EXHIBIT 10.2
MATTHEWS INTERNATIONAL CORPORATION
EMPIRE STOCK CORP.
THE YORK GROUP, INC.
YORK BRONZE COMPANY
AND
OMC INDUSTRIES, INC.
ASSET PURCHASE AGREEMENT
Dated as of May 24, 2001
TABLE OF CONTENTS
Page
ARTICLE I. Purchase of Assets; Purchase Price..............................1
1.01 Purchase of Assets...............................................1
1.02 Purchase Price for Assets........................................2
1.03 Allocation of Consideration......................................2
ARTICLE II. Representations and Warranties of York and the Companies.........2
2.01 Organization and Authority.......................................2
2.02 Due Authorization................................................2
2.03 Absence of Conflicts.............................................3
2.04 Financial Information............................................3
2.05 Absence of Material Changes......................................4
2.06 Title to Assets..................................................4
2.07 Material Contracts and Agreements................................4
2.08 Governmental Licenses and Permits; Consents......................5
2.09 Indebtedness and Commitments.....................................5
2.10 Taxes............................................................6
2.11 Insurance........................................................7
2.12 Litigation and Claims............................................7
2.13 Compliance with Laws.............................................7
2.14 Environmental and Occupational Safety Matters....................7
2.15 Brokers' Fees....................................................8
2.16 Contingencies....................................................8
2.17 Condition of Tangible Assets.....................................8
2.18 Inventory........................................................8
2.19 Books and Records................................................8
2.20 Warranties.......................................................8
2.21 Restrictions on Business Activities..............................9
ARTICLE III Representations and Warranties of Matthews and Empire............9
3.01 Organization and Authority.......................................9
3.02 Due Authorization................................................9
3.03 Absence of Conflicts............................................10
3.04 Litigation and Claims...........................................10
3.05 Brokers' Fees...................................................10
3.06 Governmental Approvals..........................................11
3.07 Warranties......................................................11
ARTICLE IV Covenants.......................................................11
4.01 Employees.......................................................11
4.02 Financial Statements............................................12
4.03 Tax Matters.....................................................12
4.04 Uses of Names...................................................12
ARTICLE V Remedies for Breaches of this Agreement.........................12
5.01 Survival of Representations, Warranties and Covenants...........12
5.02 Indemnification Provisions for Benefit of Matthews and Empire...13
5.03 Indemnification Provisions for Benefit of the Companies.........14
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5.04 Notice of Claim for Indemnification.............................15
5.05 Matters Involving Third Parties.................................15
5.06 Exclusive Remedy................................................17
ARTICLE VI Definitions.....................................................17
ARTICLE VII Miscellaneous...................................................20
7.01 Further Assurances..............................................20
7.02 Expenses........................................................20
7.03 Governing Law...................................................20
7.04 Entire Agreement; Modification; Waiver..........................20
7.05 Notices.........................................................20
7.06 Counterparts....................................................21
7.07 Matters of Construction, Interpretation and the Like............21
7.08 No Third-Party Beneficiaries....................................22
7.09 Succession and Assignment.......................................22
7.10 Time of Essence.................................................22
SCHEDULES
Schedule 1.01(a) York Bronze Assets
Schedule 1.01(b) OMC Assets
Schedule 2.01(a) Subsidiaries and Investments; Foreign
Jurisdictions of York Bronze
Schedule 2.01(b) Subsidiaries and Investments; Foreign
jurisdictions of OMC
Schedule 2.03 Third Party Consents
Schedule 2.04 Financial Statements
Schedule 2.05 Changes Since December 31, 2000
Schedule 2.06 Title to Assets
Schedule 2.07 Contracts and Agreements
Schedule 2.09 Indebtedness and Commitments
Schedule 2.10 Taxes
Schedule 2.12 Litigation and Claims
Schedule 2.13 Compliance with Laws
Schedule 2.14 Environmental and Occupational Safety Matters
Schedule 2.16 Contingencies
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") dated as of May 24,
2001, is entered into by and among MATTHEWS INTERNATIONAL CORPORATION, a
Pennsylvania corporation ("Matthews"), EMPIRE STOCK CORP., a Delaware
corporation ("Empire"), THE YORK GROUP, INC., a Delaware corporation ("York"),
YORK BRONZE COMPANY, a Delaware corporation ("York Bronze"), and OMC INDUSTRIES,
INC., a Texas corporation ("OMC") (each of York Bronze and OMC referred to at
times herein as a "Company" and collectively as the "Companies"). Capitalized
terms used in this Agreement which are not otherwise defined herein are defined
in Article VI hereof.
WITNESSETH:
WHEREAS, York Bronze and OMC are both wholly-owned subsidiaries
of York; and
WHEREAS, Empire is a wholly-owned subsidiary of Matthews; and
WHEREAS, the Companies manufacture commemorative products related to
and for use in the death care industry, such as bronze memorials, urns, flower
vases, bronze plaques and crypt letters; and
WHEREAS, the Companies desire to sell and to assign to Empire, and
Empire desires to purchase from the Companies, on the terms and conditions set
forth herein, certain of the assets of the Companies; and
WHEREAS, subsequent to the date hereof, Empire shall purchase from
York approximately 75% of the issued and outstanding shares of the capital stock
of York Bronze and of OMC upon the terms and conditions set forth in that
certain Stock Purchase Agreement dated as of May 24, 2001 (the "Stock Purchase
Agreement") among Matthews, Empire and York; and
WHEREAS, as an inducement for York and the Companies to enter into
this Agreement, Matthews has agreed to make representations, warranties,
covenants, acknowledgments and agreements as set forth herein to York and the
Companies for York's and the Companies' benefit hereunder.
NOW THEREFORE, in consideration of the mutual covenants and
agreements contained herein and intending to be legally bound hereby, the
parties hereto covenant and agree as follows:
ARTICLE I
Purchase of Assets; Purchase Price
1.04 PURCHASE OF ASSETS. (a) York Bronze does hereby sell, convey,
assign, transfer and deliver to Empire, free and clear of all Liens, and Empire
hereby purchases from York Bronze, for the consideration specified in Section
1.02 hereof, the assets of York Bronze set forth on Schedule 1.01(a) hereto (the
"York Bronze Assets")
(b) OMC does hereby sell, convey, assign, transfer and deliver to
Empire, free and clear of all Liens, and Empire hereby purchases from OMC, for
the consideration specified in Section 1.02 hereof, the assets of OMC set forth
on Schedule 1.01(b) hereto (the "OMC Assets" and, collectively with the York
Bronze Assets, the "Assets").
1.05 PURCHASE PRICE FOR ASSETS. Empire hereby purchases the Assets
and, in consideration therefor, concurrently herewith delivers via wire transfer
in immediately available funds (i) to
York Bronze, Seven Million Seven Hundred and Ninety Thousand Dollars
($7,790,000) for the York Bronze Assets, and (ii) to OMC, One Million One
Hundred Thousand Dollars ($1,100,000) for the OMC Assets (collectively, the
"Purchase Price").
1.06 ALLOCATION OF CONSIDERATION. The Purchase Price shall be
allocated among the Assets in accordance with the values agreed upon by Empire
and the Companies. Such allocation shall be made in accordance with Section 1060
of the Code.
ARTICLE II
Representations and Warranties of York and the Companies
York and each of the Companies represent and warrant to Empire and
to Matthews that the statements contained in this Article II are correct and
complete as of the date of this Agreement, except (i) as contemplated by the
Stock Purchase Agreement or any documents, disclosure schedules or transactions
related thereto or contemplated thereby, (ii) as may result from or may be
contemplated by the Sub 1 Asset Transfer or the Liquidation (as defined below)
of York Bronze or OMC, and (iii) that each of the representations, warranties
and statements in this Article II are qualified in their entirety by the
Disclosure Schedules and the information set forth or referred to therein.
Notwithstanding anything to the contrary in this Agreement, York makes no
representations nor any warranties respecting the completeness, legality,
effects or consequences of the Sub 1 Asset Transfer or the Liquidation of York
Bronze and OMC.
