. Buyer agrees to use its best efforts to cause such review to be
completed within 30 days after the accountants are directed to undertake such
review.
(d) Buyer and Seller shall share equally the costs of the determination
of the amount of the Post-Closing Adjustment, with Seller's portion to be
deducted from the Post-Closing Escrow Amount.
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(e) The determination of the amount of the Post-Closing Adjustment
shall be made in accordance with the directions specified in this Section 3.2
and, except as otherwise specifically provided in this Section 3.2, shall be
made using accounting methodologies that are in conformity with generally
accepted accounting principles and, to the extent not inconsistent with
generally accepted accounting principles, consistent with those methodologies
employed in the preparation of the Financial Statements.
SECTION 3.3 PAYMENT OF THE PURCHASE PRICE; ESCROW. The Purchase Price
shall be payable as follows:
(a) At the Closing, Buyer shall deposit the Post-Closing Adjustment
Escrow Amount, in the amount of $500,000.00 (U.S.), in the Escrow with the
Escrow Agent, to be held and disbursed by the Escrow Agent in accordance with
the terms of the ARUP Stock Purchase Agreement and the following terms and
conditions:
(1) If the amount of the Post-Closing Adjustment is less than
or equal to the amount of the Post-Closing Adjustment Escrow Amount,
then, within ten business days after the final determination of the
Post-Closing Adjustment, Buyer and Seller shall jointly, in writing,
direct the Escrow Agent to (i) promptly pay to Buyer from the
Post-Closing Adjustment Escrow Amount the amount of the Post-Closing
Adjustment, together with any interest accrued thereon through the date
of such disbursement, and (ii) promptly pay the balance of the
Post-Closing Adjustment Escrow Amount, if any, together with any
interest accrued thereon through the date of such disbursement, to
Seller; and
(2) If the amount of the Post-Closing Adjustment is greater
than the Post-Closing Adjustment Escrow Amount, then, within ten
business days after the final determination of the Post-Closing
Adjustment, Buyer and Seller shall jointly, in writing, direct the
Escrow Agent to pay to Buyer the entire amount of the Post-Closing
Escrow Amount, plus any interest accrued thereon through the date of
such disbursement, and so much of the Bulk Sales Escrow Amount, plus
any interest accrued thereon through the date of such disbursement, as
is necessary to pay the remaining balance of the Purchase Price
Adjustment;
(3) If the amount of the Post-Closing Adjustment is greater
than the Post-Closing Adjustment Escrow Amount and the Bulk Sales
Escrow Amount, then Buyer and Seller shall jointly, in writing, direct
the Escrow Agent to pay Buyer such remaining balance from the Holdback
Amount, plus any interest accrued thereon through the date of such
disbursement.
(b) At the Closing, Buyer shall deposit the Bulk Sales Escrow Amount,
in the amount of $250,000.00 (U.S.), in the Escrow with the Escrow Agent, to be
held and disbursed by the Escrow Agent in accordance with the terms of the ARUP
Stock Purchase Agreement and Section 13.2 hereof.
(c) Buyer shall pay the balance of the Purchase Price (after deducting
therefrom the sum of the amounts to be withheld pursuant to paragraphs 3.3(a)
and (b) above and plus or minus the amount of any prorations determined pursuant
to Section 4.5 hereof, as appropriate) to Seller (or
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creditors of Seller) at the Closing by wire transfer of funds to an account or
accounts designated by Seller prior to the Closing.
(d) If the Closing is not held on or before July 10, 1996, through no
fault of Seller or Shareholder, the total amount of the Purchase Price shall be
increased by an amount equal to 0.0001918 times the amount of the Purchase Price
per day until the Closing is held.
SECTION 3.4 ALLOCATION OF THE PURCHASE PRICE. Schedule 3.4 hereto
reflects the manner in which Buyer and Seller have agreed to allocate the
Purchase Price among the Purchased Assets. The allocation shall be binding upon
both Buyer and Seller for purposes of reporting the sale of the Purchased Assets
to the appropriate taxing authorities. Buyer and Seller shall each timely file
with the Internal Revenue Service, U.S. Department of Treasury, a Form 8594
Report that is consistent with such allocation and the parties hereby agree with
each other that neither will take a position before any governmental or
regulatory body charged with the collection of any tax, or in any judicial
proceeding, that is in any way inconsistent with Schedule 3.4.
SECTION 3.5 PAYMENT OF THE ROLLFORMERS PURCHASE PRICE. The Rollformers
Purchase Price shall be payable by Buyer to Shareholder (or creditors of
Shareholder) at the Closing by wire transfer of funds to an account or accounts
designated by Shareholder prior to the Closing. If the Closing is not held on or
before July 10, 1996, through no fault of Seller or Shareholder, the total
amount of the Rollformers Purchase Price shall be increased by an amount equal
to 0.0001918 times the amount of the Rollformers Purchase Price per day until
the Closing is held.
ARTICLE IV
THE CLOSING
-----------
SECTION 4.1 THE CLOSING. This transaction shall be closed at 10:00
a.m., local time, on the Closing Date at the Plant, or at such other place as
the parties may agree upon in writing. The transactions effected at Closing
shall be deemed to be simultaneous and shall be effective as of 12:01 A.M.,
Duncan, South Carolina local time, on the Closing Date.
SECTION 4.2 BUYER'S OBLIGATIONS AT THE CLOSING. At the Closing, Buyer
shall deliver to Seller, Shareholder or to the Escrow Agent, as appropriate, the
following:
(a) the payments as provided in paragraphs 3.3(a), (b), and (c) and 3.5
hereof;
(b) a certificate of the Secretary of Buyer setting forth the action
taken by the board of directors of Buyer to approve and authorize this Agreement
and the transactions contemplated hereby; and
(c) any other documents to be executed by the parties in connection
with the consummation of the transactions contemplated hereunder in accordance
with the terms of this Agreement, all as executed by Buyer.
SECTION 4.3 SELLER'S OBLIGATIONS AT THE CLOSING. At the Closing, Seller
shall deliver to Buyer the following:
(a) good and sufficient conveyance documents, including, but not
limited to, a
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transferable and recordable general warranty deed, a title affidavit, a FIRPTA
certificate, a bill or bills of sale, and assignments of contracts, warranties,
intellectual property rights, and other intangibles, duly executed, in forms
satisfactory to Buyer's legal counsel, vesting title to the Purchased Assets in
Buyer, free and clear of all liens, charges, encumbrances, and conditions,
whatsoever (except as otherwise agreed to by Buyer), and possession of the
Purchased Assets;
(b) releases or satisfactions of all then existing mortgages or other
liens encumbering the Real Property and releases or terminations of all then
existing security interests, if any, encumbering any of the other Purchased
Assets, including, but not limited to, the UCC financing statements evidencing a
lien in favor of Deutsche Credit Corporation with respect to certain items of
machinery and equipment, duly executed on behalf of the secured party and
running in favor of Seller and Buyer, which releases shall also include a
release and waiver of any right to make a claim against Buyer under any
applicable bulk transfer laws;
(c) an assignment of the lockbox currently maintained by Seller for the
receipt of payments on accounts receivable, provided, however, that promptly
upon receipt by Buyer, Buyer shall remit to Seller or to a creditor of Seller
designated by Seller, any and all amount received by Buyer in payment of any of
the accounts receivable of Seller included in the Retained Assets;
(d) a certificate of the Secretary of Seller, setting forth the action
taken by Shareholder and the board of directors of Seller to approve and
authorize this Agreement and the transactions contemplated hereby;
(e) a certificate signed by Seller stating that the representations and
warranties of Seller set forth in Article V hereof are true and correct as of
the Closing Date, and that the conditions to Buyer's obligations set forth in
Section 10.2 hereof have been fulfilled;
(f) any certifications, affidavits or other documents reasonably
required by Buyer in connection with income tax withholding, reporting, and
allocation requirements;
(g) any other documents to be executed by the parties in connection
with the consummation of the transactions contemplated hereunder in accordance
with the terms of this Agreement, all as executed by Seller, and such other
documents and instruments executed by Seller as are reasonably requested by
Buyer; and
(h) the opinions of legal counsel for Seller, Doffermyre Shields
Canfield Knowle & Devine and Dr. Ulrich Jungst, of Gorg, dated as of the Closing
Date, in the forms attached as Exhibits B and C, respectively, hereto. In
rendering such opinions, counsel for Seller shall be entitled to rely upon
appropriate certificates of public officials, upon the official minutes of the
corporate proceedings of Seller and, as to factual matters, upon certificates
from appropriate officers of Seller.
SECTION 4.4 SHAREHOLDER'S OBLIGATIONS AT THE CLOSING. At the Closing,
Shareholder shall deliver to Buyer the following:
(a) a certificate signed by Shareholder stating that the
representations and warranties of Shareholder set forth in Article VI hereof are
true and correct as of the Closing Date;
(b) any certifications, affidavits or other documents reasonably
required by Buyer in connection with income tax withholding, reporting, and
allocation requirements;
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(c) good and sufficient conveyance documents, including, but not
limited to, a bill or bills of sale for the Rollformers, duly executed, in forms
satisfactory to Buyer's legal counsel, vesting title to the Rollformers in
Buyer, free and clear of all liens, charges, encumbrances, and conditions,
whatsoever, and possession of the Rollformers;
(c) releases or satisfactions of all then existing mortgages or other
liens encumbering the Rollformers and releases or terminations of all then
existing security interests, if any, encumbering any of the Rollformers,
including, but not limited to, the UCC financing statements evidencing a lien in
favor of Deutsche Credit Corporation with respect to certain items of machinery
and equipment, duly executed on behalf of the secured party and running in favor
of Shareholder and Buyer, which releases shall also include a release and waiver
of any right to make a claim against Buyer under any applicable bulk transfer
laws; and
(d) any other documents to be executed by the parties in connection
with the consummation of the transactions contemplated hereunder in accordance
with the terms of this Agreement, all as executed by Shareholder, and such other
documents and instruments executed by Shareholder as are reasonably requested by
Buyer.
SECTION 4.5 PRORATIONS AT CLOSING. Prior to the Closing, Seller shall
file all necessary tax returns, including, but not limited to, the South
Carolina personal property tax return on form PT300 for the 1996 calendar year,
and pay all delinquent taxes, including penalties and interest, and all
assessments which are or could become a lien on the Real Property. Any such
delinquent taxes or assessments remaining unpaid as of the Closing Date shall be
a credit against payment of that portion of the Purchase Price. A portion of all
real estate taxes and business (personal property) taxes for 1996 shall be
prorated through Closing Date, based on 365-day year and, if undetermined, on
the most recent available tax rates and valuations, giving effect to applicable
exemptions, recently voted millage, changes in valuation, etc., whether or not
certified. If the real estate taxes or assessments are increased after the
Closing for any period prior to Closing so that the credit given to Buyer at the
Closing for unpaid real estate taxes or assessments is not sufficient to
compensate Buyer for the full amount of such taxes and assessments, then, upon
Buyer's delivery to Seller of the relevant tax bill(s) identifying the increased
taxes or assessments, Seller shall reimburse Buyer for the deficiency.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Seller hereby represents and warrants to and covenants with Buyer and
its successors and assigns as follows:
SECTION 5.1 ORGANIZATION; AUTHORITY; SUBSIDIARIES. Seller is a
corporation, duly organized, validly existing under the laws of New York and has
all requisite corporate power and authority to (i) own, lease, and operate its
properties, and (ii) carry on its business as now presently conducted and as
proposed to be conducted. Seller is duly qualified to do business in South
Carolina and in any other jurisdiction in which the nature of its business or
properties makes such qualification necessary, except where the failure to be so
qualified would not have a material adverse effect on such Seller's business,
assets, or financial condition taken as a whole. Seller has no subsidiaries and
does not own any capital stock of or other equity interest in any other entity.
SECTION 5.2 VALIDITY AND EXECUTION OF AGREEMENT. Seller has full legal
right, capacity, and power and all requisite corporate authority and approval
required to enter into, execute, and
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deliver this Agreement and to perform fully its obligations hereunder. The board
of directors of Seller has approved the transactions contemplated pursuant to
this Agreement and each of the other agreements required to be entered into
pursuant hereto by Seller. Shareholder, as the sole shareholder of Seller, has
taken all necessary corporate action to approve this Agreement and the
transactions contemplated hereunder and each of the other agreements required to
be entered into pursuant hereto by Seller. This Agreement has been duly executed
and delivered by Seller and constitutes the valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms, subject to the
qualifications that enforcement of the rights and remedies created hereby is
subject to (i) bankruptcy, insolvency, reorganization, moratorium, and other
laws of general application affecting the rights and remedies of creditors, and
(ii) general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law). Seller hereby represents and
warrants that it has received adequate and sufficient consideration for its
execution and delivery of this Agreement, including, without limitation, the
performance of its obligations under Article XIII hereof.
SECTION 5.3 Conflicts. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby do not and will not:
(a) violate, conflict with, or result in a breach of or default under
any of the terms, provisions, or conditions of the certificate of incorporation
or bylaws of Seller or any statute, regulation, order, judgment, decree, or
ruling of any applicable court, governmental agency, or regulatory authority or
any agreement or instrument to which Seller is a party or by which any of its
properties or assets is bound;
(b) result in the creation of any lien, charge, or encumbrance
upon any of the Purchased Assets;
(c) terminate, delay, or give any party thereto the right to terminate,
delay, amend, abandon, or refuse to perform any provision of any agreement or
instrument to which Seller is a party and which affects or relates in any way to
the Purchased Assets;
(d) accelerate or give any party thereto the right to accelerate or
modify the time within which, or the terms under which, Seller is to perform any
such agreement or instrument affecting the Purchased Assets; or
(e) require the consent or approval of any other person, governmental
authority, or other entity, or any notice to or filing with any such person,
authority, or entity, other than consents to be obtained by Seller and delivered
at the Closing.
