Exhibit 2.1
AMENDED AND RESTATED STOCK PURCHASE AGREEMENT
Among
EAGLE INDUSTRIAL PRODUCTS CORPORATION
and
O.D.E. MANUFACTURING, INC.
AS "SELLERS"
and
ROBBINS & MYERS, INC.
AS "BUYER"
DATED AS OF JUNE 29, 1994
TABLE OF CONTENTS
Page
Section 1 Definitions. . . . . . . . . . . . . . . . 1
1.01 Affiliate. . . . . . . . . . . . . . . . . 1
1.02 Chemical Agreements. . . . . . . . . . . . 1
1.03 Chemineer. . . . . . . . . . . . . . . . . 1
1.04 Chemineer Stock. . . . . . . . . . . . . . 1
1.05 Closing. . . . . . . . . . . . . . . . . . 1
1.06 Closing Adjustment . . . . . . . . . . . . 2
1.07 Closing Balance Sheet. . . . . . . . . . . 2
1.08 Closing Date . . . . . . . . . . . . . . . 2
1.09 Closing Statement. . . . . . . . . . . . . 2
1.10 Code . . . . . . . . . . . . . . . . . . . 2
1.11 Commission . . . . . . . . . . . . . . . . 2
1.12 Companies. . . . . . . . . . . . . . . . . 2
1.13 Contracts. . . . . . . . . . . . . . . . . 2
1.14 December Balance Sheet . . . . . . . . . . 3
1.15 Eagle. . . . . . . . . . . . . . . . . . . 3
1.16 Eagle Reports. . . . . . . . . . . . . . . 3
1.17 Effective Time . . . . . . . . . . . . . . 3
1.18 Employee Plans . . . . . . . . . . . . . . 3
1.19 Environmental Laws . . . . . . . . . . . . 4
1.20 ERISA. . . . . . . . . . . . . . . . . . . 4
1.21 ERISA Affiliate. . . . . . . . . . . . . . 4
1.22 Exhibit. . . . . . . . . . . . . . . . . . 4
1.23 Final Net Worth as Adjusted. . . . . . . . 4
1.24 Financial Statements . . . . . . . . . . . 4
1.25 Governmental Entity. . . . . . . . . . . . 5
1.26 Hazardous Substances . . . . . . . . . . . 5
1.27 HSR Act. . . . . . . . . . . . . . . . . . 5
1.28 India Company. . . . . . . . . . . . . . . 5
1.29 Intercompany . . . . . . . . . . . . . . . 5
1.30 Kennecott Agreement. . . . . . . . . . . . 5
1.31 Known to Sellers or to Sellers'
Knowledge. . . . . . . . . . . . . . . . . 5
1.32 Leased Real Property . . . . . . . . . . . 5
1.33 Material . . . . . . . . . . . . . . . . . 5
1.34 ODE. . . . . . . . . . . . . . . . . . . . 6
1.35 Owned Real Property. . . . . . . . . . . . 6
1.36 Permits. . . . . . . . . . . . . . . . . . 6
1.37 Proprietary Information. . . . . . . . . . 6
1.38 Pfaudler . . . . . . . . . . . . . . . . . 6
1.39 Pfaudler Stock . . . . . . . . . . . . . . 6
1.40 Purchase Price . . . . . . . . . . . . . . 6
1.41 R&M. . . . . . . . . . . . . . . . . . . . 6
1.42 R&M Debenture. . . . . . . . . . . . . . . 6
1.43 R&M Indenture. . . . . . . . . . . . . . . 6
1.44 Receivables Agreement. . . . . . . . . . . 6
1.45 Receivables Purchase Price . . . . . . . . 7
1.46 R&M Reports. . . . . . . . . . . . . . . . 7
1.47 Records. . . . . . . . . . . . . . . . . . 7
1.48 SAR. . . . . . . . . . . . . . . . . . . . 7
1.49 SAR Agreement. . . . . . . . . . . . . . . 7
1.50 Schedule . . . . . . . . . . . . . . . . . 7
1.51 Security Act . . . . . . . . . . . . . . . 7
1.52 Security Interest. . . . . . . . . . . . . 7
1.53 Sellers Group. . . . . . . . . . . . . . . 7
1.54 Senior Lenders . . . . . . . . . . . . . . 7
1.55 Stock. . . . . . . . . . . . . . . . . . . 7
1.56 Subsidiaries . . . . . . . . . . . . . . . 7
1.57 WCE Test Center. . . . . . . . . . . . . . 8
Section 2 Purchase and Sale of Stock . . . . . . . . 8
2.1 Purchase . . . . . . . . . . . . . . . . . 8
2.2 Purchase Price . . . . . . . . . . . . . . 8
2.3 Adjustment to Purchase Price . . . . . . . 8
2.4 Allocation of Purchase Price . . . . . . . 11
Section 3 Closing. . . . . . . . . . . . . . . . . . 11
Section 4 Representations and Warranties
of Sellers Regarding Sellers . . . . . . . 15
4.01 Title to, and Transfer of, Stock . . . . . 15
4.02 Organization; Good Standing; Qualification
and Net Worth. . . . . . . . . . . . . . . 15
4.03 Corporate Authority. . . . . . . . . . . . 15
4.04 No Violation . . . . . . . . . . . . . . . 16
4.05 Consents . . . . . . . . . . . . . . . . . 16
4.06 No Brokerage Fees. . . . . . . . . . . . . 16
4.07 Litigation . . . . . . . . . . . . . . . . 16
4.08 Investment Representations . . . . . . . . 17
Section 5 Representations and Warranties of
Sellers Regarding the Companies. . . . . . 17
5.01 Title to Capital Stock of Subsidiaries . . 17
5.02 Organization, Foreign Qualification and
Capitalization . . . . . . . . . . . . . . 17
5.03 Corporate Information Table. . . . . . . . 18
5.04 No Violation . . . . . . . . . . . . . . . 22
5.05 Title to Properties; Absence of
Liens, Etc.. . . . . . . . . . . . . . . . 22
5.06 Receivables. . . . . . . . . . . . . . . . 23
5.07 Financial Statements . . . . . . . . . . . 23
5.08 Litigation . . . . . . . . . . . . . . . . 23
5.09 Product Liability. . . . . . . . . . . . . 23
5.10 Contracts; Powers of Attorney. . . . . . . 24
5.11 Environmental Compliance . . . . . . . . . 24
5.12 Kennecott Agreement. . . . . . . . . . . . 25
5.13 Compliance with Laws and Orders. . . . . . 26
5.14 Permits and Licenses . . . . . . . . . . . 26
5.15 Employee Plans . . . . . . . . . . . . . . 26
5.16 Insurance. . . . . . . . . . . . . . . . . 29
5.17 Capital Projects . . . . . . . . . . . . . 29
5.18 Absence of Certain Changes, Event
or Conditions. . . . . . . . . . . . . . . 29
5.19 Labor Matters. . . . . . . . . . . . . . . 29
5.20 Proprietary Property . . . . . . . . . . . 29
5.21 Affiliates . . . . . . . . . . . . . . . . 30
5.22 Express Representations and
Warranties Only. . . . . . . . . . . . . . 30
5.23 Predecessor Affiliates . . . . . . . . . . 30
Section 6 Representations and Warranties of R&M. . . 30
6.01 Organization; Good Standing;
and Qualification. . . . . . . . . . . . . 30
6.02 Corporate Authority. . . . . . . . . . . . 30
6.03 No Violation . . . . . . . . . . . . . . . 31
6.04 Consents . . . . . . . . . . . . . . . . . 31
6.05 No Brokerage Fees. . . . . . . . . . . . . 31
6.06 Litigation . . . . . . . . . . . . . . . . 32
6.07 Capitalization . . . . . . . . . . . . . . 32
6.08 Financing. . . . . . . . . . . . . . . . . 32
Section 7 Arrangements as to Certain Employee
Plans. . . . . . . . . . . . . . . . . . . 32
Section 8 Taxes; Tax Returns; and Tax Indemnities. . 34
Section 9 Representations and Warranties of Eagle
Regarding the India Company. . . . . . . . 39
9.01 Capitalization and Title to Capital
Stock. . . . . . . . . . . . . . . . . . . 39
9.02 Organization . . . . . . . . . . . . . . . 39
Section 10 Certain Covenants of Sellers . . . . . . . 39
10.01 Interim Operations of the Companies. . . . 39
10.02 Access, Information and Confidentiality. . 41
10.03 Confidentiality. . . . . . . . . . . . . . 41
10.04 Stand-still Provisions . . . . . . . . . . 41
Section 11 Certain Covenants of R&M . . . . . . . . . 42
11.01 Personnel Required in Response to
Litigation . . . . . . . . . . . . . . . . 42
11.02 Confidentiality. . . . . . . . . . . . . . 42
11.03 Use of the Name "Eagle". . . . . . . . . . 42
Section 12 Certain Additional Agreements and
Covenants of Sellers and R&M . . . . . . . 43
12.01 HSR Act Filing . . . . . . . . . . . . . . 43
12.02 Consummation of Transactions . . . . . . . 43
12.03 Public Announcements . . . . . . . . . . . 43
12.04 Notice of Certain Events . . . . . . . . . 44
12.05 Items Received after Effective Time. . . . 45
12.06 Access to Records. . . . . . . . . . . . . 45
12.07 Further Assurances . . . . . . . . . . . . 45
12.08 Expenses; Sales and Other Transfer Taxes . 45
12.09 Outstanding Letters of Credit. . . . . . . 45
12.10 Repayment of Intercompany Debt . . . . . . 46
12.11 Consents . . . . . . . . . . . . . . . . . 46
12.12 WFE Test Center. . . . . . . . . . . . . . 47
12.13 Responsibility for Insurance Coverage. . . 47
12.14 Letters of Credit. . . . . . . . . . . . . 47
Section 13 Conditions to R&M's Obligations. . . . . . 48
13.01 Accuracy of Representations and
Warranties . . . . . . . . . . . . . . . . 48
13.02 Litigation . . . . . . . . . . . . . . . . 48
13.03 Consents and Approvals . . . . . . . . . . 48
13.04 Financing Commitments. . . . . . . . . . . 48
Section 14 Conditions to Sellers' Obligations . . . . 49
14.01 Accuracy of Representations and
Warranties . . . . . . . . . . . . . . . . 49
14.02 Litigation . . . . . . . . . . . . . . . . 49
14.03 Consents and Approvals . . . . . . . . . . 49
Section 15 Survival of Representations and
Warranties . . . . . . . . . . . . . . . . 49
Section 16 Indemnity. . . . . . . . . . . . . . . . . 50
Section 17 Termination, Amendment and Waiver. . . . . 56
17.01 Termination of Agreement . . . . . . . . . 57
17.02 Effect of Termination. . . . . . . . . . . 57
17.03 Amendment, Extension and Waiver. . . . . . 57
Section 18 Miscellaneous. . . . . . . . . . . . . . . 57
18.01 Assignment; No Third-Party Rights. . . . . 57
18.02 Entire Agreement . . . . . . . . . . . . . 57
18.03 Section and Other Headings; Number . . . . 57
18.04 Notices. . . . . . . . . . . . . . . . . . 58
18.05 Law Governing. . . . . . . . . . . . . . . 59
18.06 Counterparts . . . . . . . . . . . . . . . 59
18.07 Resolution of Disputes . . . . . . . . . . 59
AMENDED AND RESTATED STOCK PURCHASE AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT is made as of
June 29, 1994 among EAGLE INDUSTRIAL PRODUCTS CORPORATION, a
Delaware corporation ("Eagle"), and O.D.E. MANUFACTURING, INC., a
Delaware corporation ("ODE"), (each of Eagle and ODE being
individually, a "Seller," and collectively, the "Sellers"), and
ROBBINS AND MYERS, INC., an Ohio corporation ("R&M"), under the
following circumstances:
A. Eagle owns all of the issued and outstanding
Pfaudler Stock; and ODE, a direct subsidiary of Eagle,
owns all of the issued and outstanding Chemineer Stock;
B. Eagle desires to sell, and R&M desires to
purchase, the Pfaudler Stock upon the terms and
conditions hereinafter set forth;
C. ODE desires to sell, and R&M desires to
purchase, the Chemineer Stock upon the terms and
conditions hereinafter set forth; and
D. This Amended and Restated Stock Purchase
Agreement amends and restates in its entirety the Stock
Purchase Agreement among Sellers and R&M dated May 26,
1994 and such May 26, 1994 agreement shall be of no
further force and effect;
NOW, THEREFORE, Sellers and R&M agree as follows:
Section 1. Definitions. For the purpose of this
Agreement, any amendments hereto and any Exhibit attached hereto
or Schedule described herein, and in addition to terms defined
elsewhere herein, the following terms shall have the following
meanings, except as otherwise expressly provided or unless the
context otherwise requires:
1.01 "Affiliate" of a named party means any entity in
control of, controlled by, or under common control with such
named party.
1.02 "Chemical Agreements" means all of the agreements
entered into by Eagle or Affiliates of Eagle in connection with
the $425,000,000 credit refinancing, effective January 31, 1994,
as to which Chemical Bank serves as agent.
1.03 "Chemineer" means Chemineer, Inc., a Delaware
corporation.
1.04 "Chemineer Stock" means all of the issued and
outstanding capital stock of Chemineer.
1.05 "Closing" means the closing for which provision is
made in Section 3.
1.06 "Closing Adjustment" shall have the meaning
ascribed to it in Section 2.3(f).
1.07 "Closing Balance Sheet" means the balance sheet of
the Companies immediately prior to the Effective Time, as more
particularly described at Section 2.3(a); "Closing Balance Sheet
Date" means the Closing Date.
1.08 "Closing Date" means the date of the Closing.
1.09 "Closing Statement" shall have the meaning
ascribed to it at Section 2.3(a) and shall be prepared in
accordance with the Closing Statement format in Schedule 1.09.
1.10 "Code" means the Internal Revenue Code of 1986, as
amended.
1.11 "Commission" means the Securities and Exchange
Commission.
1.12 "Companies" means and includes Chemineer,
Pfaudler, and the Subsidiaries; "Domestic Company" means any or
all of the Companies incorporated in a jurisdiction within the
United States, as the context may require; and "Foreign Company"
means any or all of the Companies incorporated outside the United
States, as the context may require.
1.13 "Contracts" mean and include all of the following
which any of the Companies is a party to, is bound by, or by
which any property or assets of any of them may be bound: (i)
all real property leases; (ii) all leases of tangible personal
property having rentals in excess of $50,000 due over the
remaining term of the lease; (iii) all franchise, dealer, or
other distribution agreements pursuant to which any of the
Companies sells or otherwise distributes its products or services
or pursuant to which any person sells or otherwise distributes
products or services of any of the Companies; (iv) all supply
contracts or other such agreements or understandings pursuant to
which any of the Companies purchased in 1993, or expects to
purchase in 1994, in excess of $250,000 in products or services;
(v) any contract, purchase order, commitment, or understanding
involving the sale of products and services of any of the
Companies pursuant to which a customer is expected to pay any of
the Companies in excess of $250,000 in the next 12-month period;
(vi) any agreement involving the licensing of Proprietary
Information or the payment of royalties; (vii) any agreement,
arrangement, or commitment which materially restricts the conduct
of any line of business or which imposes a confidentiality
obligation upon any of the Companies; (viii) any agreement with
or benefiting any director or officer of any of the Companies, or
with or benefiting any Affiliate of Eagle and which provides for
aggregate payments in any calendar year in excess of $60,000,
exclusive of salary and payments under Employee Plans; (ix) any
agreement, indenture or other instrument relating to the
borrowing of money by any of the Companies (other than the debt
under the Chemical Agreements and trade payables and instruments
relating to transactions entered into in the ordinary course of
business); (x) any agreement pursuant to which any of the
Companies is obligated to lend money or make advances to any
person (other than routine advances to any employee not to exceed
$5,000, deposits or advances in respect of products purchased in
the ordinary course of business, and advances made to an employee
in connection with the relocation of such employee by any of the
Companies); (xi) any agreement, arrangement or commitment to
guarantee the obligations of or to indemnify or exonerate from
liability any person, including, without limitation, any of the
Subsidiaries and the directors or officers of any of the
Companies (other than pursuant to applicable law or the
Certificate of Incorporation or By-laws of any of the Companies);
(xii) any Tax allocation or Tax sharing agreement; (xiii) any
agreement or arrangement relating to the voting or disposition of
any securities of any of the Companies; (xiv) any other contract,
commitment, agreement, or understanding, whether written or oral,
which involves more than $500,000 and is not terminable without
penalty upon not more than 31 days' notice; and (xv) any
partnership, joint venture, or other agreement pursuant to which
any of the Companies holds an equity interest in any person or
entity.
1.14 "December Balance Sheet" means the audited
consolidated balance sheet of the Companies at December 31, 1993
which is included in the Financial Statements.
1.15 "Eagle" means Eagle Industrial Products
Corporation, a Delaware corporation.
1.16 "Eagle Reports" means all reports, registrations,
and statements, together with any amendments thereto, filed by
Eagle Industries, Inc. with the Commission since September 1,
1992, including but not limited to, Forms 10-K, Forms 10-Q, and
Forms 8-K.
1.17 "Effective Time" means 11:59 p.m. on the Closing
Date.
1.18 "Employee Plans" means all employment, bonus,
deferred compensation, pension, retirement, profit sharing, stock
option, stock purchase, employee stock ownership, stock
appreciation rights, savings, severance, termination, collective
bargaining, group insurance, fringe benefit and other employee
benefit, incentive and welfare plans, policies, contracts and
arrangements, formal or informal, written or oral, and all trust
agreements related thereto, relating to any present or former
directors, officers or employees of any of the Companies;
"Domestic Employee Plans" means Employee Plans maintained by any
one of the Companies other than a Subsidiary which is
incorporated outside of the United States; and "Foreign Employee
Plans" means Employee Plans maintained by a Subsidiary which is
incorporated outside of the United States.
