Exhibit 99.01
STOCK PURCHASE AGREEMENT
Stock Purchase Agreement ("Agreement"), dated as of the 20th day
of September, 1996, by and among THOMAS J. GOULET, an individual
("Goulet"), M&I Ventures Corporation, a Wisconsin corporation
("M&I"), UNITED STATES FILTER CORPORATION, a Delaware corporation
("USF"), through its wholly-owned subsidiary, ILLINOIS WATER
TREATMENT, INC., a Delaware corporation ("Buyer"), and KISCO
WATER TREATMENT COMPANY, a Missouri corporation (the "Company").
Goulet and M&I are hereinafter individually referred to as
"Seller" and collectively referred to as "Sellers".
Sellers desire to sell all of the issued and outstanding shares
of capital stock of the Company, consisting of an aggregate of
582,000 shares of common stock issued and issuable under the
outstanding warrant to purchase capital stock of the Company held
by M&I (the "Warrant") (the "Company Shares") to Buyer, and Buyer
desires to purchase the Company Shares, on the terms and subject
to the conditions set forth below. Goulet is the holder of
351,000 shares and M&I is entitled to issuance of 231,000 shares
by exercise of the Warrant. In consideration of the
representations, warranties, covenants and agreements contained
herein, Sellers, Buyer and the Company, each intending to be
legally bound hereby, agree as set forth below.
ARTICLE I.
DEFINITIONS; CONSTRUCTION
1.1 Definitions. As used in this Agreement, the following
terms have the meanings specified in this Section 1.1. All
accounting terms not specifically defined herein shall be
construed in accordance with Accounting Principles.
"Accounting Principles" has the meaning given that term
in Section 2.6(a).
"Adjusted Closing Balance Sheet" has the meaning given
that term in Section 2.6(a).
"Affiliate" means, with respect to any Person, any
other Person that, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common
control with such Person.
"Agreement" means this Stock Purchase Agreement, as it
may be amended from time to time.
"Benefit Plan" has the meaning given that term in
Section 3.21(a).
"Business" means the manufacture of commercial and
industrial water treatment equipment as currently conducted by
the Company.
"Buyer" means Illinois Water Treatment, Inc., a
Delaware corporation and a wholly-owned subsidiary of USF.
"Buyer Damages" has the meaning given that term in
Section 7.2.
"Buyer Indemnitees" has the meaning given that term in
Section 7.2.
"Ceiling Amount" has the meaning given that term in
Section 7.4(b).
"CERCLIS" means the United States Comprehensive
Environmental Response Compensation Liability Information System
List pursuant to Superfund.
"Closing" has the meaning given that term in Section
2.3.
"Closing Date" has the meaning given that term in
Section 2.3.
"Code" means the United States Internal Revenue Code of
1986, as amended, and the applicable rulings and regulations
thereunder.
"Company Group" has the meaning given that term in
Section 3.21(b).
"Company Plan" has the meaning given that term in
Section 3.21(a).
"Company Shares" has the meaning given that term in the
introductory paragraph of this Agreement.
"Contract" and "Contracts" have the respective meanings
given those terms in Section 3.13.
"Damages" has the meaning given that term in Section
7.7.
"Defined Benefit Plan" has the meaning given that term
in Section 3.21(e).
"Encumbrance" means any liability, debt, mortgage, deed
of trust, pledge, security interest, encumbrance, option, right
of first refusal, agreement of sale, adverse claim, easement,
lien, assessment, restrictive covenant, encroachment, burden or
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charge of any kind or nature whatsoever or any item similar or
related to the foregoing.
"Environmental Law" means any applicable Law relating
to public health and safety or protection of the environment,
including common law nuisance, property damage and similar common
law theories.
"ERISA" means the United States Employee Retirement
Income Security Act of 1974, as amended, and the applicable
rulings and regulations thereunder.
"FASB" means the United States Financial Accounting
Standards Board or its successor.
"Final Closing Balance Sheet" has the meaning given to
that term in Section 2.6(d).
"Financial Statements" has the meaning given that term
in Section 3.7(b).
"Governing Documents" means, with respect to any Person
who is not a natural Person, the certificate or articles of
incorporation, bylaws, deed of trust, formation or governing
agreement and other charter documents or organization or
governing documents or instruments of such Person.
"Governmental Body" means any court, government
(federal, state, local or foreign), department, commission,
board, bureau, agency, official or other regulatory,
administrative or governmental authority or instrumentality.
"Indemnified Party" has the meaning given that term in
Section 7.7.
"Indemnifying Party" has the meaning given that term in
Section 7.7.
"Intellectual Property" has the meaning given that term
in Section 3.20.
"IRS" means the United States Internal Revenue Service.
"Knowledge of the Company" means the best knowledge of
the Company and/or the Sellers based upon reasonable inquiry.
"Law" means any applicable federal, state, municipal,
local or foreign statute, law, ordinance, rule, regulation or
order of any kind or nature whatsoever including any public
policy, order of any Governmental Body or principle of common
law.
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"Litigation" has the meaning given that term in Section
3.12.
"Multiemployer Plan" has the meaning given that term in
Section 3.21(f).
"NYSE" means the New York Stock Exchange.
"Net Operating Assets" has the meaning given that term
in Section 2.5.
"Other Agreement" means each other agreement or
document contemplated hereby to be executed and delivered in
connection with the transactions contemplated by this Agreement
on or before Closing.
"PBGC" means the United States Pension Benefit Guaranty
Corporation.
"PCBs" means polychlorinated biphenyls.
"Permit" and "Permits" have the respective meanings
given those terms in Section 3.14.
"Person" means and includes a natural person, a
corporation, an association, a partnership, a limited liability
company, a trust, a joint venture, an unincorporated
organization, a business, any other legal entity, and a
Governmental Body.
"Post-Closing Purchase Price Adjustment" means the
post-closing adjustment to the Purchase Price pursuant to Section
2.5.
"Preliminary Closing Balance Sheet" has the meaning
given that term in Section 2.6(a).
"Purchase Price" has the meaning given that term in
Section 2.2.
"Qualified Plan" has the meaning given that term in
Section 3.21(d).
"Real Property" has the meaning given that term in
Section 3.15.
"Receivables" has the meaning given that term in
Section 3.10.
"Regulated Material" means any hazardous substance as
defined by any Environmental Law and any other material regulated
by any applicable Environmental Law, including petroleum,
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petroleum-related material, crude oil or any fraction thereof,
PCBs, and friable asbestos.
"Related Party" has the meaning given that term in
Section 3.16.
"SEC" means the United States Securities and Exchange
Commission.
"Security Right" means, with respect to any security,
any option, warrant, subscription right, preemptive right, other
right, proxy, put, call, demand, plan, commitment, agreement,
understanding or arrangement of any kind relating to such
security, whether issued or unissued, or any other security
convertible into or exchangeable for any such security.
"Security Right" includes any right relating to issuance, sale,
assignment, transfer, purchase, redemption, conversion, exchange,
registration or voting and includes rights conferred by statute,
by the issuer's Governing Documents or by agreement.
"Seller Damages" has the meaning given that term in
Section 7.3.
"Seller Indemnitees" has the meaning given that term is
Section 7.3.
"Selling Group" means a member, whether past or
present, of Seller's affiliated group of corporations within the
meaning of Code Section 1504(a).
"Securities Act" means the United States Securities Act
of 1933, as amended.
"Subsidiary" means any corporation, partnership, joint
venture or other entity in which the Company owns, directly or
indirectly, more than 20% of the outstanding voting securities or
equity interests.
"Superfund" means the United States Comprehensive
Environmental Response Compensation and Liability Act of 1980, 42
U.S.C. Sections 6901 et seq., as amended.
"Tax" means any domestic or foreign federal, state,
county or local tax, levy, impost or other charge of any kind
whatsoever, including any interest or penalty thereon or addition
thereto, whether disputed or not.
"Tax Return" means any return, declaration, report,
claim for refund, or information return or statement relating to
any Tax, including any schedule or attachment thereto, and
including any amendment thereof.
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"Transfer Agreement" means the Option, Transfer and
Registration Agreement substantially in the form of Exhibit 1.1.
"USF" means United States Filter Corporation, a
Delaware corporation.
"USF Common Stock" means USF's common stock, par value
$0.01 per share.
"USF Shares" has the meaning given that term in Section
2.4.
"USF Share Value" has the meaning given that term in
Section 2.4.
1.2 Construction. As used herein, unless the context
otherwise requires: (i) references to "Article" or "Section" are
to an article or section hereof; (ii) all "Exhibits" and
"Schedules" referred to herein are to Exhibits and Schedules
attached hereto and are incorporated herein by reference and made
a part hereof; (iii) "include", "includes" and "including" are
deemed to be followed by "without limitation" whether or not they
are in fact followed by such words or words of like import; and
(iv) the headings of the various articles, sections and other
subdivisions hereof are for convenience of reference only and
shall not modify, define or limit any of the terms or provisions
hereof.
ARTICLE II.
THE TRANSACTION
2.1 Sale and Purchase of Company Shares. Upon the terms
and subject to the conditions of this Agreement and in
consideration of the Purchase Price, Sellers shall sell, assign,
transfer and deliver the Company Shares to Buyer, and Buyer shall
purchase from Sellers and take delivery of the Company Shares, at
the Closing, free of all Encumbrances.
2.2 Purchase Price. The aggregate purchase price for the
Company Shares shall be US$4,250,000 (the "Purchase Price")
increased or decreased by the Post-Closing Purchase Price
Adjustment, if any.
2.3 Closing. The consummation of the purchase and sale of
the Company Shares and the other transactions contemplated hereby
(the "Closing") shall take place at 10:00 a.m., local time, on
September 30, 1996, at the offices of von Briesen, Purtell &
Roper, s.c., 411 East Wisconsin Avenue, Suite 700, Milwaukee,
Wisconsin, or at such other time, date or place as the parties
agree (the "Closing Date").