SECTION 5.4 FINANCIAL STATEMENTS. From and after August 17, 1995,
Seller has maintained its books of account in accordance with applicable laws,
rules, and regulations and with generally accepted accounting principles,
consistently applied; and all such books and records are complete and correct in
all material respects, fairly and accurately reflect the income, expenses,
assets, and liabilities of Seller, including the nature thereof and the
transactions giving rise thereto, and provide a fair and accurate basis for the
preparation of the Financial Statements. Seller has delivered the 1994 Financial
Statements, the Unaudited 1995 Financial Statements, and the Unaudited March 31,
1996 Balance Sheet to Buyer prior to the execution of this Agreement. The
unaudited balance sheet of Seller as of December 31, 1994, included in the
Unaudited 1995 Financial Statements, the Unaudited 1995 Financial Statements,
and the Unaudited March 31, 1996 Balance Sheet have been and, upon the delivery
thereof in accordance with Section 8.11 hereof, the Audited 1995 Financial
Statements shall have been, prepared in conformity with generally accepted
accounting principles, consistently applied, are or shall be complete and
correct in all material respects, separately show the effect of any
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operations discontinued by Seller during the periods covered, and present fairly
the financial position of Seller, as of the dates of such statements, and the
results of operations and changes in financial position of Seller for the
periods covered thereby. Seller is not obligated, by guaranty, as co-signer, or
otherwise, to repay any indebtedness or to satisfy any other Liability of
Shareholder or any other third party. Seller has no Liabilities (absolute,
accrued, contingent, or otherwise) other than:
(a) those set forth or reserved against on the balance sheets of
Seller which are a part of the Financial Statements;
(b) those incurred since March 31, 1996, in the ordinary course of
business and in arm's length transactions, as the same shall be reflected on the
books and records of Seller as of the Closing Date;
(c) those that would arise after the Closing Date under contracts,
leases, agreements, licenses, commitments, and orders to be assumed by Buyer
pursuant to Section 2.3 hereof; and
(d) those specifically described on Schedule 1.2(b) hereto or
specifically disclosed elsewhere on the Schedules hereto.
SECTION 5.5 TAXES AND OTHER PAYMENTS. Seller has, or on or before the
Closing Date will have, paid and discharged all federal, state, local, and
foreign taxes, interest, penalties, or other payments required, as the case may
be, to be paid on or before the Closing Date in respect of the Purchased Assets
and its business, operations, and employees, and Seller has, or on or before the
Closing Date will have, duly and timely filed all tax reports and returns
required in connection therewith to be filed by it on or before the Closing
Date. On the Closing Date, Seller will have incurred no federal, state, local,
or foreign tax Liability (other than income taxes that have not become due and
payable) after the end of the period covered in its tax returns for the 1995
fiscal year that are not reflected in the balance sheets of Seller that are a
part of the Financial Statements. Seller has not received notice of any tax
deficiency outstanding, proposed, or assessed against it or in respect of it,
nor has Seller executed any waiver of any statute of limitations on the
assessment or collection of any tax. Seller has no knowledge of any valid basis
for any tax deficiency which could be proposed or assessed against, or in
respect of, it. There are no income tax liens upon, pending against, or, to the
best knowledge of Seller, threatened against any asset of Seller. The federal
income tax returns of Seller have never been examined by the Internal Revenue
Service.
SECTION 5.6 REAL PROPERTY. Seller has no interest as owner, lessee, or
otherwise in any real estate used in the operation of the Automotive Business,
except the Real Property. With respect to the Real Property, Seller hereby
represents, warrants, and covenants to and with Buyer as follows:
(a) no defect or condition of the Real Property or interest of any
third party exists which materially impairs the current use of the Real Property
by Seller or the planned use of the Real Property by Buyer;
(b) the Real Property, as currently used by Seller, is not in violation
in any material respect of any applicable federal, state, or local statute,
ordinance, order, requirement, law, rule, or regulation (including without
limitation, building, fire code, zoning, or environmental laws) affecting the
Real Property;
(c) no notice of violation of any applicable federal, state, or local
statute, law, ordinance, rule, regulation, order, or requirement, or of any
covenant, condition, restriction, or easement affecting the Real Property or
with respect to the use or occupancy of the Real Property, has been given to
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Seller by any governmental authority having jurisdiction over the Real Property
or by any other person entitled to enforce the same;
(d) to the best of Seller's knowledge, there is not (i) any intended
public improvement which may involve any charge being levied or assessed or
which may result in the creation of any lien upon the Real Property, (ii) any
intended or proposed federal, state, or local statue, ordinance, order,
requirement, law, or regulation (including, but not limited to, zoning changes)
which would materially adversely affect the current use of the Real Property, or
(iii) any suit, action, claim, or legal, administrative, arbitration, or other
proceeding or governmental investigation pending, threatened, or contemplated
against or affecting the Real Property;
(e) there are no encroachments onto the Real Property of any
improvements on any adjoining property which interfere with the operation of the
Plant as presently conducted, and no improvement on the Real Property necessary
to the operation of the Plant as presently conducted encroaches on any adjoining
property, and all utility service lines for the Real Property are located within
the boundary lines of the Real Property, within lands dedicated to public use or
within recorded easements for such lines;
(f) no unpaid for improvements have been made or materials, machinery,
or fuel delivered to or labor performed on the Real Property which might form
the basis of a mechanic's or materialman's lien on the Real Property and Seller
has not received a copy of any affidavit or notice of mechanic's or
materialman's lien which may be filed against the Real Property;
(g) all bills for water, sewer, and other utilities which have been
issued prior to the date hereof have been paid in full; and
(h) Seller is currently complying in all material respects with all
covenants, conditions, restrictions, easements, and similar matters affecting
the Real Property.
SECTION 5.7 TITLE. On the Closing Date, Seller will have good and
marketable title to the Purchased Assets, including the Real Property in fee
simple, subject to no pledges, liens, or other charges of any kind, or other
encumbrances, except as have been approved by Buyer or except such matters which
will be released at the Closing.
SECTION 5.8 LITIGATION. Except as set forth on Schedule 5.8 hereto,
there is no litigation, at law or in equity, no arbitration proceeding, and no
proceeding before any commission or other administrative or regulatory authority
pending or, to the knowledge of Seller, threatened against Seller or affecting
the Purchased Assets or Seller's right to carry on its business as conducted on
the date hereof. Seller is not in default with respect to any order, writ,
injunction, or decree of any federal, state, local, or foreign court,
department, agency, or instrumentality. Seller is not presently engaged in any
legal action to recover monies due to it or damages sustained by it with respect
to any of the Purchased Assets.
SECTION 5.9 DISPOSITION OF ASSETS. During the period between March 31,
1996, and the Closing Date, Seller has not sold or otherwise disposed of,
without the prior written consent of Buyer, any of Seller's assets that are used
in connection with or otherwise relate in any way to the Automotive Business,
except in the ordinary course of business and for good value.
SECTION 5.10 CONSENTS. In each case where any of the Purchased Assets
are not transferable to Buyer, or cannot be purchased by Buyer pursuant to this
Agreement, without the consent of another party, Seller has obtained all such
consents of such other party in writing to the
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transfer of such properties to Buyer pursuant to this Agreement or will obtain
such consents prior to the Closing Date, and will deliver such consents to Buyer
prior to the Closing.
SECTION 5.11 ESSENTIAL ASSETS. There is no material asset (i) used by
Seller in the operation of the Automotive Business, or (ii) without which the
Automotive Business could not be conducted as presently conducted, which is not
owned by Seller, except as otherwise disclosed in this Agreement; all such
assets owned by Seller are encompassed within the Purchased Assets, and are on
the date hereof, and on the Closing Date will be, in good operating condition
and repair, ordinary wear and tear excepted.
SECTION 5.12 LICENSES AND PERMITS. Seller holds all permits, licenses,
certificates of authority, orders, and approvals of, and has made all filings,
applications, and registrations with, all governmental or regulatory bodies that
are required in order to permit it to carry on the Automotive Business so as to
comply in all material respects with all applicable statutes, regulations,
rules, and orders. Schedule 1.2(w)(7) hereto sets forth a list of all material
governmental permits, licenses, registrations, and other governmental consents
(federal, state and local) which Seller has obtained in connection with its
operations and properties. To the best knowledge of Seller, all such permits,
licenses, registrations, and consents are in full force and effect and in good
standing. Seller has not received any notice of any claim of revocation nor does
Seller have any knowledge of any event which might give rise to such a claim.
SECTION 5.13 CONTRACTS. Schedule 1.2(ff) hereto contains a true and
complete list of all of Seller's Contracts, except purchase orders and sales
contracts entered into by Seller in the ordinary course of business and which do
not involve in excess of $5,000, individually, or $10,000 in the aggregate. All
of Seller's Contracts are valid and in full force and effect and constitute the
legal, valid, and binding obligations of Seller and, to the best knowledge of
Seller, constitute the legal, valid, and binding obligations of the other
parties thereto, and there are no existing defaults by Seller or, to the best
knowledge of Seller, by any other party thereunder and, to the best knowledge of
Seller, no event, act, or omission has occurred which (with or without notice,
lapse of time, or the happening or occurrence of any other event) would result
in a default thereunder. No other party to any such contract, lease, agreement,
license, commitment, or order has asserted the right, and no basis exists for
the assertion of any right, to renegotiate the terms or conditions of any such
contract, lease, agreement, license, commitment, or order. None of the Seller's
Contracts is in excess of the normal, ordinary, and usual requirements of its
business or at any excessive terms or prices, and no loss of a Seller's Contract
could reasonably be expected to create a material adverse change in the
Purchased Assets, the financial condition of Seller in relation to the
Automotive Business, or the Buyer's ability to operate the Automotive Business
following the Closing, based on current levels of operations and in keeping with
customary practices.
SECTION 5.14 INTELLECTUAL PROPERTY
(a) Schedule 1.2(w)(4) contains a list of all patents, copyrights,
trademarks, service marks, trade names, and brand names owned, controlled, or
licensed by Seller (whether registered with any state or federal authority or
not) that are used by Seller in connection with the operation of the Automotive
Business, together with a summary description and full information in respect of
any of such items. Except as set forth on Schedule 1.2(w)(4), Seller, owns the
entire right, title, and interest in and to any and all such patents,
copyrights, trademarks, service marks, trade names, and brand names and each
such item is in full force and effect, not currently being challenged in any
way, and not involved in any pending (or, to the knowledge of Seller,
threatened) infringement or interference proceeding. No intellectual property
other than that listed on Schedule 1.2(w)(4) is required in order to operate the
Automotive Business. Specifically, and without in any way limiting the
generality of the
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foregoing, Seller has licensed certain intellectual property from Shareholder,
as the same is listed on Schedule 1.2(w)(4). Such license is valid and in full
force and effect and neither Seller nor Shareholder is in default under the
same.
(b) The use of the patents, copyrights, trademarks, service marks,
trade names and brand names of Seller has not, and pending the Closing will not,
involve infringement, nor has Seller been advised of any claim of infringement,
of any patent, copyright, trademark, service mark, trade name, or other
proprietary right of others.
SECTION 5.15 CUSTOMERS AND SUPPLIERS. Schedule 5.15 sets forth a list
of all of the customers and the suppliers of Seller in excess of $50,000 (in
terms of purchases) during the fiscal year ended December 31, 1995. Except as
previously disclosed to Buyer in writing, Seller is unaware of any loss or
threatened loss of any customer or supplier listed on Schedule 5.15 or any other
customer, supplier, or account of Seller material to the Purchased Assets or the
Automotive Business.
SECTION 5.16 LABOR RELATIONS. No employees of Seller are covered by any
collective bargaining agreements. Seller has complied in all material respects
with applicable laws, rules, and regulations relating to the employment of
labor, including without limitation those relating to wages, hours, equal
employment opportunity, and payment of social security and similar taxes. Seller
is not engaging in and has not engaged in any unfair labor practice, and there
are no complaints against Seller pending before the National Labor Relations
Board or any similar state or local labor agency by or on behalf of any employee
of Seller. There are no representation questions, arbitration proceedings, labor
strikes, slow-downs or stoppages, or material grievances pending or, to the best
knowledge of Seller, threatened with respect to its employees.
SECTION 5.17 ENVIRONMENTAL MATTERS.
(a) Seller has obtained all permits, licenses, and other authorizations
which are required under the Environmental Laws. Seller is in compliance with
the terms and conditions of all such permits, licenses, and authorizations, and
is in compliance with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules, and timetables
contained in any applicable Environmental Law or in any regulation, code, plan,
order, decree, judgment, injunction, notice, or demand letter issued, entered,
promulgated, or approved thereunder.
(b) No notice, notification, demand, request for information, citation,
summons, or order has been issued, no complaint has been filed, no penalty has
been assessed, and no investigation or review is pending or threatened by any
governmental or other entity with respect to any permit, license, or
authorization required in connection with the conduct of the business of Seller
or with respect to any generation, treatment, storage, recycling,
transportation, disposal, or any Release of any Hazardous Material generated by
Seller.
(c) Seller has not handled any Hazardous Material, other than as a
generator, on the Real Property; no PCBs (polychlorinated biphenyls) are or have
been present on the Real Property; no asbestos is or has been present at the
Real Property; there are no underground storage tanks for Hazardous Materials,
active or abandoned, at, on, or under the Real Property; no Hazardous Materials
have been released, in a reportable quantity, where such a quantity has been
established by statute, ordinance, rule, regulation, or order, at, on, or under
the Real Property; and no Hazardous Materials have been otherwise released at,
on or under the Real Property.
(d) Seller has not transported or arranged for the transportation of
any Hazardous Material to any location which is listed on the Priorities List or
which is the subject of federal, state, or
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local enforcement actions or other investigations which may lead to claims
against Seller for clean-up costs, remedial work, damages to natural resources,
or for personal injury claims, including, but not limited to, claims under
CERCLA.
