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Exhibit 2.1
EXECUTION COPY
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ASSET PURCHASE AGREEMENT
AMONG
CARLISLE COMPANIES INCORPORATED,
CARLISLE TIRE & WHEEL COMPANY,
CARLISLE MANAGEMENT COMPANY,
TITAN TIRE CORPORATION OF TENNESSEE,
TITAN WHEEL CORPORATION OF WISCONSIN,
AND
TITAN INTERNATIONAL, INC.
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DATED APRIL 14, 2000
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TABLE OF CONTENTS
I. Purchase and Sale of Assets...................................................................................2
1.1 Assets...................................................................................................2
1.2 Allocation of Assets among Purchasers....................................................................3
1.3 Excluded Assets..........................................................................................4
II. Assumption of Liabilities....................................................................................5
2.1 Obligations to be Assumed by Purchasers..................................................................5
2.2 No Other Liabilities to be Assumed.......................................................................5
2.3 Assignment of Contracts..................................................................................5
III. Purchase Price..............................................................................................6
3.1 Purchase Price...........................................................................................6
3.2 Allocation of Purchase Price.............................................................................6
IV. Representations and Warranties of Seller Group...............................................................6
4.1 Organization and Standing................................................................................7
4.2 Corporate Authorization..................................................................................7
4.3 Personal Property; No Encumbrances.......................................................................7
4.4 1999 EBIT................................................................................................7
4.5 Schedules................................................................................................7
4.6 No Defaults..............................................................................................8
4.7 No Breaches; etc.........................................................................................8
4.8 Lawsuits; Proceedings; etc...............................................................................9
4.9 Employees................................................................................................9
4.10 Assets....................................................................................................9
4.11 Real Estate..............................................................................................10
4.12 Inventory................................................................................................10
4.13 Compliance with Laws; Permits............................................................................10
4.14 Post Balance Sheet Changes...............................................................................11
4.15 Intangible Properties....................................................................................11
4.16 Changes in Customers or Suppliers........................................................................12
4.17 Disclosure...............................................................................................12
4.18 No Brokers or Finders....................................................................................12
4.19 ERISA....................................................................................................12
4.20 Environmental Matters....................................................................................13
4.21 Schedules for Disclosure Purposes Only...................................................................14
V. Representations and Warranties of Purchaser and Management...................................................14
5.1 Organization and Standing...............................................................................14
5.2 Corporate Authorization.................................................................................14
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5.3 No Breaches; etc........................................................................................14
5.4 No Brokers or Finders...................................................................................15
VII. Post-Closing Agreement.....................................................................................15
6.1 Confidential Information................................................................................15
6.2 Further Assurances......................................................................................15
6.3 Access to Books and Records.............................................................................15
6.4 Collection of Excluded Accounts Receivables.............................................................16
VII. Employee Matters...........................................................................................17
7.1 Lease of Employees......................................................................................17
VIII. Closing...................................................................................................18
8.1 Time and Place..........................................................................................18
8.2 Seller Group Deliveries.................................................................................18
8.3 Purchasers'Deliveries...................................................................................19
8.4 Joint Deliveries........................................................................................19
IX. Survival of Representations and Warranties; Indemnification.................................................20
9.1 Seller Group's Agreement to Indemnify...................................................................20
9.2 Intentionally Omitted...................................................................................21
9.3 Purchasers' Agreement to Indemnify......................................................................21
9.4 Procedure for Indemnification...........................................................................22
9.5 Indemnification Limits..................................................................................23
X. Miscellaneous................................................................................................24
10.1 Binding Effect.......................................................................................24
10.2 Governing Law........................................................................................24
10.3 Notices..............................................................................................24
10.4 Entire Agreement and Counterparts....................................................................25
10.5 Amendments...........................................................................................25
10.6 Counterparts.........................................................................................25
10.7 No Third-Party Beneficiaries.........................................................................25
10.8 Headings.............................................................................................25
10.9 Expenses.............................................................................................25
10.10 Bulk Sales Laws......................................................................................25
10.11 Taxes................................................................................................25
10.12 Severability.........................................................................................25
10.13 Like-Kind Exchange...................................................................................26
10.14 Definitions..........................................................................................26
10.15 Definitions..........................................................................................27
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AGREEMENT FOR
PURCHASE AND SALE OF ASSETS
This Agreement for Purchase and Sale of Assets is made April 14, 2000
among Carlisle Companies Incorporated, a Delaware Corporation ("Carlisle"),
Carlisle Tire & Wheel Company, a Delaware corporation ("Carlisle Tire"),
Carlisle Management Company, a Delaware corporation ("Management" and together
with Carlisle and Carlisle Tire collectively, "Purchasers"), Titan Tire
Corporation of Tennessee, a Delaware corporation ("Titan Tennessee"), Titan
Wheel Corporation of Wisconsin, a Wisconsin corporation ("Titan Wisconsin", and,
together with Titan Tennessee and Titan Wisconsin collectively, "Sellers") and
Titan International, Inc., an Illinois corporation and the indirect owner of all
of the outstanding capital stock of each Seller ("Shareholder"). Sellers and
Shareholder are collectively referred to as the "Seller Group" and individually
as a "member of the Seller Group".