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2.4 Payment. Upon the terms and subject to the conditions
of this Agreement, (i) at Closing, Buyer shall deliver the
Purchase Price to Sellers pro rata by delivery of that number of
________
shares of common stock of USF, par value $0.01 (rounded in the
aggregate to the nearest whole share; collectively, such shares
together with any shares of common stock of USF delivered to
Sellers pursuant to the Post-Closing Purchase Price Adjustment,
the "USF Shares") that is equal to the Purchase Price less the
amount to be held in escrow pursuant to Section 7.4 (the "Escrow
Amount"), divided by the closing price for the USF Shares as
reported by the NYSE on the fifth to the last trading day
preceding the Closing Date (the "USF Share Value"), and (ii)
subject to Buyer's right to hold in escrow USF Shares pursuant to
Section 7.4 for the time period described therein. Within five
(5) business days after the determination of the Post-Closing
Purchase Price Adjustment is made and the time period described
in Section 7.4 has expired, Buyer and Sellers shall settle the
Post-Closing Purchase Price Adjustment as follows: (x) if the
Post-Closing Purchase Price Adjustment results in an increase in
the Purchase Price, Buyer shall deliver to Sellers, pro rata,
________
that number of shares of common stock of USF, valued at the USF
Share Value, equal to the Post-Closing Purchase Price Adjustment
(or cash in the event the Put Right or the Call Offer provided
for in the Transfer Agreement have been exercised), and (y) if
the Post-Closing Purchase Price Adjustment results in a decrease
in the Purchase Price, that number of USF Shares valued at the
USF Share Value (or cash, if applicable), equal to the Post-
Closing Purchase Price Adjustment shall be distributed to Buyer
from the escrow established pursuant to Section 7.4(b).
2.5 Post-Closing Purchase Price Adjustment. If the Net
Operating Assets of the Company at the close of business on the
Closing Date as shown on the Adjusted Closing Balance Sheet
("Closing Balance") is more than $5,000 greater or more than
$5,000 less than $1,513,414.88, the total Net Operating Assets
balance on June 30, 1996 ("June Balance"), then the Purchase
Price shall be increased or decreased (as appropriate), dollar-
for dollar, by the amount of such excess or deficiency (i.e., to
the extent that the Closing Balance exceeds the June Balance plus
$5,000 or is less than the June Balance less $5,000). "Net
Operating Assets" means the Company's total assets (other than
cash and cash equivalents) less liabilities, as adjusted and
calculated in accordance with the procedure established for
delivering the Final Closing Balance Sheet in Section 2.6. Prior
to or at Closing, the Company will distribute existing cash in
payment of expenses pursuant to Sections 3.24 and 8.1, and to
redeem its outstanding preferred stock and outstanding
subordinated debt, with any remaining cash to be distributed pro
rata to Sellers as a dividend.
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2.6 Closing Balance Sheets.
(a) Preliminary and Adjusted Closing Balance Sheets.
Promptly after the Closing, Seller shall prepare a consolidated
balance sheet of the Company as of the close of business on the
Closing Date (the "Preliminary Closing Balance Sheet"). The
Preliminary Closing Balance Sheet shall be prepared in accordance
with the Accounting Principles but will not reflect the results
of the physical inventory taken on September 30, 1996. As used
herein, "Accounting Principles" mean the set of principles and
methodologies applied on a basis consistent with past practices
of the Company, except that no item shall fail to be included
therein or excluded therefrom on the basis of materiality,
individually or collectively. The parties shall conduct a
physical count of the inventory of the Company as of the close of
business on September 30, 1996 in accordance with generally
accepted auditing standards. The results of such inventory will
be included in the Adjusted Closing Balance Sheet. Buyer shall
examine and review the Preliminary Closing Balance Sheet in
accordance with generally accepted auditing standards and, based
upon such examination, make such adjustments, if any, to the
Preliminary Closing Balance Sheet as shall in its judgment be
required to cause the Preliminary Closing Balance Sheet to
reflect fairly those items required to be reflected therein in
accordance with the Accounting Principles (after examination and
any adjustment, the "Adjusted Closing Balance Sheet").
(b) Delivery of Adjusted Closing Balance Sheet.
Within 30 days after Seller has delivered to Buyer the
Preliminary Closing Balance Sheet, the Adjusted Closing Balance
Sheet shall be delivered by Buyer to Sellers. Sellers and their
representatives shall be provided complete access to all work
papers and other information used by Buyer in preparing the
Adjusted Closing Balance Sheet. The Adjusted Closing Balance
Sheet, when delivered by Buyer to Sellers, shall be deemed
conclusive and binding on the parties for purposes of determining
the Post-Closing Purchase Price Adjustment, unless Seller
notifies Buyer in writing within thirty (30) days after receipt
of the Adjusted Closing Balance Sheet of its disagreement
therewith, which notice shall state with reasonable specificity
the reasons for any disagreement and identify the items and
amounts in dispute.
(c) Arbitration. If any disagreement concerning the
Post-Closing Purchase Price Adjustment is not resolved by Buyer
and Sellers within thirty (30) days following the receipt by
Buyer of notice from Seller of a disagreement concerning the
Post-Closing Purchase Price Adjustment, the undisputed amount, if
any, shall be paid in accordance with Section 2.5, and Buyer and
Sellers shall promptly engage, on standard terms and conditions
for a matter of such nature, a nationally recognized firm of
independent accountants to resolve such dispute. The firm of
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independent accountants shall be proposed in writing by Buyer to
Sellers. In the absence of prompt agreement on the identity of
the independent accountants, the Chicago office of the accounting
firm of Ernst & Young, LLP shall be engaged by the parties. The
engagement agreement with the independent accountants shall
require the independent accountants to make their determination
with respect to the items in dispute within ninety (90) days
following the receipt by Sellers of the Adjusted Closing Balance
Sheet. Buyer and Sellers shall each pay one-half of the cost of
the fees and expenses of such independent accountants at the time
of payment of the Post-Closing Purchase Price Adjustment. The
resolution by the independent accountants of any dispute
concerning the Post-Closing Purchase Price Adjustment shall be
final, binding and conclusive upon the parties and shall be the
parties' sole and exclusive remedy regarding any dispute
concerning the Post-Closing Purchase Price Adjustment.
(d) Final Closing Balance Sheet. The Adjusted Closing
Balance Sheet, as modified by the parties' agreement and by any
determination by the independent accountants as described in this
Section 2.6, shall be the "Final Closing Balance Sheet".
2.7 Transfer Agreement. The USF Shares shall be entitled
to the benefits of and subject to the restrictions contained in
the Transfer Agreement.
2.8 USF Guaranty. USF guaranties the performance by Buyer
of its obligations under Article II and Section 6.4, subject to
all of the applicable terms and conditions thereof.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
OF SELLER(S) AND THE COMPANY
As an inducement to Buyer and USF to enter into this
Agreement and consummate the transactions contemplated hereby,
and subject to the limitations set forth below and in Article
VII, each of the Sellers and the Company, severally but not
jointly, represents and warrants to Buyer and USF as follows.
Each Seller's responsibility for breach of any representation or
warranty hereunder shall be limited to such Seller's pro rata
________
share of the Escrow Amount and the Sellers aggregate
responsibility for such a breach shall be limited to the Ceiling
Amount (with the exception of any liability under Section 7.6).
3.1 Organization. The Company is a corporation duly
organized, validly existing and in good standing under the laws
of its jurisdiction of organization, and has the corporate power
and authority to own or lease its properties, carry on its
business as now conducted, enter into this Agreement and the
Other Agreements to which it is or is to become a party and
perform its obligations hereunder and thereunder.
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3.2 Authorization; Enforceability. This Agreement and each
Other Agreement to which Sellers or the Company, or any of them,
is a party have been duly executed and delivered by and
constitute the legal, valid and binding obligations of such
party, enforceable against it in accordance with their respective
terms. Each Other Agreement to which either Sellers or the
Company is to become a party pursuant to the provisions hereof,
when executed and delivered by such party, will constitute the
legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with the terms of such Other
Agreement. All actions contemplated by this Section and this
Agreement have been duly and validly authorized by all necessary
proceedings by Sellers and the Company.
3.3 Company Shares; Capitalization. The authorized capital
stock of the Company consists solely of 601,250 shares of capital
stock, US$.08 par value per share, of which 600,000 shares are
common stock and 1,250 shares are 6% Cumulative Preferred Stock
and none are held in its treasury. At Closing, the Company
Shares will constitute all of the issued and outstanding shares
of capital stock of the Company. The Company Shares are or will
at Closing be owned of record, legally and beneficially by
Sellers as follows: 351,000 shares of common stock held by Goulet
and 231,000 shares of common stock issuable to M&I upon exercise
of the Warrant (which also holds the 1,250 shares of Preferred
Stock to be redeemed at or prior to Closing). Except as set
forth on Schedule 3.3, there are no Security Rights relating to
any of the Company Shares. All rights and powers to vote the
Company Shares are (or would upon exercise of the Warrant be)
held exclusively by Sellers. The Company represents that all of
the Company Shares are or will be validly issued prior to the
Closing, fully paid and nonassessable, were not issued in
violation of the terms of any agreement or other understanding,
and were issued in compliance with all applicable federal and
state securities or "blue sky" laws and regulations.
3.4 Subsidiaries and Investments. The Company does not
own, nor has it ever owned, any shares of capital stock of or
other equity interest in any corporation, partnership, joint
venture or other entity.
3.5 Qualification. The Company is duly qualified and in
good standing as a foreign corporation and is duly authorized to
transact business in each jurisdiction wherein the character of
the properties owned or leased by it or the nature of the
activities conducted by it makes such qualification and good
standing necessary.