(e) No Hazardous Material generated by Seller has been recycled,
treated, disposed of, or released by Seller on the Real Property.
(f) No oral or written notification of a Release of a Hazardous
Material has been filed by or on behalf of Seller and the Real Property is not
listed or proposed for listing on the Priorities List.
(g) There are no liens of any nature whatsoever arising under or
pursuant to any Environmental Laws on the Real Property, no government actions
have been taken or are in process which could subject the Real Property to any
such liens, and Seller would not be required to place any notice or restrictions
relating to the presence of Hazardous Materials at the Real Property or in any
deed to the Real Property.
(h) There have been no environmental investigations, studies, audits,
tests, reviews, or other analyses conducted by or which are in possession of
Seller in relation to the Real Property which have not been made available to
Buyer.
SECTION 5.18 EMPLOYEE BENEFITS.
(a) Schedule 5.18 hereto contains a true and complete list of all
Employee Benefit Plans maintained by Seller at any time. All such Employee
Benefit Plans comply in all material respects with ERISA and the Code. Seller
represents that at least a post-1984 favorable determination letter is in effect
for all qualified plans of Seller, and that the said plans have at all times
been administered in operational compliance with the Code, including the Tax
Reform Act of 1986, and subsequent legislation. As of the date hereof, Seller
does not have any liability on account of any failure to pay benefits under any
such plan nor is Seller aware of any claim pending or threatened to be brought
by any party regarding such matter. No prohibited transaction has occurred with
respect to any such plan that would result, directly or indirectly, in the
imposition of any excise tax under Section 4975 of the Code; nor has any
reportable event under Section 4043 of ERISA occurred with respect to any such
plan. All reporting and disclosure requirements of ERISA and the Code have been
met by all such plans. Seller is not required to contribute to any Employee
Benefit Plan that is a "multi-employer plan" within the meaning of Section 3(37)
of ERISA. Seller shall not, with respect to each Employee Benefit Plan, transfer
or otherwise cause Buyer to incur withdrawal liability within the meaning of
ERISA Section 4201, et. seq., or as such liability is defined in any employee
welfare benefit plan or trust, and Buyer shall in no manner become a "successor
employer," as defined in ERISA, with respect to any such plans.
(b) Seller has delivered to Buyer complete and correct copies of all
Employee Benefit Plans sponsored by Seller for its employees, including each
trust or other agreement under which any trustee or custodian holds funds or
property of the plan and the most recently prepared financial actuarial reports
and currently effective Internal Revenue Service rulings or determination
letters in respect thereof. Seller does not maintain, except as disclosed in
writing to Buyer, any deferred compensation, excess benefit, incentive plans,
non-qualified plans, or other plans not included in Section 3(3) of ERISA.
Seller has provided to Buyer all such plans, including employment agreements,
health or life insurance, sick leave, disability, death benefit, and severance
arrangements, and all personnel and employee handbooks. Seller has not as of the
date hereof announced or otherwise made a commitment to create any Employee
Benefit Plan except as disclosed in writing to Buyer.
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(c) Seller has complied fully with ERISA and any and all other
applicable laws and regulations in connection with the termination of any
Employee Benefit Plans that have been terminated by Seller at any time prior to
the date of this Agreement. Seller has no ongoing liability with respect to any
such terminated Employee Benefit Plans.
SECTION 5.19 INSURANCE. The Plant and the Purchased Assets are insured
by Seller. Schedule 5.19 lists all such insurance policies presently maintained
by Seller, showing the types of coverage, policy expiration dates, policy
numbers, and policy limits as to each such policy. Seller has delivered copies
of all such policies to Buyer prior to the date of this Agreement. All such
policies pursuant to which coverage exists are in full force and effect and have
been issued under valid policies for the benefit of Seller by insurance carriers
licensed to do business in the proper jurisdictions. Except as described on
Schedule 5.19, there are no pending claims against Seller for personal injuries,
products liability, or property or other damage under any insurance policy
heretofore or presently issued to Seller.
SECTION 5.20 LOSSES. Since March 31, 1996, Seller has not sustained any
loss on account of fire, flood, accident, or other calamity of such character as
to interfere materially with the continued operation of the Automotive Business
regardless of whether or not such loss was covered by insurance.
SECTION 5.21 INCREASES IN COSTS. Seller has no knowledge that leads it
to believe that the acquisition of the Purchased Assets by Buyer will cause the
costs or expenses incurred by Buyer in the operation of the Automotive Business
following the Closing to increase significantly over those currently paid or
incurred by Seller in the operation of the Automotive Business.
SECTION 5.22 BROKERS. Neither Seller, nor any of its officers,
directors, or employees, have employed any broker or finder or incurred any
liability for any financial advisory fees, brokerage fees, commissions, or
finder's fees in connection with this Agreement or the transactions contemplated
herein.
SECTION 5.23 ABSENCE OF CERTAIN CHANGES. Since March 31, 1996, there
has been no material adverse change in the business, operations, financial
condition, or prospects of the Automotive Business or in the condition of any of
the Purchased Assets, and there are no events with respect to any of the
foregoing, or the assets or properties of others leased or used by Seller that,
to the best knowledge of Seller, threaten to disrupt, prevent, or impair the
conduct of the Automotive Business in a materially adverse manner.
SECTION 5.24 RELIANCE. All documents, records, and other information
attached as schedules hereto have been prepared by Seller and furnished to Buyer
or Buyer's representatives by Seller, and fairly, accurately, and completely
present (in a manner consistent with prior periods) the matters purported to be
presented therein. Seller acknowledges that such documents were furnished at the
request of Buyer or Buyer's representatives and that such documents, records,
and other information have been relied upon by Buyer or Buyer's representatives
(to the extent of Seller's representations and warranties set forth in the
preceding sentence) as an inducement to the execution and delivery of this
Agreement.
SECTION 5.25 DISCLOSURE. Neither this Agreement nor any certificate,
schedule, list, or other instrument or information required to be furnished by
Seller pursuant to this Agreement, contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make the
statements contained herein or therein not materially misleading.
SECTION 5.26 REPRESENTATIONS AND WARRANTIES. The representations and
warranties
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contained in this Article V and all other information with respect to Seller and
the Purchased Assets that has been or will be supplied to Buyer by Seller, will
be true, complete, and correct on and as of the Closing Date with the same force
and effect as though such representations and warranties had been made on and as
of the Closing Date. No examination, inspection, investigation, or audit by
Buyer or its agents shall in any way affect, diminish, or terminate any of the
representations, warranties, or covenants of Seller contained in this Agreement.
All of the representations and warranties of Seller contained herein shall,
notwithstanding any such examination, inspection, investigation, or audit,
survive the Closing and remain in full force and effect for a period of one year
after the Closing Date, with the exception of the representations and warranties
contained in Sections 5.5, 5.10, 5.12, 5.17, 5.18, and 5.22 hereof, which shall
remain in full force and effect for a period of three years after the Closing
Date. The maximum liability of Seller for a breach of any of the representations
and warranties contained herein shall be limited to the total of the balance, if
any, of the Post-Closing Adjustment Escrow Amount remaining after the payments
to be made pursuant to clauses 3.3(a)(1) and (2) hereof, plus the amount of the
Holdback Amount, except that the representations and warranties contained in
Sections 5.5, 5.10, 5.12, 5.17, 5.18, and 5.22 hereof shall not be subject to
such limitation.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER
---------------------------------------------
To the extent that any representation or warranty contained herein is
limited by reference to the knowledge of Shareholder, such knowledge is based
solely upon the actual knowledge of the Managing Directors of the General
Partner of Shareholder and that of any other senior employee of either
Shareholder or the General Partner of Shareholder who is either acting in a
management capacity or serving as a financial or accounting officer. Shareholder
hereby represents and warrants to and covenants with Buyer and its successors
and assigns as follows:
SECTION 6.1 VALIDITY AND EXECUTION OF AGREEMENT. Shareholder has full
legal right, capacity, and power and all requisite corporate authority and
approval required to enter into, execute, and deliver this Agreement and to
perform fully its obligations hereunder. The managing directors of Shareholder
have approved the transactions contemplated pursuant to this Agreement and each
of the other agreements required to be entered into pursuant hereto by
Shareholder. Shareholder, as the sole shareholder of Seller, has taken all
necessary corporate action to approve this Agreement and the transactions
contemplated hereunder and each of the other agreements required to be entered
into pursuant hereto by Seller. This Agreement has been duly executed and
delivered by Shareholder and constitutes the valid and binding obligation of
Shareholder, enforceable against Shareholder in accordance with its terms,
subject to the qualifications that enforcement of the rights and remedies
created hereby is subject to (i) bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting the rights and
remedies of creditors, and (ii) general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law).
Shareholder hereby represents and warrants that it has received adequate and
sufficient consideration for its execution and delivery of this Agreement,
including, without limitation, the performance of its obligations under Article
XIII hereof.
SECTION 6.2 CONFLICTS. The execution and delivery of this Agreement by
Shareholder and the consummation of the transactions contemplated hereby do not
and will not:
(a) violate, conflict with, or result in a breach of or default under
any of the terms, provisions, or conditions of the organizational or governing
documents of Shareholder or any statute, regulation, order, judgment, decree, or
ruling of any applicable court, governmental agency, or
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regulatory authority or any agreement or instrument to which Shareholder is a
party or by which any of its properties or assets is bound;
(b) result in the creation of any lien, charge, or encumbrance upon any
of the Purchased Assets;
(c) terminate, delay, or give any party thereto the right to terminate,
delay, amend, abandon, or refuse to perform any provision of any agreement or
instrument to which Shareholder is a party and which affects or relates in any
way to the Purchased Assets;
(d) accelerate or give any party thereto the right to accelerate or
modify the time within which, or the terms under which, Shareholder is to
perform any such agreement or instrument affecting the Purchased Assets; or
(e) require the consent or approval of any other person, governmental
authority, or other entity, or any notice to or filing with any such person,
authority, or entity, other than consents to be obtained by Seller and delivered
at the Closing.
SECTION 6.3 LITIGATION. There is no litigation, at law or in equity, no
arbitration proceeding, and no proceeding before any commission or other
administrative or regulatory authority pending or, to the knowledge of
Shareholder, threatened against Shareholder or Seller except as disclosed on
Schedules 5.8 and 6.3 and such litigation does not affect the Purchased Assets
or the Rollformers, or Seller's right to carry on its business as conducted on
the date hereof. Shareholder is not in default with respect to any order, writ,
injunction, or decree of any federal, state, local, or foreign court,
department, agency, or instrumentality. Shareholder is not presently engaged in
any legal action to recover monies due to it or damages sustained by it with
respect to any of the Rollformers.
SECTION 6.4 DISCLOSURE. Neither this Agreement nor any certificate,
schedule, list, or other instrument or information required to be furnished by
Shareholder pursuant to this Agreement, contains any untrue statement of a
material fact or omits to state any material fact necessary in order to make the
statements contained herein or therein not materially misleading.
SECTION 6.5 TAXES AND OTHER PAYMENTS. Shareholder has, or on or before
the Closing Date will have, paid and discharged all federal, state, local, and
foreign taxes, interest, penalties, or other payments required, as the case may
be, to be paid on or before the Closing Date in respect of the Rollformers, and
Shareholder has, or on or before the Closing Date will have, duly and timely
filed all tax reports and returns required in connection therewith to be filed
by it on or before the Closing Date. Shareholder has not received notice of any
tax deficiency outstanding, proposed, or assessed against it or in respect of
it, nor has Shareholder executed any waiver of any statute of limitations on the
assessment or collection of any tax. Shareholder has no knowledge of any valid
basis for any tax deficiency which could be proposed or assessed against, or in
respect of, it. There are no income tax liens upon, pending against, or, to the
best knowledge of Shareholder, threatened against any asset of Shareholder.
SECTION 6.6 TITLE. On the Closing Date, Shareholder will have good and
marketable title to the Rollformers, subject to no pledges, liens, or other
charges of any kind, or other encumbrances, except such matters which will be
released at the Closing.
SECTION 6.7 DISPOSITION OF ASSETS. During the period between March 31,
1996, and the Closing Date, Shareholder has not sold or otherwise disposed of
any of the Rollformers.
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SECTION 6.8 CONSENTS. In each case where any of the Rollformers are not
transferable to Buyer, or cannot be purchased by Buyer pursuant to this
Agreement, without the consent of another party, Shareholder has obtained all
such consents of such other party in writing to the transfer of such properties
to Buyer pursuant to this Agreement or will obtain such consents prior to the
Closing Date, and will deliver such consents to Buyer prior to the Closing.
SECTION 6.9 INSURANCE. The Rollformers are insured by Shareholder.
Schedule 5.19 lists all such insurance policies presently maintained by
Shareholder or Seller relating to the Rollformers, showing the types of
coverage, policy expiration dates, policy numbers, and policy limits as to each
such policy.
SECTION 6.10 LOSSES. Since March 31, 1996, Shareholder has not
sustained any loss on account of fire, flood, accident, or other calamity of
such character as to interfere materially with the continued operation of the
Rollformers regardless of whether or not such loss was covered by insurance.
SECTION 6.11 INCREASES IN COSTS. Shareholder has no knowledge that
leads it to believe that the acquisition of the Rollformers by Buyer will cause
the costs or expenses incurred by Buyer in the operation of the Automotive
Business following the Closing to increase significantly over those currently
paid or incurred by Shareholder or Seller in the operation of the Automotive
Business.
SECTION 6.12 ABSENCE OF CERTAIN CHANGES. Since March 31, 1996, there
has been no material adverse change in the operation or in the condition of any
of the Rollformers, and there are no events with respect to any of the
foregoing, that, to the best knowledge of Shareholder, threaten to disrupt,
prevent, or impair the conduct of the Automotive Business in a materially
adverse manner.