2.010 ORGANIZATION AND AUTHORITY. (a) York Bronze is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. York Bronze (i) has full corporate power and authority to own
and lease the property and assets it now owns and leases and to carry on its
business as and where such property and assets are now owned or leased and such
business is now conducted and (ii) except as set forth on Schedule 2.01(a), has
not owned and does not now own directly or indirectly any debt or equity
securities issued by any other corporation, or any interest in any partnership,
joint venture or other business enterprise. Schedule 2.01(a) sets forth a true
and complete list of each jurisdiction in which York Bronze is qualified to do
business as a foreign corporation. The copies of the certificate of
incorporation and bylaws of York Bronze, which have previously been delivered to
Empire and/or to Matthews, are complete and correct and in either case have not
been amended since March 31, 2001. There are no bankruptcy proceedings pending,
contemplated by or, to either York's or York Bronze's knowledge, threatened
against York Bronze.
(e) OMC is a corporation duly organized, validly existing and in
good standing under the laws of the State of Texas. OMC (i) has full corporate
power and authority to own and lease the property and assets it now owns and
leases and to carry on its business as and where such property and assets are
now owned or leased and such business is now conducted and (ii) except as set
forth on Schedule 2.01(b), has not owned and does not now own directly or
indirectly any debt or equity securities issued by any other corporation, or any
interest in any partnership, joint venture or other business enterprise.
Schedule 2.01(b) sets forth a true and complete list of each jurisdiction in
which OMC is qualified to do business as a foreign corporation. The copies of
the certificate of incorporation and bylaws of OMC, which have previously been
delivered to Empire and/or to Matthews, are complete and correct and in either
case have not been amended since March 31, 2001. There are no bankruptcy
proceedings pending, contemplated by or, to either York's or OMC's knowledge,
threatened against OMC.
2.011 DUE AUTHORIZATION. The execution and delivery by York and each
Company of this Agreement and the other Transaction Documents to which each is a
party, the performance by York and each such Company of all the terms and
conditions hereof and thereof to be performed by it and the consummation of the
transactions contemplated hereby and thereby, have been duly authorized and
approved by all necessary corporate proceedings on the part of York and each
such Company. No other
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corporate proceeding on the part of York or either Company is necessary to
approve and adopt this Agreement and each of the other Transaction Documents to
which York and each such Company is a party and to consummate the transactions
contemplated hereby and thereby. This Agreement and each of the other
Transaction Documents to which York or either Company is a party have been duly
and validly executed and delivered by York and each such Company and constitute
the legal, valid and binding obligations of York and each such Company
enforceable against York and each such Company in accordance with their
respective terms, subject to bankruptcy, insolvency or other similar laws of
general application affecting creditors' rights and general principles of
equity.
2.012 ABSENCE OF CONFLICTS. Except as set forth in Schedule 2.03,
neither the execution and delivery by York or either Company of this Agreement
and the other Transaction Documents to which it is a party, the compliance by
York or such Company with the terms and conditions hereof and thereof, nor the
consummation by York or such Company of the transactions contemplated hereby or
thereby will:
(f) conflict with any of the terms, conditions or provisions of the
certificate of incorporation or bylaws of York or such Company,
(g) violate any provision of, or require any consent, authorization
or approval under, any law or administrative regulation or any judicial
administrative or arbitration order, award, judgment, writ, injunction or decree
applicable to, or any Permit issued to, or notice to or filing with any
Governmental Authority with respect to York or such Company or that portion of
the Assets owned by such Company,
(h) to York's knowledge or such Company's knowledge, violate,
conflict with, result in a breach of any provision of or the loss of any benefit
under, constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, result in the termination of or a right
of termination or cancellation under, accelerate the performance required by, or
result in the creation of any Lien upon any of the properties or assets of such
Company under, or require any consent, authorization or approval under, any of
the terms, conditions or provisions of any note, bond, mortgage, indenture, Lien
or other agreement, instrument for borrowed money, any guarantee of any
agreement or instrument for borrowed money or any license, lease or any other
agreement or instrument to which York or such Company, or by which it or any of
its properties or assets may be bound or affected, including without limitation
that portion of the Assets owned by such Company,
(i) result in the creation of any Lien upon any of the properties or
assets of such Company, including without limitation that portion of the Assets
owned by such Company, or
(j) give to others any material rights or interests (including
rights of purchase, termination, cancellation or acceleration), under any such
indenture, mortgage, Lien, lease, agreement or instrument; except as would not
have a Material Adverse Effect.
2.013 FINANCIAL INFORMATION. York and the Companies have heretofore
furnished to Empire and/or to Matthews the financial statements and information
with respect to the Companies described on Schedule 2.04 (the "Financial
Statements"). The Financial Statements, in the context of their original use as
part of the financial statements of the consolidated group of which York is the
parent, and subject to such consolidated financial statements and the notes
thereto as included in York's applicable SEC filings under the Securities
Exchange Act of 1934, as amended, complied as to form in all material respects
with applicable accounting requirements, were prepared in accordance with
generally accepted accounting principles ("GAAP") consistently applied during
the periods involved and fairly present:
(c) the balance sheet of the Companies as of March 31, 2001 and as
of December 31, 2000 and 1999; and
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(d) the results of operations and changes in financial position of
the Companies for the three-month period ending March 31, 2001
and for the fiscal year ended December 31, 2000, and York
Bronze for the fiscal year ended December 31, 1999.
The books and records of each of the Companies from which the Financial
Statements were prepared properly and accurately reflect the transactions and
activities which they purport to record except as would not have a Material
Adverse Effect. Except as disclosed on Schedule 2.04 or as required by GAAP,
neither York nor either of the Companies has, since March 31, 2001, made any
change in the accounting practices or policies applied in the preparation of the
Financial Statements.
2.014 ABSENCE OF MATERIAL CHANGES. Except as set forth on Schedule
2.05 or the Financial Statements, since December 31, 2000, there has not been:
(d) any Material Adverse Effect with respect to either Company or
that portion of the Assets owned by each such Company, or any event, condition
or state of facts which could be reasonably expected (i) to have a Material
Adverse Effect on that portion of the Assets owned by each such Company, or (ii)
to impair the ability of York or either such Company to perform their respective
obligations under this Agreement,
(e) any damage, destruction, condemnation or loss, whether covered
by insurance or not, which has had, or could reasonably be expected to have, a
Material Adverse Effect on that portion of the Assets owned by either Company,
or
(f) any material strikes or work stoppages against the operations of
either Company relating to the conduct of its business or any injunction, order,
writ or decree of any Governmental Authority against such strikes or work
stoppages.
2.015 TITLE TO ASSETS. Except as set forth in Schedule 2.06, (i) all
of the York Bronze Assets are owned by York Bronze, free and clear of any and
all Liens other than Permitted Liens, and (ii) all of the OMC Assets are owned
by OMC, free and clear of any and all Liens other than Permitted Liens.
2.016 MATERIAL CONTRACTS AND AGREEMENTS. Schedule 2.07 identifies
the following categories of material contracts, commitments and agreements of
the Companies related to the Assets not otherwise identified in any other
Schedule:
(g) contracts with any current officer or director of either of the
Companies;
(h) contracts for the sale of any of the business, operations,
properties or assets of either of the Companies, including without limitation
that portion of the Assets owned by such Company, other than in the ordinary
course of business, or for the grant to any Person of any preferential rights to
purchase any of the business, operations, properties or assets of either of the
Companies, including without limitation that portion of the Assets owned by such
Company, other than inventory in the ordinary course of business;
(i) contracts containing covenants of either of the Companies not to
compete in any line of business or with any Person in any geographical area or
covenants of any other Person not to compete with either of the Companies in any
line of business or in any geographical area;
(j) all other agreements, contracts or instruments for either of the
Companies which, (i) involve purchases after the date hereof of more than
$50,000 from any one seller or group of related
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sellers, or (ii) involve sales or leases after the date hereof of more than
$50,000 to any one buyer or lessee or group of related buyer or lessees;
(k) all other agreements contracts or instruments which are
contracts, commitments or agreements or involve transactions with any Affiliate
or subsidiary of either of the Companies other than York Bronze Trade Company, a
West Virginia corporation; or
(l) all agreements, contracts, commitments or instruments otherwise
material to the business, operations, properties or assets of any of either of
the Companies, including without limitation that portion of the Assets owned by
such Company.
The contracts, commitments and agreements listed on Schedule 2.07 are
hereinafter called the "Contracts." York and the Companies have heretofore made
available to Empire and/or to Matthews true and complete copies of all Contracts
as in effect on the date hereof. Except as set forth in Schedule 2.07 or except
as would not have a Material Adverse Effect, all Contracts are in full force and
effect (other than those which have been duly performed), and are the legal,
valid and binding obligations of the signatory Company, enforceable against such
Company in accordance with their respective terms. Except as set forth on
Schedule 2.07, there is no default, nor any event which with notice or the lapse
of time or both will become a default, under any of the Contracts, by the
signatory Company or any other party thereto, and no consent, waiver, approval
or authorization is required under any of the Contracts as a result of the
execution of this Agreement or the consummation of the transactions contemplated
hereby except as would not have a Material Adverse Effect.