1.19 "Environmental Laws" shall mean any foreign,
federal, state or local law, statute, ordinance, rule, regulation
or code, and any license, permit, authorization, approval,
consent, order, judgment, decree, injunction or agreement with
any Governmental Entity to which a Company or any property owned,
leased, occupied or used by a Company is a party or subject,
related to (i) the protection, preservation or restoration of the
environment (including, without limitation, air, water vapor,
surface water, ground water, drinking water supply, surface soil,
subsurface soil, plant and animal life or any other natural
resource), and/or (ii) the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling,
production, release or disposal of Hazardous Substances. The
term Environmental Law includes, without limitation: the
Comprehensive Environmental Response, Compensation and Liability
Act, as amended, 42 U.S.C. section 9601, et seq.; the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. section 6901, et
seq.; the Clean Air Act, as amended, 42 U.S.C. section 7401, et seq.;
the Federal Water Pollution Control Act, as amended, 33 U.S.C.
section 1251, et seq.; the Toxic Substances Control Act, as amended,
125 U.S.C. section 9601, et seq.; the Emergency Planning and Community
Right to Know Act, 42 U.S.C. section 11001, et seq.; the Safe Drinking
Water Act, 42 U.S.C. section 300f, et seq.; all comparable state and
local laws; and any common law (including without limitation,
common law that may impose strict liability) that may impose
liability or obligations for injuries or damages due to, or
threatened as a result of, the presence of or exposure to any
Hazardous Substance.
1.20 "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
1.21 "ERISA Affiliate" means, as applied to any person,
(i) any corporation which is a member of a controlled group of
corporations within the meaning of Section 414(b) of the Code of
which that person is a member, (ii) any trade or business
(whether or not incorporated) which is a member of a group of
trades or business under common control within the meaning of
Section 414(c) of the Code of which that person is a trade
member, and (iii) any member of an affiliated service group
within the meaning of Section 414(m) or (o) of the Code of which
that person, any corporation described in clause (i) above or any
trade or business described in clause (ii) above is a member.
1.22 "Exhibit" means any of the exhibits attached to
and made a part of this Agreement.
1.23 "Final Net Worth as Adjusted" shall have the
meaning ascribed to it at Section 2.2(b).
1.24 "Financial Statements" shall have the meaning
ascribed to it at Section 5.07.
1.25 "Governmental Entity" means any court,
governmental authority or other regulatory or administrative
agency or commission, domestic or foreign.
1.26 "Hazardous Substances" shall mean any material
presently listed, defined, designated or classified as hazardous,
toxic, radioactive, under any Environmental Laws, whether by type
or by quantity, and petroleum or any derivative or by-product
thereof.
1.27 "HSR Act" shall mean the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended.
1.28 "India Company" means Gujarat Machinery
Manufacturers Limited, a company incorporated under the laws of
India.
1.29 "Intercompany" means, with respect to any
transaction, obligation, agreement or account, a transaction,
obligation, agreement or account between any one of the Companies
and a Seller or any of its Affiliates (other than one of the
Companies).
1.30 "Kennecott Agreement" means the agreement among
Kennecott Mining Corporation and Pfaudler-Balfour Limited, as
sellers, and Great American Industrial Group, Inc. and Legibus
855, Limited, as buyers, dated March 13, 1987.
1.31 "Known to Sellers" or "to Sellers' Knowledge"
means any information known (such knowledge to be actual and not
imputed) to any officer or director of Eagle, ODE, or to any of
the persons listed at Exhibit B.
1.32 "Leased Real Property" means the land, building,
structures, or other real property listed at Schedule 1.32 as
currently being leased by any of the Companies.
1.33 "Material" when used herein to limit a
representation or warranty of a party shall be interpreted as
follows:
(i) whenever any representation or warranty of a
Seller or the Sellers, collectively, contains an
exception or limitation relating to "materiality,"
"material adverse" events or omissions, "material
adverse effects" or similar concepts (collectively,
"Materiality Tests"), such Materiality Tests shall be
deemed to have been met (i.e., such events or omissions
shall be deemed to be "material," "materially adverse,"
have a "material adverse effect" or otherwise meet a
similar test), and such representation or warranty shall
be deemed to have been breached, if such breach results
in an adverse impact with respect to the Companies'
assets of $100,000 or an adverse impact with respect to
the Companies' consolidated earnings of $100,000; and
(ii) whenever any representation or warranty of R&M
contains a Materiality Test, such representation or
warranty shall be deemed to have been breached, if such
breach results in an adverse impact with respect to
Sellers' assets of $100,000 or an adverse impact with
respect to Sellers' earnings of $100,000.
1.34 "ODE" means O.D.E. Manufacturing, Inc., a Delaware
corporation.
1.35 "Owned Real Property" means the land, buildings,
structures, fixtures, and other improvements located at the
premises listed at Schedule 1.31 as currently being owned by any
of the Companies.
1.36 "Permits" means foreign, federal, state, local and
other governmental licenses, permits, approvals and
authorizations which relate to, or are necessary to conduct the
Business.
1.37 "Proprietary Information" means all rights of any
of the Companies under any patent, trademark, service mark, trade
name or copyright (or registrations or applications therefor) and
all other intellectual property rights, inventions, know-how,
confidential business information, data and documents, trade
secrets or proprietary information, drawings processes and
formulae used in the Business.
1.38 "Pfaudler" means Pfaudler (United States), Inc., a
Delaware corporation incorporated on January 31, 1994.
1.39 "Pfaudler Stock" means all of the issued and
outstanding capital stock of Pfaudler.
1.40 "Purchase Price" shall have the meaning ascribed
to it at Section 2.2.
1.41 "R&M" means Robbins & Myers, Inc., an Ohio
corporation. "R&M Group" shall have the meaning ascribed to it
in Section 16(a).
1.42 "R&M Debenture" means the $50,000,000 in
debentures of R&M to be delivered to Eagle at the Closing, a copy
of which is attached hereto as Exhibit A.
1.43 "R&M Indenture" means the indenture pursuant to
which the R&M Debenture is to be issued, a copy of which is
attached hereto as Exhibit A.
1.44 "Receivables Agreement" means the Receivables Sale
Agreement to be entered into between R&M and Continental Bank,
National Association, as Trustee, and to be attached hereto as
Schedule 1.44.
1.45 "Receivables Purchase Price" means an amount equal
to the receivables purchase price payable to Continental Bank,
National Association, as Trustee, pursuant to the Receivables
Agreement.
1.46 "R&M Reports" means all reports, registrations, and
statements, together with any amendments thereto, filed by R&M
with the Commission since September 1, 1992, including but not
limited to, Forms 10-K, Forms 10-Q, Forms 8-K, and proxy
statements.
1.47 "Records" means, in the case of each Company, all
books and records of the Company including, without limitation,
its tax returns, minute books, stock records, general ledger, all
property and equipment records, production records, engineering
records, purchasing and sales records, personnel and payroll
records, accounting records, magnetic copies of computer files
and documentation, customer and vendor lists, and other records
and files of the Company kept in the ordinary course of its
business and in the possession of any of the Sellers, the
Companies, or Affiliates of the Sellers.
1.48 "SAR" means a stock appreciation right granted
pursuant to the SAR Agreement.
1.49 "SAR Agreement" means the SAR and Registration
Rights Agreement in the form attached hereto as Exhibit C
1.50 "Schedule" means any of the Schedules listed in
the Table of Contents to this Agreement.
1.51 "Securities Act" means the Securities Act of 1933,
as amended.
1.52 "Security Interest" means any pledge, security
interest, lien, charge, encumbrance, option, or restriction on
transfer.
1.53 "Seller Group" shall have the meaning ascribed to
it in Section 16(b).
1.54 "Senior Lenders" means Bank One, Dayton, NA and
National City Bank, Columbus, which have committed to loan R&M an
aggregate of $75,000,000 under Loan Commitment Letters dated
April 22, 1994.
1.55 "Stock" means the Pfaudler Stock and the Chemineer
Stock.
1.56 "Subsidiaries" means and includes each of the
corporations listed below:
(a) Chemineer, Limited, a corporation incorporated
under the laws of England and a subsidiary of Chemineer
("Chemineer U.K.");
(b) Edlon Products Inc., a Delaware corporation and a
subsidiary of Pfaudler ("Edlon");
(c) Pfaudler-Werke GMBH, a corporation incorporated
under the laws of Germany ("Pfaudler Germany"); Pfaudler
Balfour Holdings, Limited, a corporation incorporated under
the laws of England ("Pfaudler Holdings U.K."); Pfaudler
Balfour Limited, a corporation incorporated under the laws
of England and a subsidiary of Pfaudler Holdings U.K.
("Pfaudler U.K."); Chemical Reactor Services, Limited, a
corporation incorporated under the laws of England and a
subsidiary of Pfaudler Holdings U.K. ("Pfaudler CRS U.K.");
Stoline, Limited, a corporation incorporated under the laws
of Scotland and a subsidiary of Pfaudler Holdings U.K.
("Pfaudler Stoline U.K.); Pfaudler Development Corporation,
a corporation incorporated under the laws of Panama
("Pfaudler Panama"); Pfaudler S.A. de C.V., a corporation
incorporated under the laws of Mexico and a subsidiary of
Pfaudler Panama ("Pfaudler Mexico"); Pfaudler Equipamentos
Industriais, LTDA, a corporation incorporated under the laws
of Brazil ("Pfaudler Brazil"); and Torin Aerotecnica, LTDA,
a corporation incorporated under the laws of Brazil and a
subsidiary of Pfaudler Brazil ("Pfaudler Torin") (each of
the foregoing is a direct or indirect subsidiary of Pfaudler
and are collectively referred to hereinafter as "Pfaudler
Foreign Subsidiaries");
1.57 "WFE Test Center" means the WFE Test Center,
Henrietta, New York.
Section 2. Purchase and Sale of Stock.
2.1 Purchase. Subject to the terms and conditions of
this Agreement, Sellers shall sell, convey, assign, transfer and
deliver the Pfaudler Stock and the Chemineer Stock, free and
clear of any Security Interest, to R&M; and R&M shall purchase
and acquire from Sellers, the Pfaudler Stock and the Chemineer
Stock at the Closing.
2.2 Purchase Price. The purchase price for the Stock
to be paid by R&M to Eagle at the Closing shall be the sum of (a)
One Hundred Twenty-Four Million Dollars ($124,000,000 U.S.) less
the Receivables Purchase Price plus (b) a contingent amount
determined by reference to the value of R&M common shares (in
accordance with the SAR Agreement) as evidenced by 2,000,000 SARs
(collectively the "Purchase Price"), subject to possible
adjustment as provided in Section 2.3.
2.3 Adjustment to Purchase Price. The Purchase Price
shall be subject to adjustment as provided in this Section 2.3.
(a) Preparation of the Closing Balance Sheet and the
Closing Statement. Within 60 days after the Effective Time,
Eagle shall deliver to R&M a consolidated balance sheet of the
Companies immediately prior to the Effective Time (the "Closing
Balance Sheet") and the Closing Balance Sheet as adjusted in
accordance with Schedule 1.09 (the "Closing Statement") showing
Eagle's calculation of the Closing Adjustment in accordance with
the provisions of Section 2.3(f). The excess of the assets over
the liabilities of the Companies immediately prior to the
Effective Time as shown on the Closing Statement shall be the
"Final Net Worth as Adjusted." The Closing Balance Sheet shall
be prepared by Eagle on the basis of historical costs in
accordance with generally accepted accounting principles
consistently applied on a going-concern basis in accordance with
the standard practices of the Companies used to prepare the
December 31, 1993 financial statements. Arthur Andersen & Co.
shall examine the Closing Balance Sheet in accordance with
generally-accepted auditing standards; shall provide an opinion
that the Closing Balance Sheet presents fairly, in all material
respects, the financial condition of the Companies on a
consolidated basis immediately prior to the Effective Time; and
shall review Eagle's calculation of the Closing Adjustment to
determine that it is consistent with the provisions of this
Agreement.
(b) Closing Balance Sheet. The Closing Balance Sheet
to be prepared in accordance with Section 2.3(a) shall separately
reflect those assets and liabilities necessary to determine the
Closing Adjustment. Eagle and R&M agree that the "Net Worth As
Adjusted at September 30, 1993" was $60,351,000.
(c) Scope of Audit and Observation of Inventory. The
audit plan and scope of audit of the Companies shall be prepared
by Arthur Andersen & Co. and shall be reviewed by R&M and Eagle
and their representatives prior to the Closing. Ernst & Young
and other representatives of R&M shall be entitled to observe the
taking of the inventory in connection with the preparation of the
Closing Balance Sheet and to observe such other activities
related to the preparation of the Closing Balance Sheet as they
may reasonably request.
(d) Access to Books and Records. After the Closing,
R&M shall permit Eagle, Arthur Andersen & Co., and their
respective representatives, during normal business hours, to have
reasonable access to and to examine and make copies of any books
and records of R&M or any of its Affiliates which are reasonably
required for purposes of preparing the Closing Balance Sheet and
Closing Statement. After the Closing, Eagle shall permit R&M,
Ernst & Young, and their representatives, during normal business
hours, to have reasonable access to, and to examine and make
copies of, the books and records of Eagle, the Companies, any
Affiliate of Eagle, or Arthur Andersen & Co. which are in the
possession of any of them and are necessary for R&M and its
representatives to review the Closing Balance Sheet and Closing
Statement.
(e) Objections to the Closing Balance Sheet or
Calculation of Closing Adjustment. R&M may object to any of the
information contained in the Closing Balance Sheet and the
Closing Statement which could affect the Closing Adjustment to be
made pursuant to Section 2.3(f) if such objection is based on a
claim that the Closing Balance Sheet was not prepared in
accordance with Section 2.3(a) and may object to the Closing
Adjustment shown on the Closing Statement if such objection is
based on the claim that the Closing Statement or the calculation
of the Closing Adjustment is inconsistent with the provisions of
this Agreement. Any such objection must be made by delivery of a
written statement of objections (stating the basis of the
objections with reasonable specificity) to Eagle within 20 days
following delivery of the Closing Balance Sheet, together with
the Closing Statement and Arthur Andersen & Co.'s statement as to
the consistency of the Closing Adjustment as shown on the Closing
Statement with the provisions of this Agreement. If R&M does not
so object to the Closing Balance Sheet or the Closing Adjustment
within such 20-day period, the Closing Balance Sheet and the
Closing Adjustment as shown on the Closing Statement shall be
considered final and binding upon the parties.
In the event R&M and Eagle are unable to resolve a
dispute or disagreement set forth in a written objection pursuant
to this Section 2.3(e), either party may elect, by written notice
to the other party (given within 20 days after Eagle's receipt of
R&M's objections), to have all such disputes or disagreements
resolved by an accounting firm of recognized national standing
acceptable to Eagle and R&M and not then employed by either Eagle
or R&M (the "Selected Accounting Firm"). If R&M and Eagle cannot
agree upon the accounting firm to serve as the Selected
Accounting Firm, then Price Waterhouse & Co. (through its New
York City office) shall serve as the Selected Accounting Firm.
The Selected Accounting Firm shall make a final and binding
resolution of the disputes or disagreements in accordance with
the provisions of this Agreement and the Closing Balance Sheet
and calculation of the Closing Adjustment as shown on the Closing
Statement as finally determined by the Selected Accounting Firm
shall be deemed acceptable to R&M and Eagle for all purposes of
this Agreement. The Selected Accounting Firm shall be instructed
to use every reasonable effort to perform its services within 30
days after submission of the Closing Balance Sheet to it and, in
any case, as soon as practicable after such submission. The
costs and expenses for the services of the Selected Accounting
firm shall be borne by R&M and Eagle in proportion to the extent
to which the Selected Accounting Firm accepts the respective
positions of R&M and Eagle. For example, if Eagle asserts that
the Closing Adjustment should be $10,000 and R&M asserts that no
Closing Adjustment is warranted, and the Selected Accounting Firm
determines that the Closing Adjustment is $4,000, Eagle is
responsible for 60% and R&M is responsible for 40% of the costs
of the Selected Accounting Firm.
(f) Calculation and Payment of Closing Adjustment.
The amount of the Closing Adjustment, if any, shall be
determined as follows:
(i) if the difference between the Final Net Worth as
Adjusted and $60,351,000 is $100,000 or less, then no Closing
Adjustment shall be payable;
(ii) if the Final Net Worth as Adjusted exceeds
$60,451,000, then the Closing Adjustment shall be an amount
equal to the excess of the Final Net Worth as Adjusted over
$60,351,000 and shall be paid by R&M to Eagle in cash within
five days after the Closing Adjustment is finally determined.
(iii) if the Final Net Worth as Adjusted is less than
$60,251,000, then the Closing Adjustment shall be an amount
equal to the difference between the Final Net Worth as
Adjusted and $60,351,000 and shall be paid to R&M in cash by
Eagle within five days after the Closing Adjustment is
finally determined.
(g) Form of Payment. Payment of the Closing
Adjustment, if any, shall be made by wire transfer of immediately
available federal funds, together with interest thereon at the
prime rate of Continental Bank N.A. ("Prime Rate") plus one
percent (1%) per annum from the Closing Date until the date of
payment. If such adjustment (including the interest component,
if any,) is not paid within five (5) business days after final
determination of the Closing Adjustment, then such payment shall
accrue interest at the Prime Rate plus three percent (3%) from
the Closing Date until the date of actual payment.
2.4 Allocation of Purchase Price. Sellers and R&M
agree that the Purchase Price of the Stock (other than the value
of the 2,000,000 SARs), the Receivables Purchase Price, and the
book value of the liabilities of the Companies as shown on the
Closing Statement shall be allocated among the assets of the
Companies in the manner indicated on Exhibit D and that Sellers
and R&M shall each act in a manner consistent with such
allocation in filing Department of Treasury Form 8594, captioned
"Asset Acquisition Statement under Section 1060." When and to
the extent the SARs are exercised, the value received by the
holder of the SAR shall be allocated in accordance with
Exhibit D.
Section 3. Closing.
(a) The Closing under this Agreement shall take place
at the offices of Thompson, Hine and Flory, 2000 Courthouse
Plaza, NE, 10 West Second Street, Dayton, Ohio 45402, at 10:00
a.m., local time, on the later of 30 days after the date this
Agreement was entered into and, subject to the terms of Section
17.01(e), the third business day after all waiting periods under
the HSR Act have expired or been terminated, or at such other
place, date, or time as the parties may agree.