SECTION 6.13 REPRESENTATIONS AND WARRANTIES. Shareholder hereby
represents and warrants to and covenants with Buyer and its successors and
assigns that the representations and warranties of Shareholder contained in this
Article VI and all other information with respect to Shareholder, Seller, and
the Purchased Assets that has been or will be supplied to Buyer by Shareholder,
are in all material respects true, complete, and correct and will be true,
complete, and correct on and as of the Closing Date with the same force and
effect as though such representations and warranties had been made on and as of
the Closing Date. Shareholder hereby represents and warrants to and covenants
with Buyer and its successors and assigns that, to the best of Shareholder's
knowledge, the representations and warranties of Seller contained in Article V
hereof are true, complete, and correct and will be true, complete, and correct
on and as of the Closing Date with the same force and effect as though such
representations and warranties had been made on and as of the Closing Date. No
examination, inspection, investigation, or audit by Buyer or its agents shall in
any way affect, diminish, or terminate the representations, warranties, or
covenants of Shareholder contained in this Agreement. All of the representations
and warranties of Shareholder contained herein shall, notwithstanding any such
examination, inspection, investigation, or audit, survive the Closing and remain
in full force and effect for a period of one year after the Closing Date, with
the exception of the representations and warranties of Shareholder with respect
to the representations and warranties of Seller contained in Sections 5.5, 5.10,
5.12, 5.17, 5.18, and 5.22 hereof, which shall remain in full force and effect
for a period of three years after the Closing Date. The maximum liability of
Shareholder for a breach of any of the representations and warranties contained
herein shall be limited to the total of the balance, if any, of the Post-Closing
Adjustment Escrow Amount remaining after the payments to be made pursuant to
clauses 3.3(a)(1) and (2) hereof, plus the amount of the Holdback Amount, except
that the representations and warranties of Shareholder with respect to the
representations and warranties of Seller contained in Sections 5.5, 5.10, 5.12,
5.17, 5.18, and 5.22 hereof shall not be subject to such limitation.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer hereby represents and warrants to and covenants with Seller,
Shareholder, and their respective successors and assigns as follows:
SECTION 7.1 ORGANIZATION. Buyer is a corporation, duly organized,
validly existing, and in good standing under the laws of the State of Delaware.
SECTION 7.2 VALIDITY AND EXECUTION OF AGREEMENT. Buyer has the full
legal right, capacity, and power and all requisite corporate authority and
approval required to enter into, execute, and deliver this Agreement and to
perform fully its obligations hereunder. The board of directors of Buyer has
approved the transactions contemplated pursuant to this Agreement and each of
the other agreements required to be entered into pursuant hereto by Buyer. This
Agreement has been duly executed and delivered on behalf of Buyer and
constitutes the valid and binding obligation of Buyer enforceable against Buyer
in accordance with its terms, subject to the qualifications that enforcement of
the rights and remedies created hereby is subject to (i) bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting the
rights and remedies of creditors, and (ii) general principles of equity
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).
SECTION 7.3 CONFLICTS. The execution and delivery of this Agreement and
the performance by Buyer of the transactions contemplated hereby do not and will
not (i) violate or conflict with any of the provisions of the certificate of
incorporation or bylaws of Buyer or any statute, regulation, order, judgment,
decree, or ruling of any applicable court, governmental agency, or regulatory
authority to which Buyer is a party or by which any of its properties or assets
is bound, or (ii) require the consent or approval of any person, governmental
authority, or other entity or any notice to or other filing with any such
person, authority. or entity.
SECTION 7.4 BROKERS. Neither Buyer nor any of its officers, directors,
or employees has employed any broker or finder or incurred any liability for any
financial advisory fees, brokerage fees, commissions, or finder's fees in
connection with this Agreement or the transactions contemplated herein, with the
exception of Goldman, Sachs & Co., oHG. All fees, commissions, and expenses of
Goldman, Sachs & Co., oHG shall be paid by Buyer.
SECTION 7.5 DISCLOSURE. Neither this Agreement nor any certificate,
schedule, list, or other instrument or information required to be furnished by
Buyer pursuant to this Agreement, contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make the
statements contained herein or therein not misleading.
SECTION 7.6 REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in this Article VII and all other information with respect
to Buyer that has been or will be supplied to Seller by Buyer, will be true,
complete, and correct on and as of the Closing Date with the same force and
effect as though such representations and warranties had been made on and as of
the Closing Date.
ARTICLE VIII
PRE-CLOSING COVENANTS OF SELLER AND SHAREHOLDER
-----------------------------------------------
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Seller hereby represents, warrants, covenants, and agrees with Buyer
and, where and to the extent indicated, Shareholder and Seller hereby, jointly
and severally, represent, warrant, covenant, and agree with Buyer that, for and
during the period from and after June 30, 1996, until the Closing:
SECTION 8.1 CONFIDENTIALITY. Seller and Shareholder shall keep
confidential, shall not disclose to any third party, and shall not use in any
manner inconsistent with the transactions contemplated by this Agreement any
information or documents obtained from Buyer concerning Buyer's assets,
properties, business, or operations, unless (i) readily ascertainable from
public or published information or trade sources, (ii) already known or
subsequently developed by Seller or Shareholder independently of any information
obtained from Buyer, (iii) received from a third party not under any obligation
to Buyer to keep such information confidential, or (iv) required to be disclosed
by law or by order of any court or governmental agency.
SECTION 8.2 CORPORATE EXAMINATIONS AND INVESTIGATIONS. At any and all
reasonable times prior to the Closing Date, Buyer shall be entitled, through its
employees, representatives, and lenders, to make such examination, inspection,
investigation, or audit of the Purchased Assets, the Plant, and the operation of
the Businesses as Buyer may desire. Any such examination, inspection,
investigation, or audit shall be conducted at reasonable times and under
reasonable circumstances and Seller shall cooperate fully therein. In connection
with any such examination, inspection, investigation, or audit, Seller shall (i)
provide access to the representatives of Buyer to the Plant and all of the
Purchased Assets, (ii) furnish the representatives of Buyer with all such
information and copies of such documents concerning the operation and affairs of
the Businesses as such representatives may reasonably request, including without
limitation, books of account, records, market studies and reports, consultant
studies and reports, Seller's Contracts, customer lists, appraisals, valuation,
and other material or information in the possession of Seller relating to the
Plant, the operation of the Businesses, or the Purchased Assets, and (iii) cause
their respective officers, employees, consultants, agents, accountants, and
attorneys to cooperate fully with such representatives in connection with such
examination, inspection, investigation, or audit and to make full disclosure to
Buyer of all material facts affecting the financial condition and operations of
the Businesses. No investigations by Buyer shall diminish or obviate any of the
representations, warranties, covenants, or agreements of Seller or Shareholder
under this Agreement.
SECTION 8.3 ACQUISITION PROPOSALS. Unless and until this Agreement
shall have been terminated by either party pursuant to Article XI hereof,
neither Seller nor Shareholder shall (i) directly or indirectly, solicit,
encourage, initiate, entertain, consider, or participate in any negotiations or
discussions with respect to any Acquisition Proposal, or (ii) disclose any
information not customarily disclosed to any person or entity or provide access
to its properties, books, or records or otherwise assist or encourage any person
or entity in connection with any Acquisition Proposal. Seller and Shareholder
will promptly communicate to the other parties hereto the occurrence, nature,
and terms of any Acquisition Proposal that it may receive.
SECTION 8.4 CONDUCT OF BUSINESS. Except to the extent that Buyer has
expressly waived in writing the requirements of this Section 8.4, Seller shall:
(i) conduct the Automotive Business only in the ordinary course, in the same
manner as its has been conducted prior to the date hereof (including, without
limitation, that Seller shall not make disproportionately large payments to any
creditor or group of creditors) and in such a manner so that the representations
and warranties contained in Article V hereof shall continue to be true and
correct on and as of the Closing Date as if made on and as of the Closing Date
(except as otherwise expressly contemplated herein); and (ii) not sell or
otherwise dispose of any assets, other than the sale of inventory in the
ordinary course of business, provided that Seller shall not sell or otherwise
dispose of any inventory during the period from June 30, 1996, and July 7, 1996,
inclusive. Similarly, no dividends, increases in compensation,
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material contracts, or other non-routine changes will be made, entered into, or
agreed to, and Seller generally will conduct itself and the Automotive Business
so as to preserve the goodwill of its customers, suppliers, and others.
SECTION 8.5 TERMINATION OF ROLLFORMER LEASES. Shareholder and Seller
agree that (i) a certain Lease Agreement between Shareholder and Seller, dated
June 1, 1993, and (ii) a certain Assembly and Lease Agreement between
Shareholder and Seller, dated January 1, 1994, are hereby terminated effective
immediately prior to the Closing, to enable the Shareholder to sell the
Rollformers to the Buyer free and clear of such agreements pursuant to the terms
hereof.
SECTION 8.6 TERMINATION OF EMPLOYEES. Seller shall terminate all
employees of Seller effective as of the Closing Date.
SECTION 8.7 NOTICE OF EVENTS. Seller and Shareholder shall promptly
notify Buyer of (i) any event, condition, or circumstance that would constitute
a violation or breach of this Agreement, (ii) any event, occurrence,
transaction, or other item which would have been required to have been disclosed
on any schedule or statement delivered hereunder had such event, occurrence,
transaction, or item existed on the date hereof, other than items arising in the
ordinary course of business which would not render any representation or
warranty of Seller and Shareholder made hereunder materially misleading, and
(iii) Seller's entering into any contract affecting any of the Purchased Assets.
SECTION 8.8 ENVIRONMENTAL. Seller shall provide Buyer with (i) copies
of any and all prior environmental investigations, studies, audits, tests,
reviews, or other analyses conducted by or which are in the possession of Seller
in relation to the Real Property or any property or facility now or previously
owned or leased by Seller which is adjacent to the Real Property, (ii) copies of
any and all notifications, permits, licenses, or communications with any
environmental agency with regard to compliance with any Environmental Laws in
relation to the Real Property, (iii) reasonable access to the Real Property for
the purpose of carrying out any environmental investigations, studies, audits,
tests, reviews, or other analyses, (iv) all reasonable cooperation in
transferring or renewing any permits or licenses required for compliance with
Environmental Laws, and (v) all reasonable cooperation in assuring continuing
compliance with Environmental Laws.
SECTION 8.9 SUPPLEMENTS TO SCHEDULES. From time to time prior to the
Closing Date, Seller shall promptly supplement or amend the Schedules to this
Agreement to reflect any matter hereafter arising which, if existing or
occurring on the date of this Agreement, would have been required to be set
forth or described in such Schedules; provided, however, that no such supplement
or amendment shall have the effect of curing any inaccuracy or misrepresentation
in any representation or warranty contained in this Agreement or any breach
thereof.
SECTION 8.10 AGREEMENT TO VOTE. Shareholder hereby covenants and agrees
to vote the shares of Seller as follows: (i) in favor of the adoption of this
Agreement and the approval of the sale of the Purchased Assets to Buyer; (ii)
against the approval of any Acquisition Proposal made by or on behalf of any
person or entity other than Buyer or another affiliate of Buyer; and (iii)
against any other transaction which is inconsistent with the obligation of
Seller to consummate the transactions contemplated by this Agreement in
accordance with this Agreement. Shareholder further agrees that, during the term
of this Agreement, Shareholder will not sell or otherwise voluntarily dispose of
any of the shares of Seller which are owned by Shareholder or take any other
voluntary action which would have the effect of removing Shareholder's power to
vote the shares that Shareholder presently has the power to vote or which would
otherwise be inconsistent with this Agreement.
SECTION 8.11 DELIVERY OF THE AUDITED 1995 FINANCIAL STATEMENTS. Seller
or
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Shareholder shall deliver to Buyer a copy of the Audited 1995 Financial
Statements immediately upon receipt of the same by Seller or Shareholder.
SECTION 8.12 RISK OF LOSS. Risk of loss to all of the Purchased Assets
and the Rollformers shall be borne by Seller or Shareholder until the Closing
and, if all or any part of the Real Property or any material part of the balance
of the Purchased Assets or the Rollformers is substantially damaged or destroyed
before the Closing Date, Buyer may (a) proceed with the transaction, whereupon
Buyer shall be entitled to all insurance money, if any, payable to Seller or
Shareholder under all policies covering the Purchased Assets or the Rollformers,
or (b) rescind this Agreement and thereby release all parties from liability
hereunder, by giving written notice to Seller and Shareholder within ten days
after Buyer has written notice of such damage or destruction. Failure by Buyer
to so notify Seller and Shareholder shall constitute an election to proceed with
the transaction.
ARTICLE IX
PRE-CLOSING COVENANTS OF BUYER
------------------------------
Buyer hereby covenants and agrees with Seller and Shareholder that, for
and during the period from and after the date hereof through the Closing Date,
Buyer shall keep confidential, shall not disclose to any third party, and shall
not use in any manner inconsistent with the transactions contemplated by this
Agreement any information or documents obtained from Seller concerning its
assets, properties, business, or operations, unless (i) readily ascertainable
from public or published information or trade sources, (ii) already known or
subsequently developed by Buyer independently of any information obtained from
Seller, (iii) received from a third party not under any obligation to Seller to
keep such information confidential, or (iv) required to be disclosed by law or
by order of any court or governmental agency.
ARTICLE X
CONDITIONS TO CLOSING
---------------------
SECTION 10.1 CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES. The
obligations of Seller, Shareholder, and Buyer to consummate the transactions
contemplated under this Agreement are subject to the fulfillment, prior to or at
the Closing, of the following conditions, either or both of which may be waived
in a writing signed by all such parties:
(a) There shall be no litigation or administrative proceedings pending
or threatened against Buyer, Seller, or Shareholder on the Closing Date which,
if successful, would prohibit the consummation of the transactions contemplated
by this Agreement or materially affect the value of such transactions to any
party.