2.017 GOVERNMENTAL LICENSES AND PERMITS; CONSENTS. (a) Except as
disclosed in the Disclosure Schedules, each Company is in possession of all
franchises, grants, authorizations, licenses, permits, charters, easements,
variances, exceptions, consents, certificates, approvals and orders of any
Governmental Authority (collectively, "Permits") necessary for such Company to
own, lease and operate its properties or to carry on its business except as
would not have a Material Adverse Effect (the "Company Permits"), and no
suspension or cancellation of any of the Company Permits is pending or, to the
knowledge of York or such Company, threatened except as would not have a
Material Adverse Effect.
(b) No consents or approvals or filings or registrations with any
Governmental Authority, or under any third party contract, are required to be
made by York or either of the Companies or obtained by York or either of the
Companies in connection with (i) the execution and delivery by York and the
Companies of this Agreement and the other Transaction Documents, and (ii) the
consummation by York and the Companies of the transactions contemplated by this
Agreement.
2.018 INDEBTEDNESS AND COMMITMENTS. Schedule 2.09 hereto identifies
each indenture, mortgage, promissory note, or other instrument for borrowed
money under which either of the Companies has outstanding any indebtedness,
guaranty or liability for borrowed money or the deferred purchase price of
property or has the right or obligation to incur any such indebtedness, guaranty
or liability in each case in excess of $50,000 (the "Debt Instruments"). York
and the Companies have heretofore made available to Empire and/or to Matthews
true and complete copies of each of the Debt Instruments as in effect on the
date hereof. Except as set forth in Schedule 2.09 and except as would not have a
Material Adverse Effect, there is no event of default or condition or event
which, with the giving of notice or the lapse of time or both, could become an
event of default under any of the Debt Instruments.
2.019 TAXES. Except as set forth in Schedule 2.10 hereto:
(j) York and each of the Companies has prepared and executed and
duly filed when due all United States Federal, state and other Tax Returns
required to be filed by applicable laws and regulations
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and have duly and timely paid all Taxes or installments thereof that are due
with respect to such Tax Returns;
(k) there are no Liens with respect to Taxes upon any of the assets
of either of the Companies, other than Liens with respect to Taxes that are not
yet due or remain payable without penalty or are being contested in good faith
and by appropriate proceedings;
(l) there are no agreements, waivers or arrangements by York or
either of the Companies for the extension of the time for the assessment of any
amounts of Tax, and no power of attorney granted by York or either of the
Companies with respect to any Taxes is currently in effect. No closing agreement
under Section 7121 of the Code or any similar provision of any state or local
law has been entered into by or with respect to either of the Companies;
(m) all United States Federal, state and local income Tax Returns of
York and each of the Companies for each year to and including the year ended
December 31, 1996 have been examined by or accepted as filed with the relevant
Tax authorities and any asserted deficiencies settled and paid;
(n) there have been no deficiencies proposed as a result of the
examination of any United Stated Federal, state or other Tax Returns filed by
York or either of the Companies. No audit or other proceeding by any
Governmental Authority is pending or, to the knowledge of York or the Companies,
threatened with respect to any Taxes due from or with respect to York or either
of the Companies or any Tax Return filed by or with respect to York or either of
the Companies, and no assessment of Tax, has been proposed and delivered in
writing against York or either of the Companies or any of their respective
assets;
(o) Neither York nor the Companies has filed or consented to the
filing of any United States Federal or state consolidated income Tax Return with
any other Person (other than a group the common parent of which was York) during
the three (3) years immediately preceding the date hereof;
(p) Neither York nor the Companies has any liability or potential
liability with respect to any consolidated Tax Return filed or to be filed by
any Person (other than a group the common parent of which is York);
(q) Neither York nor the Companies has consented to the application
to it of Section 341(f)(2) of the Code;
(r) Each Company has duly and timely withheld from employee
salaries, wages, and other compensation and paid over to the appropriate Taxing
authorities all amounts required to be so withheld and paid over for all periods
under all applicable laws.
2.020 INSURANCE. York and the Companies have made available to
Empire and/or to Matthews complete and correct copies of all insurance policies
insuring the Companies as in effect on the date hereof. One or more of York and
the Companies has in effect insurance coverage for the Companies with one or
more reputable insurer, which in respect of amounts, premiums, types and risks
insured, constitutes reasonably adequate coverage against all risks customarily
insured against by companies of comparable size and with similar operations.
2.021 LITIGATION AND CLAIMS. Except as set forth in Schedule 2.12:
(d) There are no actions, suits or proceedings pending or threatened
against York or either of the Companies or any of their respective directors,
officers or employees, that portion of the Assets owned by the Companies,
relating to the transactions contemplated by this Agreement, or which could
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reasonably be expected, if adversely determined, to delay, prevent or hinder the
consummation of the transactions contemplated by this Agreement,
(e) Neither York nor the Companies nor any of their respective
directors, officers or employees has been charged with violating or threatened
in writing with a charge of violating, any provision of any United States
Federal, state, local or foreign law or administrative ruling or regulation, and
(f) Neither York nor the Companies has received any currently
effective notice of any default, nor to such York's or such Company's knowledge
is in default, under any order, writ, injunction, decree or Permit of any
Governmental Authority.
Except as set forth in Schedule 2.12 or elsewhere on the Disclosure Schedules,
to York's and each Company's knowledge there is no investigation of the
business, operations, properties or assets of such Company, including without
limitation that portion of the Assets owned by such Company, being conducted by
any Governmental Authority.
2.022 COMPLIANCE WITH LAWS. Except as would not have a Material
Adverse Effect or except as set forth in Schedule 2.13, to York's and each
Company's knowledge such Company (i) is in compliance with all laws,
regulations, orders, judgments or decrees of any Governmental Authority provided
that no representation is made as to Environmental Laws and (ii) has made and is
current with respect to all filings, reports, certificates, returns and other
documentation and writings required to be furnished at any time or from time to
time to any Governmental Authority, and all such materials so furnished were
true, correct and complete, all amounts shown as due thereon have been paid in
full or appropriately reserved for and based on the affairs, revenues,
enrollment or other applicable measure of operations or assets during the period
in question, each such filing, report, certificate, return or other document or
writing correctly stated and reported the amount due.
2.023 ENVIRONMENTAL AND OCCUPATIONAL SAFETY MATTERS. With respect to
all applicable federal, state, local, regional and foreign laws, rules and
regulations, orders, decrees, common law, judgments, permits and licenses
relating to public and worker health and safety (collectively, "Worker Safety
Laws") and relating to the protection, regulation and clean-up of the indoor and
outdoor environment, including, without limitation, those relating to the
generation, handling, disposal, transportation or release of hazardous or toxic
materials, substances, wastes, pollutants and contaminants including, without
limitation, asbestos, petroleum, radon and polychlorinated biphenyls
(collectively, "Environmental Laws") York has in good faith made reasonable
efforts to disclose on Schedule 2.14 and during due diligence any matter which,
to York's or the Companies' knowledge, could have a Material Adverse Effect, but
otherwise makes no statements, representations or warranties and Empire and
Matthews take the Assets "AS IS, WHERE IS" AND "WITH ALL FAULTS" with respect to
such Environmental Laws and Worker Safety Laws.
2.024 BROKERS' FEES. Neither York nor either of the Companies has
incurred any liability for brokerage fees, finder's fees, agent's commissions or
other similar forms of compensation in connection with this Agreement or any
transaction contemplated hereby for which Empire or Matthews will be
responsible.
2.025 CONTINGENCIES. Except for:
(e) liabilities which are disclosed and fully provided for in the
most recent balance sheet referred to in Section 2.04,
(f) liabilities incurred in the usual and ordinary course of
business of each of the
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Companies subsequent to the date of such balance sheet and on or prior to the
Closing Date,
(g) liabilities disclosed in Schedule 2.16 to this Agreement, and
(h) liabilities relating to Environmental Laws,
neither of the Companies has any material liabilities or obligations (absolute
or contingent, known or unknown, asserted or unasserted), including without
limitation contingent liability for the performance of any obligation by any
other Person.