3.6 No Violation of Laws or Agreements; Consents. Neither
the execution and delivery of this Agreement or any Other
Agreement to which Sellers or the Company is or is to become a
party, the consummation of the transactions contemplated hereby
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or thereby nor the compliance with or fulfillment of the terms,
conditions or provisions hereof or thereof by Sellers or the
Company will: (i) contravene any provision of the Governing
Documents of the Company, (ii) conflict with, result in a breach
of, constitute a default or an event of default (or an event that
might, with the passage of time or the giving of notice or any of
them, constitute a default or event of default) under any of the
terms of, result in the termination of, result in the loss of any
right under, or give to any other Person the right to cause such
a termination of or loss under, any asset of the Company,
including any Permit, Intellectual Property, license, franchise,
indenture, mortgage or any other contract, agreement or
instrument to which either Sellers or the Company is a party or
by which any of the Company's assets may be bound or affected,
(iii) result in the creation, maturation or acceleration of any
liability or obligation of the Company (or give to any other
Person the right to cause such a creation, maturation or
acceleration), (iv) violate any Law or violate any judgment or
order of any Governmental Body to which the Company is subject or
by which any of the Company assets may be bound or affected, or
(v) result in the creation or imposition of any Encumbrance upon
any of the Company Shares or asset of the Company or give to any
other Person any interest or right therein. No consent, approval
or authorization of, or registration or filing with, any Person
is required in connection with the execution or delivery by
Sellers or the Company, or any of them, of this Agreement or any
of the Other Agreements to which either, or any of them is or is
to become a party pursuant to the provisions hereof or the
consummation by or the Company, or any of them, of the
transactions contemplated hereby or thereby.
3.7 Financial Information.
(a) Records. The books of account and related records
of the Company reflect accurately and in detail its assets,
liabilities, revenues, expenses and other transactions.
(b) Financial Statements. Attached as Exhibit 3.7(b)
are the consolidated and consolidating balance sheets, income
statements and statements of cash flows for the Company at
September 30, 1995, 1994, 1993 and for the years then ended, and
attached hereto as Exhibit 3.7(b) are the unaudited annual
balance sheets and income statements for the Company at July 31,
1996 and for the periods then ended (collectively, the "Financial
Statements"). The Financial Statements (i) are accurate, correct
and complete in accordance with the books of account and records
of the Company, (ii) have been prepared in accordance with the
Accounting Principles on a consistent basis throughout the
indicated periods, and (iii) present fairly the consolidated
financial condition, assets, and liabilities and results of
operation of the Company at the dates and for the relevant
periods indicated in accordance with the Accounting Principles.
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(c) Undisclosed Liabilities. The Company has no debt,
obligation or liability, absolute, fixed, contingent or
otherwise, of any nature whatsoever, whether due or to become
due, including, to the Knowledge of the Company, any unasserted
claim, whether incurred directly or by any predecessor thereto,
and whether arising out of any act, omission, transaction,
circumstance, sale of goods or services, state of facts or other
condition, except: (i) those reflected or reserved against on the
Financial Statements in the amounts shown therein; (ii) those not
required under Accounting Principles to be reflected or reserved
against in the Financial Statements that are expressly quantified
and set forth in the Contracts identified pursuant to
Section 3.13; (iii) those disclosed on Schedule 3.7(c) attached
hereto; and (iv) those of the same nature as those set forth on
the Financial Statements (or not required to be so set forth
pursuant to the Accounting Principles) that have arisen in the
ordinary course of business of the Company after the date of the
latest Financial Statements through the date hereof, all of which
have been consistent in amount and character with past practice
and experience, and none of which, individually or in the
aggregate, has had or will have a material adverse effect on the
business, financial condition or prospects of the Company and
none of which represents a liability for breach of contract or
warranty or has arisen out of tort, infringement of any
intellectual property rights, or violation of Law or is claimed
in any pending or threatened legal proceeding.
(d) No Changes. Since the date of the Financial
Statements, to the Closing Date, the Company has conducted its
business only in the ordinary course. Without limiting the
generality of the foregoing sentence, since the date of the
Financial Statements, there has not been any: (i) material
adverse change in the financial condition, assets, liabilities,
net worth, earning power, business or prospects of the Company;
(ii) material damage or destruction to any asset of the Company,
whether or not covered by insurance; (iii) strike or other labor
trouble at the Company; (iv) creation of any Encumbrance on any
asset of the Company; (v) except as provided for in Section 2.5,
declaration or payment of any dividend or other distribution on
or with respect to or redemption or purchase by the Company of
any shares of capital stock of the Company, including any of the
Company Shares; (vi) increase in the salary, wage or bonus of any
managerial employee of the Company except those done in the
normal course of business for periodic raises in accordance with
past business practices, or any increase in the number of such
employees; (vii) asset acquisition or expenditure in excess of
US$5,000, other than the purchase of inventory in the ordinary
course of business; (viii) amendment to any Company Plan; (ix)
change in any method of accounting; (x) payment to or transaction
with any Related Party, which payment or transaction is not
specifically disclosed on Schedule 3.16; (xi) disposition of any
asset (other than inventory in the ordinary course of business)
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for less than fair market value; (xii) payment, prepayment or
discharge of any liability other than in the ordinary course of
business or any failure to pay any liability when due,
(xiii) write-offs or write-downs of any assets of the Company;
(xiv) creation, termination or amendment of, or waiver of any
right under, any material agreement of the Company; or (xv)
agreement or commitment to do any of the foregoing.
3.8 Taxes.
(a) Tax Returns; Payment. The Company has filed or
caused to be filed on a timely basis, or will file or cause to be
filed on a timely basis, all Tax Returns that are required to be
filed by it prior to or on the Closing Date with respect to the
Company's interest therein pursuant to the Law of each
governmental authority with taxing power over it. To the
Knowledge of the Company all such Tax Returns were or will be, as
the case may be, correct and complete. The Company has paid all
Taxes that have become due as shown on such Tax Returns or
pursuant to any assessment received as an adjustment to such Tax
Returns, except such Taxes, if any, as are being contested in
good faith and disclosed on the attached Schedule 3.8. The
Company is not currently the beneficiary of any extension of time
within which to file any Tax Return. No claim has been made by a
taxing authority of a jurisdiction where the Company does not
file Tax Returns that it is or may be subject to taxation in that
jurisdiction.
(b) Withholding. The Company has withheld and paid
all Taxes required to have been withheld and paid in connection
with amounts paid or owing to any employee, independent
contractor, creditor, stockholder or other third party.
3.9 Inventory. All of the inventory owned by the Company
is valued on the books and records of the Company and in the
Financial Statements at lower of cost or market, the cost thereof
being determined on a LIFO basis in accordance with Accounting
Principles. To the Knowledge of the Company, all other finished
goods inventory of the Company is in good, merchantable and
useable condition and is salable in the ordinary course of
business within a reasonable time and at normal profit margins,
and all of the raw materials and work-in-process inventory of the
Company can reasonably be expected to be consumed in the ordinary
course of business within a reasonable period of time. None of
the Company's inventory is obsolete or has been consigned to
others or is on consignment from others.
3.10 Receivables. Schedule 3.10, attached hereto, discloses
all trade and other accounts receivable of the Company
("Receivables") outstanding as of September 19, 1996 presented on
an aged basis and separately identifies each account and the
total amount of each related Receivable. All Receivables,
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whether reflected on the Financial Statements disclosed on
Schedule 3.10 hereto or created after the date of the Financial
Statements, arose from bona fide sale transactions of the
_________
Company, and to the Knowledge of the Company no portion of any
Receivable is subject to counterclaim, defense or set-off or is
otherwise in dispute except as set forth in Schedule 3.10.
Except to the extent of the recorded reserve for doubtful
accounts, to the Knowledge of the Company all of the Receivables,
net of the reserves reflected on the Final Closing Balance Sheet
are collectible in the ordinary course of business and should be
fully collected within (i) one hundred twenty (120) days after
having been created or (ii), for those Receivables set forth on
Schedule 3.10 as being over 120 days old, 120 days after the
Closing Date, in each case using commercially reasonable efforts,
except for contract reserves and retainages.
3.11 Condition of Assets; Business; Title.
(a) Condition of Assets; Business. The buildings,
fixtures, improvements, machinery, equipment, tools, furniture,
improvements and tangible personal property of the Company are in
good operating condition and repair and are suitable for the
purposes for which they are used in the Business. The Company is
engaged in the Business and no other business. All of the
Company's assets are reflected on the Financial Statements or,
under Accounting Principles, are not required to be reflected
thereon and include substantially all assets that are necessary
for use in and operation of the Business.
(b) Title. The Company has good and marketable title
to all of its assets, free and clear of all of Encumbrances,
except for those Encumbrances disclosed in Schedule 3.11(b)
attached hereto.
3.12 No Pending Litigation or Proceedings. Except as
described on Schedule 3.12, no action, suit, investigation, claim
or proceeding of any nature or kind whatsoever, whether civil,
criminal or administrative, by or before any Governmental Body or
arbitrator ("Litigation") is pending or, to the Knowledge of and
the Company, threatened against or affecting the Company, the
Business, any of the Company's assets, any of the Company Shares,
or any of the transactions contemplated by this Agreement or any
Other Agreement, and to the Knowledge of the Company there is no
basis for any Litigation. The Company has not been a party to
any other litigation during the past five (5) years. There is
presently no outstanding judgment, decree or order of any
Governmental Body against or affecting the Company, the Business,
any of the Company's assets, any of the Company Shares, or any of
the transactions contemplated by this Agreement or any Other
Agreement. Except as described on Schedule 3.12, the Company
does not have pending any Litigation against any third party.
- 14 -
3.13 Contracts; Compliance. Disclosed on Schedule 3.13,
3.15, 3.17, 3.19, 3.20 or 3.21, each of which are attached
hereto, is a brief description of each contract, lease,
indenture, mortgage, instrument, commitment or other agreement,
arrangement or understanding, oral or written, formal or
informal, to which the Company is a party or by which it or its
assets may be affected, except for service agreements whose
annual contract price is less than US$25,000, and that (i) is
material to the Business or the Company's assets or operations,
individually or in the aggregate, (ii) involves the purchase,
sale or lease of any asset, materials, supplies, inventory or
services in excess of US$25,000 per year, (iii) has an unexpired
term of more than six (6) months from the date hereof, taking
into account the effect of any renewal options, (iv) relates to
the borrowing or lending of any money or guarantee of any
obligation, (v) limits the right of the Company to compete in any
line of business or otherwise restricts any right the Company may
have, (vi) is an employment or consulting contract involving
payment of compensation and benefits, or (vii) was not entered
into in the ordinary course (each, a "Contract" and collectively,
the "Contracts"). Each Contract is a legal, valid and binding
obligation of the Company and is in full force and effect. To
the Knowledge of the Company, the Company and each other party to
each Contract has performed all obligations required to be
performed by it thereunder and is not in breach or default, and
is not alleged to be in breach or default, in any respect
thereunder, and no event has occurred and no condition or state
of facts exists (or would exist upon the giving the notice or the
lapse of time or any of them) that would become or cause a
breach, default or event of default thereunder, would give to any
Person the right to cause such a termination or would cause an
acceleration of any obligation thereunder. The Company is not
currently renegotiating any contract in excess of US$25,000,
except as those Contracts disclosed on Schedule 3.13 attached
hereto, nor has the Company received any notice of non-renewal or
price increase or sales or production allocation with respect to
any Contract.