(b) At the Closing, Sellers shall, subject to the
fulfillment to their reasonable satisfaction of the conditions
set forth in Section 14 or its waiver thereof, deliver to R&M:
(i) a certificate or certificates representing the
Pfaudler Stock, registered in the name of Eagle, duly
endorsed by Eagle for transfer or accompanied by an
assignment of the Pfaudler Stock duly executed by Eagle
and with any requisite tax transfer stamps or other
documents attached, with each certificate being free and
clear of any Security Interest;
(ii) a certificate or certificates representing the
Chemineer Stock, registered in the name of ODE, duly
endorsed by ODE for transfer or accompanied by an
assignment of the Chemineer Stock duly executed by ODE
and with any requisite tax transfer stamps or other
documents attached, with each certificate being free and
clear of any Security Interest;
(iii) the Noncompetition Agreement in the form
attached hereto as Exhibit E, dated the Closing Date and
duly executed by an authorized officer of Eagle
Industries, Inc.;
(iv) a certificate of each Seller, dated the
Closing Date and executed by a duly authorized officer
of each Seller, certifying that the conditions set forth
in Section 13 have been satisfied;
(v) an opinion, dated the Closing Date, of
Rosenberg & Liebentritt, P.C., counsel to Sellers,
substantially in the form attached hereto as Exhibit F;
(vi) copies of resolutions of the Board of
Directors and shareholders of Eagle and ODE authorizing,
respectively, the sale of the Pfaudler Stock and the
Chemineer Stock pursuant to this Agreement and copies of
all resolutions of each Seller's Board of Directors
authorizing this Agreement, the transactions
contemplated hereby or otherwise relating to this
Agreement and the transactions contemplated hereby,
certified by the Secretary (or an Assistant Secretary)
of Eagle and ODE as being in full force and effect on
the Closing Date;
(vii) stock certificates representing all of the
outstanding capital stock of each of the Subsidiaries,
registered in the name of one of the Companies, with
each certificate being free and clear of any Security
Interest;
(viii) except as otherwise directed by R&M,
resignations of each director and officer of each of the
Companies, effective as of the Effective Time, and such
transfer documents as R&M may reasonably request to
substitute an R&M designee as the registered holder of
any capital shares of a Foreign Company held by an
Affiliate or designee of Eagle;
(ix) a certificate of the Secretary or Assistant
Secretary of each of the Companies certifying as to the
particular Company in which such person serves as such
officer (i) a true copy of the Certificate of
Incorporation of the Company and all amendments thereto,
with original certification by the Secretary of State or
other appropriate agencies in the state or jurisdiction
of incorporation of the Company and (ii) a true copy of
the Bylaws (or similar document) of the Company as in
effect on the Closing Date;
(x) certificates of good standing, dated no
earlier than 20 days prior to the Closing Date, with
respect to Eagle, ODE, and each of the Companies from
the respective Secretaries of State or other appropriate
agencies of each of the jurisdictions in which any of
such corporations is incorporated;
(xi) certificates of good standing, dated no
earlier than 20 days prior to the Closing Date, with
respect to each of the Companies from the respective
Secretaries of State or other appropriate agencies of
each of the jurisdictions in which each of the
respective Companies is qualified to do business as set
forth at Section 5.03;
(xii) copies of all third-party consents and
approvals required by Section 4.05 of this Agreement;
(xiii) all minute books and stock transfer records of
each of the Companies; and
(xiv) the R&M Indenture, dated the Closing Date;
(xv) SAR Agreement substantially in the form
attached hereto as Exhibit A, dated the Closing Date and
duly executed by an authorized officer of Eagle;
(xvi) The consent of Sellers to R&M's collateral
assignment of this Agreement to the Senior Lenders in
the event R&M defaults in a payment obligation under the
debt instruments held by the Senior Lenders; and
(xvii) such other documents and instruments as are
required to be delivered to R&M by Sellers pursuant to
this Agreement at or prior to the Closing.
(c) At the Closing, R&M shall, subject to the
fulfillment to its reasonable satisfaction of the conditions set
forth in Section 13 or its waiver thereof, deliver to Sellers the
following:
(i) an amount equal to $74,000,000 less the
Receivables Purchase Price, payable in cash by wire
transfer of immediately available funds to such bank
account as Eagle may specify in writing to R&M three
days prior to the Closing Date;
(ii) the R&M Debenture, in the principal amount of
$50,000,000, dated the Closing Date and duly executed by
an authorized officer of R&M;
(iii) the R&M Indenture, dated the Closing Date and
duly executed by an authorized officer of R&M;
(iv) Certificate evidencing 2,000,000 SARs,
registered in the name of Eagle, dated the Closing Date
and executed by a duly authorized officer of R&M;
(v) SAR Agreement substantially in the form
attached hereto as Exhibit A, dated the Closing Date and
executed by a duly authorized officer of R&M;
(vi) a certificate, dated the Closing Date and
executed by a duly authorized officer of R&M, certifying
that the conditions set forth in Section 14 have been
satisfied;
(vii) an opinion, dated the Closing Date, of
Thompson, Hine and Flory, counsel for R&M, substantially
in the form attached hereto as Exhibit G;
(viii) copies of all resolutions of R&M's Board of
Directors authorizing the transactions contemplated
hereby or otherwise relating to this Agreement and the
transactions contemplated hereby, certified by the
Secretary (or an Assistant Secretary) of R&M as being in
full force and effect on the Closing Date;
(ix) the Noncompetition Agreement attached hereto
as Exhibit E, dated the Closing Date and executed by a
duly authorized officer of R&M;
(x) sales tax exemption certificates, if
applicable, with respect to tangible personal property
included among the assets of the Companies;
(xi) certificates of good standings, dated no
earlier than 20 days prior to the Closing Date, that R&M
is duly incorporated and in good standing in the State
of Ohio; and
(xii) such other documents and instruments as are
required to be delivered to Sellers by R&M pursuant to
this Agreement at or prior to the Closing.
(d) At the Closing, the following additional actions
shall be taken provided the actions contemplated by Section 3(b)
and (c) are concurrently taken:
(i) R&M shall pay the Receivables Purchase Price
to Continental Bank, National Association, as Trustee,
as contemplated in the Receivables Sale Agreement; and
(ii) To the extent not previously done by Eagle
within the week prior to the Closing, Eagle shall cause
Falcon Manufacturing, Inc. ("Falcon") to pay to Pfaudler
Germany the DM 15,000,000 indebtedness of Falcon to
Pfaudler Germany under the loan agreement between Falcon
and Pfaudler Germany dated July 15, 1993 (the "German
Loan Agreement"), together with accrued but unpaid
interest through the Effective Time.
Section 4. Representations and Warranties of Sellers
Regarding Sellers. Each of the Sellers jointly and severally,
represent and warrant the following to R&M as of the date of this
Agreement:
4.01 Title to, and Transfer of, Stock. Except as set
forth on Schedule 4.01, Eagle has good title to the Pfaudler
Stock, and ODE has good title to the Chemineer Stock, in each
case, free and clear of any and all Security Interests. Eagle has
the full legal right, power and authority to transfer, convey,
and sell to R&M at the Closing the Pfaudler Stock, and upon
delivery of a certificate or certificates representing the
Pfaudler Stock at the Closing as contemplated herein, Eagle will
transfer to R&M good and valid title to the Pfaudler Stock, free
and clear of any and all Security Interests, including any listed
on Schedule 4.01, other than Security Interests created by R&M.
ODE has the full legal right, power and authority to transfer,
convey, and sell to R&M at the Closing the Chemineer Stock, and
upon delivery of a certificate or certificates representing the
Chemineer Stock at the Closing as contemplated herein, ODE will
transfer to R&M good and valid title to the Chemineer Stock, free
and clear of any and all Security Interests, including any listed
on Schedule 4.01 other than Security Interests created by R&M.
4.02 Organization; Good Standing; Qualification; and
Net Worth. Each Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware, with the corporate power and authority to conduct its
business and to own and lease its properties and assets. Eagle
has, and will have at the Effective Time, a net worth on a
consolidated basis of not less than $250,000,000.
4.03 Corporate Authority. Each Seller has the
corporate power and authority to execute, deliver and carry out
the terms of this Agreement and the other agreements and
instruments to be executed and delivered by it in connection with
the transactions contemplated hereby and thereby and has taken
all necessary corporate action, including approval by the
shareholders of each of the Sellers, to authorize the execution
and delivery of this Agreement and such other agreements and
instruments and the consummation of the transactions contemplated
hereby and thereby. This Agreement is, and the other agreements
and instruments to be executed and delivered by Sellers in
connection with the transactions contemplated hereby and thereby
will be, the legal, valid and binding obligations of each Seller
executing the same, enforceable in accordance with their terms,
except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or from time to time affecting the enforcement of
creditors' rights generally and except that the enforceability of
each Seller's obligations is subject to general principles of
equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
4.04 No Violation. Neither the execution and delivery
of this Agreement or the other documents and instruments to be
executed and delivered by Sellers pursuant hereto, nor the
consummation by Sellers of the transactions contemplated hereby
or thereby (i) will violate any provision of the Certificate of
Incorporation or Bylaws of either Seller, (ii) will violate or be
in conflict with any applicable law or any applicable judgment,
decree, injunction or order of any Governmental Entity, or (iii)
subject to obtaining the consents set forth on Schedule 4.04,
will violate or conflict with or constitute a default (or an
event which, with notice or lapse of time or both, would
constitute a default) under or will result in the termination of,
or accelerate the performance required by, or result in the
creation of any Security Interest, upon any of the assets of
Sellers under, any term or provision of the Certificate of
Incorporation or Bylaws of either Seller or of any contract,
commitment, understanding, arrangement, agreement, order,
arbitration award, judgment, decree or restriction of any kind or
character to which either Seller is a party or by which either
Seller or any of their assets or properties may be bound or
affected, other than violations or conflicts which would not have
a material adverse effect on Sellers.
4.05 Consents. Except as required under the HSR Act
and except as set forth in Schedule 4.05, no authorization,
consent, approval, order or filing with or notice to any
Governmental Entity or another entity or person, is necessary for
the execution and delivery of this Agreement or any other
agreement or document to be delivered by Sellers or the
consummation by Sellers of the transactions contemplated hereby
or thereby, other than such authorization, consent, approval,
order, filing or notice, the lack of which would not have a
material adverse effect on Sellers, R&M, or the Companies.
4.06 No Brokerage Fees. No broker or finder has acted
for Sellers in connection with this Agreement or the transactions
contemplated hereby and no broker or finder is entitled to any
brokerage or finders fee or other commissions in respect of such
transactions based in any way on agreements, arrangements or
understandings made by or on behalf of Sellers.
4.07 Litigation. There is no order, judgment or decree
of any Governmental Entity, by which either Seller is bound and
no action, suit or other legal, administrative or arbitration
proceedings or investigations before any Governmental Entity is
pending or, to the Sellers' Knowledge, threatened, which, in each
case, would prohibit the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby.
4.08 Investment Representations. Eagle is an
"accredited investor" as defined in Rule 501 adopted under the
Securities Act. Eagle is acquiring the SARs and the R&M Note for
its own account and not with a view to any distribution thereof.
Eagle acknowledges that the issuance of the SARs and the R&M Note
pursuant to this Agreement have not been, and the issuance of any
R&M Shares issued upon exercise of SARs will not be registered
under the Securities Act or any applicable state securities laws,
in reliance upon an exemption from the registration requirements
of the Securities Act and such state laws and neither the SARs,
the R&M Note nor any R&M Shares so issued may be resold or
transferred unless they are registered under the Securities Act
and such state laws or unless an applicable exemption from
registration is available (and the certificates evidencing the
SARs, any R&M Shares and the R&M Note will bear legends setting
forth such restrictions and the other restrictions imposed under
the SAR Agreement or R&M Note Agreement). Eagle acknowledges
receiving copies of the R&M Reports and that it has had the
opportunity to ask questions and receive answers concerning the
terms and conditions of this Agreement and the issuance of the
SARs and the R&M Note and to obtain any additional information
which R&M possesses or can require without reasonable effort or
expense that is necessary to verify the accuracy of any
information provided by R&M to Eagle.
Section 5. Representations and Warranties of Sellers
Regarding the Companies. Each of the Sellers jointly and
severally represent and warrant the following to R&M as of the
date of this Agreement:
5.01 Title to Capital Stock of Subsidiaries. Except as
set forth in Schedule 5.01, Sellers, directly or indirectly, own
of record and beneficially all of the issued and outstanding
capital stock of the Subsidiaries, free and clear of any and all
Security Interests. At the Closing, when Sellers transfer and
convey the Pfaudler Stock and Chemineer Stock to R&M, Pfaudler
and Chemineer will, directly or indirectly, own of record and
beneficially all of the issued and outstanding capital stock of
the Subsidiaries, free and clear of any and all Security
Interests, including any listed on Schedule 5.01, except for
Security Interests created by R&M.
5.02 Organization, Foreign Qualification and
Capitalization. Each of the Companies is a corporation, duly
organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, has all requisite corporate
power to carry on its business as it currently is conducted and
to own, lease or operate the properties and assets it now owns,
leases or operates. Except as set forth on Schedule 5.02, each
of the Companies is duly qualified or licensed to do business as
a foreign corporation and is in good standing in each of the
jurisdictions in which the conduct of its business or the
character and location of any property or personnel of the
Company requires such qualification or good standing, except
where the failure to be so licensed or qualified would not have a
material adverse effect on the Companies. All of the issued and
outstanding shares of capital stock of each Company have been
validly authorized and duly issued and are validly outstanding,
fully paid and nonassessable. None of the Companies holds shares
of its capital stock in its treasury and there are no outstanding
(i) subscriptions, calls, puts, options, warrants or other rights
with respect to any capital stock of any of the Companies, (ii)
securities convertible into or exchangeable for shares of any
capital stock of any of the Companies or (iii) other commitments
or agreements of any kind for the issuance of additional shares
of capital stock of any Companies or options, warrants or other
securities of any of them. Schedule 5.02 sets forth the names of
the officers and directors of each Company.
5.03 Corporate Information Table. The following
"Corporate Information Table" sets forth with respect to each of
the Companies: (a) the name under which the Company is
incorporated; (b) the state or other jurisdiction in which the
Company is incorporated; (c) the capitalization of each Company,
including the number of authorized shares of each class of its
stock, the number of issued and outstanding shares of each class
of its stock, the registered holders of any of the Company's
outstanding shares and the number of shares and class of its
stock held by each such registered owner as the same will be at
the Effective Time; and (d) the states or other jurisdictions in
which the Company is qualified to do business as a foreign
corporation.
CORPORATE INFORMATION TABLE
(1) PFAUDLER:
a. Legal name of Company: Pfaudler (United States), Inc.
b. Jurisdiction of Incorporation: Delaware
c. Capitalization of Company:
Number of Number of Name of Registered
Class of Authorized Outstanding Owner/Number of
Shares Shares Shares Shares Owned
Common,
$1.00 par -1,000- -1,000- Eagle Industrial Products
Corporation/all
d. Jurisdictions in which the Company is qualified to do
business as a foreign corporation: Illinois, Michigan,
Ohio, Texas, Missouri, North Carolina, South Carolina, New
York, Massachusetts, and Pennsylvania (with pending
qualifications in Alabama, West Virginia, New Jersey, and
Louisiana)
(2) CHEMINEER:
a. Legal name of Company: Chemineer, Inc.
b. Jurisdiction of Incorporation: Delaware
c. Capitalization of Company:
Number of Number of Name of Registered
Class of Authorized Outstanding Owner/Number of
Shares Shares Shares Shares Owned
Common,
$.01 par -1,000- -800- O.D.E. Manufacturing,
Inc./all
d. Jurisdictions in which the Company is qualified to do
business as a foreign corporation: California, Louisiana,
Ohio, Texas and Massachusetts
(3) EDLON:
a. Legal name of Company: Edlon Products, Inc.
b. Jurisdiction of Incorporation: Delaware
c. Capitalization of Company:
Number of Number of Name of Registered
Class of Authorized Outstanding Owner/Number of
Shares Shares Shares Shares Owned
Common,
$1.00 par -1,000- -1,000- Pfaudler (United States),
Inc./all
d. Jurisdictions in which the Company is qualified to do
business as a foreign corporation: Pennsylvania and
Tennessee
(4) PFAUDLER GERMANY:
a. Legal name of Company: Pfaudler-Werke GMBH
b. Jurisdiction of Incorporation: Germany
c. Capitalization of Company:
Number of Number of Name of Registered
Class of Authorized Outstanding Owner/Number of
Shares Shares Shares Shares Owned
--- -19,950,000- -19,950,000- Pfaudler (United States),
Inc./all
d. Jurisdictions in which the Company is qualified to do
business as a foreign corporation: None
(5) PFAUDLER HOLDINGS U.K.:
a. Legal name of Company: Pfaudler Balfour Holdings, Limited
b. Jurisdiction of Incorporation: England
c. Capitalization of Company:
Number of Number of Name of Registered
Class of Authorized Outstanding Owner/Number of
Shares Shares Shares Shares Owned
Ordinary -5,627- -5,627- Pfaudler (United States),
Inc./5,626
William K. Hall/1
d. Jurisdictions in which the Company is qualified to do
business as a foreign corporation: None
(6) PFAUDLER U.K.:
a. Legal name of Company: Pfaudler Balfour Limited
b. Jurisdiction of Incorporation: England
c. Capitalization of Company:
Number of Number of Name of Registered
Class of Authorized Outstanding Owner/Number of
Shares Shares Shares Shares Owned
Ordinary -100- -2- William K. Hall/1
Pfaudler Balfour Holdings,
Limited/1
d. Jurisdictions in which the Company is qualified to do
business as a foreign corporation: None
(7) PFAUDLER CRS U.K.:
a. Legal name of Company: Chemical Reactor Services Limited
b. Jurisdiction of Incorporation: England
c. Capitalization of Company:
Number of Number of Name of Registered
Class of Authorized Outstanding Owner/Number of
Shares Shares Shares Shares Owned
Ordinary -2,110- -2,110- Pfaudler Balfour Holdings,
Limited/2,109
Pfaudler Balfour Limited/1
d. Jurisdictions in which the Company is qualified to do
business as a foreign corporation: None
(8) PFAUDLER STOLINE U.K.:
a. Legal name of Company: Stoline Limited
b. Jurisdiction of Incorporation: Scotland
c. Capitalization of Company:
Number of Number of Name of Registered
Class of Authorized Outstanding Owner/Number of
Shares Shares Shares Shares Owned
Ordinary -999- -999- Pfaudler Balfour Holdings,
Limited/998
Pfaudler Balfour Limited/1
d. Jurisdictions in which the Company is qualified to do
business as a foreign corporation: None
(9) PFAUDLER PANAMA:
a. Legal name of Company: Pfaudler Development Corporation
b. Jurisdiction of Incorporation: Panama
c. Capitalization of Company:
Number of Number of Name of Registered
Class of Authorized Outstanding Owner/Number of
Shares Shares Shares Shares Owned
Common -400- -400- Pfaudler (United States),
Inc./all
d. Jurisdictions in which the Company is qualified to do
business as a foreign corporation: None
(10) PFAUDLER MEXICO:
a. Legal name of Company: Pfaudler S.A. de C.V.