2.026 CONDITION OF TANGIBLE ASSETS. To the knowledge of York and the
Companies, no tangible Assets which are material to the operations of the
Subsidiaries are reasonably likely to be unavailable for use (except to the
extent scheduled to be repaired or replaced) in the ordinary course of business
during the next three months succeeding the date of this Agreement or except as
would not have a Material Adverse Effect. Subject to the previous sentence and
the representations and warranties set forth elsewhere in this Agreement, the
assets of each of the Subsidiaries shall be accepted by Empire and Matthews in
its "AS IS" "WHERE IS" AND "WITH ALL FAULTS" condition, with any and all faults,
defects and conditions, without representation or warranty of any kind, express,
implied, statutory or otherwise, including, without limitation, any warranty as
to habitability, suitability, merchantability, condition or fitness, fitness for
a particular purpose or fitness for any purpose.
2.027 INVENTORY. The inventory of each of the Companies constituting
part of the Assets is taken and shall be accepted by Empire and Matthews in its
"AS IS" "WHERE IS" AND "WITH ALL FAULTS" condition, with any and all faults,
defects and conditions, without representation or warranty of any kind, express,
implied, statutory or otherwise, including, without limitation, any warranty as
to habitability, suitability, merchantability, condition or fitness, fitness for
a particular purpose or fitness for any purpose.
2.028 BOOKS AND RECORDS. Except as would not have a Material Adverse
Effect, the minute books and other similar records of each of the Companies
contain a true and complete record of all actions taken at all meetings and by
all written consents in lieu of meetings of such Company's stockholders, boards
of directors, and committees thereof. Such books and records have been
maintained in accordance with good business and bookkeeping practices.
2.029 WARRANTIES. The accrual for warranty related expenses as of
December 31, 2000 reported in York's audited financial statements for the year
ended December 31, 2000, adequately reflects an amount required for satisfaction
of warranty claims due in respect of goods sold or services provided by each
Company prior to such date, except as would not have Material Adverse Effect.
Such provision has been established in accordance with GAAP, except as would not
have Material Adverse Effect. Neither Company has agreed to provide any express
product or service warranties other than standard warranties, the terms of which
York and the Companies have made available to Empire and/or to Matthews and
identified as such Company's standard warranties.
2.030 RESTRICTIONS ON BUSINESS ACTIVITIES. There is no agreement,
commitment, judgment, injunction, order or decree binding upon either of the
Companies or to which either of the Companies is a party which has or could
reasonably be expected to have the effect of prohibiting or materially impairing
any business practice of such Company, any acquisition or transfer of property
by York or such Company or the conduct of business by such Company, as currently
conducted.
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ARTICLE III
Representations and Warranties of Matthews and Empire
Matthews and Empire represent and warrant to York and the Companies
that the statements contained in this Article III are correct and complete.
3.01 ORGANIZATION AND AUTHORITY. (a) Empire is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Empire has the corporate power and authority to execute and deliver
this Agreement and each of the other Transaction Documents to which it is a
party and to perform its obligations hereunder and thereunder. There are no
dissolution, liquidation or bankruptcy proceedings pending, contemplated by or,
to the knowledge of Matthews or Empire, threatened against Empire.
(b) Matthews is a corporation duly organized, validly existing and
in good standing under the laws of the Commonwealth of Pennsylvania. Matthews
has the corporate power and authority to execute and deliver this Agreement and
each of the other Transaction Documents to which it is a party and to perform
its obligations hereunder and thereunder. There are no dissolution, liquidation
or bankruptcy proceedings pending, contemplated by or, to the knowledge of
Matthews or Empire, threatened against Matthews.
3.02 DUE AUTHORIZATION. (a) The execution and delivery by Empire of
this Agreement and each of the other Transaction Documents to which it is a
party, the performance by it of all the terms and conditions hereof and thereof
to be performed by it and the consummation of the transactions contemplated
hereby and thereby have been duly authorized and approved by all necessary
corporate proceedings on the part of Empire. No other corporate proceeding on
the part of Empire is necessary to approve and adopt this Agreement and each of
the other Transaction Documents to which it is a party and to consummate the
transactions contemplated hereby and thereby. This Agreement and the other
Transaction Documents to which Empire is a party have been duly and validly
executed by Empire and constitute the legal, valid and binding obligations of
Empire enforceable against Empire in accordance with their respective terms,
subject to bankruptcy, insolvency or other similar laws of general application
affecting creditors' rights and general principles of equity.
(b) The execution and delivery by Matthews of this Agreement and
each of the other Transaction Documents to which it is a party, the performance
by it of all the terms and conditions hereof and thereof to be performed by it
and the consummation of the transactions contemplated hereby and thereby have
been duly authorized and approved by all necessary corporate proceedings on the
part of Matthews. No other corporate proceeding on the part of Matthews is
necessary to approve and adopt this Agreement and each of the other Transaction
Documents to which it is a party and to consummate the transaction contemplated
hereby and thereby. This Agreement and the other Transaction Documents to which
Matthews is a party have been duly and validly executed by Matthews and
constitute the legal, valid and binding obligations of Matthews enforceable
against Matthews in accordance with their respective terms, subject to
bankruptcy, insolvency or other similar laws of general application affecting
creditors' rights and general principles of equity.
3.03 ABSENCE OF CONFLICTS. The execution and delivery by each of
Empire and Matthews of this Agreement and each of the other Transaction
Documents to which it is a party, the compliance by each of Empire and Matthews
with the terms and conditions hereof and thereof, and the consummation by each
of Empire and Matthews of the transactions contemplated hereby and thereby will
not:
(f) conflict with any of the terms, conditions or provisions of the
articles of incorporation
9
or bylaws of either of Empire or Matthews,
(g) violate any provision of, or require any consent, authorization
or approval under, any law or administrative regulation or any judicial,
administrative or arbitration order, award, judgment, writ, injunction or decree
applicable to, or any Permit issued to, or notice to or filing with any
Governmental Authority with respect to either of Empire or Matthews,
(h) violate, conflict with, result in a breach of any provision of
or the loss of any benefit under, constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or require
any consent, authorization or approval under, any of the terms conditions or
provisions of any note, bond mortgage, indenture, Lien or other agreement,
instrument for borrowed money, any guarantee of any agreement or instrument for
borrowed money or any license, lease or any other agreement or instrument to
which either of Empire or Matthews is a party or by which it is bound or to
which any of its properties or assets is subject,
(i) result in the creation of any Lien upon any of the assets of
either of Empire or Matthews, or
(j) give to others any material rights or interests (including
rights of purchase, termination, cancellation or acceleration) under any such
indenture, mortgage, Lien, lease, agreement or instrument, which, with respect
to the matters specified in clauses (b) through (e) of this Section 3.03 could
reasonably be expected to delay, prevent or hinder in any material respect the
transactions contemplated hereby.
3.04 LITIGATION AND CLAIMS. There are no actions, suits or
proceedings pending or, to the knowledge of Matthews or Empire, threatened
against either of Empire or Matthews which could reasonably be expected, if
adversely determined, to delay, prevent or hinder the consummation of the
transactions contemplated by this Agreement.
3.05 BROKERS' FEES. Neither Empire nor Matthews has incurred any
liability for brokerage fees, finder's fees, agent's commissions or other
similar forms of compensation in connection with this Agreement or any
transactions contemplated hereby for which York or the Companies will be
responsible.
3.06 GOVERNMENTAL APPROVALS. No consents or approvals of or filings
or registrations with Governmental Authority, or with any third party are
required to be made or obtained by either of Empire or Matthews in connection
with (i) the execution and delivery by each of Empire and Matthews of this
Agreement and the other Transaction Documents and (ii) the consummation by each
of Empire and Matthews of the transactions contemplated by this Agreement.