R E C I T A L S:
A. Sellers desire to sell to Purchasers, and Purchasers desire to
purchase from Sellers, on the terms and subject to the conditions set forth in
this Agreement, the properties, assets, operations, goodwill and businesses
owned or used in connection with the operations at Clinton, Tennessee, and
Slinger, Wisconsin, including all such assets used to generate the 1999 EBIT (as
defined below), but excluding the Retained Liabilities and the Excluded Assets
(collectively, the "Business").
B. Concurrently herewith Shareholder shall lease to Carlisle Tire the
Greenwood, South Carolina real estate under a separate real property lease
("Real Property Lease"). The Real Property Lease is attached as Exhibit A.
C. All capitalized terms used herein are defined in the various
sections indicated in Section 10.13.
NOW, THEREFORE, in consideration of the premises, the respective
covenants and commitments of the members of the Seller Group and Purchasers set
forth in this Agreement, and other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties agree as follows:
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I. Purchase and Sale of Assets
1.1 Assets. In reliance on the representations, warranties and
covenants contained in this Agreement, on the Closing Date, Sellers shall, and
the Shareholder agrees to cause Sellers to, sell, assign, deliver and transfer
to Purchasers, and Purchasers agree to purchase and acquire from Sellers, free
and clear of all Encumbrances, and on the terms and subject to the conditions
set forth in this Agreement, all of the assets, owned or used or held for use by
Sellers in the Business, of every kind and nature (the "Assets"), but excluding
the Excluded Assets, as defined below. Without limiting the generality of the
foregoing, the Assets shall include all of each Seller's right, title and
interest in and to:
(a) Equipment. All of the equipment, machinery, vehicles, tooling,
dies, jigs, molds, presses, patterns, furniture, fixtures and furnishings owned
by each Seller and used in the Business including, without limitation, all
equipment listed on Schedule 4.5(i), but excluding the Excluded Assets, as
defined below.
(b) Real Property. Each parcel of land described on Schedule 4.5(ii)
together with (i) any and all buildings, facilities and other structures and
improvements thereon, and (ii) any and all rights, privileges, hereditaments and
appurtenances pertaining thereto (collectively, the "Real Estate").
(c) Personal Property Leases. The personal property leases described on
Schedule 4.5(iii)(A) (the "Personal Property Leases").
(d) Other Contracts. All purchase orders, sales orders and other
contracts, agreements and commitments relating to the Business described on
Schedule 4.5(iv) (the "Other Contracts" and, together with the Personal Property
Leases, the "Assigned Contracts").
(e) Inventories, Purchase Contracts. All inventories of supplies, raw
materials, parts, components, work-in-process, product labels and packaging
materials, and all third party manufacturers' warranties applicable to the
inventories.
(f) Engineering and Production Data. All blueprints, drawings, forms,
raw material specifications, manufacturing specification, quality assurance
specifications, engineering data, production data, development data, design
data, formulae, plans, and other data owned by Sellers and used in the operation
of the Business, whether such properties are located on the site at which the
Business is being conducted or on the business premises of Sellers' suppliers or
elsewhere, but only to the extent that the foregoing relate primarily to the
designing, engineering, manufacturing, selling or marketing of (i) Lawn and
Garden Tire and Wheel Products or (ii) All Terrain Vehicle Tire and Wheel
Products to original equipment manufacturers (as such capitalized terms are
defined in the Noncompetition Agreement). The parties agree and acknowledge that
all such engineering and production data used for the designing, engineering,
manufacturing, selling or marketing of All Terrain Vehicle Tire and Wheel
Products to both original equipment manufacturers and the aftermarket shall not
be included among the Assets.