(b) There shall be no pending action by any creditor of Seller the
purpose of which is to attach any of the Purchased Assets or the proceeds of the
sale thereof or to prevent the transactions contemplated by this Agreement,
whether or not instituted under the Bulk Transfer Act provisions of the General
Statutes of South Carolina, or otherwise.
SECTION 10.2 CONDITIONS TO BUYER'S OBLIGATIONS. The obligations of
Buyer to consummate the transactions contemplated under this Agreement are
subject to the fulfillment on or prior to the Closing Date of the following
conditions, any one or more of which may be waived in a
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writing signed by both such parties:
(a) The representations and warranties of Seller and Shareholder
contained in this Agreement shall be true, complete, and correct on and as of
the Closing Date with the full force and effect as though made on and as of the
Closing Date.
(b) Seller and Shareholder shall have performed and complied with all
covenants and agreements required by this Agreement to be performed or complied
with by them on or prior to the Closing Date.
(c) Shareholder, as the sole shareholder of Seller, shall have taken
all necessary corporate action to approve this Agreement and the transactions
contemplated hereunder and each of the other agreements required to be entered
into pursuant hereto by Seller.
(d) At least two business days prior to the Closing Date, Buyer shall
have obtained, a title insurance commitment and such endorsements as Buyer may
reasonably require, on a form reasonably acceptable to Buyer, for an owner's
title insurance policy with respect to the Real Property, on forms and in
amounts reasonably acceptable to Buyer. Such commitment shall show that fee
simple title to the Real Property is in the name of Seller and that the Real
Property is free and clear of any liens, encumbrances, and other exceptions to
title, except real estate taxes and assessments not delinquent and utility and
other easements that do not interfere with the use of the property for the
business being conducted thereon. At Closing, Seller shall deliver the owner's
title policy in accordance with such commitment, with the cost of such policy,
including attorney search and related fees and expenses and conveyance stamp or
other transfer taxes, to be shared equally by Buyer and Seller.
(e) At least two business days prior to the Closing Date, Buyer shall
have obtained, with the expenses to be shared equally by Buyer and Seller, a
current land survey of the Real Property, conducted by a duly licensed land
surveyor approved by Buyer and, unless otherwise agreed by Buyer, shall be a
duly certified ALTA/ACSM field survey, which shall confirm to Buyer's reasonable
satisfaction that the Real Property is not subject to any easements,
restrictions, set backs, encroachments, or other limitations except utility and
other easements that do not interfere with the use of the Real Property for the
business being conducted thereon, and that the Real Property is not located in
any flood hazard area and has free, unrestricted, commercially reasonable, and
direct access for vehicular ingress and egress to and from abutting dedicated
public streets or highways.
(f) Seller and Shareholder shall have delivered duly executed
counterparts of all deeds, bills of sale, assignments, certifications,
affidavits, opinions, agreements, title insurance policy, surveys, reports, and
other documents required of them pursuant to this Agreement.
(g) All of Seller's Contracts shall be transferable and continuing and
any necessary third party consents to such transfer and continuity shall have
been obtained.
(h) Buyer shall have received a written report of its independent
environmental consultant, covering the Real Property and the operation of the
Plant, which written report shall be satisfactory in form and substance to Buyer
as to all matters covered thereby, and Buyer shall have received an engineering
report on the Plant prepared by a licensed engineer or architect hired by Buyer
which is satisfactory to Buyer in all respects and indicates that the buildings
and other improvements and utilities servicing the buildings on the Real
Property are in good structural and operating condition and available for their
intended use, that all mechanical systems are in good condition and that no
extraordinary repair or expense or cost should be anticipated with respect to
such buildings, other
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improvements, utilities, or mechanical systems during a period of one year
following the Closing.
(i) Buyer shall receive from Seller releases from the South Carolina
Department of Taxation and any other applicable taxing authority, in form
satisfactory to Buyer, to the effect that Seller's sales tax and income
withholding tax obligations have been satisfied or a waiver of any claim against
Buyer, satisfactory to Buyer, and a release of any lien on any of the Purchased
Assets.
SECTION 10.3 Conditions to Seller's and Shareholder's Obligations. The
obligations of Seller and Shareholder to consummate the transactions
contemplated under this Agreement are subject to the fulfillment on or prior to
the Closing Date of the following conditions, any one or more of which may be
waived in a writing signed by both such parties:
(a) The representations and warranties of Buyer contained in this
Agreement shall be true, complete, and correct on and as of the Closing Date
with the same force and effect as though made on and as of the Closing Date.
(b) Buyer shall have performed and complied with all covenants and
agreements required by this Agreement to be performed or complied with by Buyer
on or prior to the Closing Date.
(c) Buyer shall have made all payments, and shall have delivered duly
executed counterparts of all certifications, affidavits, opinions, agreements,
and other documents required of it pursuant to this Agreement.
ARTICLE XI
TERMINATION
-----------
SECTION 11.1 TERMINATION BY AGREEMENT. This Agreement may be terminated
at any time prior to the Closing by the mutual written consent of all of the
parties hereto.
SECTION 11.2 TERMINATION FOR FAILURE OF CONDITIONS. The parties may
terminate this Agreement by giving written notice to the other parties
specifying the basis for such termination, as follows: (i) any party may
terminate this Agreement if the condition specified in paragraph 10.1(a) hereof
has not been fulfilled on or before the Closing Date; (ii) Buyer may terminate
this Agreement if any of the conditions specified in paragraph 10.1(b) or
Section 10.2 hereof have not been fulfilled on or before the Closing Date; and
(iii) Seller or Shareholder may terminate this Agreement if any of the
conditions specified in Section 10.3 hereof have not been fulfilled on or before
the Closing Date.
SECTION 11.3 PROCEDURES UPON TERMINATION. Upon any termination of this
Agreement, the parties shall have no further liability or obligation hereunder,
except that the covenants contained in Section 8.1 and Article IX hereof shall
survive any termination of this Agreement and except that Seller and Shareholder
have certain continuing liabilities and obligations to Insilco under the ARUP
Stock Purchase Agreement and certain other agreements, instrument, and other
documents. Upon any termination of this Agreement, each party shall be obligated
to pay its own legal, accounting, and other fees and expenses incurred with
respect to this Agreement and the transactions contemplated herein.
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ARTICLE XII
PERSONNEL MATTERS
-----------------
SECTION 12.1 EMPLOYEES. Buyer may, but shall not be obligated to, offer
employment to any of Seller's current or former employees as new employees of
Buyer, but this shall not be deemed to create any obligation on the part of
Buyer or any contract of continuing employment or of employment for a definite
term between Buyer and any such current or former employee of Seller. Buyer may
also, but shall not be obligated to, engage or contract with any agent or
representative previously engaged by or contractually related to Seller.
SECTION 12.2 OBLIGATIONS TO EMPLOYEES THROUGH THE CLOSING DATE. Except
as disclosed on Schedule 12.2 hereto, at the Closing, Seller shall have
satisfied all of its accrued (or accruable) obligations with respect to its
employees, agents, and representatives, including without limitation,
obligations relating to payroll, commissions, bonuses, payroll taxes benefit
plans, hospitalization, COBRA, WARN, vacation and sick pay, and any other fringe
benefits with respect to work performed through the Closing Date, whether or not
the employees, agents, or representatives have any vested rights therein. Buyer
shall have no responsibility whatsoever with respect to any such obligations
relating to payroll, payroll taxes, benefit plans, hospitalization, COBRA, WARN,
vacation and sick pay, and any other fringe benefits with respect to work
performed through the Closing Date, whether or not the employees have any vested
rights therein. Buyer shall have no responsibility whatsoever with respect to
any such obligations, and is not assuming or continuing any of Seller's Employee
Benefit Plans or other fringe benefits, or any bargaining agreements which
Seller may have with its employees.
SECTION 12.3 OBLIGATIONS TO EMPLOYEES AFTER THE CLOSING DATE. Buyer
shall have no liability whatsoever to employees of Seller or to any federal,
state, or local authority with respect to accrued pension benefits under any
employee pension benefit plan for such employee's service with Seller under such
plan, whether or not any of such employees are offered employment by, or become
employees of, Buyer. Buyer agrees, contingent upon the occurrence of the
Closing, to provide after the Closing Date to those employees of Buyer who shall
have been participating employees of Seller immediately prior to the Closing
Date, benefits substantially similar to those under the plan currently provided
to them by Seller; and provided further, that nothing expressed in this Section
12.3 shall prevent Buyer from modifying, limiting, or terminating such health
insurance benefits, or from substituting other health insurance benefits or
another health insurance carrier therefor, at any time.
ARTICLE XIII
INDEMNIFICATION
---------------
SECTION 13.1 INDEMNIFICATION BY BUYER. Buyer agrees to defend,
indemnify, and hold Seller and Shareholder harmless from and against any and all
liability, assessment, loss, cost, expense, and damage, including reasonable
fees for consultants and attorneys, arising out of or resulting from (i) any
breach of warranty or representation made by Buyer in this Agreement, or the
non-performance of any covenant, obligation, contract, or commitment to be
performed or assumed by Buyer pursuant to this Agreement, (ii) any of the
Assumed Liabilities, or (iii) Buyer's operation of the Automotive Business from
and after the Closing Date. Seller and Shareholder shall promptly notify Buyer
of any action, suit, or proceeding which is commenced, or any claim, demand, or
assessment which is asserted against Seller and Shareholder in respect of which
Seller and Shareholder propose to demand indemnification and Buyer shall
diligently defend against or satisfy the same, and Seller and
32
<PAGE> 33
Shareholder shall make no settlement as to any of such matters so long as Buyer
is actively contesting the same in good faith and has not exhausted its
remedies.
SECTION 13.2 INDEMNIFICATION BY SELLER AND SHAREHOLDER.
(a) Seller and Shareholder, jointly and severally, agree to defend,
indemnify, and hold Buyer harmless from and against any and all liability,
assessment, cost, expense, and damage, including reasonable fees for consultants
and attorneys, arising out of or resulting from:
(1) any breach of a warranty or representation made by Seller
or Shareholder in this Agreement, or the non-performance of any
covenant or obligation to be performed by Seller or Shareholder
pursuant to this Agreement;
(2) any Retained Liabilities; and
(3) any Liability or any claim made against any or all of the
Purchased Assets arising out of or in any way relating to the failure
of Seller to comply with the bulk transfer laws of the State of South
Carolina, Section 36-6-101, et seq., of the General Statutes of South
Carolina, but only to the extent that the aggregate of such claims
exceeds the Bulk Sales Escrow Amount and irrespective of whether such
Bulk Sales Escrow Amount is applied to satisfy such Liabilities or
claims, or other obligations of Seller arising pursuant to Section 3.3
(a) above.
(b) Buyer shall promptly notify Seller and Shareholder of any action,
suit, or proceeding which is commenced against, or any claim, demand, or
assessment which is asserted against Buyer or any of the Purchased Assets in
respect of which Buyer proposes to demand indemnification and Seller or
Shareholder shall diligently defend against or satisfy the same. Buyer shall
make no settlement or payment as to any of such matters without Seller's and
Shareholder's written consent so long as Seller or Shareholder is actively
contesting the same in good faith and has not exhausted its remedies with
respect thereto.
(c) Buyer shall be entitled to set-off against the Bulk Sales Escrow
Amount the amount of any and all Liabilities of Seller or Shareholder to Buyer
under clause 13.2(a)(3) hereof, from time to time following the Closing Date as
such Liabilities are incurred or otherwise determined, in accordance with the
terms of the ARUP Stock Purchase Agreement and the following terms and
conditions:
(1) At any time and from time to time following the Closing
Date, Buyer and Seller shall jointly, in writing, direct the Escrow
Agent to (i) promptly pay to Buyer the aggregate amount of any and all
such Liabilities then payable to Buyer pursuant to the right of set-off
granted under this paragraph 13.2(c), and (ii) retain the balance of
the Bulk Sales Escrow Amount in the Escrow to be held and disbursed in
accordance with this paragraph 13.2(c); and
(2) On the date that is one year after the Closing Date, Buyer
and Seller shall jointly, in writing, direct the Escrow Agent to pay to
Seller the amount of any balance of the Bulk Sales Escrow Amount
remaining on that date, less the amount reasonably necessary to satisfy
any and all pending claims by Buyer under paragraph 13.2(c) hereof.
33
<PAGE> 34
(d) Buyer shall be entitled to set-off against the Holdback Amount the
amount of any and all Liabilities of Seller or Shareholder to Buyer under
paragraph 13.2(a) hereof, from time to time following the Closing Date as such
Liabilities are incurred or otherwise determined, in accordance with the terms
of this Agreement and the ARUP Stock Purchase Agreement.
SECTION 13.3 SURVIVAL. The obligations set forth in this Article XIII
shall survive the Closing and remain in full force and effect for a period of
one year after the Closing Date, with the exception of the obligations of Seller
and Shareholder to indemnify Seller with respect to breaches of the warranties
and representations contained in Sections 5.5, 5.10, 5.12, 5.17, 5.18, and 5.22
hereof, which shall survive and remain in full force and effect for a period of
three years after the Closing Date.
SECTION 13.4 LIMITATION OF LIABILITY. The maximum liability of Seller
and Shareholder under clause 13.2(a)(3) hereof shall be limited to the sum of
the Bulk Sales Escrow Amount plus the Holdback Amount and the maximum liability
of Seller and Shareholder for a breach of any of the representations and
warranties contained in this Agreement shall be limited to the Holdback Amount,
except that the representations and warranties contained in Sections 5.5, 5.10,
5.12, 5.17, 5.18, and 5.22 hereof shall not be subject to such limitation.