b. Jurisdiction of Incorporation: Mexico
c. Capitalization of Company:
Number of Number of Name of Registered
Class of Authorized Outstanding Owner/Number of
Shares Shares Shares Shares Owned
--- --- 240,000 Pfaudler Development
Corporation/239,999
Gus J. Athas/1
d. Jurisdictions in which the Company is qualified to do
business as a foreign corporation: None
(11) PFAUDLER BRAZIL:
a. Legal name of Company: Pfaudler Equipamentos Industrias
Ltda.
b. Jurisdiction of Incorporation: Brazil
c. Capitalization of Company:
Number of Number of Name of Registered
Class of Authorized Outstanding Owner/Number of
Shares Shares Shares Shares Owned
Quotas 1,278,000,000 1,278,000,000 Pfaudler (United States),
Inc./1,277,999,042
Eagle Industries, Inc./958
d. Jurisdictions in which the Company is qualified to do
business as a foreign corporation: None
(12) PFAUDLER TORIN:
a. Legal name of Company: Torin Aerotecnica, Ltda.
b. Jurisdiction of Incorporation: Brazil
c. Capitalization of Company:
Number of Number of Name of Registered
Class of Authorized Outstanding Owner/Number of
Shares Shares Shares Shares Owned
Quotas 166,000,000 166,000,000 Pfaudler Equipamentos
Industrias
Ltda./165,999,986
Great American Management
and Investment, Inc./14
d. Jurisdictions in which the Company is qualified to do
business as a foreign corporation: None
(13) CHEMINEER U.K.:
a. Legal name of Company: Chemineer Limited
b. Jurisdiction of Incorporation: England
c. Capitalization of Company:
Number of Number of Name of Registered
Class of Authorized Outstanding Owner/Number of
Shares Shares Shares Shares Owned
Ordinary -- -50,002- Chemineer, Inc./50,000
David Barke/2
d. Jurisdictions in which the Company is qualified to do
business as a foreign corporation: None
5.04 No Violation. Neither the execution and delivery
of this Agreement or the other documents and instruments to be
executed and delivered by Sellers pursuant hereto, nor the
consummation by Sellers of the transactions contemplated hereby
or thereby (i) will violate any provision of the Certificate of
Incorporation or Code of Bylaws of any of the Companies, (ii)
will violate or be in conflict with any applicable law or any
applicable judgment, decree, injunction or order of any
Governmental Entity, or (iii) subject to obtaining the consents
set forth on Schedule 5.04, will violate or conflict with or
constitute a default (or an event which, with notice or lapse of
time or both, would constitute a default) under or will result in
the termination of, or accelerate the performance required by, or
result in the creation of any Security Interest, upon any of the
assets of any of the Companies under, any term or provision of
the Certificate of Incorporation or Bylaws of any of the
Companies or of any contract, commitment, understanding,
arrangement, agreement, order, arbitration award, judgment,
decree or restriction of any kind or character to which any of
the Companies is a party or by which any of the Companies or any
of their assets or properties may be bound or affected, other
than violations or conflicts which would not have a material
adverse effect on the assets or earnings of the Companies.
5.05 Title to Properties; Absence of Liens, Etc.
(a) Real Property Schedule. Set forth on Schedule 1.32
is a complete list of all owned Real Property and Leased Real
Property identified by street address. Listed on Schedule 1.32
is any lease, sublease or other agreement under which any of the
Companies has rights with respect to the Leased Real Property.
None of the Owned Real Property or Leased Real Property is leased
or subleased by the Company to another person.
(b) Title to Real Property and Tangible Assets. Except
as set forth in Schedule 5.05, each of the Companies has good and
marketable title to all its Owned Real Property and all of its
other tangible properties and assets, including without
limitation, those assets and properties reflected in the December
Balance Sheet and those that will be reflected in the Closing
Balance Sheet, free and clear of all Security Interest, except
(i) Security Interests for current Taxes not yet delinquent; (ii)
properties and assets disposed of since the date of the December
Balance Sheet in the ordinary course of business; (iii) Security
Interests and imperfections of title which do not individually or
in the aggregate materially detract from the value, or impair the
use, of the properties as currently used; (iv) inchoate mechanics
and materialmens' Security Interests for construction in
progress; (v) Security Interests of workmen, repairmen,
warehousemen and carriers arising in the ordinary course of
business which are not, material in amount; and (vi) as to Leased
Real Property, Security Interests arising as a result of actions
or inactions of the landlord or owner of such properties
unrelated to any default by any of the Companies under the terms
of occupancy of such property. Each of the Companies own, or
have valid and enforceable rights as lessees to possess and use,
all properties and assets used in the conduct of their respective
businesses since December 31, 1993, other than any properties or
assets disposed of since such date in the ordinary course of
business.
5.06 Receivables. Except as set forth in Schedule
5.06, all of the accounts, notes and other receivables which are
reflected in the December Balance Sheet, and that will be
reflected in the Closing Balance Sheet, were acquired in the
ordinary and regular course of business.
5.07 Financial Statements. Sellers have furnished R&M
the following consolidated financial statements of the Companies
which are attached at Schedule 5.07: (i) the consolidated
statements of financial condition of the Companies at
December 31, 1992 and December 31, 1993 and related statements of
income and cash flow and related notes for the twelve month
period ended July 31, 1992, the five month period ended
December 31, 1992, and the twelve month period ended December 31,
1993, examined by Arthur Andersen & Co., whose report and opinion
thereon is included therewith; (ii) the unaudited consolidated
balance sheet of the Companies at September 30, 1993 and related
statements of income and cash flow; and (iii) the unaudited
consolidated balance sheet of the Companies at March 31, 1994 and
related statement of income (when available) (all of which,
including the notes thereto, are collectively referred to as the
"Financial Statements"). The Financial Statements are in
accordance with the respective books and records of the
Companies, and except as noted in Schedule 5.07 or in such
Financial Statements, have been prepared in accordance with
generally accepted accounting principles applied on a consistent
basis throughout the periods covered by such statements and
fairly present in all material respects the financial condition,
assets and liabilities, net worth, profit and loss accounts and
retained earnings of the Companies on a consolidated basis as of
their respective dates and the results of operations for the
periods then ended.
5.08 Litigation. Schedule 5.08 sets forth every
investigation, action, suit, arbitration, or other legal
proceeding (herein "Legal Proceeding"), which involves any of the
Companies which is presently pending (except such actions, suits
or proceedings as have not been served on any of the Companies
and which are not Known to Sellers), or, to Sellers' Knowledge,
is threatened against any of the Companies other than those set
forth on Schedule 5.09 or 5.11. None of the Companies is in
violation of any judgment, decree, injunction or order
outstanding against any of them.
5.09 Product Liability. Schedule 5.09 is a true and
complete list of any action, arbitration or proceeding alleging
personal injury or property damage which relates to products or
services sold by any of the Companies which is presently pending
(except such actions, arbitrations, or proceedings as have not
been served on a Company and which are not Known to Sellers) or
which, to Sellers' Knowledge, have been threatened since
January 1, 1993 to be asserted against any of the Companies or
which to Sellers' Knowledge have been commenced since or settled
since January 1, 1989.
5.10 Contracts; Powers of Attorney. (a) Schedule 5.10
is a true and complete list of all Contracts of any of the
Companies other than Employee Plans of the Companies which are
listed at Schedule 5.15 and Real Estate Leases which are listed
at Schedule 1.30. Sellers have delivered to R&M true and
complete copies of each Contract listed on Schedule 5.10 and each
Real Estate Lease listed on Schedule 1.30. Except as set forth
on Schedule 5.10, none of the Companies is in default in any
material respect under any Contract and no condition or state of
facts exists which, with notice or the passage of time, or both,
would constitute such a default, except for such instances of
default which do not, either alone or in the aggregate,
materially adversely affect the financial condition or operations
of the Companies.
(b) Except as set forth on Schedule 5.10, there are no
persons holding powers of attorney from any of the Companies.
5.11 Environmental Compliance.
(a) Compliance with Law. Except as set forth in
Schedule 5.11, the Business is being operated in compliance with
all applicable Environmental Laws, except for such minor
instances of noncompliance which do not, either alone or in the
aggregate, materially adversely affect the financial condition or
operations of the Companies.
(b) Permits and Licenses. Except as set forth in
Schedule 5.11, each of the Companies has obtained all permits,
licenses and other authorizations which are required with respect
to the properties and operations of any of the Companies under
applicable Environmental Laws. Except as set forth in Schedule
5.11, each of the Companies is in compliance with all terms and
conditions of the required permits, licenses and authorizations,
and with any order, decree, or judgment of any Governmental
Entity affecting any of the Companies or its properties, except
for such minor instances of noncompliance which do not, either
alone or in the aggregate, materially adversely affect the
financial condition or operations of the Companies.
(c) Legal Proceedings. Except as set forth in Schedule
5.11, there are no actions, suits, demands, notices, claims,
investigations or proceedings under any Environmental Law pending
or, to Sellers' Knowledge, threatened against any of the
Companies or relating to any real property previously or
currently owned, leased, occupied or used by any of the Companies
or requests for information from any Governmental Entity making
inquiries relating to any Environmental Law or any notice that
any of the Companies is or may be a potentially responsible party
under any Environmental Law.
(d) Use or Storage of Hazardous Substances. Except as
set forth on Schedule 5.11, there are no Hazardous Substances
currently utilized at or stored at the Owned Real Property, the
Leased Real Property, or any other property leased, owned, or
operated by any of the Companies except for those for which
permits have been obtained and are in effect or are present in a
manner or in quantities which do not require issuance of permits
under the Environmental Laws.
(e) Releases of Hazardous Substances. Except as set
forth in Schedule 5.11, there has not been any release of any
Hazardous Substances on or from the Owned Real Property, the
Leased Real Property, or any other real property currently or
previously leased, owned, or operated by any of the Companies
during the time any such property was owned, leased, or operated
by any of the Companies except for such minor instances of
noncompliance which do not, either alone or in the aggregate,
materially adversely affect the financial condition or operations
of the Companies. The term "release" shall have the meaning
given to such term in Section 101(22) of CERCLA.
(f) Off-site Disposal of Hazardous Substances. Except
as set forth in Schedule 5.11, any Hazardous Substances removed
from the Owned Real Property, the Leased Real Property, or any
other property currently or previously owned, leased, or operated
by any of the Companies during the time the property was owned,
leased, or operated by any of the Companies was removed,
transported off-site, treated, stored or disposed of in
compliance with applicable Environmental Laws, except for such
minor instances of noncompliance which do not, either alone or in
the aggregate, materially adversely affect the financial
condition or operations of the Companies.
(g) Limitations. Nothing in this Section 5.11 shall be
construed as a representation or warranty regarding activities,
practices or conditions on the Owned Real Property, the Leased
Real Property or any other real property currently or previously
owned or operated by any of the Companies, prior to Eagle's
ownership of the Companies.
5.12 Kennecott Agreement. Neither Great American
Industrial Group, Inc., a Delaware corporation, nor Legibus 855,
Limited, an English corporation, assigned the Kennecott Agreement
or any portion thereof or its respective rights thereunder, to
any party who was not then an affiliate of the assignor, nor has
any assignee of the Agreement or such rights further assigned the
Kennecott Agreement or any portion thereof or its respective
rights thereunder to any party who was not then an affiliate of
such assignor. To Seller's Knowledge, the sellers under the
Kennecott Agreement and their respective successors and assigns
have never asserted that the indemnification provided to the
buyers under the Kennecott Agreement was not available to any
successor of the original buyers under the Agreement due to any
assignment thereof.
5.13 Compliance with Laws and Orders. Except as
disclosed in Schedule 5.11 or 5.13, to Sellers' Knowledge, the
Companies and the Business are currently operating in compliance
with any law ordinance, regulation, judgment, order, decree,
license or permit of any Governmental Entity (including without
limitation, zoning ordinances, building codes, occupational
health and safety laws and regulations and franchise laws and
regulations), except for possible violations which have not had,
and, insofar as reasonably can be foreseen will not have, a
material adverse effect on the financial condition or operations
of the Companies. Except as set forth on Schedule 5.11 or 5.13,
to Sellers' Knowledge, no investigation or review by any
Governmental Entity with respect to any of the Companies is
pending or threatened.
5.14 Permits and Licenses. Except as set forth in
Schedule 5.11 or 5.14, each of the Companies has all permits,
licenses, orders and approvals of all federal, state, local, and
foreign governmental or regulatory bodies required for to carry
on the Business as presently conducted, except for such permits,
licenses, orders and approvals, the absence of which does not
have a material adverse effect on the Companies. All of such
permits are in full force and effect, and to Sellers' Knowledge,
no suspension or cancellation of any of them is being threatened,
nor will any of the permits be affected by the consummation of
the transactions contemplated by this Agreement.
5.15 Employee Plans.
(a) Representations Applicable to All Employee Plans.
(i) Part I of Schedule 5.15 sets forth a complete list
of all Domestic Employee Plans, and Part II of Schedule 5.15
sets forth a complete list of all Foreign Employee Plans.
Sellers have previously delivered or made available to R&M
true and complete copies of all such Employee Plans, in each
case as in effect on the date of this Agreement.
(ii) Each Employee Plan has been maintained, operated
and administered in substantial compliance with its terms.
Each Domestic Employee Plan currently complies, and has at
all relevant times complied, in all material respects with
ERISA, the Code, and any other applicable laws.
(iii) Except as set forth on Schedule 5.15, no Domestic
Employee Plan provides benefits, including without
limitation, death or medical benefits (whether or not
insured), with respect to current or former employees beyond
their retirement or other termination of service, other than
(a) temporary coverage mandated by applicable law, (b) death
benefits or retirement benefits under any employee pension
plan, as that term is defined in Section 3(2) of ERISA, (c)
deferred compensation benefits accrued as liabilities on the
books of the Company providing the same, or (d) benefits the
full cost of which are borne by the current or former
employee (or his or her beneficiary).
(iv) No Domestic Employee Plan is involved in or is the
subject of any litigation or any claims other than routine
benefit claims, and to Sellers' Knowledge, no facts exists
which are reasonably expected to result in the filing of any
such litigation or claim that may have a materially adverse
effect on a Company.
(v) All required contributions to each Domestic
Employee Plan have been made, except for current
contributions not yet due and payable, all of which through
March 31, 1994 have been accrued and are reflected in the
Financial Statements.
(b) Qualified Plans.
(i) All "employee pension benefit plans" (within the
meaning of Section 3(2) of ERISA) listed in Part I of
Schedule 5.15 which are also stock bonus, pension or profit-
sharing plans within the meaning of Section 401(a) of the
Code are marked "Qualified" on such Schedule.
(ii) Each such plan has been duly authorized by the
appropriate board of directors of any of the Companies whose
employees participate in such a plan. Each such plan is
qualified in form and operation under Section 401(a) of the
Code and each trust under each such plan is exempt from tax
under Section 501(a) of the Code. No event has occurred that
will or could give rise to disqualification or loss of tax-
exempt status of any such plan or trust under such Sections.
No event has occurred that will subject any such plans to tax
under Section 511 of the Code.
(iii) Sellers have delivered to R&M for each such plan
copies of the following documents: (a) the Form 5500 filed
in the most recent plan year, including but not limited to
all schedules thereto and financial statements with attached
opinions of independent accountants, (b) the most recent
determination letter from the IRS, (c) the consolidated
statement of assets and liabilities of such plan as of its
most recent valuation date, and (d) the statement of changes
in fund balance and in financial position or the statement of
changes in net assets available for benefits under such plan
for the most recently ended plan year. The financial
statements so delivered fairly present the financial
condition and the results of operations of each of such plans
as of such dates, in accordance with generally accepted
accounting principles.
(iv) With respect to each plan subject to Section 412 of
the Code maintained for employees of any of the Companies, or
any of their ERISA Affiliates, there has occurred no failure
to meet the minimum funding standard of Section 412 of the
Code (whether or not waived in accordance with Section 412(d)
of the Code) or failure to make by its due date a required
installment under Section 412(m) of the Code.
(c) Title IV Plans.
(i) All Employee Plans listed in Part I of Schedule
5.15 which are also subject to Title IV of ERISA are marked
"Qualified and Subject to Title IV" on such Schedule.
(ii) With respect to each "employee pension benefit
plan" (within the meaning of Section 3(2) of ERISA) in which
any of the Companies or any ERISA Affiliate participates or
has participated, (a) none of the Companies nor any ERISA
Affiliate has withdrawn from such plan during a plan year in
which it was a "substantial employer" (as defined in Section
4001(a)(2) of ERISA) where such withdrawal could result in
liability of such substantial employer pursuant to Section
4062(e) or 4063 of ERISA, (b) none of the Companies nor any
ERISA Affiliate has filed a notice of intent to terminate any
such plan or adopted any amendment to treat any such plan as
terminated, (c) the PBGC has not instituted proceedings to
terminate any such plan, (d) no other event or condition has
occurred which might constitute grounds under Section 4042 of
ERISA for termination of, or the appointment of a trustee to
administer, any such plan, (e) no accumulated funding
deficiency, whether or not waived, exists with respect to any
such plan, and no condition has occurred or exists which with
the passage of time would be expected to result in an
accumulated funding deficiency as of the last day of the
current plan year of any such plan, (f) all required premium
payments to the PBGC have been paid when due, (g) no
reportable event, as described in Section 4043 of ERISA has
occurred with respect to any such plan except as set forth on
Schedule 5.15, (h) no excise taxes are payable under the Code
and (i) no amendment with respect to which security is
required under Section 307 of ERISA has been made or is
reasonably expected to be made.