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(g) Intangible Property Rights. All intangible property rights used or
useful in connection with the Business, including patents, patent applications,
copyrights, copyright applications, trade names and any and all other names
similar to the foregoing), trade dress, goodwill, trademarks or service marks,
registered or unregistered and applications therefor, logos, processes, computer
programs and software, inventions, trade secrets, discoveries, improvements,
drawings, designs, patterns, know-how, manufacturing standards and procedures,
data bases, product names and other intellectual property rights including,
without limitation, those items listed on Schedule 4.5(v) , but only to the
extent that the foregoing relate primarily to the designing, engineering,
manufacturing, selling or marketing of (i) Lawn and Garden Tire and Wheel
Products or (ii) All Terrain Vehicle Tire and Wheel Products to original
equipment manufacturers (as such capitalized terms are defined in the
Noncompetition Agreement) (collectively, the "Intangible Property Rights"). The
parties agree and acknowledge that all such intangible property rights used for
the designing, engineering, manufacturing, selling or marketing of All Terrain
Vehicle Tire and Wheel Products to both original equipment manufacturers and the
aftermarket shall not be included among the Assets.
(h) Books and Records. Copies of all books, accounting records,
financial statements and documents, records and other documents and information
relating to the Assets and the Business, including, without limitation, all
customer, prospect, dealer and distributor lists, sales literature, inventory
records, purchase orders and invoices, sales orders and sales order log books,
customer information, commission records, correspondence, outstanding proposals,
employee payroll and personnel records, product data, price lists, product
demonstrations, testing data and results, quotes and bods, catalogues and
brochures of every kind and nature, but only to the extent that the foregoing
relate primarily to the designing, engineering, manufacturing, selling or
marketing of (i) Lawn and Garden Tire and Wheel Products or (ii) All Terrain
Vehicle Tire and Wheel Products to original equipment manufacturers (as such
capitalized terms are defined in the Noncompetition Agreement). The parties
agree and acknowledge that all such books and records used for the designing,
engineering, manufacturing, selling or marketing of All Terrain Vehicle Tire and
Wheel Products to both original equipment manufacturers and the aftermarket
shall not be included among the Assets.
(i) Telephone Listings. Sellers' current telephone listings and the
right to use the telephone numbers currently being used at the principal offices
located on the Real Estate and/or subject to the Real Property Lease.
(j) Permits. All permits, licenses and other approvals relating to the
Business which may be assignable including those listed on Schedule 4.5(vi).
(k) Goodwill. All goodwill associated with or attributable to the
Business.
1.2 Allocation of Assets among Purchasers. The parties agree that
Purchasers may designate to which Purchaser the Assets will be assigned at
Closing.
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1.3 Excluded Assets. Notwithstanding the foregoing, the Assets shall
not include the following assets of Sellers (the "Excluded Assets"):
(a) All cash or cash equivalents on hand or on deposit in any bank or
financial institution.
(b) All accounts, notes and other receivables owing to Sellers
(including, without limitation, all intercompany receivables) (the "Excluded
Accounts Receivable"), and all marketable securities owned by Sellers.
(c) All finished goods inventory, including finished goods shipped and
not yet billed.
(d) The name "Titan", it being agreed and understood by the parties
that concurrently herewith Shareholder shall license Carlisle Tire to use such
name pursuant to a separate license agreement (the "License Agreement"). The
License Agreement is attached as Exhibit B.
(e) The low sidewall technology which is the subject of a pending
patent application.
(f) All prepaid expenses and deposits of the Business or relating to
the Assets including, without limitation, cash deposits under leases or
contracts and performance bonds.
(g) All of each Seller's right, title and interest to insurance
policies, claims and causes of action.
(h) Any purchase order, sale order, and other contract, agreement or
commitment not included among the Assigned Contracts.
(i) All consideration received by and the rights of, Sellers under or
pursuant to this Agreement or any agreement ancillary hereto.