ARTICLE XIV
MISCELLANEOUS
-------------
SECTION 14.1 FURTHER ASSURANCES AND COOPERATION. After the Closing,
Buyer shall have such access as it may reasonably request during regular
business hours to the corporate, business, and financial records being retained
by Seller pertaining to the business, properties, and activities of Seller which
are being acquired by Buyer pursuant to this Agreement. Seller shall have
reasonable access during regular business hours to the books, records, and other
documents of Seller being transferred to Buyer pursuant to this Agreement
pertaining to the fiscal years prior to and including the Closing Date to the
extent necessary for the corporate accounting and tax purposes of Seller and for
the final settlement of the transactions contemplated by this Agreement. All
such books, records, and documents shall be retained by the party having
possession for the periods required by law, if any. The parties shall cooperate
in making required records available for audit purposes. Seller agrees that at
any time and from time to time after the Closing Date each will execute such
written assurances as Buyer shall reasonably request in order to vest and
confirm in Buyer the title to the Purchased Assets to be, and intended to be,
sold and transferred to Buyer pursuant to this Agreement. Seller shall give
Buyer reasonable cooperation in asserting warranty claims, if any, against the
vendors with respect to any of the Purchased Assets.
SECTION 14.2 REMEDIES UPON DEFAULT. Seller and Shareholder recognize
that if Seller or Shareholder breaches this Agreement or fails or refuses to
perform its obligations under the terms hereof, monetary damages alone may not
be adequate compensation to Buyer. Therefore, upon such a breach, failure, or
refusal to perform, Buyer shall, at its option, be entitled to (i) obtain
specific performance of the terms of this Agreement, in which event Buyer shall
also be entitled to recovery of reasonable attorney's fees and other costs of
enforcing its rights hereunder, or (ii) bring suit at law or equity for money or
other damages. In any action to enforce the provisions of this Agreement, Seller
and Shareholder shall waive the defense that there is an adequate remedy at law
or equity and Seller and Shareholder further agree that Buyer shall have the
right to obtain specific performance of the terms of this Agreement without
being required to prove actual damages, post bond, or furnish other security.
34
<PAGE> 35
SECTION 14.3 NOTICES. All notices under this Agreement shall be in
writing and shall be deemed to have been duly given if (i) delivered personally,
(ii) mailed by certified mail, return receipt requested, (iii) sent by facsimile
and confirmed by first-class mail, or (iv) sent by commercial overnight courier,
to the parties at their respective addresses and facsimile numbers set forth
below. All such notices shall be deemed to have been duly given at the earliest
of the times that they are delivered personally in accordance with clause (i)
above, deposited in the U.S. mails or other appropriate governmental mail
service in accordance with clause (ii) above, sent by facsimile in accordance
with clause (iii) above, provided that the required confirmation is sent,
or two days after having been delivered to a commercial overnight courier if
delivered in accordance with clause (iv) above.
(a) If to Buyer, to:
Mr. Robert L. Smialek
President
Insilco Corporation
425 Metro Place North
Fifth Floor
Dublin, Ohio 43017
Facsimile: (614) 791-3195
with a copy to:
Kenneth H. Koch, Esq,
Vice President and General Counsel
Insilco Corporation
425 Metro Place North
Fifth Floor
Dublin, Ohio 43017
Facsimile: (614) 791-3195
(b) If to Seller, to:
Mr. Peter Brede
President
c/o Helmut Lingemann GmbH & Co.
Am Deckershauschen 62
4211 Wuppertal, Germany
Facsimile: 49-202-7094211
with copies to:
Everette L. Doffermyre, Esq.
Doffermyre Shields Canfield Knowle & Devine
Suite 1600
1355 Peachtree Street
Atlanta, Georgia 30309
Facsimile: (404) 881-3007
and:
Dr. Ulrich Jungst
35
<PAGE> 36
Gorg
Konrad-Adenauer-Ufer 21
D-50668 Cologne, Germany
Facsimile: 49-221-916 44 30
(c) If to Shareholder, to:
Messrs. Peter Brede and Horst Lingemann
Managing Directors
Helmut Lingemann GmbH & Co.
Am Deckershauschen 62
4211 Wuppertal, Germany
Facsimile: 49-202-7094211
with a copy to:
Dr. Ulrich Jungst
Gorg
Konrad-Adenauer-Ufer 21
D-50668 Cologne, Germany
Facsimile: 49-221-916 44 30
or to such other address as any party or parties may advise the other parties in
writing.
SECTION 14.4 EXPENSES. Each party shall be obligated to pay its own
legal, accounting, and other fees and expenses incurred with respect to this
Agreement and the transactions contemplated herein, including, without
limitation, any fees payable to any investment banker or brokers retained by
each. Seller shall also be charged with the cost of discharging any liens or
encumbrances not accepted by Buyer, and with the cost of bulk sales compliance.
Buyer shall pay any fees or costs incurred in connection with an audit or review
of the Financial Statements that it requests. Each party will be responsible for
all taxes, including federal withholding and state workers' compensation and
unemployment taxes, sales, purchase and use taxes, which are the legal
obligation of that party, regardless of the period to which they apply or when
they are payable.
SECTION 14.5 TRANSFER TAXES AND SIMILAR CHARGES. All costs of
transferring the Purchased Assets in accordance with this Agreement, including
recordation and conveyance fees, and deed transfer, excise, sales, or use taxes,
shall be borne by Seller. Buyer will execute tax exemption certificates which
are appropriate and requested by Seller.
SECTION 14.6 APPLICABLE LAW. This Agreement shall be construed and
enforced in accordance with the internal laws of the State of Ohio, without
reference to its conflicts of laws principles.
SECTION 14.7 Construction. The captions preceding the Articles and
Sections in this Agreement have been inserted for convenience only and shall not
be used to modify, expand, or construe any of the provisions of this Agreement.
SECTION 14.8 SUPERSESSION. This Agreement and the documents to be
delivered pursuant hereto constitute the entire Agreement between the parties
hereto with respect to the subject matter contained therein, and they supersede
all prior and contemporaneous agreements, representations, and understandings of
the parties, express or implied, oral or written.
36
<PAGE> 37
SECTION 14.9 AMENDMENTS. This Agreement may not be amended or
modified in any way except in a writing signed by all of the parties hereto.
SECTION 14.10 ASSIGNMENT. This Agreement may not be assigned by any
party without prior written consent of the other parties; provided, however,
that Buyer may assign this Agreement to a wholly owned subsidiary of Insilco or
Buyer or to any other affiliate of either of them and provided, further, that
Buyer shall be entitled to assign its right to indemnification by Seller and
Shareholder pursuant to SECTION 13.2 hereof, to any lender or lenders to Buyer
or Insilco without the consent of Seller or Shareholder.
SECTION 14.11 BINDING EFFECT.This Agreement shall be binding upon the
heirs, successors, and permitted assigns of the respective parties hereto.
SECTION 14.12 PARTIES IN INTEREST. Nothing contained in this Agreement,
whether express or implied, is intended to confer any rights or remedies under
or by reason of this Agreement on any persons other than the parties hereto and
their respective heirs, successors, and permitted assigns, nor is anything in
this Agreement intended to relieve or discharge the obligation or liability of
any third persons to any party to this Agreement, nor shall any provision give
any third party any right of subrogation over or action against any party to
this Agreement.
SECTION 14.13 PUBLICITY. Prior to the Closing, the parties hereto shall
not make any public release of information regarding matters contemplated herein
except (i) that a joint press release in agreed form may be issued by the
parties after execution of this Agreement, (ii) the parties hereto may each
continue such communications with employees, customers, suppliers, franchisees,
lenders, lessors, shareholders, and other particular groups as may be legally
required or necessary or appropriate and not inconsistent with the best
interests of the other parties hereto or the prompt consummation of the
transactions contemplated by this letter, and (iii) as required by law.
SECTION 14.14 INTERPRETATION. Words used herein, regardless of the
number and gender specifically used, shall be deemed and construed to include
any other number, singular or plural, and any other gender, masculine, feminine,
or neuter, as the context requires.
SECTION 14.15 WAIVER. Any provision of this Agreement may be waived in
writing at any time by the party which is entitled to the benefit of such
provision.
SECTION 14.16 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same Agreement,
and shall become effective when one or more counterparts have been signed by
each of the parties to this Agreement.
SECTION 14.17 ENTIRE AGREEMENT. This Agreement, together with the other
documents, agreements and instruments executed and delivered pursuant to or in
connection with this Agreement, contains the entire agreement among Seller,
Shareholder, and Buyer with respect to the transactions contemplated by this
Agreement.
37
<PAGE> 38
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
Buyer:
------
HHI ACQUISITION CORP.
By: /s/ Robert F. Heffron
----------------------------------------
Robert F. Heffron, Executive Vice
President
Seller:
-------
HELIMA-HELVETION
INTERNATIONAL, INC.
By: /s/ Peter Brede
----------------------------------------
Peter Brede, President
Shareholder:
------------
HELMUT LINGEMANN GmbH & CO.
By: /s/ Peter Brede
----------------------------------------
Peter Brede, Managing Director
INSILCO GUARANTY
Insilco hereby guarantees the payment of Buyer's obligations under
Article XIII of this Agreement.
INSILCO CORPORATION
By: /s/ Robert F. Heffron
----------------------------------------
Robert F. Heffron, Executive Vice President
38
<PAGE> 1
Exhibit 4(g)
------------
FOURTH AMENDMENT TO
CREDIT AGREEMENT
This Fourth Amendment to Credit Agreement dated as of June 21,
1996 (this "Amendment"), is entered into among Insilco Corporation, a Delaware
corporation (with its successors and permitted assigns, the "Borrower"), the
financial institutions from time to time party thereto as lenders (the
"Lenders"), the financial institutions from time to time party thereto as
issuing banks (the "Issuing Banks"), Citicorp USA, Inc. ("Citicorp") and Pearl
Street, L.P., a Bermuda limited partnership and an affiliate of Goldman, Sachs &
Co. ("Pearl Street"), in their separate capacities as Co-Agents for the Lenders
and the Issuing Banks (the "Co-Agents") and Citicorp, in its separate capacity
as administrative and collateral agent for the Lenders and the Issuing Banks
(with its successors and permitted assigns in such capacity, the "Administrative
Agent"), and amends the Credit Agreement dated as of October 21, 1994, as
amended by the First Amendment to Credit Agreement dated as of November 21,
1994, the Second Amendment to Credit Agreement dated as of March 8, 1995 and the
Third Amendment to Credit Agreement dated as of July 18, 1995 (as so amended as
amended hereby and as the same may be further amended, supplemented or otherwise
modified from time to time, the "Credit Agreement") entered into among the
Borrower, the Lenders, the Issuing Banks, the Co-Agents and the Administrative
Agent. Capitalized terms used herein and not otherwise defined herein shall have
the meanings ascribed to them in the Credit Agreement.
W I T N E S S E T H:
--------------------
WHEREAS, the Borrower has advised the Administrative Agent
that it desires to purchase from Helmut Lingemann GmbH and Co. KG (the "Parent")
(i) 100% of the capital stock of ARUP Alu-Rohr Und -Profil GmbH, a corporation
formed under the laws of the Federal Republic of Germany and wholly owned
Subsidiary of the Parent ("ARUP") and (ii) substantially all of the United
States assets of the automotive business of Helima-Helvetion International Inc.,
a New York corporation and wholly owned Subsidiary of the Parent ("Helvetion");
<PAGE> 2
WHEREAS, the Borrower intends to form (i) a wholly owned
Subsidiary, Insilco NewCo GmbH, a corporation formed under the laws of the
Federal Republic of Germany ("German Holdings") for the purpose of holding the
capital stock of ARUP and (ii) a wholly owned Subsidiary, HHI Acquisition Corp.,
a Delaware corporation ("HHI"), for the purpose of purchasing the automotive
assets of Helvetion;
WHEREAS, German Holdings and the Parent have entered into that
certain Share Purchase Agreement dated as of July 1, 1996 (the "Share Purchase
Agreement"), pursuant to which German Holdings will purchase 100% of the capital
stock of ARUP from the Parent for a purchase price not in excess of $30,000,000
(approximately 46,000,000 German Marks) (the "ARUP Acquisition");
WHEREAS, HHI, Helvetion and the Parent have entered into that
certain Asset Purchase Agreement dated as of July 1, 1996 (the "Asset Purchase
Agreement"), pursuant to which HHI will purchase substantially all of the
assets, subject to certain liabilities, of Helvetion's Automotive Business (as
defined in the Asset Purchase Agreement) for a purchase price, together with the
purchase price of the ARUP Acquisition, not in excess of $35,000,000
(approximately 53,000,000 German Marks) (the "Helvetion Acquisition"; together
with the ARUP Acquisition, the "German Acquisitions");
WHEREAS, the Borrower has requested that the consent of the
Requisite Lenders, among other things, (i) to waive certain requirements
contained in the definition of Permitted Acquisition to permit the Borrower to
consummate the German Acquisitions, (ii) to amend the Credit Agreement to permit
the Borrower to enter into a Currency Agreement for the purpose of hedging the
Borrower's foreign exchange exposure in respect of Revolving Loans made for the
purpose of financing the ARUP Acquisition in German Marks and providing for
ARUP's working capital needs and (iii) to amend certain financial covenants
contained in the Credit Agreement to take into account the impact that the
German Acquisitions are anticipated to have on the future financial performance
of the Borrower and its Subsidiaries;
WHEREAS, Curtis Manufacturing Co., Inc., a New Hampshire
corporation and wholly owned Subsidiary of the Borrower ("Curtis") has entered
into a Settlement Agreement dated as of February 22,
-2-
<PAGE> 3
1996 (the "Settlement Agreement") among Curtis and Venture Technologies, Inc., a
Massachusetts corporation ("Venture"), pursuant to which Curtis and Venture have
agreed to resolve certain disputes regarding the ownership of certain patents
and patent applications listed on Exhibit A hereto (the "Patents") and the
manufacture and sale of products covered by the Patents;
WHEREAS, as a Guarantor of the Obligations, Curtis has pledged
to the Administrative Agent certain of the Patents pursuant to the Subsidiary
Patent Security Agreement dated as of November 21, 1994 (the "Patent Security
Agreement") between Curtis and the Administrative Agent;
WHEREAS, the Settlement Agreement provides that Curtis will
assign to itself and to Venture a joint undivided one-half interest in its
rights, title and interest in each of the Patents free and clear of all Liens
and that Curtis will obtain a release from the Administrative Agent of its Lien
on the Patents encumbered by the Patent Security Agreement;
WHEREAS, Curtis has requested the Requisite Lenders (i) to
permit the transfer of an undivided one-half interest in the Patents to Venture
and (ii) to authorize the Administrative Agent to release its Lien on the
Patents encumbered by the Patent Security Agreement in order to consummate the
transactions contemplated in the Settlement Agreement;
NOW, THEREFORE, in consideration of the above premises, the
Borrower, Lenders party hereto, the Issuing Banks, the Co-Agents and the
Administrative Agent agree as follows:
SECTION 1. AMENDMENT TO EXHIBITS AND SCHEDULES TO THE CREDIT
AGREEMENT. The Credit Agreement is, effective as determined pursuant to Section
3 hereof, hereby amended as follows:
1.01 Section 1.01 of the Credit Agreement is hereby amended by
adding the following new defined terms to such section in alphabetical order:
"ARUP" means ARUP Alu-Rohr Und -Profil GmbH, a
corporation formed under the laws of the Federal Republic of Germany.