3.07 WARRANTIES. YORK AND THE COMPANIES HAVE NOT MADE, AND YORK AND
THE COMPANIES HEREBY EXPRESSLY DISCLAIM AND NEGATE, ANY REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, OF ANY KIND OR NATURE WHATSOEVER, RELATING TO ANY
IMPLIED OR EXPRESSED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, OR ANY IMPLIED OR EXPRESSED WARRANTY CONCERNING ENVIRONMENTAL
CONDITION, ZONING, FLOODING OR DRAINAGE CHARACTERISTICS, WETLANDS STATUS,
FAULTING CHARACTERISTICS OR SOIL CONDITIONS WITH RESPECT TO THE COMPANIES AND
THE ASSETS. EMPIRE AND MATTHEWS ACKNOWLEDGE THAT ENVIRONMENTAL PERMITS ARE
REQUIRED FOR EMPIRE TO OWN AND OPERATE CERTAIN OF THE ASSETS AND THAT LICENSES
OR OTHER APPROVALS MAY BE REQUIRED TO OPERATE CERTAIN OF THE ASSETS. EMPIRE AND
MATTHEWS ACKNOWLEDGE AND AGREE THAT CERTAIN OF THE ENVIRONMENTAL
10
PERMITS OF THE COMPANIES OR THE ASSETS AND ANY APPLICABLE LICENSES NECESSARY TO
OPERATE SUCH ASSETS MAY NOT BE FREELY ASSIGNABLE TO EMPIRE. EMPIRE AND MATTHEWS
ACKNOWLEDGE AND AGREE THAT UNDER SOME CIRCUMSTANCES THERE MAY BE A PERIOD OF
TIME BETWEEN ACQUISITION OF AN ASSET AND ISSUANCE, REISSUANCE OR TRANSFER OF A
PERMIT BY A GOVERNMENTAL AUTHORITY, AND, SUBJECT TO THE OBLIGATIONS OF YORK
UNDER THIS AGREEMENT TO COOPERATE WITH AND ASSIST EMPIRE IN CONNECTION
THEREWITH, EMPIRE ASSUMES ALL RISKS RELATED THERETO, INCLUDING RISK OF FINES AND
PENALTIES ASSOCIATED WITH ACQUISITION AND OPERATION OF AN ASSET PRIOR TO
ISSUANCE, REISSUANCE OR TRANSFER OF A PERMIT OR LICENSE. IF ANY ENVIRONMENTAL
PERMITS ARE ISSUED, REISSUED, OR TRANSFERRED TO EMPIRE, EMPIRE AND MATTHEWS
UNDERSTAND AND ACKNOWLEDGE THAT THEY MAY CONTAIN DIFFERENT OR LESS FAVORABLE
TERMS THAN THOSE ENVIRONMENTAL PERMITS CURRENTLY HELD BY YORK OR THE COMPANIES.
EMPIRE AND MATTHEWS ACKNOWLEDGE THAT THE PROVISIONS OF THIS SECTION 3.07 ARE A
MATERIAL PORTION OF THE INDUCEMENT TO THE COMPANIES TO SELL THE ASSETS TO
EMPIRE, AND THAT BUT FOR SUCH PROVISIONS, THE COMPANIES WOULD NOT SELL THE
ASSETS TO EMPIRE.
ARTICLE IV
Covenants
4.01 EMPLOYEES. (a) None of Matthews, Empire, the Companies nor York
intends this Agreement to create any rights or interests, except as between
Matthews, Empire, the Companies and York, and no present, former or future
employee of Matthews, Empire, the Companies or York shall be treated as a third
party beneficiary by, in or under this Agreement. Nothing in this Agreement
shall affect the ability of Matthews or Empire to hire or terminate the
employment of employees.
(b) York shall be liable for compliance with the WARN Acts insofar
as they relate to any facilities closing, mass layoff or similar event which
occurs before the Closing. Matthews and Empire shall be liable for compliance
with the WARN Acts insofar as they relate to any facilities closing, mass layoff
or similar event which occurs upon or after the Closing.
4.02 FINANCIAL STATEMENTS. York will cause its auditors to provide
to Matthews and to Empire, on or prior to sixty five (65) days after the date
hereof, the audited financial statements of the Companies which are necessary
for Matthews to meet its reporting obligations under Items 2 and 7 of Form 8-K
under the Securities Exchange Act of 1934, as amended. Matthews shall pay to
York one half of the fees of York's auditors in connection with the same.
4.03 TAX MATTERS. Matthews, York and the Companies agree to furnish
or cause to be furnished to each other, upon request, as promptly as
practicable, such information and assistance relating to the Companies
(including, without limitation, access to books and records) as is reasonably
necessary for the filing of all Tax Returns, and making of any election related
to Taxes, the preparation for any audit by any taxing authority, and the
prosecution or defense of any claim, suit or proceeding relating to any Tax
Return. Matthews, York and the Companies will retain all books and records with
respect to Taxes pertaining to the Companies for a period of at least six (6)
years following the Closing. Matthews, York and the Companies will cooperate
with each other in the conduct of any audit or other proceeding related to Taxes
and each will execute and deliver such powers of attorney and other documents as
are necessary to carry out the intent of this Section 4.03.
4.04 USES OF NAMES. (a) Effective from and after the Closing and up
to December 31, 2001, York hereby grants the Matthews Group the nonexclusive,
royalty-free right to use (without right of
11
sublicense) the name "York Bronze" any derivative thereof and any corporate
symbols or logos related thereto, but only in connection with the conduct and
operation of the businesses of the Companies, PROVIDED, HOWEVER, that the
Matthews Group shall not represent or hold itself out as representing York and
PROVIDED FURTHER, HOWEVER, that the Matthews Group shall indemnify and hold
harmless York from and Adverse Consequences incurred by York as a result of the
Matthews Group's use of such names or symbols or logos.
(b) The Matthews Group acknowledges that, except for the limited
right granted by this Section, the Matthews Group has no right or interest in
the name "York" or any trade name, service name, trademark or service mark or
logos relating thereto. Except as set forth in this Section, the Matthews Group
shall not use any name, trade name, service mark, trademark, service mark or any
related logos or symbols incorporating "York" in any manner whatsoever. Prior to
December 31, 2001, the Matthews Group shall take all such action as is necessary
to cause the Companies to make all filings as necessary to change their
corporate names to names that do not contain "York" or any substantially or
confusingly similar name or reference, and thereafter, the Matthews Group shall
take all such action as is necessary to cause the Matthews Group and its
Affiliates to cease using any name, trade name, trademark or service mark or any
related logos or symbols incorporating "York" in any manner whatsoever.
ARTICLE V
Remedies for Breaches of this Agreement
5.06 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All of
the representations, warranties and covenants of the parties contained in this
Agreement shall survive the Closing (even if the damaged party knew or had
reason to know of any misrepresentation or breach of warranty at the time of the
Closing) and shall continue in full force and effect thereafter for a period of
one (1) year; provided, that (a) Sections 7.01 and 7.02 shall survive for the
applicable statute of limitations period and (b) Sections 5.03(a)(ii) and (iii)
shall survive the Closing without limitation. MATTHEWS AND EMPIRE HEREBY WAIVE
FROM AND AFTER CLOSING TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL
RIGHTS, CLAIMS, ACTIONS OR CAUSES OF ACTION EITHER OF THEM MAY HAVE AGAINST YORK
AND ITS AFFILIATES RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE
CERTIFICATES AND OTHER DOCUMENTS DELIVERED PURSUANT TO THIS AGREEMENT, OTHER
THAN CLAIMS UNDER SECTIONS 5.02, 7.01 and 7.02 AND OF FRAUD AND RIGHTS, CLAIMS,
ACTIONS AND CAUSES OF ACTION ARISING OUT OF A BREACH OF ANY COVENANT OR
AGREEMENT OF YORK. FURTHER, EXCEPT AS PROVIDED IN SECTIONS 5.02, 7.01 AND 7.02
MATTHEWS AND EMPIRE WAIVE, RELEASE AND COVENANT NOT TO SUE YORK AND ITS
AFFILIATES FOR ANY DAMAGES OF ANY KIND OR CHARACTER, ARISING UNDER ANY
ENVIRONMENTAL LAW (STATUTORY, REGULATORY, COMMON LAW OR OTHERWISE) RELATING TO
ANY DAMAGE, INCLUDING STRICT LIABILITY, INCURRED OR ALLEGEDLY INCURRED BY EITHER
OF MATTHEWS OR EMPIRE. IN ADDITION, MATTHEWS AND EMPIRE COVENANT AND AGREE THAT
NEITHER OF THEM SHALL FILE ANY CLAIMS WITH ANY INSURER OF YORK OR ITS AFFILIATES
FOR RECOVERY UNDER ANY INSURANCE POLICIES COVERING YORK OR ITS AFFILIATES AND DO
HEREBY WAIVE, IRREVOCABLY AND FOREVER AND TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY RIGHTS THEY MAY HAVE TO RECOVER UNDER SUCH INSURANCE POLICIES;
PROVIDED, HOWEVER, THAT MATTHEWS SHALL HAVE THE RIGHT TO CLAIM AGAINST THE
AMERICAN INTERNATIONAL SPECIALTY LINES INSURANCE COMPANY POLLUTION LEGAL
LIABILITY SELECT POLICY, POLICY NUMBER PLS2674645, ISSUED TO YORK.