3.14 Permits; Compliance With Law. The Company holds all
permits, certificates, licenses, franchises, privileges,
approvals, registrations and authorizations required under any
applicable Law or otherwise advisable in connection with the
operation of its assets and Business (each, a "Permit" and
collectively, "Permits"). Each permit is valid, subsisting and
in full force and effect. The Company is in material compliance
with and has fulfilled and performed its obligations under each
Permit, and, to the Knowledge of the Company, no event or
condition or state of facts exists (or would exist upon the
giving of notice or lapse of time or any of them) that could
constitute a breach or default under any Permit. Except as set
forth in Schedule 3.14, the Company has received no notice of any
violation of law and, to the Knowledge of the Company it is not
- 15 -
currently in violation of any law and no event has occurred or
condition or state of facts exist which could give rise to any
such violation. The Company has not received any notice of
nonrenewal of any Permit.
3.15 Real Property. Schedule 3.15, attached hereto,
discloses and summarizes all real properties currently used or
leased by the Company or in which the Company has an interest
(collectively, the "Real Property") and identifies the record
title holder of all of the Real Property. The Company owns no
Real Property. The Company has the right to quiet enjoyment of
all Real Property in which it holds a leasehold interest for the
full term, including all renewal rights, of the lease or similar
agreement relating thereto. Copies of all title insurance
policies written in favor of the Company and all surveys relating
to the Real Property leased by the Company have been delivered to
Buyer. To the Knowledge of the Company, the use and operation of
all Real Property conform to all applicable building, zoning,
safety and subdivision Laws, Environmental Laws and other Laws,
and all restrictive covenants and restrictions and conditions
affecting title. The Company has not received any written or
oral notice of assessments for public improvements or
condemnation against any Real Property.
3.16 Transactions With Related Parties. No Related Party is
or has been during the past five (5) years a party to any
transaction, agreement or understanding with the Company except
pursuant to arrangements disclosed on Schedule 3.16, attached
hereto. For this purpose a Related Party is defined as a Seller,
an Affiliate of a Seller, including the Company, an officer or
director of M&I or the Company, and any spouse, sibling, ancestor
or lineal descendant of Goulet.
3.17 Labor Relations. Except as set forth in Schedule 3.17,
no employee of the Company is represented by any union or other
labor organization. No representation election, arbitration
proceeding, grievance, labor strike, dispute, slowdown, stoppage
or other labor trouble is pending or, to the Knowledge of the
Company, threatened against, involving, affecting or potentially
affecting the Company. No complaint against the Company is
pending or, to the Knowledge of the Company, threatened before
the National Labor Relations Board, the Equal Employment
Opportunity Commission or any similar state or local agency, by
or on behalf of any employee or the Company. Except as set forth
in Schedule 3.17, the Company has no contingent liability for
sick leave, vacation time, severance pay or any similar item. To
the Knowledge of the Company, the Company has no contingent
liability for any occupational disease of any of its employees,
former employees or others. Neither the execution and delivery
of this Agreement, the performance of the provisions hereof nor
the consummation of the transactions contemplated hereby will
- 16 -
trigger any severance pay obligation under any contract or under
any Law.
3.18 Products Liability; Warranties. To the Knowledge of
the Company, there is no litigation, investigation, proceeding or
claim pending or threatened against or relating to the Company,
its properties or business, of facts or circumstances, which
could reasonably give rise to a material claim for bodily injury
or property damage resulting from accidents occurring at any
time, alleged or otherwise growing out of or alleged to have
grown out of the manufacture, sale, distribution, existence,
maintenance and/or use of products distributed by the Company
prior to Closing. To the Knowledge of the Company, the Company
shall have no liability after the Closing Date not fully covered
by insurance or warranties relating to any product manufactured,
distributed or sold by the Company prior to the Closing Date,
whether or not such liability relates to products that are
defective or improperly designed or manufactured or in breach of
any express or implied product warranty. The attached Schedule
3.18 discloses and describes the terms of all express product
warranties under which the Company has distributed its products
prior to the Closing Date.
3.19 Insurance. The attached Schedule 3.19 discloses all
insurance policies with respect to which the Company is the
owner, insured or beneficiary and the manner in which the Company
provides coverage for workers compensation claims. The Company
believes that the policies are reasonable, in both scope and
amount, in light of the risk attendant to the Business. The
Company will not have any liability after the Closing for
retrospective or retroactive premium adjustments, except as
disclosed on the attached Schedule 3.19. For the past five (5)
years, all insurance policies covering product liability and
general liability maintained by or for the benefit of the Company
have been "occurrence" policies and not "claims made" policies.
3.20 Intellectual Property Rights. Except as disclosed in
Schedule 3.20, there are no Intellectual Property rights, license
agreements or the like used or granted to or owned by the
Company. The attached Schedule 3.20 discloses all of the
trademark and service mark rights, applications and
registrations, trade names, fictitious names, service marks,
logos and brand names, copyrights, copyright applications,
letters patent, patent applications and licenses of any of the
foregoing owned or used by the Company in or applicable to the
Business. The Company has the entire right, title and interest
in and to, or has the exclusive perpetual royalty-free right to
use, the intellectual property rights disclosed on the attached
Schedule 3.20 and all other processes, know-how, show-how,
formulae, trade secrets, inventions, discoveries, improvements,
blueprints, specifications, drawings, designs, and other
proprietary rights necessary or applicable to or advisable for
- 17 -
use in the Business ("Intellectual Property"), free and clear of
all Encumbrances. The Company has no Intellectual Property under
license. The Intellectual Property is valid and not the subject
of any interference, opposition, re-examination or cancellation.
To the Knowledge of the Company, no person is infringing upon nor
has any Person misappropriated any Intellectual Property. To the
Knowledge of the Company, it is not infringing upon the
Intellectual Property rights of any other Person.
3.21 Employee Benefits.
(a) Benefit Plans; Company Plans. The attached
Schedule 3.21 discloses all written and unwritten "employee
benefit plans" within the meaning of Section 3.3 of ERISA, and
any other written and unwritten profit sharing, pension, savings,
deferred compensation, fringe benefit, insurance, medical,
medical reimbursement, life, disability, accident, post-
retirement health or welfare benefit, stock option, stock
purchase, sick pay, vacation, employment, severance, termination
or other plan, agreement, contract, policy, trust fund or
arrangement (each, a "Benefit Plan"), whether or not funded and
whether or not terminated, (a) maintained or sponsored by the
Company, or (b) with respect to which the Company (or Sellers
with respect to the Company) has or may have liability or is
obligated to contribute, or (c) that otherwise covers any of the
current or former employees of the Company or their
beneficiaries, or (d) as to which any such current or former
employees or their beneficiaries participated or were entitled to
participate or accrue or have accrued any rights thereunder
(each, a "Company Plan").
(b) Company Group Matters; Funding. Neither the
Company nor any corporation that may be aggregated with the
Company under Section 414(b), (c), (m) or (o) of the Code (the
"Company Group") has any obligation to contribute to or any
direct or indirect liability under or with respect to any Benefit
Plan of the type described in Sections 4063 and 4064 of ERISA or
Section 413(c) of the Code. The Company does not have any
liability, and after the Closing the Company will not have any
liability, with respect to any Benefit Plan of any other member
of the Company Group, whether as a result of delinquent
contributions, distress terminations, fraudulent transfers,
failure to pay premiums to the PBGC, withdrawal liability or
otherwise. No accumulated funding deficiency (as defined in
Section 302 of ERISA and Section 412 of the Code) exists nor has
any funding waiver from the IRS been received or requested with
respect to any Company Plan or any Benefit Plan of any member of
the Company Group and no excise or other Tax is due or owing
because of any failure to comply with the minimum funding
standards of the Code or ERISA with respect to any of such plans.
- 18 -
(c) Compliance. To the Knowledge of the Company, each
of the Company Plans and all related trusts, insurance contracts
and funds have been created, maintained, funded and administered
in all respects in compliance with all applicable Laws and in
compliance with the plan document, trust agreement, insurance
policy or other writing creating the same or applicable thereto.
No Company Plan is or is proposed to be under audit or
investigation, and no completed audit of any Company Plan has
resulted in the imposition of any Tax, fine or penalty.
(d) Qualified Plans. No Company Plan is a qualified
plan under Section 401(a) of the Code and exempt from United
States Federal income tax under Section 501(a) of the Code (a
"Qualified Plan").
(e) No Defined Benefit Plans. No Company Plan is a
defined benefit plan within the meaning of Section 3(35) of ERISA
(a "Defined Benefit Plan"). No Defined Benefit Plan sponsored or
maintained by any member of the Company Group has been terminated
or partially terminated after September 1, 1974, except as set
forth on Schedule 3.21. Each Defined Benefit Plan identified as
terminated on Schedule 3.21 has met the requirement for standard
termination for single-employer plans contained in Section
4041(b) of ERISA. During the five (5) year period ending on the
Closing Date, no member of the Company Group has transferred a
Defined Benefit Plan to a corporation that was not, at the time
of transfer, related to the transferor in any manner described in
Sections 414(b), (c), (m) or (o) of the Code.
(f) Multiemployer Plans. No Company Plan is a
multiemployer plan within the meaning of Section 3(37) or Section
4001(a)(3) of ERISA (a "Multiemployer Plan"). No member of the
Company Group has withdrawn from any Multiemployer Plan or
incurred any withdrawal liability to or under any Multiemployer
Plan. No Company Plan covered any employee with any member of
the Company Group in any foreign country or territory.