-3-
<PAGE> 4
"GERMAN HOLDINGS" means Insilco NewCo GmbH, a
corporation formed under the laws of the Federal Republic of Germany
and a wholly owned Subsidiary of the Borrower.
1.02 Section 9.01(ix) of the Credit Agreement is amended
in its entirety to read as follows:
(ix) Indebtedness of (A) the Borrower arising pursuant to Interest
Rate Contracts entered into pursuant to SECTION 8.16 or otherwise on
terms and conditions reasonably satisfactory to the Requisite Lenders
for the purpose of hedging against floating rate interest in respect of
the Obligations, (B) the Borrower or any Subsidiary of the Borrower
arising pursuant to Currency Agreements entered into in the ordinary
course of the Borrower's or such Subsidiary's business and (C) the
Borrower arising pursuant to Currency Agreements entered into for the
purpose of hedging the Borrower's foreign exchange exposure in respect
of Revolving Loans made for the purpose of financing the acquisition of
ARUP and providing for its working capital needs in a notional
principal amount not to exceed $30,000,000;
1.03 Section 9.04 of the Credit Agreement is amended by
deleting the "and" after clause (viii) thereof, replacing the period at the end
of clause (ix) thereof with the word "and" and adding the following new clause
(x) at the end thereof:
(x) in addition to Investments in Permitted Acquisitions
permitted pursuant to CLAUSE (IX) above, Investments made by the
Borrower in German Holdings and its Subsidiaries of up to $30,000,000
in the aggregate.
1.04 Section 9.07 of the Credit Agreement is amended by adding
the following sentence at the end thereof:
The Borrower agrees to cause German Holdings not to engage in any
business or activity other than owning all of the Capital Stock of ARUP
and Stewart Connectors Systems GmbH and engaging in the transactions
contemplated in the Share Purchase Agreement dated as of July 1, 1996
among German Holdings and Helmut Lingemann GmbH and Co. KG.
-4-
<PAGE> 5
1.05 Sections 10.02, 10.03 and 10.04 are amended in their
entirety to read as follows:
10.02. MINIMUM FIXED CHARGE COVERAGE RATIO. The Fixed
Charge Coverage Ratio of the Borrower and its Subsidiaries on a
consolidated basis, as determined as of the last day of each fiscal
quarter of the Borrower set forth below for the twelve month period
ending on such date, shall not be less than the minimum ratio set forth
opposite such fiscal quarter:
<TABLE>
<CAPTION>
FISCAL QUARTER MINIMUM RATIO
-------------- -------------
<S> <C>
Fourth fiscal quarter of 1994 1.25 to 1
First fiscal quarter of 1995 1.25 to 1
Second fiscal quarter of 1995 1.35 to 1
Third fiscal quarter of 1995 1.40 to 1
Fourth fiscal quarter of 1995 1.50 to 1
First fiscal quarter of 1996 1.50 to 1
Second fiscal quarter of 1996 1.50 to 1
Third fiscal quarter of 1996 1.25 to 1
Fourth fiscal quarter of 1996 1.25 to 1
First fiscal quarter of 1997 1.35 to 1
Second fiscal quarter of 1997 1.35 to 1
Third fiscal quarter of 1997 1.70 to 1
Fourth fiscal quarter of 1997 1.70 to 1
First fiscal quarter of 1998 1.70 to 1
Second fiscal quarter of 1998 1.70 to 1
Third fiscal quarter of 1998 1.90 to 1
Fourth fiscal quarter of 1998 1.90 to 1
First fiscal quarter of 1999 1.90 to 1
Second fiscal quarter of 1999 1.90 to 1
Third fiscal quarter of 1999 1.90 to 1
Fourth fiscal quarter of 1999 1.90 to 1
First fiscal quarter of 2000 1.90 to 1
Second fiscal quarter of 2000 1.90 to 1
Third fiscal quarter of 2000
and each fiscal quarter thereafter 2.00 to 1
</TABLE>
-5-
<PAGE> 6
10.03. MINIMUM INTEREST COVERAGE RATIO. The Interest
Coverage Ratio of the Borrower and its Subsidiaries on a consolidated
basis, as determined as of the last day of each fiscal quarter of the
Borrower set forth below for the twelve month period ending on such
date, shall not be less than the minimum ratio set forth opposite such
fiscal quarter:
<TABLE>
<CAPTION>
FISCAL QUARTER MINIMUM RATIO
-------------- -------------
<S> <C>
Fourth fiscal quarter of 1994 2.20 to 1
First fiscal quarter of 1995 2.40 to 1
Second fiscal quarter of 1995 2.85 to 1
Third fiscal quarter of 1995 3.25 to 1
Fourth fiscal quarter of 1995 3.75 to 1
First fiscal quarter of 1996 3.75 to 1
Second fiscal quarter of 1996 4.00 to 1
Third fiscal quarter of 1996 3.75 to 1
Fourth fiscal quarter of 1996 3.75 to 1
First fiscal quarter of 1997 4.00 to 1
Second fiscal quarter of 1997 4.00 to 1
Third fiscal quarter of 1997 5.50 to 1
Fourth fiscal quarter of 1997 5.50 to 1
First fiscal quarter of 1998 5.50 to 1
Second fiscal quarter of 1998 5.50 to 1
Third fiscal quarter of 1998
and each fiscal quarter thereafter 6.00 to 1
</TABLE>
10.04. MAXIMUM LEVERAGE RATIO. The Leverage Ratio of
the Borrower and its Subsidiaries on a consolidated basis, as
determined as of the last day of each fiscal quarter of the Borrower
set forth below for the twelve month period ending on such date, shall
not be greater than the maximum amount set forth opposite such fiscal
quarter:
<TABLE>
<CAPTION>
FISCAL QUARTER MAXIMUM RATIO
-------------- -------------
<S> <C>
Fourth fiscal quarter of 1994 3.60 to 1
First fiscal quarter of 1995 3.50 to 1
Second fiscal quarter of 1995 3.25 to 1
Third fiscal quarter of 1995 3.00 to 1
Fourth fiscal quarter of 1995 2.80 to 1
First fiscal quarter of 1996 2.80 to 1
Second fiscal quarter of 1996 2.80 to 1
</TABLE>
-6-
<PAGE> 7
<TABLE>
<S> <C>
Third fiscal quarter of 1996 3.25 to 1
Fourth fiscal quarter of 1996 3.25 to 1
First fiscal quarter of 1997 3.00 to 1
Second fiscal quarter of 1997 3.00 to 1
Third fiscal quarter of 1997 2.00 to 1
Fourth fiscal quarter of 1997 2.00 to 1
First fiscal quarter of 1998 2.00 to 1
Second fiscal quarter of 1998 2.00 to 1
Third fiscal quarter of 1998 1.50 to 1
Fourth fiscal quarter of 1998 1.50 to 1
First fiscal quarter of 1999
and each fiscal quarter thereafter 1.00 to 1
</TABLE>
SECTION 2. CONSENT.
-------
2.01 The Requisite Lenders hereby agree that, for purposes of
determining whether the German Acquisitions meet the requirements for a
Permitted Acquisition contained in the definition of such term in Section 1.01
of the Credit Agreement, (i) HHI may acquire the Automotive Business from
Helvetion pursuant to the Asset Purchase Agreement without being a Guarantor,
but only so long as HHI becomes party to the Subsidiary Guaranty on the
Amendment Effective Date and (ii) the covenant levels in SECTIONS 10.02, 10.03
and 10.04 for the first and second fiscal quarters of Fiscal Year 1996 shall be
1.25 to 1.00, 3.75 to 1.00 and 3.25 to 1.00, respectively, for the purpose of
determining whether the pro forma historical calculation required to be made in
clause (i) of the definition of Permitted Acquisition can be met.
2.02 The Requisite Lenders hereby waive the requirement
contained in clause (v) of the definition of Permitted Acquisition and Sections
8.12 and 8.13 of the Credit Agreement (requiring HHI to grant to the
Administrative Agent a Lien on all of its assets after giving effect to the
Helvetion Acquisition) for a period of 120 days after the consummation of the
Helvetion Acquisition; PROVIDED, HOWEVER, no later than the 120th day after the
consummation of the Helvetion Acquisition, (A) HHI shall have granted to the
Administrative Agent a Lien on its personal Property and, to the extent required
by Section 8.12 of the Credit Agreement, Real Property, in accordance with the
requirements contained in Sections 8.12 and 8.13 of the Credit Agreement and (B)
HHI shall have entered into a Junior Security Agreement substantially in the
form of the Junior Security Agreements dated
-7-
<PAGE> 8
as of November 21, 1994 entered into by each Guarantor on the Closing Date and
the Liens granted by HHI thereunder shall have been perfected.
2.03 The Requisite Lenders hereby waive the requirement
contained in clause (iv) of the definition of Permitted Acquisition and Section
8.13 of the Credit Agreement (requiring the Borrower to grant to the
Administrative Agent a Lien on the Capital Stock of German Holdings after giving
effect to the ARUP Acquisition) for a period of 90 days after the consummation
of the ARUP Acquisition; PROVIDED, HOWEVER, no later than the 90th day after the
consummation of the ARUP Acquisition, the Borrower shall have granted to the
Administrative Agent a Lien on 65% of the Capital Stock of German Holdings in
accordance with the requirements contained in Section 8.13 of the Credit
Agreement.
2.04 The Requisite Lenders hereby consent, pursuant to Section
9.02 of the Credit Agreement, to the sale of the assets of HHI acquired in
connection with the Helvetion Acquisition; PROVIDED, HOWEVER, that the Net Cash
Proceeds of such sale are applied to the Obligations to the extent required
pursuant to Section 3.01(b) of the Credit Agreement.
2.05 The Requisite Lenders hereby consent, pursuant to
Sections 9.02, 9.04, 9.08 and 9.09 of the Credit Agreement, to permit Stewart
Connector Systems, Inc., effective upon the consummation of the German
Acquisitions, to transfer its Capital Stock in Stewart Connector Systems GmbH to
German Holdings.
2.06 The Requisite Lenders (i) hereby consent pursuant to
Section 9.02 of the Credit Agreement to the transfer of an undivided one-half
interest in the Patents to Venture pursuant to the Settlement Agreement and (ii)
hereby acknowledge that the Administrative Agent is authorized pursuant to
Section 12.09(c)(i)(B) of the Credit Agreement to release its Lien on the
Patents encumbered by the Patent Security Agreement in connection with the
disposition of the Patents pursuant the Settlement Agreement.
2.07 The Lenders have received the letter from the Borrower
dated June 14, 1996 informing the Lenders of the Borrower's intention to
consummate the German Acquisitions. The Requisite Lenders hereby acknowledge
that such letter meets the
-8-
<PAGE> 9
requirement for notice of a Permitted Acquisition contained in clause (vi) of
the definition of Permitted Acquisition (notwithstanding the fact that such
notice may have been delivered less than fourteen Business Days prior to the
closing date for the German Acquisitions).
SECTION 3. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS
AMENDMENT. This Amendment shall become effective as of the date hereof on the
date (the "Amendment Effective Date") when the following conditions precedent
have been satisfied (unless waived by the Requisite Lenders or unless the
deadline for delivery has been extended by the Administrative Agent):
3.01 (a) CERTAIN DOCUMENTS. The Administrative Agent shall
have received on or before the Amendment Effective Date all of the following,
all of which, except as otherwise specifically described below, shall be in form
and substance satisfactory to the Requisite Lenders and in sufficient copies for
each of the Lenders:
(i) This Amendment executed by the Borrower and Lenders
constituting the Requisite Senior Lenders;
(ii) A Subsidiary Guaranty Supplement executed by HHI,
pursuant to which HHI will become party to the Subsidiary Guaranty;
(iii) An Intercompany Note made by HHI in favor of the
Borrower duly endorsed in favor of the Administrative Agent;
(iv) An amendment to the Borrower Pledge Agreement dated as of
November 21, 1994 made by the Borrower in favor of the Administrative
Agent, pursuant to which the Borrower shall pledge to the
Administrative Agent the Capital Stock of HHI, executed by the
Borrower, together with certificates representing such Capital Stock
and stock powers in blank executed by the Borrower;
(v) A certificate of the Secretary or Assistant Secretary of
the Borrower dated the Amendment Effective Date certifying (A) the
names and true signatures of the incumbent officers of the Borrower
authorized to sign this Amendment, the German Acquisition Agreements to
which it is a party and
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<PAGE> 10
the other documents to be executed in connection with this Amendment
and such agreements, (B) the resolutions of the Borrower's Board of
Directors approving and authorizing the execution, delivery and
performance of this Amendment, the German Acquisition Agreements and
the other documents to be executed in connection with this Amendment
and such agreements and (C) that there have been no changes in the
Certificate of Incorporation or By-Laws of the Borrower since the
Closing Date;
(vi) A certificate of the Secretary or Assistant Secretary
of HHI dated the Amendment Effective Date certifying (A) the names and
true signatures of the incumbent officers of HHI authorized to sign the
Asset Purchase Agreement and the other documents to be executed in
connection with this Amendment and the Asset Purchase Agreement, (B)
the resolutions of HHI's Board of Directors approving and authorizing
the execution, delivery and performance of the Asset Purchase Agreement
and the other documents to be executed in connection with this
Amendment and the Asset Purchase Agreement, (C) that attached thereto
is a true and correct copy of the By-laws of HHI as in effect on the
date of such certification and (D) that there have been no changes in
the Certificate of Incorporation of HHI since the date of the most
recent certification thereof by the Secretary of the State of Delaware.