(iii) All costs of any plans which are sponsored by any
of the Companies and subject to Title IV of ERISA and
identified in Part I of Schedule 5.15 as such have been
provided for on the basis of consistent methods in accordance
with sound actuarial assumptions and practices. Schedule
5.15 includes for each such plan, as of its last valuation
date, the amount by which its assets exceeded (or were less
than) its "benefit liabilities" (within the meaning of
Section 4001 of ERISA). Since the last valuation date for
each such plan, there has been no amendment or change to such
plan that would increase the amount of benefits thereunder
and, to Sellers' Knowledge, there has been no event or
occurrence that would cause the excess of assets over benefit
liabilities as listed in Schedule 5.15 to be reduced or the
amount by which benefit liabilities exceed assets as listed
in Schedule 5.15 to be increased.
(iv) In addition to the documents listed in Section
5.15(b) above, Sellers have delivered to R&M for each Title
IV plan which is sponsored by any of the Companies copies of
the following documents: (a) the Form PBGC-1 filed in each
of the most recent three plan years, and (b) the actuarial
report as of the last valuation date. Each such actuarial
report fairly presents the financial condition and the
results of operations of each such plan as of such date, in
accordance with generally accepted accounting principles.
5.16 Insurance. Schedule 5.16 sets forth a list and
description of the insurance policies currently maintained by any
of the Companies. No notice of suspension or cancellation of any
such policies has been received by any of the Companies or to
Sellers' Knowledge, is threatened in writing. R&M acknowledges
that coverage under such insurance policies will cease at the
Effective Time for occurrences after the Effective Time.
5.17 Capital Projects. Schedule 5.19 contains a
summary description of all capital projects committed for or
authorized by any of the Companies involving the expenditure of
Fifty Thousand Dollars ($50,000) or more.
5.18 Absence of Certain Changes, Events or Conditions.
Since December 31, 1993 and except as set forth in Schedule 5.20,
(1) the Business has been conducted in the ordinary course on a
basis consistent with past practice, (2) each of the Companies
have paid each of their respective creditors in the ordinary
course of business unless the existence or amount of indebtedness
is being contested in good faith, (3) except as reflected on the
Financial Statements, there has not been any material adverse
change in the financial position, results of operations, or net
worth of the Companies, or (4) none of the Companies have
declared, set aside, or paid any dividend or other distribution
in respect of its capital stock, or, directly or indirectly,
redeemed or otherwise acquired any of its capital stock.
5.19 Labor Matters. Except as set forth on Schedule
5.19, (i) there are no controversies pending between any of the
Companies and any of their respective employees, other than
routine individual grievances which will not have a materially
adverse affect on the Companies and (ii) no employee of any of
the Companies is represented by any labor union and, to Sellers'
Knowledge, no labor union is attempting any such representation.
5.20 Proprietary Property. Except as set forth on
Schedule 5.08, there are no pending and, to the best of Sellers'
Knowledge, threatened interference, opposition or infringement
actions, or any other proceedings with respect to the Proprietary
Information. Schedule 5.20 lists all of the patents, trademarks,
service marks, trade names and registered copyrights and all
applications for any of the foregoing which are owned by any of
the Companies. Subject to being challenged during any unexpired
opposition period provided under applicable law or to being
contested as improperly issued under applicable law, one of the
Companies will be at the Effective Time the registered owner and
have good and marketable title to the registered patents and
trademarks in the listed jurisdictions and, to Sellers'
Knowledge, good title to all of the other Proprietary
Information. To Sellers' Knowledge, each of the Companies has
valid, binding, enforceable and assignable rights to use all of
the other Proprietary Information it uses. R&M acknowledges that
Sellers do not make any representation or warranty hereunder that
third parties cannot and do not lawfully possess and use in their
business trade secrets, know-how, patents, trademarks, service
marks, trade names, copyrights, applications for any of the
foregoing and other similar proprietary or intellectual property
rights or interests which are similar to the Proprietary
Information. Except as set forth on Schedule 5.20, to Sellers'
Knowledge, there has been no infringement or misappropriation of
the Proprietary Information.
5.21 Affiliates. No part of the Business is conducted
through any Affiliate of Sellers other than the Companies.
5.22 Express Representations and Warranties Only. THE
BUSINESS AND ASSETS OF THE COMPANIES ARE BEING ACQUIRED BY R&M
PURSUANT TO THIS AGREEMENT WITHOUT REPRESENTATION OR WARRANTY OF
ANY KIND, EXPRESS OR IMPLIED, EXCEPT FOR SUCH REPRESENTATIONS AND
WARRANTIES AS ARE EXPRESSLY SET FORTH IN THIS AGREEMENT.
5.23 Predecessor Affiliates. For purposes of the
representations, warranties, or covenants of Sellers under this
Agreement with respect to any Company, "Company" includes any
predecessor company to a Company if the predecessor company was
owned by any person who was an Affiliate of any person who is now
an Affiliate of Eagle.
Section 6. Representations and Warranties of R&M. R&M
hereby represents and warrants the following to Sellers as of the
date of this Agreement:
6.01 Organization; Good Standing; and Qualification.
R&M is a corporation duly organized, validly existing and in good
standing under the laws of the State of Ohio, with the corporate
power and authority to conduct its business and to own and lease
its properties and assets.
6.02 Corporate Authority. R&M has the corporate power
and authority to execute, deliver and carry out the terms of this
Agreement and the other agreements and instruments to be executed
and delivered by it in connection with the transactions
contemplated hereby and thereby and has taken all necessary
corporate action, including approval by its Board of Directors,
to authorize the execution and delivery of this Agreement and
such other agreements and instruments and the consummation of the
transactions contemplated hereby and thereby. This Agreement is,
and the other agreements and instruments to be executed and
delivered by R&M in connection with the transactions contemplated
hereby and thereby will be, the legal, valid and binding
obligations of R&M, enforceable in accordance with their terms,
except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or from time to time affecting the enforcement of
creditors' rights generally and except that the enforceability of
R&M's obligations is subject to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
6.03 No Violation. Neither the execution and delivery
of this Agreement or the other documents and instruments to be
executed and delivered by R&M pursuant hereto, nor the
consummation by R&M of the transactions contemplated hereby or
thereby (i) will violate any provision of its Articles of
Incorporation or Code of Regulations, (ii) will violate or be in
conflict with any applicable law or any judgment, decree,
injunction or order of any Governmental Entity, or (iii) subject
to obtaining the consents set forth on Schedule 6.04, will
violate or conflict with or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a
default) under or will result in the termination of, or
accelerate the performance required by, or result in the creation
of any Security Interest, upon any of the assets of R&M under,
any term or provision of the Certificate of Incorporation or
Bylaws of R&M or of any contract, commitment, understanding,
arrangement, agreement, order, arbitration award, judgment,
decree or restriction of any kind or character to which R&M is a
party or by which R&M or any of its assets or properties may be
bound or affected, other than violations or conflicts which would
not have a material adverse effect on R&M and Security Interests
created in connection with the bank loan agreements which R&M
intends to enter into at Closing and the R&M Note Agreement.
6.04 Consents. Except as required under the HSR Act
and except as set forth in Schedule 6.04, no authorization,
consent, approval, order or filing with or notice to any
Governmental Entity or another entity or person, is necessary for
the execution and delivery of this Agreement or any other
agreement or document to be delivered by R&M or the consummation
by R&M of the transactions contemplated hereby or thereby.
6.05 No Brokerage Fees. Except for Wasserstein Perella
& Co., Inc. and Scott W. Mohr, no broker or finder has acted for
R&M in connection with this Agreement or the transactions
contemplated hereby and no broker or finder is entitled to any
brokerage or finders fee or other commissions in respect of such
transactions based in any way on agreements, arrangements or
understandings made by or on behalf of R&M. Any and all fees of
Wasserstein Perella & Co., Inc. and Scott W. Mohr (or any firm
with which he is associated) due in connection with the
transactions provided for herein shall be the responsibility of
R&M.
6.06 Litigation. There is no order, judgment or decree
of any Governmental Entity, by which R&M is bound and no action,
suit or other legal, administrative or arbitration proceedings or
investigations before any Governmental Entity is pending or, to
R&M's knowledge, threatened, which, in each case, would prohibit
the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby.
6.07 Capitalization. The authorized capital stock of
R&M consists of 10,000,000 common shares ("R&M Shares"). As of
the date of this Agreement, there were 5,116,816 R&M Shares
issued and outstanding. There are no outstanding options,
warrants, convertible instruments or other rights, agreements or
commitments to acquire capital shares of R&M except for options
or rights granted under R&M's 1984 Stock Option Plan, Stock
Option Plan for Non-Employee Directors (1988), 1994 Long-Term
Incentive Plan and 1994 Directors Stock Compensation Plan.
6.08 Financing. R&M has the funds immediately
available to it, or commitments from responsible financial
institutions to provide the funds, required by R&M to consummate
the transactions contemplated hereby. R&M has provided Seller a
copy of such commitments.
Section 7. Arrangements as to Certain Employee Plans.
(a) Transfer from Eagle Savings Plan
(i) Each employee of the Companies who is a current
participant in the Eagle Industries, Inc. Employee Savings
Plan (the "Savings Plan") shall have his or her accrued
benefit under the Savings Plan become vested and
nonforfeitable in accordance with the terms of the Savings
Plan as of the Closing Date and shall be entitled to receive
an allocation of any and all employer contributions (if any)
made to the Savings Plan for the plan year which includes the
Closing Date, including the contributions required to be made
pursuant to paragraph (a)(iv) of this Section 7.
(ii) On or before ninety (90) days after the Closing
Date, Eagle shall cause the trustee of the Savings Plan to
transfer, to the trustee or trustees of the trust fund of a
qualified defined contribution plan maintained by R&M (either
currently existing or hereinafter established by R&M) (the
"Transferee Savings Plan") in cash or in marketable
securities at market values determined by the plan trustees,
the entire value of the accounts of each employee of the
Companies participating in the Savings Plan (excluding any
deferred vested former participants), as determined under the
provisions of the Savings Plan. Eagle will amend the Savings
Plan to the extent required to accomplish the transfer of
assets. All written elections governing the making and
investment of participant contributions, current written
beneficiary designation forms and findings regarding the
rights of alternate payees (as defined in Section 414(p) of
the Code) under the Savings Plan which are in effect on the
Closing Date shall become effective with respect to the
Transferee Savings Plan on and after the Closing Date and
shall continue in effect under the plan after the Closing
Date until changed in accordance with the terms of the
Transferee Savings Plan. Unless otherwise agreed by Eagle
and R&M, at least sixty (60) days prior to the transfer R&M
shall present to Eagle an executed copy of the Transferee
Savings Plan and either an opinion of counsel in a form
satisfactory to Eagle that the Transferee Savings Plan has
been duly adopted by R&M's board of directors and satisfies
the requirements for qualification under section 401(a) of
the Code or a determination letter issued by the Internal
Revenue Service that the Transferee Savings Plan meets the
requirements of Section 401(a) of the Internal Revenue Code
of 1986. At least sixty (60) days prior to the transfer
Eagle shall present to R&M either an opinion of counsel that
the Savings Plan has been duly adopted by Eagle's board of
directors and satisfies the requirements of Section 401(a) of
the Code or a determination letter issued by the Internal
Revenue Service that the Savings Plan meets the requirements
of Section 401(a) of the Internal Revenue Code of 1986.
Prior to any transfer hereunder, Eagle and R&M each shall
file Form 5310 or such other forms with the Internal Revenue
Service and the Department of Labor if required under
applicable law.
(iii) After the transfer described above, neither Eagle
nor the Savings Plan shall have any liability or obligation
to pay or otherwise provide to employees of the Companies any
benefits accrued under the Savings Plan, and R&M shall assume
full liability for such benefits; provided that R&M shall
have no liability whatsoever and Eagle shall remain liable to
employees of the Companies for any failure by Eagle to
operate the Savings Plan on a qualified basis under Section
401(a) of the Internal Revenue Code and in compliance with
applicable law prior to the transfer described in this
subsection.
(iv) At the Closing each of the Companies which is a
participating employer under the Savings Plan shall pay to
Eagle (and Eagle shall pay to the Savings Plan) all employee
and employer contributions of the Companies to the Savings
Plan not already transferred to the Savings Plan as of the
Closing Date, for all calendar months ending on or prior to
the Closing Date and for the calendar month in which the
Closing Date occurs. For purpose of this paragraph, employee
contributions shall be those amounts withheld from employees'
compensation for the period prior to and including the
Closing Date, and employer contributions shall be the
employer contributions required to be made with respect to
such employee contributions.
(b) Assumption of Union Savings Plan. Eagle maintains
the Eagle Industries, Inc. and Affiliates Savings Plan for Union
Employees (the "Transferred Savings Plan") for certain employees
of Pfaudler. Within sixty (60) days after the Closing Date,
Eagle shall take all actions necessary to cause the trustee of
the Transferred Savings Plan to transfer to R&M the Transferred
Savings Plan (and the related trusts or their assets), including
the obtaining of any consents of any trustees or administrators
or of any entity holding trust assets or in which trust assets
are invested, and R&M shall take all actions necessary to
formally assume as of the Closing Date the Transferred Savings
Plan, and related trusts, as plan sponsor. After effecting such
transfer, Eagle shall have no responsibility or liability for any
further funding of or any payments made or to be made from any
liabilities, obligations, losses, damages or expenses relating to
funding of or payments made or to be made from the Transferred
Savings Plan following the transfer of the Transferred Savings
Plan from Eagle to R&M; provided, that R&M shall have no
liability whatsoever for, and Eagle shall indemnify R&M and the
Companies from and against, any liability arising from the
failure by Eagle to operate the Transferred Savings Plan on a
qualified basis in compliance with applicable law prior to the
transfers contemplated by this subsection (b).
Section 8. Taxes; Tax Returns; and Tax Indemnities.
(a) Definitions. For purposes of this Section 8, the
following terms shall have the following meanings:
(i) "Consolidated Return" means any consolidated
federal income tax return or any other consolidated,
combined or unitary state or local tax return that has been
or will be filed for any Pre-Closing Tax Period by Sellers
or an Affiliate of Sellers on behalf of an affiliated group
of corporations of which one or more of the Companies was or
is includible as members.
(ii) "Pre-Closing Tax Period" means all taxable
periods ending on or before the Closing Date and that
portion to and including the Closing Date of any taxable
period that includes (but does not end on) the Closing Date.
(iii) "Tax" or "Taxes" means all taxes, charges, fees,
levies or other assessments imposed by any federal, state,
local, or foreign taxing authority, including without
limitation, income, excise, property, sales, use, transfer,
payroll, license, employment, production, gross receipts,
windfall profits, severance, withholding and franchise taxes
(including any interest, penalties or additions attributable
to or imposed on or with respect to any such assessment);
and any amounts that could be charged against any of the
Companies under a tax sharing agreement relating to a Pre-
Closing Tax Period.
(iv) "Tax Return" means any return, report,
information return, or other document (including any related
or supporting information) filed or required to be filed
with any federal, state, local, or foreign governmental
entity or other authority in connection with the
determination, assessment or collection of any Taxes or the
administration of any laws, regulations or administrative
requirements relating to any Taxes, including, without
limitation, consolidated federal income tax returns of the
Seller Group, declarations of estimated tax and tax reports
required to be filed with respect to any of the Companies or
any of their income, properties or operations.
(b) Section 338(h)(10) Election. Sellers and R&M
shall, at the time and in the manner requested by R&M, join in
making a Section 338(h)(10) election under the Code (or any
comparable election available in any state or local tax
jurisdiction) with respect to the purchase and sale of the Stock
(and the capital stock of Edlon) and, in connection therewith (i)
shall cause a Department of the Treasury Form 8023 that has been
appropriately completed to be timely filed on behalf of the
affiliated group of corporations, for federal income tax
purposes, of which any of the Companies is a member on the
Closing Date and (ii) take such other action as R&M shall
reasonably request including, without limitation, providing R&M
with any requested information, and making available and causing
appropriate persons to take any action on behalf of the Sellers
required for the making of a Section 338(h)(10) election (or any
comparable election in any state or local tax jurisdiction) in
accordance with Treasury Regulation Section 1.338(h)(10)-1 and
Department of the Treasury Form 8023 (or comparable regulations
of the applicable jurisdiction).
(c) Section 338(g) Election. R&M or the Companies, at
their sole discretion, may make a Section 338(g) election under
the Code for any or all of the Foreign Companies. If such
election or elections are made, R&M will give, or cause the
applicable Company to give, the notice required by Treasury
Regulation 1.338-1(g)(4).
(d) Indemnification of R&M Group. Subject to the
provisions of Section 8.1(f), Sellers shall be liable for, and
shall hold the R&M Group harmless from and against, any and all
Taxes due or payable by a Company for any Pre-Closing Tax Period,
including, without limitation, any liability pursuant to Treasury
Regulations Section 1.1502-6, or any comparable state or local
provisions. Taxes that Sellers shall be liable for and shall
hold the R&M Group harmless from and against shall include any
income and franchise taxes imposed by any state or political
subdivision thereof that result from or arise out of the filing,
in accordance with Treasury Regulation Section 1.338(h)(10)-1, of
a Section 338(h)(10) election (or any election of the applicable
jurisdiction which treats the purchase and sale of the Stock (and
the capital stock of Edlon) as a deemed purchase and sale of
assets) with respect to the purchase and sale of the Stock (and
the capital stock of Edlon). Any liability of Sellers for Taxes
under this Section 8.1(d) to the R&M Group in respect of any tax
period for which R&M or a Company will file a Tax Return pursuant
to Section 8.1(g) shall be paid by Sellers to R&M or the Company,
as applicable, within ten (10) business days after R&M provides
the Sellers with a copy of the Tax Return to be filed, but no
such payment shall be required if the liability for such Taxes is
included in the Closing Statement. Notwithstanding the
foregoing, Sellers shall not be required to indemnify the R&M
Group for any Taxes, other than income or franchise taxes, until
the amount of such Taxes which are not income or franchise Taxes
and which were not reserved against in the Closing Statement
exceeds $250,000 in the aggregate and then Sellers shall
indemnify R&M for the full amount of such Taxes.
(e) Indemnification Of Seller. Subject to the
provisions of Section 8.1(f), R&M and the Companies shall be
liable for, and shall hold the Seller Group harmless from and
against, any and all Taxes due or payable by a Company, R&M or
Sellers with respect to a Company for any taxable year or tax
period beginning after the Effective Time.