5.07 INDEMNIFICATION PROVISIONS FOR BENEFIT OF MATTHEWS AND EMPIRE.
(a) Subject to the terms and conditions of this Article V, if there is any
breach or inaccuracy of any of the representations,
12
warranties or covenants of York or either of the Companies contained herein, or
if any third party alleges facts that, if true, would mean that such a breach or
inaccuracy existed, and provided that the Parent Group delivers to York,
pursuant to Section 5.04 hereof, a claim for indemnification with respect to
such alleged breach or inaccuracy, then York shall indemnify the Parent Group,
from and against all Adverse Consequences that the Parent Group has suffered
caused by, resulting from, arising out of or relating to such breach or
inaccuracy through and after the date of such claim. For purposes of this
Agreement, the "Parent Group" shall mean either or both of Matthews and Empire.
(b) York's obligations under Section 5.02(a) shall be subject
to the following limitations:
(v) York shall not have any liability to the Parent Group for
Adverse Consequences for any breach of the representations,
warranties or covenants under this Agreement or the Stock
Purchase Agreement to the extent the aggregate amount of all
such Adverse Consequences for which York would otherwise be
liable under this Agreement and under Section 5.02(a) of the
Stock Purchase Agreement exceeds Ten Million Dollars
($10,000,000);
(vi) York shall not have any liability to the Parent Group for
Adverse Consequences for any breach of the representations or
warranties under this Agreement or under the Stock Purchase
Agreement unless and until the aggregate amount of all such
Adverse Consequences relating thereto for which York would,
but for this Section 5.02(b)(ii) or Section 5.02(b)(ii) of the
Stock Purchase Agreement, be required to indemnify the Parent
Group exceeds on a cumulative basis an amount (the "Basket
Amount") equal to Five Hundred Thousand Dollars ($500,000), at
which point York, subject to the further terms, conditions and
limitations of this Agreement and the Stock Purchase
Agreement, shall indemnify the Parent Group for all Adverse
Consequences exceeding the Basket Amount;
(vii) if a reserve (in the form of an accrued Liability or an offset
to an asset or similar item) was reflected in the Financial
Statements relating to any matter for which the Parent Group
would otherwise be entitled to indemnification under this
Agreement or the Stock Purchase Agreement, then the
calculation of the Parent Group's Adverse Consequences in
respect of such matter shall be reduced by the full amount of
the reserve as reflected in Financial Statements; and
(viii) the obligations to indemnify and hold the Parent Group
harmless shall terminate as to each representation, warranty
and covenant when each such representation, warranty or
covenant terminates; provided, however, that such obligations
to indemnify and hold harmless shall not terminate with
respect to any item as to which the Parent Group shall have,
prior to the expiration of the applicable period, previously
made a claim by delivering an indemnification notice pursuant
to Section 5.04 and in compliance with the requirements
therefor, but only with respect to the content of, and on the
basis set forth in, such indemnification notice.
(c) York's obligation to indemnify Parent Group under Section
5.02(a) shall not be affected or limited by Parent Group's obligation to
indemnify York and its Affiliates under Section 5.03(a)(iii)(3).
5.08 INDEMNIFICATION PROVISIONS FOR BENEFIT OF YORK.
13
(a) Subject to the terms and conditions of this Article V, Matthews
and Empire shall have the following indemnification obligations:
(i) If there is any breach or inaccuracy of any of the
representations, warranties or covenants of the Parent
Group contained herein, or if any third party alleges facts
that, if true, would mean that such a breach or inaccuracy
existed, and provided that York delivers to the Parent
Group pursuant to Section 5.04 hereof a claim for
indemnification with respect to such alleged breach or
inaccuracy, then Matthews and Empire, jointly and
severally, shall indemnify York from and against all
Adverse Consequences that York has suffered or may suffer
caused by, resulting from, arising out of or relating to
such breach or inaccuracy through and after the date of
such claim.
(ii) Matthews and Empire, jointly and severally, shall also
indemnify York and its Affiliates for any fines, penalties and
Adverse Consequences relating to any recission (but not
attorneys' fees) arising out of any violation of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder in
connection with the transactions contemplated by this
Agreement, the Stock Purchase Agreement and any other
agreements among the parties or their Affiliates.
(iii) Empire and Matthews, jointly and severally, shall indemnify
York and its Affiliates from and against any and all
Liabilities and other Adverse Consequences resulting from,
arising out of or relating to (1) the Liquidation of OMC
and/or York Bronze, (2) any attempt by a third party to
recover any amount of the Actual York Liquidation Proceeds
from York or its Affiliates, and (3) any failure by Sub 1 or
any of its Affiliates to fully pay, perform or otherwise
satisfy any of the Assumed Liabilities as defined in the
Contribution, Assignment and Assumption Agreement dated as of
May 21, 2001; provided, however, that Matthews and Empire
shall not be required to indemnify York and its Affiliates
under this Section 5.03(a)(iii)(3) if and only to the extent
that (and only for so long as) Parent Group is entitled to
indemnification from York under Section 5.02(a).
(b) The Parent Group's obligations under Section 5.03(a)(i) shall be
subject to the following limitations:
(i) The Parent Group shall not have any liability for Adverse
Consequences for any breach of representations, warranties
or covenants under Section 5.03(a)(i) of this Agreement or
Section 5.03(a)(i) of the Stock Purchase Agreement to the
extent the aggregate amount of all such Adverse
Consequences for which the Parent Group would otherwise be
liable under Section 5.03(a)(i) of this Agreement and under
Section 5.03(a)(i) of the Stock Purchase Agreement exceeds
Ten Million Dollars ($10,000,000) Dollars;
(ii) The Parent Group shall not have any liability for Adverse
Consequences for any breach of the representations or
warranties under Section 5.03(a)(i) of this Agreement and
Section 5.03(a)(i) of the Asset Purchase Agreement unless and
until the aggregate amount of all such Adverse Consequences
relating thereto for which the Parent Group would, but for
this Section 5.03(b)(ii) or Section 5.03(b)(ii) of the Stock
Purchase Agreement, be required to indemnify York exceeds on a
cumulative basis a Basket Amount equal to Five Hundred
Thousand Dollars
14
($500,000), at which point, the Parent Group, subject to the
further terms, conditions and limitations of this Agreement
and the Stock Purchase Agreement, shall indemnify York for all
Adverse Consequences exceeding the Basket Amount; and
(iii) the obligations to indemnify and hold York harmless shall
terminate as to each representation, warranty and covenant
when each such representation, warranty or covenant
terminates; provided, however, that such obligations to
indemnify and hold harmless shall not terminate with respect
to any item as to which York shall have, prior to the
expiration of the applicable period, previously made a claim
by delivering an indemnification notice pursuant to Section
5.04 and in compliance with the requirements therefor, but
only with respect to the content of, and on the basis set
forth in, such indemnification notice.
(c) Notwithstanding anything to the contrary in this Agreement or
the Stock Purchase Agreement, the limitations set forth in Sections 5.03(b)(i),
(ii) and (iii) above shall not apply to or otherwise limit in any manner the
obligations of Matthews and Empire under Sections 5.03(a)(ii) and (iii) above.
5.09 NOTICE OF CLAIM FOR INDEMNIFICATION. No claim for
indemnification hereunder shall be valid unless notice of such claim is
delivered to the Parent Group (in the case of a claim by York) or to York (in
the case of a claim by the Parent Group) prior to or upon the date of expiration
of the representation, warranty or covenant pursuant to which such
indemnification is sought. Any such notice shall set forth in reasonable detail,
to the extent known by the person giving such notice, the facts on which such
claim is based and the estimated amount of Adverse Consequences resulting
therefrom.
5.010 MATTERS INVOLVING THIRD PARTIES. (a) If the Parent Group or
York receives notice or acquires knowledge of any matter which may give rise to
a claim by another Person and which may then result in a claim for
indemnification under this Article V, then (i) if such notice or knowledge is
received or acquired by the Parent Group, the Parent Group shall within twenty
(20) days notify York thereof, and (ii) if such notice or knowledge is received
or acquired by York, York shall within twenty (20) days notify the Parent Group
thereof; provided, however, that no delay in giving such notice shall diminish
any obligation under this Article V to provide indemnification unless (and then
solely to the extent that) the party from whom such indemnification is sought is
prejudiced. Thereafter, the party seeking indemnification (the "Indemnified
Party") shall deliver to the party from whom such indemnification is sought (the
"Indemnifying Party"), within five business days after the Indemnified Party's
receipt thereof, copies of all notices, correspondence and documents (including,
without limitation, court papers) received by the Indemnified Party relating to
the Third Party Claim.