(g) Prohibited Transactions; Fiduciary Duties; Post-
retirement Benefits. No prohibited transaction (within the
meaning of Section 406 of ERISA and Section 4975 of the Code)
with respect to any Company Plan exists or has occurred that
could subject the Company to any liability or Tax under Part 5 of
Title I of ERISA or Section 4975 of the Code. To the Knowledge
of the Company, no member of the Company Group, nor any
administrator or fiduciary of any Company Plan, nor any agent of
any of the foregoing, has engaged in any transaction or acted or
failed to act in a manner that will subject the Company to any
liability for a breach of fiduciary or other duty under ERISA or
any other applicable Law. With the exception of the requirements
of Section 4980B of the Code, no post-retirement benefits are
provided under any Company Plan that is a welfare benefit plan as
described in ERISA Section 3(1).
- 19 -
3.22 Environmental Matters.
(a) Compliance; No Liability. To the Knowledge of the
Company, the Company has operated the Business and each parcel of
Real Property in compliance with all applicable environmental
Laws. To the Knowledge of the Company, the Company is not
subject to any liability, penalty or expense (including legal
fees) and will not hereafter suffer or incur any loss, liability,
penalty or expense (including legal fees) by virtue of any
violation of any Environmental Law occurring prior to the
Closing.
(b) Treatment; CERCLIS. The Company has not treated,
stored, recycled or disposed of any Regulated Material on any
real property, and, to the Knowledge of the Company, no other
Person has treated, stored, recycled or disposed of any Regulated
Material on any part of the Real Property. The Company has not
transported any Regulated Material or arranged for the
transportation of any Regulated Material to any location that is
listed or proposed for listing on the National Priorities List
pursuant to Superfund, on CERCLIS or any other location that is
the subject of federal, state or local enforcement action or
other investigation that may lead to claims against the Company
for cleanup costs, remedial action, damages to natural resources,
to other property or for personal injury including claims under
Superfund. None of the Real Property is listed or, to the
knowledge of Seller or the Company, proposed for listing on the
National Priorities List pursuant to Superfund, CERCLIS or any
state or local list of sites requiring investigation or cleanup.
(c) Notices; Existing Claims; Certain Regulated
Materials; Storage Tanks. The Company has not received any
request for information, notice of claim, demand or other
notification that it is or may be potentially responsible with
respect to any investigation, abatement or cleanup of any
threatened or actual release of any Regulated Material. The
Company is not required to place any notice or restriction
relating to the presence of any Regulated Material at any Real
Property or in any deed to any Real Property. The Company has
provided to Buyer a list of all sites to which the Company has
transported any Regulated Material for recycling, treatment,
disposal, other handling or otherwise. There has been no past,
and there is no pending or contemplated, claim by the Company
under any Environmental Law or Laws based on actions of others
that may have impacted on the Real Property, and the Company has
not entered into any agreement with any Person regarding any
Environment Law, remedial action or other environmental liability
or expense. All storage tanks located on the Real Property,
whether underground or aboveground, are disclosed on Schedule
3.22, and all such tanks and associated piping are in sound
condition and are not leaking and have not leaked.
- 20 -
3.23 Customer Relations. Except as set forth on Schedule
3.23, to the knowledge of the Company, there exists no condition
or state of facts or circumstances involving the Company's
customers, suppliers, distributors or sales representatives that
the Company can reasonably foresee could adversely affect the
Business after the Closing Date.
3.24 Finders' Fees. Neither Seller nor the Company nor any
of their respective officers, directors or employees has
employed any broker or finder or incurred any liability for any
brokerage fee, commission or finders' fee in connection with any
of the transactions contemplated hereby or by any Other
Agreement, except with respect to Cleary Gull Reiland & McDevitt,
Inc., who acted as financial advisor to the Company and whose
fees will be paid by the Company at Closing.
3.25 Securities Matters. Each Seller is an "accredited
investor" within the meaning of Rule 501 of the Securities Act.
Each Seller is acquiring the USF Shares not with a view to or in
connection with any distribution of such shares.
3.26 Disclosure. None of the representations or warranties
of the Company contained herein and none of the information
contained in the Schedules referred to in Article III is false or
misleading in any material respect or omits to state a fact
herein or therein necessary to make the statements herein or
therein not misleading in any material respect.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to Sellers to enter into this Agreement and
consummate the transactions contemplated hereby, each of USF and
Buyer jointly and severally represents and warrants to Sellers as
follows:
4.1 Organization. USF and Buyer are corporations duly
organized, validly existing and in good standing under the laws
of the State of Delaware and the Commonwealth of Massachusetts,
respectively, and have the corporate power and authority to own
or lease its properties, carry on its business, enter into this
Agreement and the Other Agreements to which it is or is to become
a party and perform its obligations hereunder and thereunder.
4.2 Authorization; Enforceability. This Agreement and each
Other Agreement to which Buyer or USF is a party, respectively,
have been duly executed and delivered by and constitute the
legal, valid and binding obligations of Buyer and USF,
respectively, enforceable in accordance with their respective
terms. Each Other Agreement to which Buyer and USF is to become
a party pursuant to the provisions hereof, when executed and
delivered by Buyer or USF, will constitute the legal, valid and
- 21 -
binding obligation of Buyer and USF, respectively, enforceable
against Buyer and USF, as appropriate, in accordance with the
terms of such Other Agreement. All actions contemplated by this
Section have been duly and validly authorized by all necessary
proceedings by Buyer and USF.
4.3 No Violation of Laws; Consents. Neither the execution
and delivery of this Agreement or any Other Agreement to which
Buyer or USF is or is to become a party, the consummation of the
transactions contemplated hereby or thereby nor the compliance
with or fulfillment of the terms, conditions or provisions hereof
or thereof by Buyer or USF will: (i) contravene any provision of
the Governing Documents of Buyer or USF, or (ii) violate any Law
or any judgment or order of any Governmental Body to which Buyer
or USF is subject or by which any of its assets may be bound or
affected. Except for listing of the USF Shares on the NYSE, no
consent, approval or authorization of, or registration or filing
with, any person is required in connection with the execution or
delivery by Buyer of this Agreement or any of the Other Agreement
to which Buyer is or is to become a party pursuant to the
provisions hereof or the consummation by Buyer of the
transactions contemplated hereby or thereby.
4.4 No Pending Litigation or Proceedings. No Litigation is
pending or, to the knowledge of Buyer, threatened against or
affecting Buyer in connection with any of the transactions
contemplated by this Agreement or any Other Agreement to which
Buyer is or is to become a party. There is presently no
outstanding judgment, decree or order of any Governmental Body
against or affecting Buyer in connection with the transactions
contemplated by this Agreement or any Other Agreement to which
Buyer is or is to become a party.
4.5 Capitalization. The authorized capital stock of USF
consists of 150,000,000 shares of common stock. The authorized
capital stock of Buyer consists of 400 shares of common stock,
par value $100.00 per share. The USF Shares to be issued to
Sellers pursuant to this Agreement will be duly authorized,
validly issued, fully paid and nonassessable and not subject to
preemptive rights created by statute, the USF's Certificate of
Incorporation or by-laws or any agreement to which the Buyer or
USF is a party or is bound.
4.6 SEC Filings. Buyer has delivered or made available to
each Seller all material filings made by USF under the Securities
Exchange Act of 1934 since the end of its most recent fiscal
year.
4.7 Finders' Fees. Neither Buyer nor any of its officers,
directors or employees has employed any broker or finder or
incurred any liability for any brokerage fee, commission or
- 22 -
finders' fee in connection with any of the transactions
contemplated hereby.
ARTICLE V.
CERTAIN COVENANTS
5.1 Conduct of Business Pending Closing. From and after
the date hereof and until the Closing Date, unless Buyer shall
otherwise consent in writing, the Company shall, and Sellers
shall cause the Company to, conduct its affairs as follows:
(a) Ordinary Course; Compliance. The Business shall
be conducted only in the ordinary course and consistent with past
practice. The Company shall maintain its property, equipment and
other assets consistent with past practice and shall comply in a
timely fashion with the provisions of all Contacts and Permits
and its other agreements and commitments. The Company shall use
its best effort to keep its business organization intact, keep
available the services of its present employees and preserve the
goodwill of its suppliers, customers and others having business
relations with it. The Company shall maintain in full force and
effect the policies of insurance disclosed on Schedule 3.19,
subject only to variations required by the ordinary operations of
the Business, or else shall obtain, prior to the lapse of any
such policy, substantially similar coverage with insurers of
recognized standing.
(b) Transactions. The Company shall not: (i) amend
its Governing Documents; (ii) change its authorized or issued
capital stock or issue any Security Rights with respect to shares
of its capital stock (other than pursuant to Section 2.5); (iii)
enter into any contract or commitment the performance of which
may extend beyond the Closing, except those made in the ordinary
course of business, the terms of which are consistent with past
practice; (iv) enter into any employment or consulting contract
or arrangement that is not terminable at will and without penalty
or continuing obligation; (v) fail to pay any Tax or any other
liability or charge when due, other than charges contested in
good faith by appropriate proceedings; (vi) make, change or
revoke any Tax election or make any agreement or settlement with
any taxing authority; (vii) take any action or omit to take any
action that will cause a breach or termination of any Contract,
other than termination by fulfillment of the terms thereunder; or
(viii) increase any employee's salary, wage, benefits or bonus or
increase the number of employees of Company other than consistent
with business conditions and past practices.
5.2 Access, Information and Documents. Sellers and the
Company shall give to Buyer and to Buyer's employees and
representatives (including accountants, actuaries, attorneys,
environmental consultants and engineers) access during the normal
business hours to all of the properties, books, Tax Returns,
- 23 -
contracts, commitments, records, officers, personnel and
accountants (including independent public accountants and their
audit workpapers concerning the Company) of the Company and shall
furnish to Buyer all such documents and copies of documents and
all information with respect to the properties, liabilities and
affairs of the Company and the Subsidiaries as Buyer may
reasonably request. All information provided to Buyer and/or USF
pursuant to this Section 5.2 shall be subject to the terms of the
letter agreement concerning confidentiality executed by USF dated
July 22, 1996, and both USF and Buyer shall be bound thereby.