(f) Allocable Taxes. Taxes, other than Taxes payable
in respect of a Consolidated Return, for a tax period beginning
before the Effective Time and ending after the Effective Time
shall be apportioned between Sellers and the Companies based upon
the parties best estimate of the income and expenses allocable to
each parties period of ownership.
(g) Filing of Returns. R&M shall cause each of the
Companies to file any Tax Return (other than any Consolidated
Return) with respect to the business, activities or assets of any
of the Companies for any tax period beginning before the
Effective Time and ending after the Effective Time and R&M shall
pay or cause the relevant Company to pay (subject to Sellers'
obligations to R&M in respect of such Taxes therefor as provided
in Section 8.1(d)) all Taxes shown as due on any such Tax Return.
(h) Refunds. Any refunds or credits of Taxes
attributable to a Pre-Closing Tax Period for which Sellers are
liable for Taxes under Section 8.1(d) shall be for the account of
Sellers, provided, that if Sellers receive a refund or credit of
Taxes for any such periods and such Taxes are attributable solely
to the carry-back of losses, credits or similar items from a
taxable year or period that begins after the Effective Time and
attributable to a Company, after receipt Sellers shall promptly
pay to R&M the amount of such refund or credit, together with any
interest thereon received from the relevant taxing authority, and
if any such refund or credit of Taxes is subsequently reduced or
disallowed, R&M and the Companies shall hold Seller Group
harmless from any Taxes assessed against Sellers by reason of the
reduction or disallowance.
(i) Maintenance of Records and Assistance. Sellers
and R&M shall each maintain (or, in the case of R&M, cause the
Companies to maintain) the books and records that relate to any
Tax Return of a Company or any Consolidated Return for a period
of not less than seven years following the filing date of such
Tax Return or Consolidated Return, shall thereafter give the
other party at least 30 days notice of its intention to destroy
any such records and shall, at the other party's request and
expense, to the extent such records relate to a Company, turn
over any such records to the other party instead of destroying
them. As soon as practicable after a request by Sellers or R&M
("Requesting party"), R&M or Sellers, as the case may be (the
"Delivering Party"), shall deliver to the Requesting Party such
information and data and make available such knowledgeable
persons employed at the time of the request by the Delivering
Party as the Requesting Party may reasonably request, in order to
enable the Requesting Party to complete and file all Tax Returns
which it is required to file with respect to the activities or
assets of a Company or to respond to audits by any taxing
authorities with respect to such activities or assets. The
Delivering Party's obligation under this paragraph to permit the
Requesting Party access to and to review the foregoing materials
is conditioned upon the Requesting Party's execution of a
reasonable confidentiality agreement with respect thereto.
(j) Notice. If R&M or a Company becomes aware of any
assessment, official inquiry, examination or proceeding that
could result in an official determination with respect to any Tax
for which Sellers could be liable pursuant to this Agreement, R&M
shall promptly so notify Sellers in writing. If Sellers become
aware of any official inquiry, examination or proceeding that
could result in an official determination with respect to any Tax
for which R&M or a Company could be liable pursuant to this
Agreement, Sellers shall promptly so notify R&M in writing.
(k) Sellers and R&M agree that the Companies will
remain a member of the consolidated federal income tax return of
the Sellers and their Affiliates for the period through the
Closing Date and that a Company will not make an election
pursuant to Treasury Income Tax Regulation Section 1.1502-
76(b)(5).
(l) New York Real Property Gains Tax.
(i) Sellers and R&M agree to comply timely with the
requirements of Article 31-B of the Tax law of the State of
New York relating to gain realized from the transfer of real
property located in New York, as the same from time to time
may be amended (collectively, the "Gains Tax Law") in good
faith and in such manner as to avoid any postponement of the
Closing or of the transfer of the Stock at Closing. R&M
agrees to deliver to Seller a duly executed and acknowledged
Transferee Questionnaire, if applicable, within five (5)
business days after written request from Sellers. At the
Closing, Sellers shall deliver or cause to be delivered
either (i) an official Statement of No Tax Due, (ii) an
official Tentative Assessment and Return accompanied by a
certified check or official bank check (drawn on a New York
Clearinghouse member bank) payable to the order of the State
Tax Commission in the amount of the tax shown to be due
thereon (it being understood, however, that if Sellers have
duly elected to pay such tax in installments, the amount so
required to be paid shall be the minimum installment of such
tax then permitted to be paid), or (iii) if applicable, a
duly executed and acknowledged affidavit in form permitted
under the Gains Tax Law claiming exemption therefrom.
(ii) Sellers further agree to pay promptly any
installment(s) or additional tax due under the Gains Tax
Law, and interest and penalties thereon, if any, which may
be assessed or become due after the Closing for which
Sellers are responsible pursuant to Section 8.1(d).
(iii) In addition to making the payment and delivering
the instruments and documents referred to above in this
Section, Sellers and R&M shall timely execute, acknowledge
and deliver such further documents and instruments as may be
necessary to comply with the Gains Tax Law.
(m) New York Real Property Transfer Tax. Sellers
shall file any Tax Return required under Article 31 of the Tax
law of the State of New York relating to the conveyance of real
property located in the State of New York within 15 days after
the Closing Date and pay and hold harmless the R&M Group against
all Taxes, if any, arising thereunder.
(n) Each of the Sellers jointly and severally
represents and warrants the following to R&M as of the date of
this Agreement:
(i) Tax Return Filings. The Companies have duly filed
or caused to be filed, or shall duly file or cause to be
filed, in a timely manner (taking into account all
extensions of due dates) with the appropriate federal,
state, county, local and foreign governmental agencies all
Tax Returns, which are required to be filed on or before the
Closing Date by or on behalf of the Companies and such
returns are (or will be, in the case of those filed or
caused to be filed between the date hereof and the Closing
Date) complete and correct in all material respects, and all
Taxes shown to be due on such Tax Returns have been or will
have been paid in full on or before the Closing Date.
(ii) International Boycott. None of the Companies has
participated in (and will not participate in) an
international boycott within the meaning of Section 999 of
the Code.
(iii) U.S. Real Property Holding Corporation. None of
the Companies is, and none has been, a United States real
property holding corporation (as defined in Section
897(c)(2) of the Code) during the applicable period
specified in Section 897(c)(1)(A)(ii) of the Code.
(iv) Permanent Establishment. None of the Companies
have, or has had, a permanent establishment in any foreign
country other than their respective country of formation.
(v) Passive Foreign Investment Company. None of the
Foreign Companies is, or have been, a Passive Foreign
Investment Company or have Qualifying Election Fund Status
within the meaning of the Code.
Section 9. Representations and Warranties of Sellers
Regarding the India Company. Sellers represent and warrant the
following to R&M as of the date of this Agreement:
9.01 Capitalization and Title to Capital Stock. There
are 1,591,800 equity shares of the India Company issued and
outstanding. At the Closing, when Eagle transfers and conveys
the Pfaudler Stock to R&M, Pfaudler will own of record and
beneficially 636,720 equity shares of the issued and outstanding
capital stock of the India Company free and clear of any and all
Security Interests, except for Security Interests created by R&M,
which shares represent 40% of the outstanding equity shares of
the India Company.
9.02 Organization. The India Company is a
corporation, duly organized, validly existing and in good
standing under the laws of India, with the corporate power and
authority to conduct its business and to own and lease its
properties and assets.
Section 10. Certain Covenants of Sellers.
10.01 Interim Operations of the Companies. During the
period from the date of this Agreement to the Effective Time,
except as specifically contemplated by this Agreement, as
required by applicable laws or regulations or proper orders of
Governmental Entities, or as otherwise consented to by R&M in
writing (and R&M shall designate one or more persons to be
available, which persons shall have the authority to provide such
consent):
(a) Conduct of Business. Seller shall cause each of
the Companies to conduct its business in, and only in, the
regular course in substantially the same manner as
heretofore conducted.
(b) Governing Instruments. Sellers shall not permit
any of the Companies to make any change or amendment to or
repeal their respective Certificate of Incorporation or By-
laws or comparable governing instruments.
(c) Capital Stock. Sellers shall not permit any of
the Companies to issue or sell shares of capital stock or
any other securities of any of them or issue any securities
convertible into or exchangeable for, or rights to purchase
relating to, or enter into any contract, commitment or
arrangement with respect to the issuance of, any shares of
capital stock or any other securities of any of them, or
adjust, split, combine or reclassify any of their capital
stock or other securities, or amend, permit acceleration of,
or otherwise make any other changes in their capital
structures.
(d) Dividends. Sellers shall not permit any of the
Companies to declare, set aside, pay or make any dividend or
other distribution or payment (whether in cash, stock or
property) with respect to, or purchase or redeem, any shares
of their capital stock.
(e) Employee Plans, Compensation, Etc. Sellers shall
not permit any of the Companies to adopt or amend any bonus,
profit sharing, compensation, severance, stock option,
pension, retirement or other employee benefit agreement,
trust, plan or arrangement for the benefit or welfare of any
present or former director, officer or employee of any of
the Companies. Sellers shall not permit any of the
Companies to increase the compensation or fringe benefits of
any present or former director, officer or employee (except
that, in the case of employees who are not officers,
individual merit increases and promotional increases, not to
exceed 5% of salary, in accordance with past practices may
be granted, but no across-the-board or generally applicable
increases may be granted), or pay any bonus, compensation or
benefit not required by any existing Employee Plan, or hire
any employee at an annual rate of compensation (including
anticipated incentive compensation, if any) in excess of
$65,000, or enter into any contract, agreement, commitment
or arrangement to do any of the foregoing.
(f) Sale of Assets. Other than in the ordinary course
of business, Sellers shall not permit any of the Companies
to lease, sell or dispose of, or contract to lease, sell or
dispose of, in any single transaction or series of related
transactions, any asset or group of assets having a value,
or selling price, or aggregate rental, in excess of $50,000.
(g) Purchase of Assets. Other than in the ordinary
course of business, Sellers shall not permit any of the
Companies to lease, purchase or otherwise acquire, in any
single transaction or series of related transactions, any
asset or group of assets having a value or purchase price,
or lease payments, in excess of $50,000, except that each of
the Companies shall be permitted to, and shall, continue any
existing capital expenditure projects or programs listed in
Schedule 5.17 in a manner consistent with the performance of
such projects or programs prior to the date of this
Agreement.
(h) Investments, Loans and Guarantees. Seller shall
not permit any of the Companies to make any investment
(whether by acquisition of stock, capital contribution or
otherwise) in, or make any loan or advance to, or enter into
or renew any guarantee on behalf of, any person which
continues after the Effective Time other than a directly or
indirectly wholly-owned Subsidiary of Pfaudler or Chemineer
or become committed to do so.
10.02 Access, Information and Confidentiality.
(a) During the period from the date of this Agreement
to the Effective Time, Sellers shall provide to R&M and R&M's
authorized representatives reasonable access during normal
business hours to the books and records of Eagle and its
Affiliates, but only insofar as such access is reasonably
required in regard to R&M's due diligence review of the financial
statements and Business of the Companies (e.g. items related to
financial statement consolidation, consolidated or combined Tax
Returns, insurance, administration and Employee Plans).
(b) During the period from the date of this Agreement
to the Effective Time, Sellers shall cause each of the Companies
to provide to R&M and R&M's authorized representatives reasonable
access during normal business hours to the facilities and to the
books and records of each of the Companies and shall cause the
officers and the officers of each of the Companies to promptly
furnish R&M with such information with respect to the business
and properties of each of the Companies as R&M or its authorized
representatives from time to time may reasonably request.
(c) R&M shall indemnify and hold Sellers and the
Companies and their respective employees and agents, and each of
them, harmless from and against any and all losses, claims,
damages and liabilities (including, without limitation,
reasonable attorneys' fees incurred in connection therewith)
arising out of or resulting from R&M's exercise of its rights
under this Section 10.02.
10.03 Confidentiality. After the Effective Time,
Sellers shall keep confidential, except as to directors and
officers of R&M and its Affiliates, all information concerning
the Companies and the Business which was considered confidential
by either Seller or any of the Companies prior to the Closing
Date, unless such information is required to be disclosed by law
or is readily ascertainable from public or published information
or trade sources.
10.04 Stand-still Provisions. Without the prior
written consent of R&M duly authorized by a majority of its
Board of its Directors, Sellers will not, and will cause any
entity controlled by Eagle Industries, Inc. not, at any time
prior to July 1, 2002 to, directly or indirectly:
(a) acquire (except for shares acquired under the SAR
Agreement), directly or indirectly, by purchase or
otherwise, any Shares or any other securities of R&M
entitled to vote generally in the election of directors of
R&M or securities convertible into such securities ("Voting
Securities") provided, however, this Section 10.04 shall not
prohibit Sellers or any of their Affiliates from acquiring
Voting Securities by way of stock splits or dividends or
other distributions or exchanges or warrants or other rights
made available to holders of Voting Securities generally;
(b) "solicit" proxies with respect to Voting
Securities under any circumstances or become a "participant"
in any "election contest" relating to the election of
directors of R&M, as such terms are defined in Regulation
14A under the Securities Exchange Act of 1934 (the "1934
Act"); and
(c) except for shares of R&M acquired under the SAR
Agreement, become a member of any "group" as defined under
Section 13(d)(3) of the 1934 Act which would be required to
file a Schedule 13D under such Act except for a group or
groups in which the only members are Sellers and/or
Affiliates of Sellers.
Section 11. Certain Covenants of R&M.
11.01 Personnel Required in Response to Litigation.
R&M agrees to make certain employees of the Companies available
to Sellers as reasonably required by either Seller after the
Closing Date in the event that any litigation which either Seller
is required to defend is commenced or previously was commenced
against the Companies. Sellers agree to reimburse R&M for
reasonable out-of-pocket expenses incurred by R&M to third-
parties in connection with requests by Sellers pursuant to this
Section 11.01.
11.02 Confidentiality. R&M agrees that any
information contained in any Schedule or Exhibit to this
Agreement or otherwise provided to R&M pursuant to this Agreement
shall be held by R&M as confidential information in accordance
with, and shall be subject to the terms of, that certain
confidentiality agreement dated October 11, 1993 between R&M and
Eagle Industries, Inc. and entered into in connection with the
transactions contemplated hereby (the "Confidentiality
Agreement"). The terms of the Confidentiality Agreement are
hereby incorporated by reference herein and shall continue in
full force and effect, and if this Agreement is terminated or if
the Closing shall not have occurred for any reason whatsoever,
the Confidentiality Agreement shall thereafter remain in full
force and effect in accordance with its terms.
11.03 Use of the Name "Eagle". After the Effective
Time, R&M may continue to use existing supplies of sales
literature, stationery, signs and other materials which identify
Eagle provided (i) that with respect to products shipped to
customers of R&M after the Effective Time, R&M shall use
reasonable commercial efforts to remove or block-out the name
"Eagle" or any derivation thereof and (ii)that with respect to
all other materials, R&M shall also use reasonable commercial
efforts to block-out such identifying names and where such is not
practical because, for example, of the repeated use of the names
in a sales brochure, R&M shall at least stamp its name in the
forepart of the brochure. Notwithstanding the foregoing, R&M
shall cease all use of the name "Eagle" or any derivation thereof
within six months after the Effective Time.
Section 12. Certain Additional Agreements and
Covenants of Sellers and R&M.
12.01 HSR Act Filing.
(a) General. Sellers and R&M acknowledge that the
transactions contemplated by this Agreement require filings with
the Federal Trade Commission (the "FTC") and the Antitrust
Division of the United States Department of Justice (the
"Antitrust Division") under the HSR Act.
(b) Filings. Seller and R&M shall each promptly file
with the FTC and the Antitrust Division the notifications and
reports required to be filed pursuant to the HSR Act and shall
undertake in good faith to file promptly any supplemental
information which may be requested in connection therewith, which
notifications and reports comply, and filing of supplemental
information will comply, in all material respects with the
requirements of such act. Seller and R&M shall each furnish the
other with such information as either may reasonably request to
make such filings.
12.02 Consummation of Transactions. Upon the terms and
subject to the conditions of this Agreement, each of the parties
hereto agrees to use reasonable commercial efforts (i) to take,
or cause to be taken, all such actions and to do, or cause to be
done, all other things necessary to carry out its obligations
hereunder; (ii) to cause the conditions to the obligations of the
other party hereto to be satisfied prior to or at the Closing;
and (iii) to consummate and make effective, as soon as reasonably
practicable, the transactions contemplated by this Agreement,
including obtaining all waivers, permits, consents and approvals
and effecting all registrations, filings and notices with or to
third parties or governmental or public bodies or authorities
which are necessary in connection with the transactions
contemplated by this Agreement, including making promptly as
possible the required filings under the HSR Act; provided,
however, that this Section 12.02 shall not require either party
to waive any condition for its benefit or any performance
hereunder by the other party; and provided, further, that this
Section 12.02 shall not require such party to take any action the
result of which, in its reasonable judgment, would be to impose
material limitations on its ability to consummate and retain the
full benefits of the transactions contemplated hereby.
12.03 Public Announcements. Sellers and R&M agree that
no press release or other public statements with respect to the
transactions contemplated by this Agreement shall be issued
unless the content and timing thereof are mutually agreed upon;
provided, however, that nothing contained herein shall prohibit
any party from issuing any press release or other public
statement which such party in good faith believes is required by
applicable law or regulation or by a proper order of any
Governmental Entity. The initial press release announcing this
Agreement shall be a joint press release. Thereafter, Eagle and
R&M shall consult with each other in issuing any press releases
or otherwise making public statements with respect to the
transactions contemplated hereby and in making any filings with
any Governmental Entity. Without limiting the generality of the
foregoing, Eagle and R&M shall consult with each other concerning
the timing and content of communications to customers of the
Companies concerning this Agreement and the transactions
contemplated hereby. Sellers shall take reasonable commercial
steps to cause each of the Companies to restrict their press
releases and other public statements to the communications which
R&M and Eagle approve or are otherwise permitted under this
Section.