(vii) A certificate of an authorized representative of German
Holdings dated the Amendment Effective Date certifying (A) that
attached thereto is a true and correct copy of its current filings with
the German Trade Registry, (B) the resolutions of an authorized
managing director of German Holdings approving and authorizing the
execution, delivery and performance of the Share Purchase Agreement,
and the other documents to be executed in connection therewith, (C)
that attached thereto is a true and correct copy of the articles of
association (or organization) of German Holdings as in effect on the
date of such certification, and (D) that there have been no changes in
such articles of association (or organization) of German Holdings since
the date of the most recent certification thereof by the appropriate
Governmental Authority of the Federal Republic of Germany;
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<PAGE> 11
(viii) A certificate of an authorized representative of ARUP
dated the Amendment Effective Date certifying (A) that attached thereto
is a true and correct copy of its current filings with the German Trade
Registry, (B) the resolutions of an authorized managing director of
ARUP approving and authorizing the execution, delivery and performance
of the Share Purchase Agreement, and the other documents to be executed
in connection therewith, (C) that attached thereto is a true and
correct copy of the articles of association (or organization) of ARUP
as in effect on the date of such certification, and (D) that there have
been no changes in such articles of association (or organization) of
ARUP since the date of the most recent certification thereof by the
appropriate Governmental Authority of the Federal Republic of Germany;
(ix) Certificate of Incorporation of HHI together with all
amendments thereto certified by the Secretary of State of Delaware;
(x) The German equivalent of a Certificate of Incorporation
of German Holdings and ARUP together with all amendments thereto
certified by the appropriate Governmental Authority of the Federal
Republic of Germany;
(xi) Good Standing Certificates certified by the Secretary of
State of Delaware relating to the Borrower and HHI;
(xii) The certificate required to be delivered to the
Administrative Agent pursuant to Section 8.17(b) of the Credit
Agreement, certifying, among other things, that the German Acquisitions
meet the requirements of the definition of Permitted Acquisition
(except to the extent waived pursuant to this Amendment);
(xiii) A favorable opinion of Porter, Wright, Morris
& Arthur, counsel to the Borrower;
(xiv) To the extent delivered in connection with the German
Acquisitions, a reliance letter from Porter, Wright, Morris & Arthur,
counsel to the Borrower or Kenneth H. Koch, General Counsel of the
Borrower, entitling the Lenders to rely
-11-
<PAGE> 12
on the opinion of such firm or person delivered in connection with the
closing of the German Acquisitions; and
(xv) To the extent delivered in connection with the German
Acquisitions (and provided such counsel so consents), a reliance letter
from Dr. Ulrich Jungst, counsel to ARUP and Helvetion, entitling the
Lenders to rely on the opinion of such firm delivered in connection
with the closing of the German Acquisitions; and
(xvi) Such additional documentation as the
Administrative Agent, the Co-Agents or the Requisite Lenders
may reasonably require.
3.02 Each of the representations and warranties made by the
Borrower or the Guarantors in or pursuant to the Credit Agreement, as amended by
this Amendment, and the other Loan Documents to which the Borrower or any of the
Guarantors is a party or by which the Borrower or any of the Guarantors is
bound, shall be true and correct in all material respects on and as of the
Amendment Effective Date (except any such representations and warranties stated
to be given as of a specific date other than the Amendment Effective Date).
3.03 All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the transactions
contemplated by this Amendment and the German Acquisition Agreements shall be
satisfactory in all respects in form and substance to the Administrative Agent,
the Co-Agents and the Requisite Lenders.
3.04 No Event of Default or Default shall have occurred and be
continuing on the Amendment Effective Date.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Borrower
hereby represents and warrants to the Lenders that (a) as of the date hereof no
Event of Default or Default under the Credit Agreement shall have occurred and
be continuing and (b) all of the representations and warranties of the Borrower
contained in subsections 6.01(a) through (z) of the Credit Agreement and in any
other Loan Document (as defined under the Credit Agreement) continue to be true
and correct as of the date of execution hereof in all material respects, as
though made on and as of such date
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<PAGE> 13
(unless stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct as of such earlier
date).
SECTION 5. REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS.
5.01 Upon the effectiveness of this Amendment, on and after
the date hereof, each reference in the Credit Agreement to "this Agreement",
"hereunder", "hereof" or words of like import, and each reference in the other
Loan Documents to the Credit Agreement, shall mean and be a reference to the
Credit Agreement as amended hereby.
5.02 Except as specifically amended above, all of the terms of
the Credit Agreement and all other Loan Documents shall remain unchanged and in
full force and effect.
5.03 The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of any Lender, any Issuing Bank, either Co-Agents or
the Administrative Agent under the Credit Agreement or any of the Loan
Documents, nor constitute a waiver of any provision of the Credit Agreement or
any of the Loan Documents.
SECTION 6. COSTS AND EXPENSES. The Borrower agrees to pay on
demand in accordance with the terms of Section 13.02 of the Credit Agreement all
costs and expenses of the Administrative Agent in connection with the
preparation, reproduction, execution and delivery of this Amendment and all
other Loan Documents entered into in connection herewith, including the
reasonable fees and out-of-pocket expenses of Sidley & Austin, counsel for the
Administrative Agent with respect thereto.
SECTION 7. EXECUTION IN COUNTERPARTS. This Amendment may be
executed and delivered in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed an original and all of which taken together shall constitute one
and the same original agreement.
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<PAGE> 14
SECTION 8. GOVERNING LAW. This Amendment shall be interpreted,
and the rights and liabilities of the parties determined, in accordance with the
internal law of the State of New York.
IN WITNESS WHEREOF, this Amendment has been duly executed on
the date set forth above.
INSILCO CORPORATION
By: /s/ James D. Miller
--------------------------
Title: Executive Vice President
CITICORP USA, INC., as Administrative
Agent, Co-Agent and as a Lender
By: /s/ Charles Foster
---------------------------
Title: Vice President
PEARL STREET L.P., as Co-Agent and as a
Lender
By: /s/ Edward C. Forst
---------------------------
Title: Authorized Signatory
BANK OF AMERICA ILLINOIS
By: /s/ Authorized Agent
---------------------------
Title: Managing Director
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<PAGE> 15
BANQUE PARIBAS
By: /s/ Karen E. Coons
-----------------------------
Title: Vice President
By: /s/ Nicholas C. Mast
-----------------------------
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Authorized Agent
-----------------------------
Title: Vice President
ABN AMRO BANK N.V., PITTSBURGH BRANCH
By: ABN AMRO NORTH AMERICA, INC., as Agent
By: /s/ Kathryn C. Toth
-----------------------------
Title: Vice President and
Operational Manager
By: /s/ Andre Nel
-----------------------------
Title: Senior Vice President and
Managing Director-Pittsburgh
CAISSE NATIONALE DE CREDIT AGRICOLE
By: /s/ David Bouhl
-----------------------------
Title: EVP, Head of Corporate
Banking-Chicago
THE FUJI BANK, LIMITED
By: /s/ Peter L. Chinnichi
-----------------------------
Title: Joint General Manager
FIRST BANK NATIONAL ASSOCIATION
By: /s/ Authorized Agent
-----------------------------
Title: Vice President
THE BANK OF NEW YORK
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<PAGE> 16
By: /s/ Authorized Agent
---------------------------
Title: Vice President
THE HUNTINGTON NATIONAL BANK
By: /s/ Authorized Agent
---------------------------
Title: Commercial Loan Officer
THE BANK OF NOVA SCOTIA
By: /s/ F.C.H. Ashby
---------------------------
Title: Senior Manager Loan Operation
BANK OF SCOTLAND
By: /s/ Authorized Agent
---------------------------
Title: Vice President
NATIONAL CITY BANK, COLUMBUS
By: /s/ Lydia D. Altman
---------------------------
Title: Vice President
STAR BANK N.A.
By: /s/ Authorized Agent
---------------------------
Title: Vice President
THE MITSUBISHI TRUST AND
BANKING CORPORATION
By: /s/ Authorized Agent
---------------------------
Title: Chief Manager
GIROCREDIT BANK A.G. DER SPARKASSAN
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<PAGE> 17
By: /s/ Authorized Agent
--------------------------
Title:
THE NIPPON CREDIT BANK, LTD., NEW YORK
BRANCH
By: /s/ Barry G. Fein
--------------------------
Title: Assistant Vice President
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<PAGE> 18
ACKNOWLEDGMENT
--------------
Reference is hereby made to the Subsidiary Guaranty dated as
of November 21, 1994 (the "Subsidiary Guaranty"), to which each of the
undersigned is a party, in favor of the Administrative Agent, the Co-Agents, the
Lenders and the Issuing Banks. Each of the undersigned hereby consents to the
terms of the foregoing Fourth Amendment to Credit Agreement (and any prior
amendment of the Credit Agreement executed since November 21, 1994) and agrees
that the terms thereof shall not affect in any way its obligations and
liabilities under the undersigned's Guaranty or any other Loan Document, all of
which obligations and liabilities shall remain in full force and effect and each
of which is hereby reaffirmed.
TAYLOR PUBLISHING COMPANY
By: /s/ James D. Miller
--------------------------------
Title: Executive Vice President
ROLODEX CORPORATION
By: /s/ David A. Kauer
--------------------------------
Title: Treasurer
ROLODEX DE PUERTO RICO, INC.
By: /s/ David A. Kauer
--------------------------------
Title: Treasurer
SIGNAL TRANSFORMER CO., INC.
By: /s/ David A. Kauer
--------------------------------
Title: Treasurer
SIGNAL CARIBE, INC.
By: /s/ James D. Miller
--------------------------------
Title: Executive Vice President
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<PAGE> 19
STEWART CONNECTOR SYSTEMS, INC.
By: /s/ David A. Kauer
-----------------------
Title: Treasurer
STEWART STAMPING CORPORATION
By: /s/ David A. Kauer
-----------------------
Title: Treasurer
STEEL PARTS CORPORATION
By: /s/ David A. Kauer
-----------------------
Title: Treasurer
CURTIS MANUFACTURING CO., INC.
By: /s/ David A. Kauer
-----------------------
Title: Treasurer
GREAT LAKE ACQUISITION CORP.
By: /s/ David A. Kauer
-----------------------
Title: Treasurer
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<PAGE> 1
Exhibit 20
Excellence in Electronics, Telecommunications, Automotive,
Office Products, Publishing
- --------------------------------------------------------------------------------
NEWS RELEASE
- --------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE CONTACT: DAVID A. KAUER
TREASURER
(614) 792-0468
INSILCO ACQUIRES LINGEMANN HEAT EXCHANGER
TUBING BUSINESS
COLUMBUS, OHIO, JULY 10, 1996 - INSILCO CORPORATION (NASDAQ:INSL) today
announced it has acquired the automotive aluminum tubing business of Helmut
Lingemann GmbH & Co. The transactions include the purchase of stock of
Lingemann's German subsidiary, ARUP Alu-Rohr und-Profil GmbH, technology rights
from its equipment development subsidiary, Helmut Lingemann Maschinenbau GmbH,
and the assets of its Duncan, South Carolina based Helima-Helvetion
International, Inc. The cash transaction is valued at approximately $31 million,
plus transaction fees and expenses, and is subject to certain adjustments.
The acquired businesses manufacture and market aluminum tubing used in
a variety of automotive heat exchanger applications, including radiators and
charged air coolers for automobiles and trucks. The Dortmund, Germany based
operation is a leading supplier of aluminum tubing to the European automotive
market, with 1995 pro forma sales of approximately $19 million. The South
Carolina operation generated approximately $4 million in automotive tubing sales
in 1995.
Robert L. Smialek, Insilco Chairman and CEO, stated, "This acquisition
strategically positions our Thermal Components Group as an important participant
in the growing European automotive aluminum tube market. The rising proportion
of air conditioners in European automobiles and the use of charged air coolers
in more fuel efficient engines represents an exciting growth opportunity.
Lingemann's U.S. aluminum tube manufacturing equipment will bring needed
production capacity to our Thermal Components Division. In addition, the
combination of production technologies and know-how with our Thermal Components
Group will give us the ability to better serve our existing customers and
potentially opens new applications for welded aluminum tubing."
Insilco Corporation, based in suburban Columbus Ohio, with 1995 sales
of $561 million, is a diversified manufacturer of industrial components serving
the telecommunications, electronics and automotive markets, as well as a
marketer/manufacturer of office and specialty publishing products. The company's
business units include Rolodex, a leading marketer of
<PAGE> 2
office products; Taylor Publishing, a major publisher of school yearbooks;
Thermal Components and Steel Parts Corporation serving the automotive and other
industrial markets; and Insilco Technologies Group comprised of Stewart
Connector Systems, Escod Industries, Stewart Stamping and Signal Transformer,
serving the electronics and telecommunications markets.
Investor Relations Contact: David A. Kauer, (614) 792-0468 or write to Insilco
Corporation, Investor Relations, 425 Metro Place North, Box 7196, Dublin, OH
43017 or call Melodye Demastus, Melrose Consulting (614) 771-0860.