5.3 Certain Tax Matters.
(a) Tax on Company Income. All federal, state or
local income tax of the Company for all taxable periods whether
prior to or after the Closing Date shall be paid by the Company
when due.
(b) Mutual Cooperation. Buyer and Sellers shall each
provide the other, and Buyer shall cause the Company to provide
Sellers, with such assistance as may reasonably be requested by
any of them in connection with the preparation of any Tax Return,
any Tax audit, or any judicial or administrative proceedings
relating to any Tax, and each will retain and provide the other
with any records or information that may be relevant to such Tax
Return, Tax audit, proceeding or determination. The party
requesting assistance hereunder shall reimburse the other for
direct expenses incurred in providing such assistance.
5.4 Covenant Not to Compete.
(a) Restriction. For a period of one (1) year from
and after the Closing Date, Goulet shall not, except as an
officer or employee of USF, Buyer, the Company or their
Affiliates, or with the prior written consent of USF, directly or
indirectly, own, manage, operate, join, control or participate in
the ownership, managements, operation or control of, or be
employed or otherwise connected as an officer, employer,
stockholder, partner or otherwise with, any business that at any
relevant time during such period directly or indirectly competes
with the Business in the United States. Ownership of not more
than 2% of the outstanding stock of any publicly traded company
shall not be a violation of this Section 5.4.
(b) Enforcement. The restrictive covenant contained
in this Section is a covenant independent of any other provisions
of this Agreement and the existence of any claim that Seller may
allege against any other party to this agreement, whether based
on this Agreement or otherwise, shall not prevent the enforcement
of this covenant. Sellers agree that Buyer's remedies at law for
any breach or threat of breach by Goulet of the provisions of
this Section will be inadequate, and the Buyer shall be entitled
- 24 -
to any injunction or injunctions to prevent breached of the
provision of this Section and to enforce specifically the terms
and provisions hereof, in addition to any other remedy to which
Buyer may be entitled at law or equity. In the event of
litigation regarding this covenant not to compete, the prevailing
party in such litigation shall, in addition to any other remedies
the prevailing party may obtain in such litigation, be entitled
to recover from the other party its reasonable legal fees and out
of pocket costs incurred by such party in enforcing or defending
its rights hereunder. The length of time for which this covenant
not to compete shall be in force shall not include any period of
violation or any other period required for litigation during
which Buyer seeks to enforce this covenant. Should any provision
of this Section be adjudged to any extent invalid by any
competent tribunal, such provision will be deemed modified to the
extent necessary to make it enforceable.
5.5 Publicity. The parties will not issue any press
release or otherwise make any announcements to the public or the
employees or the Company with respect to this Agreement without
the prior written consent of the other party except as required
by Law. This Section shall expire on the 30th day after the
Closing Date.
5.6 Fulfillment of Agreements. Each party hereto shall use
its best efforts to cause all of those conditions to the
obligations of the other under Article VI that are not beyond its
reasonable control to be satisfied on or prior to the Closing and
shall use its best efforts to take, or cause to be taken, all
action and to do, or cause to be done, all things necessary,
proper or advisable to consummate and make effective the
transactions contemplated by this Agreement.
ARTICLE VI.
CONDITIONS TO CLOSING; TERMINATION
6.1 Conditions Precedent to Obligation of Buyer. The
obligation of Buyer to proceed with the Closing under this
Agreement is subject to the fulfillment prior to or at Closing of
the following conditions, any one or more of which may be waived
in whole or in part by Buyer at Buyer's sole option:
(a) Bringdown of Representations and Warranties;
Covenants. Each of the representations and warranties of Sellers
and the Company contained in this Agreement shall be true and
correct in all material respects on and as of the Closing Date,
with the same force and effect as though such representations and
warranties had been made on, as of and with reference to the
Closing Date. Each of Sellers and the Company shall have
performed in all respects all of the covenants and complied with
all of the provisions required by this Agreement to be performed
or complied with by it at or before the Closing.
- 25 -
(b) Litigation. No statute, regulation or order of
any Governmental Body shall be in effect that restrains or
prohibits the transactions contemplated hereby or that would
limit or adversely affect Buyer's ownership of the Company Shares
or control of the Company, and there shall not have been
threatened, nor shall there be pending, any action or proceeding
by or before any Governmental Body challenging the lawfulness of
or seeking to prevent or delay any of the transactions
contemplated by this Agreement or any of the Other Agreements or
seeking monetary or other relief by reason of the consummation of
any of such transactions.
(c) No Material Adverse Change. Between the date
hereof and the Closing Date, there shall have been no material
adverse change, regardless of insurance coverage therefor, in the
Business or any of the assets, results of operations,
liabilities, prospects or condition, financial or otherwise, of
the Company.
(d) Private Placement. Buyer shall be satisfied that
there shall be a valid private placement of the USF Shares to be
delivered pursuant hereto under the Securities Act and under any
applicable state securities laws, including representations or
questionnaires or both from each Seller to the effect that each
has such knowledge and experience in financial and business
matters that would permit him to be capable of evaluating the
merits and risks of an investment in the USF Shares.
(e) Transfer Agreement. The Transfer Agreement shall
have been executed and delivered by Seller.
(f) Listing on NYSE. The USF Shares shall have been
authorized for listing on the NYSE, subject to official notice of
issuance.
(g) Environmental Assessment. Buyer shall be
satisfied that the environmental condition of the Real Property
is acceptable based upon an environmental assessment conducted by
Buyer at its sole cost and expense.
(h) Closing Certificate; Closing Documents. Seller
shall have delivered a certificate, dated the Closing Date, in
such detail as Buyer shall reasonably request, certifying to the
fulfillment of the conditions set forth in subparagraphs (a),
(b), and (c) of this Section 6.1. Such certificate shall
constitute a representation and warranty of Seller with regard to
the matters therein for purposes of this Agreement. Buyer shall
have received the other documents referred to in Section 6.3.
All agreements, certificates, opinions and other documents
delivered by Sellers or the Company to Buyer hereunder shall be
in form and substance satisfactory to counsel for Buyer, in the
exercise of such counsel's reasonable professional judgment.
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(i) Interview of Employees of Company. In conducting
its due diligence review prior to execution of this Agreement,
the Company asked the Buyer to refrain from contacting employees
of the Company. As a condition to Closing, Buyer shall be
reasonably satisfied that any additional facts arising from such
contacts after the execution of this Agreement do not indicate a
material adverse change in the condition of the Company or its
operations at variance with information otherwise provided by the
Company.
6.2 Conditions Precedent to Obligation of Sellers. The
obligation of Sellers to proceed with the Closing under this
Agreement is subject to the fulfillment prior to or at Closing of
the following conditions, any one or more of which may be waived
in whole or in part by Sellers acting jointly at their option.
(a) Bringdown of Representations and Warranties;
Covenants. Each of the representations and warranties of Buyer
contained in this Agreement shall be true and correct in all
material respects on and as of the Closing Date, with the same
force and effect as though such representations and warranties
had been made on, as of and with reference to the Closing Date.
Buyer shall have performed all of the covenants and complied in
all respects with all of the provisions required by this
Agreement to be performed or complied with by it at or before the
Closing.
(b) Litigation. No statute, regulation or order of
any Governmental Body shall be in effect that restrains or
prohibits the transactions contemplated hereby, and there shall
not have been threatened, nor shall there be pending, any action
or proceeding by or before any Governmental Body challenging the
lawfulness of or seeking to prevent or delay any of the
transactions contemplated by this Agreement or the Other
Agreements or seeking monetary or other relief by reason of the
consummation of such transactions.
(c) No Material Adverse Change. Between the date
hereof and the Closing Date, there shall have been no material
adverse change, regardless of insurance coverage therefor, in the
Business or any of the assets, results of operations,
liabilities, prospects or condition, financial or otherwise, of
the Company.
(d) Closing Certificate. Buyer shall have delivered a
certificate, dated the Closing Date, in such detail as Sellers
shall reasonably request, certifying to the fulfillment of the
conditions set forth in subparagraphs (a) and (b) of this Section
6.2. Such certificate shall constitute a representation and
warranty of Buyer with regard to the matters therein for purposes
of this Agreement.
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(e) Listing on NYSE. the USF Shares shall have been
authorized for listing on the NYSE, subject to official notice of
issuance.
(f) Transfer Agreement. USF shall have executed and
delivered the Transfer Agreement.
(g) Closing Documents. Sellers shall have received
the other documents referred to in Section 6.4. All agreements,
certificates, opinions and other documents delivered by Buyer to
Seller hereunder shall be in form and substance satisfactory to
counsel for Seller, in the exercise of such counsel's reasonable
professional judgment.
6.3 Deliveries at the Closing by Sellers. Sellers shall
deliver or cause to be delivered to Buyer at the Closing:
(a) Certificates or documents of assignment
representing the Company Shares duly endorsed in negotiable form
or accompanied by stock powers duly executed in blank with all
transfer taxes, if any, paid in full.
(b) Certificates of the appropriate public officials
to the effect that the Company was a validly existing corporation
in good standing in its state of incorporation as of a date not
more than ten (10) days prior to the Closing Date.
(c) Incumbency and specimen signature certificates
dated the Closing Date, signed by the officers of the Company and
certified by its Secretary.
(d) True and correct copies of (A) the Governing
Documents (other than the bylaws) of the Company as of a date not
more than ten (10) days prior to the Closing Date, certified by
the Secretary of State of its state of incorporation and (B) the
bylaws of the Company as of the Closing Date, certified by its
Secretary.
(e) Certificates of the Secretary of the Company (A)
setting forth all resolutions of the Board of Directors of the
Company and, if necessary, the stockholders, authorizing the
execution and delivery of this Agreement and the performance by
the Company of the transactions contemplated hereby, and (B) to
the effect that the Governing Documents of the Company, as the
case may be, delivered pursuant to Section 6.3(d) were in effect
at the date of adoption of such resolution, the date of execution
of this Agreement and the Closing Date.
(f) General releases by all officers and directors of
the Company and by each Seller of all liability of the Company or
any Subsidiary to them and of any claim that they or any of them
may have against the Company (exclusive of pension obligations).
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(g) The minute books, stock ledgers and corporate seal
of the Company.