(j) The corporate records of Sellers, including, without limitation,
their respective minute books, articles of incorporation, by-laws, minutes of
proceedings, stock transfer ledgers and corporate seals.
(k) Each Seller's income and franchise tax returns and tax records.
(l) Any Tax refunds owing to Sellers.
(m) The equipment and molds and other assets listed on Schedule 1.3(m).
(n) All of Sellers' engineering and product data not described in
Section 1.1(f).
(o) All of Sellers' intangible property rights not described in Section
1.1(g).
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II. Assumption of Liabilities
2.1 Obligations to be Assumed by Purchasers.
(a) Purchasers agree to assume and to pay, perform and discharge in
accordance with their respective terms from and after the Closing Date all
liabilities and obligations of any member of the Seller Group under the Assigned
Contracts to the extent (and only to the extent) arising after the Closing Date
(the "Assumed Liabilities").
(b) The assumption by Purchasers of the Assumed Liabilities shall not
enlarge any rights of any person under any contracts or arrangements with any
Seller.
(c) Nothing contained herein shall prevent Purchasers from contesting
in good faith any of the Assumed Liabilities with any third party obligee.
2.2 No Other Liabilities to be Assumed. Other than as specifically set
forth in Section 2.1 as Assumed Liabilities, Purchasers shall not assume, and
nothing contained in this Agreement shall be construed as an assumption by
Purchasers of, any liabilities, obligations or undertakings of any nature
whatsoever, whether fixed or contingent, known or unknown, disclosed or
undisclosed, and whether or not reflected in any of the Sellers' financial
statements, and no members of the Seller Group shall be responsible for all of
the liabilities, obligations and undertakings not specifically assumed by
Purchasers (collectively, the "Retained Liabilities"). Each member of the Seller
Group, jointly and severally, agrees to pay, perform or discharge the Retained
Liabilities in accordance with their respective terms. Nothing contained herein
shall prevent any member of the Seller Group from contesting in good faith any
of the Retained Liabilities with any third party obligee.
2.3 Assignment of Contracts. Nothing in this Agreement shall be
construed as an assignment of, or an attempt to assign to Purchasers, any
Assigned Contract which, as a matter of law or by its terms, is (i) not
assignable, or (ii) not assignable without the approval or consent of the issuer
thereof or the other party or parties thereto without first obtaining such
approval or consent (collectively, the "Nonassignable Rights"). In connection
with the Nonassignable Rights, and, in particular, should any consent or
approval not be available on the Closing Date, each member of the Seller Group
shall:
(i) Apply for and use all reasonable efforts to obtain all
consents or approvals contemplated by the Assigned Contracts, in a form
satisfactory to Purchasers acting reasonably;
(ii) Cooperate with Purchasers in any reasonable and lawful
arrangement designed to provide the benefits of the Nonassignable
Rights to Purchasers, including without limitation, holding any of the
Nonassignable Rights in trust for Purchasers or acting as agent for
Purchasers;
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(iii) Take all reasonable steps to enforce any rights of
Seller arising under the Nonassignable Rights against the issuer
thereof or the other party or parties thereto; and
(iv) Take all such actions and do, or cause to be done, all
such things at the written request of Purchasers, as shall be
reasonably necessary and proper in order that the value of the
Nonassignable Rights shall be preserved and shall inure to the benefit
of Purchasers; and
(v) Pay over to the Purchaser, all monies collected by or paid
to the Seller Group in respect of the Nonassignable Rights.
III. Purchase Price
3.1 Purchase Price.
(a) The aggregate purchase price for the Assets shall be $94,063,000
(the "Purchase Price").
(b) On the Closing Date, Purchasers, jointly and severally, shall (i)
assume the Assumed Liabilities, (ii) pay to Shareholder (as agent for the
Sellers), by wire transfer in Federal Funds or other immediately available funds
to a bank account designated by Shareholder, $58,063,000, and (iii) pay to Bank
One Exchange Corp. (as qualified intermediary of the Sellers), by wire transfer
in Federal Funds or other immediately available funds to a bank account
designated by Bank One Exchange Corp., $36,000,000.
3.2 Allocation of Purchase Price.
(a) Set forth on Schedule 3.2 is the allocation of the Purchase Price
and Assumed Liabilities among the Assets in accordance with Section 1060 of the
Internal Revenue Code of 1986 (the "Code") (the "Allocation").