12.04 Notice of Certain Events.
(a) Should any director or officer of Sellers acquire
knowledge after the date of this Agreement of (i) any occurrence,
omission or state of events which constitutes a breach of any
representation, warranty or covenant of Sellers in this
Agreement, (ii) any material adverse change in the financial
condition, results of operations, properties, or business of the
Companies, (iii) the institution or threat of institution of any
litigation or governmental investigation relating to this
Agreement, or (iv) the occurrence, or the failure to occur, of
any other event if such occurrence or failure is reasonably
likely to result in the failure to satisfy any condition
specified in Section 13 to the obligation of R&M to consummate
the transactions, Sellers shall, promptly after the director or
officer of Eagle or its Affiliate acquires such knowledge, notify
R&M thereof in writing, in sufficient detail to permit a
reasonable analysis thereof. Eagle also shall furnish to R&M
such additional information related to the matter in question as
R&M reasonably may request.
(b) Should any director or officer of R&M acquire
knowledge after the date of this Agreement of (i) any occurrence,
omission or state of events which constitutes a breach of any
representation, warranty or covenant of R&M in this Agreement,
(ii) any material adverse change in the financial condition,
results of operations, properties, or business of R&M, (iii) the
institution or threat of institution of any litigation or
governmental investigation relating to this Agreement, or
(iv) the occurrence, or the failure to occur, of any other event
if such occurrence or failure is reasonably likely to result in
the failure to satisfy any condition specified in Section 14 to
the obligation of Sellers to consummate the transactions, R&M
shall, promptly after the director or officer of R&M acquires
such knowledge, notify Sellers thereof in writing, in sufficient
detail to permit a reasonable analysis thereof. R&M also shall
furnish to Sellers such additional information related to the
matter in question as Sellers reasonably may request.
12.05 Items Received after Effective Time. Sellers
shall promptly pay or transfer to R&M, if and when received, any
amounts or other items which shall be received by either Seller
after the Effective Time in respect of any of the Companies which
R&M is entitled to receive under this Agreement.
12.06 Access to Records. R&M agrees that on and after
the Closing it will permit Sellers and their representatives
during normal business hours to have access to and examine and
make copies of all of the Records. Each Seller agrees that it
will use its reasonable commercial efforts to prevent the
disclosure to any person or use by any person of any confidential
information which is delivered to either Seller pursuant to this
Section 12.06 other than pursuant to a court order or subpoena or
with respect to tax returns and other reports required by law.
All Records will be preserved by R&M and all Records relating to
the Companies which are not delivered to the Companies hereunder
will be preserved by Sellers, in each case, for a period of seven
years following the Closing.
12.07 Further Assurances. Each party shall at the
request of the other party do and perform or cause to be done and
performed all such further acts and furnish, execute and deliver
such other documents, instruments, certificates, notices or other
further assurances as counsel for the requesting party may
reasonably request, from time to time, to consummate more
effectively the transactions contemplated by this Agreement or to
vest in R&M all of Sellers' right, title and interest in the
Companies.
12.08 Expenses; Sales and Other Transfer Taxes. Except
as otherwise provided in this Agreement, each party will pay all
fees and expenses incurred by it in connection with this
Agreement and the transactions contemplated hereby. If the
Closing of the transactions contemplated herein does not occur
and this Agreement has not been terminated by R&M pursuant to
Section 17.01(b), then R&M shall pay the charges of Arthur
Andersen & Co. for services performed pursuant to the letter of
Arthur Andersen & Co. to Mr. Sam Cattone, dated May 11, 1994; if
the Closing of the transactions contemplated herein does occur,
then Eagle shall pay the charges of Arthur Andersen & Co.
pursuant to such letter.
12.09 Outstanding Letters of Credit. R&M shall
undertake all necessary actions to replace the Companies'
outstanding letters of credit or performance bonds with letters
of credit or performance bonds from R&M's financing source both
prior to and after July 31, 1994. In the event R&M is unable to
replace all such letters of credit or performance bonds by
July 31, 1994, it shall deliver to Eagle by July 31, 1994 a
letter of credit or cash in the amount of such outstanding
letters of credit or performance bonds to serve as security in
the event such outstanding letters of credit or performance bonds
are drawn upon after the Closing. Upon R&M's replacement of the
Companies' outstanding letters of credit and performance bonds,
Sellers shall return to R&M its letter of credit or cash less the
amount of any drawings on Sellers' letters of credit and any fees
and/or interest incurred by Sellers relating thereto.
12.10 Repayment of Intercompany Debt. Except for the
indebtedness of Falcon to Pfaudler Germany under the German Loan
Agreement, at or prior to the Effective Time, the entire amount
of indebtedness owed by the Companies to the Sellers and/or their
Affiliates (other than the Companies) and the entire amount of
indebtedness owed by the Sellers and/or its Affiliates (other
than the Companies) to the Companies, outstanding on the Closing
Date, shall be cancelled and forgiven without the payment of any
money in connection therewith, and any such cancellation and
forgiveness of intercompany debt shall be treated as a
contribution to equity or a dividend, as appropriate.
Notwithstanding the foregoing, intercompany payables owed by the
Companies to Sellers and/or their Affiliates for goods or
services provided in the ordinary course of business or any
inter-company receivables owed by the Sellers and/or its
Affiliates to the Companies for goods or services provided in the
ordinary course of business shall not be cancelled at the Closing
unless payment is made therefor.
12.11 Consents.
(a) Prior to or at the Closing, Sellers shall: (i) use
commercially reasonable efforts to obtain all consents or waivers
from third parties necessary to assure that the sale of the Stock
to R&M does not result in termination of any of the Contracts;
provided, however, to the extent that any Contract would
terminate as a result of the sale of the Stock to R&M without the
consent or waiver of a third person, Sellers agree to use
commercially reasonable efforts to obtain the consent or waiver
of such third person; and further provided that obtaining any
such consents or waivers shall not be a condition precedent to
the occurrence of the Closing unless the failure to obtain a
waiver or consent would have a material adverse affect on any of
the Companies, and the failure to obtain any such consents and
waivers shall not constitute a breach of this Agreement.
(b) After the Closing, to the extent that the consents
and waivers referred to above have not been obtained, Sellers
agree to use commercially reasonable efforts to provide to the
affected Company the benefits of any such contract, permit, lease
agreement or other property interest, cooperate in any reasonable
and lawful arrangement designed to provide such benefits to the
affected Company, and enforce, at the request of R&M for the
account of the affected Company any rights of Sellers under any
such lease, contract, permit, agreement or other property
interest.
12.12 WFE Test Center. Sellers agree to bear the costs
of the PCB Decontamination of the WFE Test Center. R&M agrees to
cause Pfaudler to vacate occupancy of the WFE Test Center by no
later than July 31, 1994, or such later date as agreed to by the
landlord, but in no event later than December 31, 1994.
12.13 Responsibility for Insurance Coverage.
(a) Liability and Workers Compensation Insurance.
Sellers hereby covenant that the Companies are insured parties
under the Sellers' current general liability, products liability,
employers' liability and workers' compensation insurance
policies, which provide coverage on an "occurrence" basis (the
"Present Insurance"). Sellers shall be responsible and liable
for all claims associated with occurrences prior to the Effective
Time of a category or type subject to coverage under the Present
Insurance but only to the extent it (or a third party on its
behalf) actually receives insurance proceeds or protection
relating thereto (an "Insurance Covered Occurrence"). To the
extent such Insurance Covered Occurrence is subject to a
deductible or self-insured retention, the Companies shall be
responsible and liable for said amount.
(b) Medical Insurance. R&M acknowledges that employees
of the Companies shall be ineligible to participate in any
employee welfare benefit plans maintained by Sellers after the
Closing and agrees that none of Sellers or any of its Affiliates
shall be liable for any claim incurred by an employee of the
Companies on or after the Closing, and the Companies shall bear
all such liability, if any. For purposes of the preceding
sentence, a claim shall be deemed incurred when the service which
results in such claim is rendered, irrespective of when the
illness or injury giving rise to such services, was first
contracted or incurred.
12.14 Letters of Credit. In the event any Affiliates
of Sellers (other than the Companies) have issued letters of
credit (or at anytime after the date hereof are required to issue
letters of credit relating to the self-insured retention
referenced in Section 12.13(a)) to third-parties on behalf of any
of the Companies, R&M shall substitute new letters of credit for
such outstanding letters of credit or make appropriate cash
deposits that will permit the termination of then outstanding
letters of credit issued by Sellers on their Affiliates (other
than the Companies) or shall deliver a back-up letter of credit
in an appropriate amount to serve as security in the event such
outstanding letters of credit are not replaced and are drawn upon
after the Closing. R&M shall deliver to Eagle at the Closing a
back-up letter of credit in the amount of $2,500,000.
Section 13. Conditions to R&M's Obligations. The
obligations of R&M are subject to satisfaction, prior to or at
the Closing, of each of the following conditions (all or any of
which may be waived in whole or in part by R&M):
13.01 Accuracy of Representations and Warranties. The
representations and warranties of Sellers contained in this
Agreement, and the statements contained in the Exhibits and
Schedules, shall have been true and correct in all material
respects when made and, except as contemplated or permitted
herein or therein or except as consented to by R&M in writing or
as otherwise contemplated in this Agreement, shall continue to be
true and correct in all material respects as of the Effective
Time with the same effect as though made at the Effective Time,
and Sellers shall have performed and complied with, in all
material respects, all agreements, obligations and conditions
required by this Agreement to be performed or complied with by
Sellers prior to or at the Closing.
13.02 Litigation. No action, suit, or proceeding
relating to the transactions contemplated hereby shall be
instituted by any party and remain pending, in which there is, or
is likely to be, sought a temporary, preliminary or permanent
judgment, order or decree restraining or enjoining consummation
of the transactions contemplated hereby or requiring any holding
separate or divestiture of any substantial portion of the assets
of the Companies by R&M.
13.03 Consents and Approvals. All waiting periods
under the HSR Act shall have expired or terminated. All
government approvals and required consents of any parties
necessary to consummation by Sellers of the transactions
contemplated by this Agreement shall have been obtained and
delivered to R&M.
13.04 Financing Commitments. No events or
circumstances shall have occurred which result in the Senior
Lenders withdrawing their commitment to loan funds to R&M under
the Loan Commitment Letters of the Senior Lenders, dated April
22, 1994, or modifying the terms of the Loan Commitment Letters
to such an extent, that R&M believes in good faith, after
consultation with Eagle, that R&M should not proceed with the
transactions contemplated herein. Notwithstanding anything to
the contrary contained in this Agreement, in the event R&M fails
to proceed with the transactions contemplated herein because of
the withdrawal or modification of the Loan Commitment Letters or
any failure of the Senior Lenders to loan funds to R&M under the
Loan Commitment Letters, then this Agreement shall terminate and
in connection with a termination arising under this Section 13.04
provided there has not been a material breach of this Agreement
by Sellers, R&M shall pay Eagle $1,000,000 within 30 days after
such termination as liquidated damages, which shall be the sole
damages Sellers shall be entitled to on account of a termination
of this Agreement arising under Section 13.04.
Section 14. Conditions to Sellers' Obligations. The
obligations of Sellers under this Agreement are subject to
satisfaction, prior to or at the Closing, of each of the
following conditions (all or any of which may be waived in whole
or in part by Sellers):
14.01 Accuracy of Representations and Warranties. The
representations and warranties of R&M contained herein shall have
been true and correct in all material respects when made and,
except as otherwise provided or permitted herein or except as
consented to by Sellers in writing or as otherwise contemplated
by this Agreement, shall continue to be true and correct in all
material respects on and as of the Effective Time with the same
effect as though made at the Effective Time, and R&M shall have
performed and complied with, in all material respects, all
agreements, obligations and conditions required by this Agreement
to be performed or complied with by it prior to or at the
Closing, including, but not limited to, purchase of the
receivables pursuant to the Receivables Agreement.
14.02 Litigation. No action, suit or proceeding
relating to the transactions contemplated hereby shall be
instituted by any party and remain pending, in which there is, or
is likely to be sought, a temporary, preliminary or permanent
judgment, order or decree restraining or enjoining consummation
of the transactions contemplated hereby.
14.03 Consents and Approvals. All waiting periods
under the HSR Act shall have expired or terminated. All
approvals and required consents of any parties, necessary to
R&M's consummation of the transactions contemplated by this
Agreement shall have been obtained by R&M and delivered to
Sellers; and the Sellers's lenders under the Chemical Agreements
shall have consented to the transactions under this Agreement.
Sellers shall use reasonable commercial efforts to obtain such
consent by no later than June 30, 1994, but in the event such
consent is not obtained, then this Agreement shall terminate.
Notwithstanding anything to the contrary contained in this
Agreement, in connection with a termination arising under this
Section 14.03, Sellers shall pay R&M, as liquidated damages
within 30 days of such a termination, R&M's documented due
diligence and other expenses incurred in connection with the
transactions contemplated in this Agreement, but not to exceed
$1,000,000, provided there has not been a material breach of this
Agreement by R&M. Such liquidated damages shall be the sole
damages R&M shall be entitled to on account of a termination of
this Agreement arising under this Section 14.03.
Section 15. Survival of Representations and Warranties.
(a) The representations and warranties of Sellers or
R&M contained in this Agreement or made pursuant to this
Agreement shall not be deemed waived or otherwise affected by any
investigation made by any party hereto. Except as provided in
subsection (b) below, all representations and warranties made by
Sellers to R&M in this Agreement shall survive the Closing Date
and continue until December 31, 1995, or until the termination
and abandonment of this Agreement pursuant to Section 17 or
otherwise. Any right of indemnification pursuant to Section 16
with respect to a claimed breach of a representation or warranty
shall expire at the date of termination of the representation or
warranty claimed to be breached (the "Termination Date"), unless
on or prior to the Termination Date written notice asserting such
breach, which shall reasonably set forth, in light of the
information then known to the party giving such notice, a
description of and estimate (if then reasonable to make) of, the
amount involved in such breach (the "Estimated Claim") has been
given to the party from whom indemnification is sought. Provided
that an Estimated Claim is timely made, it may continue to be
asserted beyond the Termination Date of the representation and
warranty to which such Estimated Claim relates.
(b) Notwithstanding anything in this Section 15 to the
contrary:
(i) the representations and warranties made in
Sections 4.01 to 4.05 (other than 4.04(iii)), inclusive,
5.01 to 5.04 (other than 5.04(iii)), inclusive, 6.01 to
6.04, inclusive, and 6.07 shall not expire;
(ii) the representations and warranties made in
Section 8 shall expire 90 days after the expiration of
the period during which any Tax (as defined in
Section 8) deficiency may be asserted for any period
prior to the Effective Time; and
(iii) the representations and warranties made in
Section 5.11 shall expire 48 months after the Effective
Time.
(c) The covenants and agreements of Sellers or R&M set
forth in this Agreement shall survive the Closing and shall
continue until all obligations set forth herein shall have been
performed or satisfied or they shall have terminated in
accordance with their terms.
Section 16. Indemnity.
(a) Indemnification of the R&M Group. Subject to the
terms and conditions of this Section 16, Sellers hereby agree,
jointly and severally, to indemnify, defend and hold harmless
R&M, each of the Companies, and each of their respective
Affiliates, directors, officers and employees and the successors
and assigns of any of them (the "R&M Group") at any time after
the Closing from and against all demands, claims, actions or
causes of action, assessments, losses, damages, liabilities,
costs and expenses (including, without limitation, reasonable
fees and expenses of counsel), (collectively, "Damages"),
asserted against, resulting to, imposed upon or incurred by any
member of the R&M Group, directly or indirectly, by reason of or
resulting from:
(i) a breach of any representation or warranty of
either Seller contained in or made pursuant to this
Agreement;
(ii) a breach by either Seller of any covenant,
agreement or obligation of either Seller contained in or
made pursuant to this Agreement;
(iii) any liability of any member of the R&M Group
in respect of any Legal Proceeding (as defined at
Section 5.08) disclosed or required to be disclosed in
Schedule 5.08, except that Sellers shall have no
obligation to indemnify any member of the R&M Group (1)
for any Legal Proceeding disclosed or required to be
disclosed in Schedule 5.08 which involves an Insurance
Covered Occurrence (as defined at Section 12.13) and
Sellers' sole obligation with respect to any Insurance
Covered Occurrence shall be as set forth at Section
12.13(a); or (2) under this Section 16(a)(iii) for any
Legal Proceeding disclosed or required to be disclosed
on Schedule 5.11; or (3) for any Legal Proceeding for
which indemnification is available under the Kennecott
Agreement;
(iv) subject to the provisions of Section 16(f),
any liability of any member of the R&M Group in respect
of any of the Legal Proceedings disclosed or required to
be disclosed on Schedule 5.11 except that Sellers shall
have no obligation to indemnify any member of the R&M
Group under this Section 16(a)(iv) (1) for any Legal
Proceeding being handled by other parties who have not
advised one of the Companies that they are reserving a
right to assert a claim against the Company in such
proceeding and (2) for such environmental matters until
all Damages arising under this Section 16(a)(iv) and
Section 12.12 exceed $250,000 in the aggregate and then
only to the extent such Damages exceed $250,000
provided, however, the obligations of Sellers under this
Section 16(a)(iv) shall expire 48 months after the
Closing Date as to any matter for which a written
estimated claim for Damages under this Section has not
been submitted prior to expiration of 48 months after
the Closing Date;
(v) any liability arising out of the use of
asbestos in, or in packing for, products sold by the
Companies while the businesses of the Companies were
owned by Sellers or an Affiliate of Sellers, provided,
however, the obligations of Sellers under this Section
16(a)(v) shall expire 48 months after the Closing Date
as to any matter for which a written estimated claim for
Damages under this Section has not been submitted prior
to expiration of 48 months after the Closing Date
(collectively with the claims set forth in Section
16(b), "Claims"); and
(vi) any costs or expenses incurred by R&M or a
Company, not reserved against on the Closing Statement,
related to the corporate restructuring of Eagle
Industries, Inc., effective January 31, 1994, as a
result of which the assets of Pfaudler (United States),
Inc., a Delaware corporation incorporated on April 21,
1987, were ultimately transferred to Pfaudler and any
costs and expenses incurred by R&M or a Company, not
reflected on the Closing Balance Sheet, associated with
the transfer of the legal title of any of the
Proprietary Information to one of the Companies.