(b) The Indemnifying Party shall have the right to defend against
such claim by another Person (the "Third Party Claim") with counsel of the
Indemnifying Party's choice reasonably satisfactory to the Indemnified Party so
long as (within thirty (30) days after the Indemnified Party has given notice of
the Third Party Claim to the Indemnifying Party, the Indemnifying Party notifies
the Indemnified Party that the Indemnifying Party will indemnify the Indemnified
Party from and against all Adverse Consequences the Indemnified Party may suffer
caused by, resulting from, arising out of or relating to such Third Party Claim
and the Indemnifying Party conducts the defense of the Third Party Claim
actively and diligently. Notwithstanding any acknowledgement made pursuant to
Section 5.05(b)(i), York shall continue to be entitled to assert any defense to
or limitation on its indemnification responsibility contained in Section 5.02.
(c) So long as the Indemnifying Party is conducting the defense of
the Third Party Claim in accordance with Section 5.05(b) hereof, (i) the
Indemnified Party may retain separate co-counsel
15
at its sole cost and expense and participate in the defense of the Third Party
Claim, it being understood, however, that the Indemnifying Party shall control
such defense, and (ii) the Indemnified Party shall not consent to the entry of
any judgment or enter into any settlement with respect to the Third Party Claim
without the prior consent of the Indemnifying Party. If the Indemnifying Party
chooses to defend any Third Party Claim, the Indemnifying Party shall have the
right to control the defense, compromise or settlement of such matter, and all
the parties hereto shall cooperate in the defense or prosecution of such Third
Party Claim. Such cooperation shall include the execution of documents necessary
to effectuate any reasonable institutional controls that are required as part of
a remedial action approved by a Governmental Authority, retention and (upon the
Indemnifying Party's request) the provision to the Indemnifying Party of Records
that are reasonably relevant to such Third Party Claim, and making employees
available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. Notwithstanding the foregoing,
the Indemnifying Party shall not compromise or settle any Third Party Claim
without the consent of the Indemnified Party, unless such compromise or
settlement by the Indemnifying Party involves only the payment of monetary
damages by the Indemnifying Party and includes a full release of the Indemnified
Party from all liability with respect to such Third Party Claim. If the
Indemnifying Party, within a reasonable time after receipt of an Indemnification
Notice relating to a Third Party Claim, chooses not to assume defense of a Third
Party Claim or fails to defend such Third Party Claim actively and diligently,
the Indemnified Party will (upon further notice) have the right to undertake the
defense, compromise or settlement of such Third Party Claim or consent to the
entry of judgment with respect to such Third Party Claim , on behalf of, and for
the account and risk of, the Indemnifying Party, and the Indemnifying Party
shall have no right to challenge the Indemnified Party's defense, compromise,
settlement or consent to judgment, subject to the limitations on the
Indemnifying Party's obligations pursuant to Section 5.02. The foregoing
notwithstanding, in the event that the Indemnifying Party chooses not to assume
defense of a Third Party Claim or fails to defend such Third Party Claim
actively and diligently, but later chooses to assume defense of such Third Party
Claim and gives notice to the Indemnified Party of such assumption, the
Indemnifying Party shall, effective concurrently with the notice, control such
defense, and the Indemnified Party shall not consent to the entry of any
judgment or enter into any settlement with respect to the Third Party Claim
without the prior consent of the Indemnifying Party.
5.06 EXCLUSIVE REMEDY. From and after the date hereof, the
indemnification provisions of this Article V shall be the sole and exclusive
remedy with respect to any and all claims relating to the subject matter of this
Agreement (or any related agreements, certificates and other documents, except
to the extent otherwise expressly set forth therein) and no other remedy shall
be had pursuant to any contract, misrepresentation, fraud or other tort theory
or otherwise by Matthews or York and their respective officers, directors,
employees, agents, Affiliates, attorneys, consultants, successors and assigns,
all such remedies being hereby expressly waived to the fullest extent permitted
under applicable Law. Without limitation, the procedures set forth in this
Article V constitute the sole and exclusive remedy of Matthews and York and
their Affiliates arising out of any breach or claimed breach of the
representations and warranties set forth in Article II and Article III made as
of the date of this Agreement relating to events occurring on or prior to the
date hereof that become known to Matthews or York on, prior to or subsequent to
the date hereof. In furtherance of the foregoing, except with respect to the
rights of Matthews under this Agreement, Matthews hereby waives, from and after
the date hereof, to the fullest extent permitted under applicable Law, any and
all other rights, claims and causes of action it may have against York and its
Affiliates relating to the subject matter of this Agreement arising under or
based upon any federal, state, local or foreign Law or otherwise, including,
without limitation, such rights, claims and causes of action Matthews may have
against York under any Environmental Law or Worker Safety Law (Statutory,
Regulatory Common Law or otherwise) or CERCLA.
16
ARTICLE VI
Definitions
Capitalized terms used herein and not defined shall have the
meanings set forth in the Stock Purchase Agreement. As used herein the following
terms have the following meanings:
"Adverse Consequences" shall mean all actions, suits, proceedings,
hearings, investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs,
amounts paid in settlement, liabilities, obligations, Taxes, Liens, losses,
expenses and fees, including court costs and reasonable attorneys' and
accountants' fees and disbursements.
"Affiliate" shall mean a Person who, directly or indirectly through
one or more intermediaries, controls, is controlled by, or is under common
control with, the Person specified.
"Agreement" shall have the meaning set forth in the preamble hereto.
"Assets" shall have the meaning set forth in Section 1.01(b).
"Basket Amount" shall have the meaning set forth in Section 5.02(b).
"Closing" shall mean the sale and purchase of the Assets upon the
signing of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Company" or "Companies" shall have the meaning set forth in the
preamble hereto.
"Company Permits" shall have the meaning set forth in Section
2.08(a).
"Contracts" shall have the meaning set forth in Section 2.07.
"Debt Instruments" shall have the meaning set forth in Section 2.09.
"Disclosure Schedules" shall mean the disclosure schedules furnished
by the Companies to Matthews and Empire and containing all lists, descriptions,
exceptions, and other information and materials as are required to be included
therein pursuant to this Agreement and the Stock Purchase Agreement.
"Empire" shall have the meaning set forth in the preamble hereto.
"Environmental Laws" shall have the meaning set forth in Section
2.14.
"Financial Statements" shall have the meaning set forth in Section
2.04.
"GAAP" shall have the meaning set forth in Section 2.04.
"Governmental Authority" shall mean any federal, state or local
court, administrative agency or commission or other governmental authority or
instrumentality except any of the same which regulate any antitrust laws.
"Indemnified Party" shall have the meaning set forth in Section
5.05(a).
17
"Indemnifying Party" shall have the meaning set forth in Section
5.05(a).
"Liability" whether or not capitalized, shall mean any liability
(whether known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due), including any liability for Taxes.
"Lien" shall mean any lien, mortgage, pledge, encumbrance, charge or
other security interest other than Permitted Liens.
"Material Adverse Effect" shall mean an event, occurrence, fact,
condition, change, development or effect that is materially adverse to the
business, property, financial condition or results of operations of the
Companies taken as a whole, or any other a specified Person, excluding
specifically any such event, occurrence, fact, condition, change, development or
effect (a) resultant from changes in general economic or political conditions,
(b) resultant from changes generally applicable to companies engaged in
businesses or industries similar to those in which the specified Person is
engaged, (c) resultant from the announcement of this Agreement or the
transactions contemplated herein, (d) resultant from the announcement of any
other transaction or transactions among York or one or more of its Affiliates
and Matthews or one or more of its Affiliates, (e) resultant from any other
transaction or transactions with respect to which York has prior to the date
hereof announced (whether generally or specifically) its intention to
investigate, evaluate or consummate, and (f) set forth in this Agreement or the
Disclosure Schedules.
"Matthews" shall have the meaning set forth in the preamble hereto.
"Matthews Group" shall mean, collectively, Matthews, Empire and
(after the Closing under the Stock Purchase Agreement) the Companies.