(b) The parties agree to file all Tax returns and information reports
in a manner consistent with the Allocation.
IV. Representations and Warranties of Seller Group
As a material inducement to Purchasers to enter into this Agreement and
with the understanding that Purchasers will be relying thereon in consummating
the transactions contemplated by this Agreement, each member of the Seller
Group, jointly and severally, represents and warrants to Purchasers as follows:
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4.1 Organization and Standing. Each Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of incorporation and, has all requisite corporate power and
authority to carry on the Business as it is now being conducted, and is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction in which qualification is necessary under applicable law.
Schedule 4.1 to this Agreement sets forth each jurisdiction in which each Seller
is qualified to do business.
4.2 Corporate Authorization. Each member of the Seller Group has full
corporate power and authority to enter into this Agreement and, in the case of
each Seller, to sell the Assets and the Business in accordance with the terms of
this Agreement. The execution, delivery and performance of this Agreement by
each member of the Seller Group, and all other agreements or instruments to be
executed by such member pursuant to this Agreement, have been duly and
effectively authorized by their respective boards of directors and shareholders
(if required by applicable law) and no other corporate proceedings on any
member's part is necessary to authorize this Agreement or the transactions
contemplated by this Agreement. This Agreement constitutes and such other
agreements or instruments will constitute, the legal, valid and binding
obligations of each member of Seller Group, which are, or will be, enforceable
against such members in accordance with their respective terms.
4.3 Personal Property; No Encumbrances. On the Closing Date, the
applicable Sellers shall transfer and convey to Purchasers good title to the
personal property Assets, free and clear of all mortgages, liens, claims,
charges, encumbrances, leases (except that the Personal Property Leases will be
subject to the rights of the lessors), security interests, pledges, and title
retention agreements of any kind or nature (collectively, "Encumbrances").
4.4 1999 EBIT. Each member of the Seller Group represents and warrants
to Purchasers that the earnings before interest and taxes of Sellers from their
operations at Clinton, Tennessee, and Slinger, Wisconsin (but not Greenwood,
South Carolina), on a "stand alone" basis, for the twelve (12) month period
ended December 31, 1999 (the "1999 EBIT"), was $15,480,000 and that such amount
was computed in accordance with generally accepted accounting principles
("GAAP") and the guidelines set forth on Exhibit C. Each member of the Seller
Group further agrees and acknowledges that the Purchase Price was computed as a
multiple of the 1999 EBIT as follows: $15,480,000 multiplied by 6.08, less an
adjustment of $55,000.
4.5 Schedules. Each of the following schedules, which have been
furnished to Purchasers by the members of the Seller Group and which are
incorporated into this Agreement by reference, is complete to the Knowledge of
Sellers and the information contained in the schedules is correct to the
Knowledge of Sellers as of the date of this Agreement:
Schedule 4.5(i): This Schedule sets forth substantially all of the
equipment, machinery, vehicles, tooling, dies, jigs, molds, presses, and
patterns owned by each Seller and used in the Business, and includes assets that
have been fully depreciated or expended on each Seller's accounting records.
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Schedule 4.5(ii): This Schedule contains a legal description of each
parcel of land used in the Business including the parcel subject to the Real
Property Lease and a description of any buildings or improvements thereon.
Schedule 4.5(iii): This Schedule contains a description of each lease
of personal property relating to the Business.
Schedule 4.5(iv): This Schedule lists and describes the material terms
of the Other Contracts.
Schedule 4.5(v): This Schedule lists all Intangible Property Rights.
Schedule 4.5(vi): This Schedule lists all permits, licenses and other
approvals and authorizations including, without limitation, those required under
the Environmental Laws, which relate to the Business (collectively, "Government
Authorizations"), sets forth the title, issuing agency and expiration date
thereof and indicates which of the Government Authorizations are not possessed
or held by Sellers.
Schedule 4.5(vii): This Schedule lists all Assigned Contracts and
Government Authorizations requiring the consent or approval of a third party
(including governmental and regulatory bodies and agencies) to Sellers' sale or
assignment of such Assigned Contracts and Government Authorizations on the
Closing Date.