(h) The opinion of von Briesen, Purtell & Roper, s.c.,
legal counsel to Sellers and the Company, in substantially the
form of Exhibit 6.3(h).
(i) Resignations of the officers and directors of the
Company effective at the Closing.
(j) The assignment of stock certificate described in
Section 7.4(b).
(k) Such other agreements and documents as Buyer may
reasonably request.
6.4 Deliveries at the Closing by Buyer. Buyer shall
deliver or cause to be delivered to Sellers at the Closing:
(a) Stock certificates evidencing the USF Shares duly
registered in the name of the Sellers and registered at the
address of the Sellers identified in Section 8.3 using the
respective Sellers' Federal tax identification numbers.
(b) A certificate of the appropriate public official
to the effect that Buyer is a validly existing corporation and in
good standing in the State of Delaware as of a date not more than
ten (10) days prior to the Closing Date.
(c) Incumbency and specimen signature certificates
signed by the officers of Buyer and certified by the Secretary or
Assistant Secretary of Buyer.
(d) The opinion of Michael E. Hulme, Assistant General
Counsel to Buyer, in substantially the form of Exhibit 6.4(d).
(e) Subject to Section 7.4(b), the delivery to the
Sellers, pro rata, and as set forth on Schedule 6.4(e), of the
________
USF Shares.
(f) Such other agreements and documents as Seller may
reasonably request.
6.5 Termination. This Agreement may be terminated at any
time prior to Closing by: (i) mutual consent of Buyer, Sellers
and Company; (ii) Buyer, if any of the conditions specified in
Section 6.1 hereof shall not have been fulfilled by October 10,
1996 and shall not have been waived by Buyer; (iii) Sellers, if
any of the conditions specified in Section 6.2 hereof shall not
have been fulfilled by October 10, 1996 and shall not have been
waived by Sellers; or (iv) Sellers, at their sole discretion and
- 29 -
as a result of information made known to them, at any time prior
to October 1, 1996.
6.6 Investment Advisor. In the event that Sellers are not
"accredited investors" or "qualified investors" pursuant to the
Securities Act, (a) Sellers, or any one or more of them, may
select and retain an investment advisor or representative of
their choosing to assist them at such Sellers' sole cost and
expense or (b) Sellers may select an investment advisor or
representative provided by Buyer, the fees and costs associated
with the employment of such investment advisor shall be paid by
Buyer.
ARTICLE VII.
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
7.1 Survival of Representations. All representations,
warranties and agreements made by any party in this Agreement or
pursuant hereto shall survive the Closing, but all claims for
damages made by virtue of such representations, warranties and
agreements shall be made under, and subject to the limitations
set forth in, this Article VII. Disclosures with respect to any
representation and warranty set forth in Articles III and IV are
cumulative and shall be deemed disclosure with respect to any
other representation and warranty therein, however any limitation
or qualification set forth in any one representation and warranty
therein shall not limit or qualify any other representation and
warranty therein. After the Closing, the Company shall have no
liability to Sellers for any breach of any representation or
warranty made by Sellers or the Company to Buyer in this
Agreement, in any certificate or document furnished pursuant
hereto by Sellers or the Company or any Other Agreement to which
Sellers or the Company, or any of them, is or is to become a
party.
7.2 Indemnification by Sellers. Notwithstanding any term
in this Agreement to the contrary, and subject to the limitation
provided in the introductory language to Article III and
Section 7.4, Sellers shall indemnify, defend, save and hold Buyer
and its officers, directors, employees, agents and Affiliates
(including, after the Closing, the Company; collectively, "Buyer
Indemnitees") harmless from and against all demands, claims,
allegations, liabilities, costs and expenses (including
reasonable legal fees, interest, penalties, and all reasonable
amounts paid in investigation, defense or settlement of any of
the foregoing, whether or not the underlying demands, claims,
allegations, etc., of third parties are meritorious;
collectively, "Buyer Damages") asserted against, imposed upon,
resulting to, required to be paid by or incurred by any Buyer
Indemnities, directly or indirectly, in connection with, arising
out of, which could result in, or which would not have occurred
but for, (i) a breach of any representation or warranty made by
- 30 -
Sellers or the Company in this Agreement, in any certificate or
document furnished pursuant hereto by Sellers or the Company or
any Other Agreement to which Sellers or the Company, or any of
them is or is to become a party, (ii) a breach or nonfulfillment
of any covenant or agreement made by Seller or the Company in or
pursuant to this Agreement or in any Other Agreement to which
Sellers or the Company, or any of them, is or is to become a
party, (iii) any and all liabilities of the Company, whether due
or to become due, existing on the Closing Date or arising out of
any transaction entered prior to the Closing Date, except for
liabilities disclosed in writing to Buyer on or before Closing or
fully reserved on the Final Closing Balance Sheet (other than the
liabilities covered by Section 7.2(vi) hereof), (iv)
noncompliance with or a violation of and any Buyer Damages with
respect to Environmental Laws and related to events prior to the
Closing, (v) any material liability under any warranty or
guarantee or other similar promise, or any material contract or
agreement, given, issued, made or entered into by Company on or
before Closing (except those disclosed in writing to Buyer on or
before Closing), and/or (vi) any pending or threatened litigation
disclosed as Item 1 on Schedule 3.12 to this Agreement. The
foregoing to the contrary notwithstanding the liability of
Sellers hereunder shall be several and they shall contribute to
such indemnification pro rata based upon their respective equity
________
interests in the Company.
7.3 Indemnification by Buyer. Buyer shall indemnify,
defend, save and hold Sellers and their officers, directors,
agents, representatives, successors and permitted assigns
(collectively, "Seller Indemnitees") harmless from and against
any and all demands, claims, actions or causes of action,
assessments, losses, damages, deficiencies, liabilities, costs
and expenses (including reasonable legal fees, interest,
penalties, and all reasonable amounts paid in investigation,
defense or settlement of any of the foregoing), whether or not
the underlying demands, claims, allegations, etc., of third
parties are meritorious, (collectively, "Seller Damages")
asserted against, imposed upon, resulting to, required to be paid
by or incurred by any Seller Indemnitees, directly or indirectly,
in connection with, arising out of, which could result in, or
which would not have occurred but for, (i) a breach of any
representation or warranty made by Buyer in this Agreement or in
any certificate or document furnished pursuant hereto by Buyer or
any Other Agreement to which Buyer is or is to become a party,
(ii) a breach or nonfulfillment of any covenant or agreement made
by Buyer in or pursuant to this Agreement and in any Other
Agreement to which Buyer is or is to become a party, and (iii)
post-Closing actions and omissions by the Company or its officers
or directors.
7.4 Limitation of Liability. Notwithstanding the
foregoing, Sellers' obligations to indemnify Buyer Indemnitees
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against any Buyer Damages shall be subject to all of the
following limitations:
(a) Threshold. No indemnification shall be made under
Section 7.2 until the aggregate amount of Buyer Damages
thereunder exceeds US $50,000, and then only for claims in excess
of such amount (the "Basket").
(b) Ceiling. No indemnification shall be made under
Section 7.2 to the extent that Buyer Damages exceed US $500,000
in the aggregate (the "Ceiling Amount") less the Basket;
provided, however, that such Ceiling Amount shall not apply in
any way to any claim for Buyer Damages sustained by reason of a
breach of any representation or warranty relating to those
matters governed by Section 3.3. In order to secure Sellers'
obligations under Section 7.2 and to provide a fund for payment
of the Post-Closing Purchase Price Adjustment under Section 2.5
an escrow shall be established for the benefit of Sellers and
Buyer for the time period specified in Section 7.5, and Sellers
and Buyer shall deposit in escrow an amount of USF Shares equal
to the Ceiling Amount based upon the USF Share Value (the "Escrow
Amount"). In connection with the establishment of the escrow,
Sellers and Buyer shall enter into an Escrow Agreement in the
form attached as Exhibit 7.4(b) which shall provide, amongst
other things, that (i) Sellers shall execute and deliver to the
Escrow Agent (as defined in the Escrow Agreement) an assignment
of stock certificate (with the name of assignee left in blank) in
the form attached to the Escrow Agreement and (ii), if the
Sellers, pursuant to the Transfer Agreement's provisions,
register and sell the USF Shares, the proceeds from the sale of
any USF Shares held in escrow shall be deposited in escrow. In
the event that the Buyer Indemnitees suffer Buyer Damages in
excess of the Basket specified in Section 7.4(a), Buyer shall be
entitled to receive payment from the escrow equal to the value of
such Buyer Damages and Sellers shall have no further right or
claim thereto.
(c) Pro Rata Contribution. Sellers shall be required
________
to contribute to the indemnification provided for herein,
severally and pro rata, based upon their respective equity
________
interests in the Company (subject to the limitations set forth in
this Agreement).
7.5 Time Period. Seller shall be obligated to indemnify
Buyer Indemnitees by virtue of Section 7.2 only for those Buyer
Damages as to which Buyer has given Seller written notice thereof
within six (6) months after the Closing Date; provided, however,
that with respect to any claim for Buyer Damages sustained by
reason of a breach of any representation or warranty relating to
those matters governed by Sections 3.8, 3.21 and 3.22, Seller's
liability shall be limited to Buyer Damages as to which such
written notice shall have been given within the periods of the
- 32 -
applicable federal and state statutes of limitations related to
such matters; provided further, that, with respect to any claim
for Buyer Damages sustained by reason of a breach of any
representation and warranty governed by Sections 3.3, 3.4,
3.11(b), and 3.16, Seller's liability hereunder shall not be
limited as to time. Six (6) months after the Closing Date,
Sellers shall be entitled to the delivery of the remaining amount
retained in escrow which exceeds the value of any claim brought
in accordance with the Notice of Claim required by Section 7.7.
If no Notice of Claim is received within six (6) months after the
Closing Date, all amounts held in escrow shall be delivered to
Sellers.
7.6 Fraud; Intentional Misrepresentation. The limitations
set forth in Sections 7.4(a) and 7.4(b) shall not apply to Buyer
Damages arising out of (i) fraud or (ii) the breach of any
representation or warranty contained herein or pursuant hereto if
such representation or warranty was made with actual knowledge
that it contained an untrue statement of a fact or omitted to
state a fact necessary to make the statements of fact contained
therein not misleading; provided, however, that (a) in no event
shall a Seller be liable for any such fraud or breach by the
other Seller, and (b) in no event shall a Seller be liable for an
amount in excess of such Seller's pro rata share of the Purchase
Price.