"OMC" shall have the meaning set forth in the preamble hereto.
"OMC Assets" shall have the meaning set forth in Section 1.01(b).
"Parent Group" shall have the meaning set forth in Section 5.02.
"Permits" shall have the meaning set forth in Section 2.08(a).
"Permitted Liens" shall mean (i) liens in respect of pledges or
deposits under workers' compensation laws or similar legislation, carrier's,
landlord's, workmen's, warehousemen's, mechanic's, laborer's, materialmen's or
other similar liens or easements, covenants and encumbrances, if the obligations
secured by same are not then delinquent; (ii) liens for current ad valorem
Taxes, payments of which are not yet delinquent; (iii) liens relating to
accounts payable incurred in the ordinary course of business and consistent with
past practice; (iv) zoning and subdivision laws and regulations; and (v) such
imperfections of title which do not materially detract from the value or current
uses of the property.
"Person" shall mean any individual, partnership, joint venture,
corporation, trust, unincorporated organization or government or any department
or agency thereof.
"Purchase Price" shall have the meaning set forth in Section 1.02.
"Sub 1" shall mean York Bronze Trade Company, a West Virginia
corporation.
"Stock Purchase Agreement" shall have the meaning set forth in the
Recitals.
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"Tax" or "Taxes" shall mean any United States Federal, state, local,
or foreign income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, environmental (including taxes under Code
Section 59A), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative minimum,
estimated or other tax of any kind whatsoever, including any interest, penalty
or addition thereto, whether disputed or not.
"Tax Return" shall mean any return, declaration, report, claim for
refund or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Third-Party Claim" shall have the meaning set forth in Section
5.05(b) hereof.
"Transaction Documents" shall mean this Agreement, the Contribution,
Assignment and Assumption Agreement referred to in Section 5.03(a)(iii), the
Stock Purchase Agreement, the License Agreement, the Preferred Provider
Agreement and all related agreements and documents.
"York" shall have the meaning set forth in the preamble hereto.
"York Bronze" shall have the meaning set forth in the preamble
hereto.
"York Bronze Assets" shall have the meaning set forth in Section
1.01(a).
"York's knowledge" and "Company's knowledge" and similar phrases
shall mean the actual personal knowledge of any of Thomas Crawford, Cristen
Cline, Daniel Malone, Kenneth Smith, Robert Monteleone or David Beck.
ARTICLE VII
Miscellaneous
7.010 FURTHER ASSURANCES. From time to time at the request of the
other party hereto and without further consideration, Matthews, Empire, York and
the Companies will execute and deliver such further instruments of conveyance
and transfer as the other party may reasonably request in order to consummate
the transactions contemplated herein.
7.011 EXPENSES. York will pay from the proceeds of sale all costs
and expenses attributable to the performance of and compliance with all
agreements and conditions contained in this Agreement to be performed or
complied with by York or the Companies prior to the Closing, including, without
limitation, all accounting and legal fees and expenses of York or the Companies
accrued prior to the Closing. Matthews and Empire will pay all costs and
expenses attributable to the performance of and compliance with all agreements
and conditions contained in this Agreement to be performed or complied with by
Matthews and Empire, after the Closing including, without limitation, all
accounting and legal fees and expenses of Matthews and Empire accrued after the
Closing.
7.012 GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the Commonwealth of
Pennsylvania.
7.013 ENTIRE AGREEMENT; MODIFICATION; WAIVER. This Agreement,
including the exhibits, schedules and appendices hereto, constitutes the entire
Agreement among the parties hereto pertaining to
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the subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the parties and there
are no warranties, representations or other agreements, express or implied, made
by any party to any other party in connection with the subject matter hereof
except as specifically set forth herein or in documents delivered pursuant
hereto. To the fullest extent permitted by law, unless otherwise expressly
provided for herein, no supplement, modification, waiver or termination of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby. No waiver of any provision of this Agreement shall be deemed or shall
constitute a waiver of any other provision hereof (whether or not similar), nor
shall such waiver constitute a continuing waiver unless otherwise expressly
provided.
7.014 NOTICES. All notices, demands, claims, requests, undertakings,
consents, opinions and other communications which may or are required to be
given hereunder or with respect hereto shall be in writing, shall be given
either by personal delivery or by mail, facsimile transmission (with
confirmation of receipt), telegraph, telex or similar means of communication,
and shall be deemed to have been given or made when delivered, if personally
delivered, and otherwise when received, addressed to the respective parties as
follows:
If to Matthews or to Empire:
Matthews International Corporation
Two Northshore Center
Pittsburgh, PA 15212
Attn:Edward Boyle, CFO
Facsimile: 412-442-8290
With a copy which shall not constitute notice to:
Reed Smith LLP
Attn:Pasquale D. Gentile, Esq.
435 Sixth Avenue
Pittsburgh, PA 15219
Facsimile: 412-288-3063
If to York or the Companies:
The York Group, Inc.
8554 Katy Freeway
Suite 200 Houston, TX 77024
Attn:Legal Department
Facsimile: 713-984-5517
With a copy which shall not constitute notice to:
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Locke Liddell & Sapp LLP
Attn:David F. Taylor, Esq.
3400 Chase Tower
600 Travis Street
Houston, TX 77002
Facsimile: 713-223-3717
7.015 COUNTERPARTS. This Agreement may be executed in as many
counterparts as may be deemed necessary and convenient, and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute but one and
the same instrument.
7.016 MATTERS OF CONSTRUCTION, INTERPRETATION AND THE LIKE.
(C) CONSTRUCTION. Matthews, Empire, the Companies and York have
participated jointly in the negotiation and drafting of this Agreement. If an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by Matthews, Empire, the Companies and York
and no presumption or burden of proof shall arise favoring or disfavoring either
Matthews, Empire, the Companies or York because of the authorship of any of the
provisions of this Agreement. Any reference to any United States Federal, state,
local or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise.
Unless the context of this Agreement otherwise requires, (a) words of any gender
are deemed to include each other gender; (b) words using the singular or plural
number also include the plural or singular number, respectively; (c) the terms
"hereof," "herein," "hereby," "hereto," and derivative or similar words refer to
this entire Agreement; (d) the terms "Article" or "Section" refer to the
specified Article or Section of this Agreement; (e) the term "party" means, on
the one hand, Matthews, on the other hand, York, (f) the word "including" means
"including without limitation"; and (g) all references to "dollars" or "$" refer
to currency of the United States of America. The exhibits and schedules
specified in this Agreement are incorporated herein by reference and made a part
hereof. The article and section headings hereof are for convenience only and
shall not affect the meaning or interpretation of this Agreement.
(D) SEVERABILITY. The invalidity or unenforceability of one or more
of the provisions of this Agreement in any situation in any jurisdiction shall
not affect the validity or enforceability of any other provision hereof or the
validity or enforceability of the offending provision in any other situation or
jurisdiction.
7.017 NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer
any rights or remedies upon any Person other than Matthews, Empire, the
Companies, York and each of their respective successors and permitted assigns.
7.018 SUCCESSION AND ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the parties named herein and their respective
successors and permitted assigns. No party may assign this Agreement or any of
such party's rights, interests or obligations hereunder without the prior
written approval of the other parties hereto.
7.12 TIME OF ESSENCE. With regard to all dates and time periods set
forth or referred to in this Agreement, time is of the essence.
[Signature page to follow]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement or have caused this Asset Purchase Agreement to be duly
executed as of the date first above written.
MATTHEWS INTERNATIONAL CORPORATION
By
-------------------------------------
Title
----------------------------------
EMPIRE STOCK CORP.
By
-------------------------------------
Title
----------------------------------
THE YORK GROUP, INC.
By
-------------------------------------
Title
----------------------------------
YORK BRONZE COMPANY
By
-------------------------------------
Title
----------------------------------
OMC INDUSTRIES, INC.
By
-------------------------------------
Title
----------------------------------
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SCHEDULE 1.01(A)
ASSET PURCHASE AGREEMENT
YORK BRONZE ASSETS
All trade accounts receivable of York Bronze Company
All prepaid expenses of York Bronze Company
All inventories of York Bronze Company
All assets under construction of York Bronze Company
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SCHEDULE 1.01(B)
ASSET PURCHASE AGREEMENT
OMC INDUSTRIES ASSETS
All trade accounts receivable of OMC Industries Company
All inventories of OMC Industries Company
All assets under construction of OMC Industries Company
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