Schedule 4.5(viii): This Schedule lists all personal property owned by
any third party (whether a customer, supplier or other person) related to the
operation of the Business for which any Seller is responsible, other than leased
property set forth on Schedule 4.5(iii).
4.6 No Defaults. Correct and complete copies of each of the Assigned
Contracts and Government Authorizations have been delivered to Purchasers and to
the Knowledge of Sellers each such Assigned Contract or Government Authorization
is in full force and effect and enforceable in accordance with its terms. No
Seller is in default or breach under any provision of such Assigned Contracts or
Government Authorizations (if assignable) and to the Knowledge of the members of
the Seller Group no other party to such Assigned Contracts is in default or
breach thereunder.
4.7 No Breaches; etc. To the Knowledge of Sellers, no member of the
Seller Group is in violation of, and the execution, delivery and performance of
this Agreement or the other agreements contemplated by this Agreement and the
consummation of the transactions contemplated by this Agreement does not and
will not result in any breach or acceleration of, any of the terms or conditions
of any member's articles of incorporation or by-laws, or of any mortgage, bond,
indenture, Assigned Contract, license or other instrument or obligation to which
any member is a party or by which the Assets are bound. The execution, delivery
and performance of this Agreement and the other agreements contemplated by this
Agreement will not result in the violation of any
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statute, regulation, judgment, writ, injunction or decree of any court, nor
require the consent, approval, permission or other authorization of any court,
arbitrator or governmental, administrative or self-regulatory authority or any
other third party.
4.8 Lawsuits; Proceedings; etc. Except as disclosed on Schedule 4.8, no
Seller is engaged in any legal action or other proceedings before any court or
administrative agency, nor has any Seller been threatened with any such action
or proceeding, nor, to the Knowledge of the members of the Seller Group, does
there exist any basis therefor, which will or could have an adverse effect on
the condition, financial or otherwise, of the Assets or the Business. To the
Knowledge of Sellers, no order, writ, injunction or decree has been issued by,
or requested of, any court or governmental agency which does or may result in
any adverse change in the Assets or in the financial condition of the Business.
4.9 Employees.
(a) Schedule 4.9(a) lists each employee of the Business and the
position, title and remuneration (including any scheduled salary or remuneration
increases).
(b) To the Knowledge of Sellers, with respect to the Business, each
member of the Seller Group is in compliance with all laws respecting employment
and employment practices, terms and conditions of employment and wages and
hours, and is not engaged in any unfair labor practice. All employees of Seller
are employed on an at-will basis and are terminable without notice, liability or
obligation (including severance) to them, except for accrued vacation and
obligations, if any, under ERISA and COBRA.
(c) Except for matters described in Schedule 4.8 or related to the
action entitled Dico Tire, Inc. and United Steel Workers of America (National
Labor Relations Board Division of Judges Atlanta branch office) and any appeal
relating thereto, (i)no Seller is a party to any labor or collective bargaining
agreement and no labor organization or group of employee of any Seller has made
a demand for recognition or organizing activity, and there are no representation
proceedings or petitions seeking a representation presently pending or, to the
Knowledge of each member of the Seller Group, threatened to be brought or filed
with the National Labor Relations Board or any other tribunal (ii) there are no
strikes, slowdowns, work stoppages, walkouts or material disputes by or with
respect to any persons employed by the Business or, to the Knowledge of each
member of the Seller Group, threatened against the Business, and (iii) there are
no material labor disputes or proceedings relating in any way to employment
pending or, to the Knowledge of each member of the Seller Group, threatened
against or involving Seller.
4.10 Assets. All of the tangible Assets, whether or not reflected on
Sellers' balance sheet, are being purchased in their "AS IS, WHERE IS"
condition. The Assets include all of the operating assets and properties that
have been used in the operation of the Business except the Excluded Assets, and
comprise all those properties, assets and rights necessary to operate the
Business in the ordinary course except the Excluded Assets. Except as set forth
on Schedule 4.10,
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since April 11, 2000 no material tangible Asset has been removed from the
operations at Clinton, Tennessee or Slinger Wisconsin.
4.11 Real Estate.
(a) Sellers have good, marketable and insurable title in fee simple to
the Real Estate free and clear of all Encumbrances and other charges, covenants,
conditions, easements, reservations, agreements or other restrictions of any
kind or character, except for restrictions identified in Schedule 4.5(ii).