7.7 Notice of Claims. If any Buyer Indemnitee or Seller
Indemnitee (an "Indemnified Party") believes that it has suffered
or incurred or will suffer or incur any Buyer Damages or Seller
Damages, as the case may be ("Damages"), for which it is entitled
to indemnification under this Article VII, such Indemnified Party
shall so notify the party or parties from whom indemnification is
being claimed (the "Indemnifying Party") in writing with
reasonable promptness and reasonable particularity in light of
the circumstances then existing. If any action at law or suit in
equity is instituted by or against a third party with respect to
which any Indemnified Party intends to claim any Damages, such
Indemnified Party shall promptly notify the Indemnifying Party of
such action or suit. The failure of an Indemnified Party to give
any notice required by this Section shall not affect any of such
party's rights under this Article VII or otherwise except and to
the extent that such failure is actually prejudicial to the
rights or obligations of the Indemnifying Party.
7.8 Third Party Claims. The Indemnified Party shall have
the right to conduct and control, through counsel of its
choosing, the defense of any third party claim, action or suit,
and the Indemnified Party may compromise or settle the same,
provided that the Indemnified Party shall give the Indemnifying
Party advance notice of any proposed compromise or settlement;
provided, however, that if the Indemnified Party compromises or
settles the suit listed as Item 1 on Schedule 3.12 for an amount
- 33 -
in excess of $130,000 the Indemnified Party shall also obtain the
Indemnifying Party's consent to such compromise or settlement,
which consent shall not be unreasonably withheld. In the event
there is disagreement with respect to the reasonableness of such
settlement such dispute shall be resolved pursuant to the
provisions of Section 7.9. The Indemnified Party shall permit
the Indemnifying Party to participate in the defense of any such
action or suit through counsel chosen by the Indemnifying Party,
provided that the fees and expenses of such counsel shall be
borne by the Indemnifying Party. If the Indemnified Party
permits the Indemnifying Party to undertake, conduct and control
the conduct and settlement of such action or suit, (i) the
Indemnifying Party shall not thereby permit to exist any
Encumbrance upon any asset of the Indemnified Party; (ii) the
Indemnifying Party shall not consent to any settlement that does
not include as an unconditional term thereof the giving of a
complete release from liability with respect to such action or
suit to the Indemnified Party; (iii) the Indemnifying Party shall
permit the Indemnified Party to participate in such conduct or
settlement through counsel chosen by the Indemnified Party; and
(iv) the Indemnifying Party shall agree promptly to reimburse the
Indemnified Party for the full amount of any Damages including
fees and expenses of counsel for the Indemnified Party incurred
after giving the foregoing notice to the Indemnifying Party and
prior to the assumption of the conduct and control of such action
or suit by the Indemnifying Party.
7.9 Good Faith Effort to Settle Disputes. Buyer and
Sellers agree that, prior to commencing any litigation against
the other concerning any matter with respect to which such party
intends to claim a right of indemnification in such proceeding,
the respective chief executive officers (or officers holding such
authority) of such parties shall meet in a timely manner and
attempt in good faith to negotiate a settlement of such dispute
during which time such officers shall disclose to the others all
relevant information relating to such dispute. In the event that
the parties are unable to amicably resolve the matter or matters
in dispute, the parties shall submit all matters still in dispute
to arbitration in accordance with the arbitration rules of the
American Arbitration Association. Sellers shall select an
arbitrator and Buyer shall select an arbitrator and the two
arbitrators so selected shall select a third arbitrator. The
decision of the arbitrators shall be final and binding on the
parties. Such matter shall be submitted to arbitration within
thirty (30) days from the date that either Seller or Buyer
declares that any matter in dispute cannot be amicably resolved.
All costs and expenses of arbitration shall be paid equally by
Sellers on one hand and Buyer on the other. Any cash or other
monetary award shall be paid within thirty (30) days of the
arbitrators final decision. Arbitration shall be held in
Chicago, Illinois.
- 34 -
7.10 Payment. All indemnification payments to be made by
Sellers under this Article VII shall be made by distributions
from escrow as provided herein. All indemnification payments to
be made by Buyer under this Article VII shall be made within
thirty (30) days of the final determination with respect thereto.
ARTICLE VIII.
MISCELLANEOUS
8.1 Costs and Expenses. Subject to Sections 2.6(c), and
8.10, Buyer and Sellers shall each pay their respective expenses,
brokers' fees and commissions, and the parties hereby agree that
the pre-Closing expenses of the Company incurred in connection
with this Agreement and the transactions contemplated hereby,
including all accounting, legal and appraisal fees and settlement
charges shall be paid by the Company.
8.2 Further Assurances. Sellers shall, at any time and
from time to time on and after the Closing Date, upon request by
Buyer and without further consideration, take or cause to be
taken such actions and execute, acknowledge and deliver, or cause
to be executed, acknowledged and delivered, such instruments,
documents, transfers, conveyances and assurances as may be
required or desirable for the better conveying, transferring,
assigning, delivering, assuring and confirming the Company Shares
to Buyer or any of the assets used in the Business to the
Company.
8.3 Notices. All notices and other communications given or
made pursuant to this Agreement shall be in writing and shall be
deemed to have been duly given or made (i) the second business
day after the date of mailing, if delivered by registered or
certified mail, postage prepaid, (ii) upon delivery, if sent by
hand delivery, (iii) upon delivery, if sent by prepaid courier,
with a record of receipt, or (iv) the next day after the date of
dispatch, if sent by cable, telegram, facsimile or telecopy (with
a copy simultaneously sent by registered or certified mail,
postage prepaid, return receipt requested), to the parties at the
following addresses:
(a) if to Buyer to:
Illinois Water Treatment, Inc.
c/o United States Filter Corporation
40-004 Cook Street
Palm Desert, CA 92211
Attention: Chief Executive Officer
Telecopy: (619) 341-9368
with a required copy to the General Counsel of
Buyer at the above address and telecopy number
- 35 -
(b) if to Sellers, to:
Thomas J. Goulet and M&I Ventures Corporation
765 West Jonathan Lane 770 North Water Street
Milwaukee, WI 53217 Milwaukee, WI 53202
with a required copy to:
Robert J. Loots
von Briesen, Purtell & Roper, s.c.
400 East Wisconsin Avenue, Suite 700
Milwaukee, WI 53202-4470
Notices to the Company shall be addressed in care of Sellers
before Closing and in care of Buyer after Closing. Any party
hereto may change the address to which notice to it, or copies
thereof, shall be addressed, by giving notice thereof to the
other parties hereto in conformity with the foregoing.
8.4 Currency. All currency references herein are to United
States dollars.
8.5 Offset; Assignment; Governing Law. Buyer shall be
entitled to offset or recoup from any amounts due to Sellers from
Buyer hereunder or under any Other Agreement against any
obligation of Sellers to Buyer hereunder or under any Other
Agreement. Seller shall be entitled to offset or recoup from any
amounts due to Buyer from Sellers hereunder or under any Other
Agreement against any obligation of Buyer to Sellers hereunder or
under any Other Agreement. This Agreement and all the rights and
powers granted hereby shall bind and inure to the benefit of the
parties hereto and their respective permitted successors and
assigns. This Agreement and the rights, interests and
obligations hereunder may not be assigned by any hereto without
the prior written consent of the other parties hereto, except
that Buyer may make such assignments to any Affiliate or Buyer
provided that Buyer remains liable hereunder. This Agreement
shall be governed by and construed in accordance with the laws of
the State of Delaware without regard to its conflict of law
doctrines.
8.6 Amendment and Waiver; Cumulative Effect. To be
effective, any amendment or waiver under this Agreement must be
in writing and be signed by the party against whom enforcement of
the same is sought. Neither the failure of any party hereto to
exercise any right, power or remedy provided under this Agreement
or to insist upon compliance by any other party with its
obligations hereunder, nor any custom or practice of the parties
at variance with the terms hereof shall constitute a waiver by
such party of its right to exercise any such right, power or
remedy or to demand such compliance. The rights and remedies of
the parties hereto are cumulative and not exclusive of the rights
- 36 -
and remedies that they otherwise might have now or hereafter, at
law, in equity, by statute or otherwise.
8.7 Entire Agreement; No Third Party Beneficiaries. This
Agreement and the Schedules and Exhibits set forth all of the
promises, covenants, agreements, conditions and undertakings
between the parties hereto with respect to the subject matter
hereof, and supersede all prior or contemporaneous agreements and
understandings, negotiations, inducements or conditions, express
or implied, oral or written. This Agreement is not intended to
confer upon any Person other than the parties hereto any rights
or remedies hereunder, except the provisions of Sections 7.2 and
7.3 relating to Buyer Indemnitees and Seller Indemnitees.
8.8 Severability. If any term or other provision of this
Agreement is held by a court of competent jurisdiction to be
invalid, illegal or incapable of being enforced under any rule of
Law in any particular respect or under any particular
circumstances, such term or provision shall nevertheless remain
in full force and effect in all other respects and under all
other circumstances, and all other terms, conditions and
provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable
manner to the end that the transactions contemplated hereby are
fulfilled to the fullest extent possible.
8.9 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an
original but all of which together shall be deemed to be one and
the same instrument.
8.10 Attorneys' Fees. If either party commences or is made
a party to an action or proceeding to enforce or interpret this
Agreement, the prevailing party in such action or proceeding
shall be entitled to recover from the other party all attorneys'
fees, costs and expenses incurred in connection with such action
or proceeding or any appeal or enforcement of any judgment
obtained in any such action or proceeding.
- 37 -
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
_________________________________
Thomas J. Goulet
M&I VENTURES CORPORATION:
__________________________________
By:
Title
ILLINOIS WATER TREATMENT, INC.
__________________________________
By:
Title
UNITED STATES FILTER CORPORATION
__________________________________
By:
Title:
KISCO WATER TREATMENT COMPANY
__________________________________
By:
Title: President
- 38 -