(b) Indemnification of Seller Group. Subject to the
terms and conditions of this Section 16, R&M hereby agrees to
indemnify, defend and hold harmless Sellers and each of their
respective Affiliates (including any person who was a director or
officer of any of the Companies prior to the Effective Time),
directors, officers and employees and the successors and assigns
of any of them (the "Seller Group") at any time after the
Closing, from and against all Damages asserted against, resulting
to, imposed upon or incurred by any member of the Seller Group,
directly or indirectly, by reason of or resulting from:
(i) a breach of any representation or warranty of
R&M contained in or made pursuant to this Agreement; or
(ii) the breach by R&M of any covenant, agreement
or obligation of R&M contained in or made pursuant to
this Agreement (collectively with the claims set forth
in Section 16(a), "Claims");
(c) Indemnification Threshold. Notwithstanding
anything contained in this Agreement to the contrary, (i) Sellers
shall not be liable to indemnify any member of the R&M Group for
Damages pursuant to Section 16(a)(i) resulting from any breach of
a representation or warranty of Sellers contained in Section 4 or
5 until the aggregate amount of all such Damages exceeds $750,000
(the "Minimum Amount") and then Sellers shall be liable for 75%
of all Damages up to the first $750,000; 50% of the next $250,000
in Damages; and then 100% of all Damages in excess of $1,000,000.
Notwithstanding anything to the contrary contained in the Section
16(c), Sellers shall indemnify and hold harmless the R&M Group
against any and all Damages incurred by the R&M Group by reason
of a breach of Sellers' representations and warranties contained
in Sections 4.01 and 5.01 of this Agreement without regard to the
Minimum Amount.
(d) Procedures Applicable to Third-Party Claims. The
obligations and liabilities of Sellers or R&M to indemnify the
other under Section 16(a) or (b) with respect to Claims asserted
by a person other than a member of the R&M Group or the Seller
Group shall be subject to the following terms and conditions:
(i) Right of Indemnifying Party to Assume Defense
of Claim. The party to be indemnified (the "Indemnified
Party") should give the other party (the "Indemnifying
Party") prompt notice of any such Claim, and, subject to
the provisions of Section 16(d)(v), the Indemnifying
Party, at its sole cost and expense, shall have the
right, upon written notice to the Indemnified Party that
it is assuming defense of the Claim, to assume the
defense of the Claim while reserving its right to
contest the issue of whether it is liable to the
Indemnified Party for any indemnity hereunder. If the
Indemnifying Party assumes the defense of the Claim, it
shall select counsel reasonably acceptable to the
Indemnified Party to conduct the defense of the Claim
and shall defend or settle the same; provided, however,
that if it shall later be determined that the
Indemnified Party is not entitled to indemnification
with respect to the matter as to which Indemnifying
Party has undertaken the defense of the Claim, the
Indemnified Party shall reimburse the Indemnifying Party
for reasonable fees and disbursements of counsel and for
any amounts paid in judgment or settlement prior to such
determination.
(ii) Control of the Defense. The contest of the
Claim may be conducted in the name and on behalf of the
Indemnifying Party or the Indemnified Party, as may be
appropriate. Subject to compliance by the Indemnifying
Party with the other requirements of this Section
16(d)(ii), such contest shall be conducted diligently by
reputable counsel employed by the Indemnifying Party,
but the Indemnifying Party shall keep the Indemnified
Party fully informed with respect to the Claim and the
contest thereof. Subject to compliance by the
Indemnifying Party with the other requirements of this
Section 16(d)(ii), if the Indemnified Party joins in any
such contest, the Indemnifying Party shall have full
authority, in consultation with the Indemnified Party,
to determine all action to be taken with respect
thereto; provided, however, the Indemnifying Party shall
not consent to a settlement of, or the entry of any
monetary judgment arising from, the Claim, without the
prior written consent of the Indemnified Party which
shall not be unreasonably withheld or delayed; and
further provided that if the Indemnified Party shall
fail or refuse to consent to a settlement or judgment
proposed by the Indemnifying Party and a judgment
thereafter shall be entered or a settlement shall be
effected in an amount in excess of the settlement or
judgment proposed by the Indemnifying Party, the
Indemnifying Party shall have no liability hereunder
with respect to such excess or any expenses or other
Damages related thereto arising after the date such
settlement or judgment is so proposed. In no event
shall the Indemnifying Party have authority to agree to
any relief other than the payment of money damages by
the Indemnifying Party unless agreed to by the
Indemnified Party.
(iii) Cooperation in Defense. If requested by the
Indemnifying Party, the Indemnified Party agrees to
cooperate with the Indemnifying Party and its counsel,
including permitting reasonable access to books and
records, in contesting any Claim which the Indemnifying
Party elects to contest or, if appropriate, in making
any counterclaim against the person asserting the Claim,
or any cross-complaint against any person, but the
Indemnifying Party will reimburse the Indemnified Party
for reasonable out-of-pocket costs (but not the cost of
employee time expended) incurred by the Indemnified
Party in so cooperating. The Indemnifying Party agrees
to use its best efforts to afford the Indemnified Party
and its counsel the opportunity to be present at, and to
participate in, conferences with all persons, including
governmental authorities, asserting any Claim against
the Indemnified Party or conferences with
representatives of or counsel for such persons.
(iv) Failure of Indemnifying Party to Assume
Defense. If the Indemnifying Party does not assume the
defense of the Claim in accordance with the terms hereof
within 20 days after the receipt of notice thereof, the
Indemnified Party may, at the Indemnifying Party's
expense, defend against the Claim in such reasonable
manner as it may deem appropriate; provided that the
Indemnified Party shall not agree to any settlement of
the Claim without the prior written consent of
Indemnifying Party, which shall not be unreasonably
withheld or delayed.
(v) Claims Below the Minimum Amount. The right to
indemnification pursuant to Section 16(a)(i) or Section
16(b)(i) does not arise with respect to a Claim until
the aggregate amount of all Damages alleged in the
Claim, together with all prior Claims, exceeds the
Minimum Amount, except that the party who would be the
Indemnifying Party if the Minimum Amount had been
reached shall have the right to participate in, but not
control, the defense of the Claim.
(vi) Compliance with Procedures. Notwithstanding
the terms of this Section 16, the Indemnified Party
shall not be entitled to indemnification pursuant to
this Section 16 unless the Indemnified Party (x)
delivers the notice required under Section 16(d)(i) (and
in the case of a representation and warranty, prior to
the expiration of the representation and warranty in
issue) and (y) permits the Indemnifying Party to
exercise its rights under Section 16 with respect to the
defense of claims or legal proceedings; provided,
however, that the failure to comply with the foregoing
requirements under (y) shall constitute a defense to the
indemnity obligations of the Indemnifying Party
hereunder only to the extent that the Indemnifying Party
suffers actual prejudice as the result of such failure
to comply.
(e) Damages. When calculating Damages under this
Section 16, Damages shall be calculated net of any tax benefit or
insurance proceeds realized by the Indemnified Party as a result
of the events giving rise to its right to indemnification under
this Section 16.
(f) Limitations on Certain Environmental Matters.
Notwithstanding anything contained in this Agreement to the
contrary, Sellers shall have no obligation to Indemnify any
member of the R&M Group pursuant to Section 16(a) for any of the
following:
(i) Any Damages caused by or relating to the presence
of asbestos or asbestos containing building materials in the
Owned Real Property, the Leased Real Property or any other
real property owned or operated by any of the Companies,
including but not limited to the cost of an asbestos survey
or any asbestos removal or other abatement activities;
(ii) Any Damages caused by or relating to the presence
of soil or ground water contamination on, in or under the
Owned Real Property, the Leased Real Property or any other
property owned or operated by any of the Companies, to the
extent such contamination originated from an off-site
source;
(iii) Any Damages caused by or relating to the
investigation or clean up of solid waste, debris or
contamination at the Owned Property, the Leased Real
Property or any other property owned or operated by any of
the Companies, except to the extent such investigation or
clean up is required by applicable Environmental Laws;
(iv) Any Damages caused by or relating to the removal
and replacement of electrical transformers containing PCBs
at the Owned Real Property, the Leased Real Property or any
other property owned or operated by any of the Companies,
provided, however, that this provision shall not apply to
the cost of remediating a release of PCB's from the
transformers if remediation is required by applicable
Environmental Laws;
(v) Any Damages associated with monitoring stormwater
run-off at the Owned Real Property, the Leased Real Property
or any other property owned or operated by any of the
Companies; and
(vi) Any Damages for the costs of purchasing or
installing new test equipment, upgrading the waste water
control system (other than as required to comply with
applicable Environmental Laws), strengthening construction,
relocating the outside path and parking lot, or providing
external blast deflectors at the WFE Test Center.
(g) Exclusive Nature of Indemnification Provisions.
The right of the parties hereto to demand and receive
indemnification pursuant to Section 16(a)(i) or 16(b)(i) shall be
the sole remedy exercisable by a party with respect to a breach
of any warranty or representation set forth herein other than a
breach under Section 8 or related to the termination of this
Agreement pursuant to Section 17.
(h) To the extent Sellers' indemnification obligations
under Section 16 of this Agreement extend to matters for which
any of the Companies has claims or causes of action against third
parties, R&M shall cooperate fully with Sellers in taking all
actions reasonably necessary to provide Sellers the benefit of
such claims or causes of action.
Section 17. Termination, Amendment and Waiver.
17.01 Termination of Agreement. This Agreement may be
terminated at any time prior to the Closing:
(a) by mutual agreement of R&M and Eagle;
(b) by R&M, if there has been a material violation or
breach by either Seller of any of the agreements, representations
or warranties of either Seller contained in this Agreement,
unless Sellers have informed R&M that such violation or breach
will be cured on or before the Closing Date;
(c) by Sellers, if there has been a material violation
or breach by R&M of any of the agreements, representations or
warranties of R&M contained in this Agreement, unless R&M has
informed Sellers that it will be cured on or before the Closing
Date;
(d) by R&M as permitted under Section 13.04; and
(e) by either party hereto (other than a party who is
in material breach of its obligations under this Agreement) if
the Closing shall not have occurred on or prior to September 30,
1994.
17.02 Effect of Termination. In the event of
termination of this Agreement by either R&M or Sellers as
provided in Section 17.01, this Agreement shall forthwith be of
no further force and effect (except that the provisions of
Sections 10.02(c), 11.02, 12.03, 12.08, 13.04 and 17.02 shall
continue in full force and effect) and there shall be no
liability on the part of R&M or Sellers, except based upon: (i)
a material and willful breach by a party of any of its
obligations under this Agreement or (ii) the obligations set
forth in Sections 10.02(c), 11.02, 12.03, 12.08, 13.04 or 17.02.
17.03 Amendment, Extension and Waiver. At any time
prior to the Closing Date, R&M and Sellers may (a) amend this
Agreement, (b) extend the time for the performance of any of the
obligations or other acts of the parties hereto, (c) waive any
inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto, or (d) waive
compliance with any of the agreements or conditions contained
herein; provided, however, that any such amendment must be in
writing and must be signed by each of the parties hereto and the
agreement with respect to any such extension or waiver must be in
writing and must be signed by the party or parties agreeing to
such extension or waiver.
Section 18. Miscellaneous.
18.01 Assignment; No Third-Party Rights. This
Agreement shall be binding upon and shall inure to the benefit
of, and be enforceable by, the parties hereto and their permitted
successors and assigns. This Agreement may not be assigned by
either party without the prior written consent of the other,
except (i) that Eagle may, without the prior consent of R&M,
assign this Agreement and the rights of Sellers hereunder to any
Affiliate of Sellers and (ii) R&M may, with the prior written
consent of Sellers which will not be unreasonably withheld,
assign the rights of R&M hereunder to take title to the Stock,
and indirectly to take title to the stock of any Subsidiary, to
any Affiliate of R&M. No assignment of this Agreement shall
relieve the assigning party of responsibility for the performance
of any of its obligations hereunder. Nothing herein is intended
to, nor shall it, create any rights in any person other than the
parties hereto, other members of the R&M Group or the Seller
Group, and their respective successors and assigns.
18.02 Entire Agreement. This Agreement and the
agreements to be executed in connection herewith set forth the
entire agreement and understanding of the parties in respect of
the transactions contemplated hereby and supersede all prior
agreements, arrangements and understandings relating to the
subject matter hereof. All Schedules and Exhibits and any
documents and instruments delivered pursuant to any provisions
hereof are expressly made a part of this Agreement as fully as
though completely set forth herein.
18.03 Section and Other Headings; Number. The section
and other headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Words used in this Agreement
in the singular number shall be held to include the plural, and
vice versa, unless the context requires otherwise.
18.04 Notices. All notices, requests, demands and
other communications under this Agreement shall be in writing and
shall be deemed to have been duly given (i) on the date of
service if served personally on the party to whom notice is to be
given, (ii) on the day of transmission if sent via facsimile
transmission to the facsimile number given below, and telephonic
confirmation of receipt is obtained promptly after completion of
transmission, (iii) on the day after delivery to Federal Express
or similar overnight courier or the Express Mail service
maintained by the United States Postal Service, or (iv) on the
fifth day after mailing, if mailed to the party to whom notice is
to be given, by registered or certified mail, postage prepaid and
properly addressed, to the party as follows:
If to R&M:
Robbins & Myers, Inc.
1400 Kettering Tower
Dayton, Ohio 45423
Telephone: 513/222-2610
FAX: 513/225-3314
Attention: Daniel W. Duval
President and Chief
Executive Officer
With a copy to:
Thompson, Hine and Flory
2000 Courthouse Plaza N.E.
Dayton, Ohio 45402-8801
Telephone: 513/443-6586
FAX: 513/443-6637
Attention: Joseph M. Rigot, Esq.
If to Eagle or ODE:
Eagle Industries, Inc.
Two North Riverside Plaza
Chicago, Illinois 60606
Telephone: 312/906-6880
FAX: 312/906-8402
Attention: William K. Hall
President and Chief
Executive Officer
With copies to:
Eagle Industries, Inc.
Two North Riverside Plaza
Chicago, Illinois 60606
Telephone: 312/906-6860
FAX: 312/906-8402
Attention: Gus J. Athas, Esq.
Senior Vice President,
General Counsel and Secretary
and
Rosenberg & Liebentritt, P.C.
Suite 1600
Two North Riverside Plaza
Chicago, Illinois 60606
Telephone: 312/466-3456
FAX: 312/454-0335
Attention: Bruce C. Strohm, Esq. and
Jordan B. Allen, Esq.
or to such other address as the person to whom notice is to be
given may have previously furnished to the other in writing in
the manner set forth above.
18.05 Law Governing. This Agreement shall be governed
by, and construed and enforced in accordance with, the laws of
the State of Ohio without regard to its conflict of law rules.
18.06 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an
original but all of which taken together shall constitute one and
the same instrument.
18.07 Resolution of Disputes.
(a) In the event of a dispute between the parties
arises under the terms of this Agreement, either party may send
to the other a letter of dispute setting forth in particular the
subject matter of the dispute ("Disputed Matter"). The parties
shall meet at the offices of R&M in Dayton, Ohio, or such other
place as may be mutually agreeable to them, not later than twenty
days after the date of the receipt of the letter of dispute for
the purposes of negotiating a settlement of the Disputed Matter.
(b) In the event that either party determines after
compliance with Section 18.07(a) that the Disputed Matter cannot
be resolved by the parties, the Disputed Matter shall be
submitted to binding arbitration before a panel of three
arbitrators in Cleveland, Ohio in accordance with the Commercial
Arbitration Rules of the American Arbitration Association;
provided, however, that (i) the parties may engage in prehearing
discovery to the full extent provided in the Federal Rules of
Civil Procedure, and (ii) evidentiary rules contained in the
Federal Rules of Civil Procedure shall govern the submission of
evidence at the arbitration hearings. Judgment upon the award by
the arbitrators may be entered in any court having jurisdiction
thereof. As part of such award the arbitrators may establish
their fee and expenses in connection therewith. The fees and
expenses of the arbitrators shall be apportioned between the
parties by the arbitrators in accordance with the findings and
results of the arbitration.
(c) Notwithstanding the provisions of Section 18.07(a)
and (b), no person shall be required to comply with the
provisions of Section 18.07(a) and (b) if the primary remedy a
person is seeking is an injunction or restraining order.
IN WITNESS WHEREOF, each of the parties hereto have
caused this Agreement to be executed by its respective officers
thereunto duly authorized as of the date first above written.
"Sellers"
EAGLE INDUSTRIAL PRODUCTS
CORPORATION
Attest: By: /s/ Gus J. Athas
---------------------------
Title: Senior Vice-President
/s/ Bruce C. Strohm
- ----------------------
O.D.E. MANUFACTURING, INC.
Attest: By: /s/ Gus J. Athas
---------------------------
Title: Senior Vice-President
/s/ Bruce C. Strohm
- ----------------------
"R&M"
ROBBINS & MYERS, INC.
Attest: By: /s/ Daniel W. Duval
--------------------------
Daniel W. Duval
President and Chief Executive
/s/ Joseph M. Rigot Officer
- ----------------------
UNDERTAKING OF EAGLE INDUSTRIES, INC.
If on November 30, 1996, the net worth of Eagle is less
than $175,000,000 and R&M has submitted any Estimated Claims for
indemnification pursuant to Section 16(a) of the Agreement and
any such Claims remain unresolved, then Eagle Industries, Inc.
("EII") shall, on or before November 30, 1996: (i) cause the
payment of the aggregate amount of any unresolved Estimated
Claims, when and if the same become payable, to be guaranteed by
EII or an Affiliate of EII having a net worth of $175,000,000 or
more or (ii) provide to R&M a performance bond with respect to
the payment of any unresolved Estimated Claims equal to the
lesser of $15,000,000 or the aggregate amount of the unresolved
Estimated Claims.
All defined terms used herein shall have the meaning
ascribed to them in the foregoing Stock Purchase Agreement.
EAGLE INDUSTRIES, INC.
By: /s/ Gus J. Athas
------------------------
Title: Senior Vice-President
Date: June 29, 1994
UNDERTAKING OF GREAT AMERICAN MANAGEMENT AND INVESTMENT, INC.
In order to induce R&M to enter into the Agreement,
Great American Management and Investment, Inc., a Delaware
corporation, guarantees the obligations of Sellers under the
Agreement to indemnify, and hold harmless, the R&M Group against
any federal income tax liability arising under a Consolidated
Return.
All defined terms used herein shall have the meaning
ascribed to them in the foregoing Stock Purchase Agreement.
GREAT AMERICAN MANAGEMENT AND INVESTMENT, INC.
By /s/ Sheli Z. Rosenberg
------------------
Title Vice-President
Date June 29, 1994