(b) The Real Estate is being purchased in its "As Is" condition.
4.12 Inventory. All raw material and work in process inventories
consist of items of a quality and quantity usable or saleable under Sellers'
current inventory valuation practices in the ordinary course of the Business.
The raw material and work in process inventory is adequate and the
work-in-process inventory is capable of being manufactured into finished goods
currently sold by Sellers, both as determined in accordance with Sellers'
current inventory valuation practices.
4.13 Compliance with Laws; Permits.
(a) To the Knowledge of Sellers, each Seller has complied in all
respects with all applicable statutes, regulations, orders, ordinances and other
laws of the United States of America, all state, local and other governmental
bodies and authorities, and agencies of any of the foregoing to which they are
subject in connection with the conduct of the Business Assets. No member of the
Seller Group has received any notice to the effect that, or otherwise been
advised that, any Seller is not in compliance with any of such statutes,
regulations and orders, ordinances, other laws or undertakings, and no member of
the Seller Group has any reason to anticipate that any presently existing
circumstances are likely to result in violations of any such regulations. To the
Knowledge of the members of the Seller Group, there is not presently pending any
proceeding, hearing or investigation with respect to the adoption of amendments
or modifications to existing laws or ordinances, regulations or restrictions
which, if adopted, would affect the Business or the Assets.
(b) To the Knowledge of Sellers, there are no products now being sold
or distributed by the Business which as of the date of this Agreement would
require any approval of any governmental or administrative body, whether
federal, state, local or foreign, prior to commercial distribution of such
products. To the Knowledge of Sellers, all products now being commercially
distributed by the Business and all products included in the inventories of the
Business on the date of this Agreement meet the applicable legal requirements of
all jurisdictions in which such products are now being, or are presently
proposed to be, commercially distributed and, where applicable, are being sold
in compliance with all necessary customer approvals. To the Knowledge of
Sellers, no product presently sold by the Business contains asbestos or
asbestos-containing material.
(c) Each Seller has duly filed reports and returns required to be filed
by it with governmental authorities and obtained all permits, consents,
licenses, approvals and authorizations which are required in connection with the
operations of the Business. All requisite permits,
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consents, licenses, approvals and authorizations are in full force and effect,
and no proceedings for the suspension or cancellation of any such permits,
consents, licenses, approvals and authorizations are pending or, to the
Knowledge of the members of the Seller Group, threatened.
4.14 Post Balance Sheet Changes. Since December 31, 1999 or as set
forth in Schedule 4.14, no member of the Seller Group has, outside the ordinary
course of the Business, (a) incurred any obligation or liability (absolute or
contingent), other than liabilities incurred, and obligations under contracts
entered into, in the ordinary course of business; (b) discharged or satisfied
any lien or Encumbrance or paid any obligation or liability (absolute or
contingent), other than liabilities shown on the Sellers' balance sheet at
December 31, 1999 or current liabilities incurred in the ordinary course of
business; (c) mortgaged, pledged or subjected to lien, charge or other
encumbrance any Asset, tangible or intangible, other than the lien of current
personal or real property taxes not yet due and payable; (d) waived any rights
of substantial value, whether or not in the ordinary course of business; (e)
suffered any damage, destruction or loss, whether or not covered by insurance,
adversely affecting the physical Assets; (f) made or suffered any amendment or
termination of any material contract or any agreement which adversely affects
the Business; (g) received notice or had Knowledge of any labor trouble other
than routine grievance matters, none of which is material; (h) increased or
decreased any intercompany accounts with any related or affiliated entity other
than in the ordinary course of business; (i) committed to any capital
expenditure or execution of any lease with respect to the Business requiring
payment or payments in excess of $25,000 in the aggregate; (j) increased the
salaries or other compensation of any of the employees of the Business or made
any increase in other benefits to which such directors, officers or employees
may be entitled; (k) paid any bonuses or made any loans to any employees of the
Business or declared, set aside, made or paid any dividend or distribution in
respect of any Sellers' capital stock or purchased or redeemed such capital
stock; (l) sold, assigned, transferred or otherwise disposed of any of the
Assets or canceled any debts or claims, other than in the ordinary course of
business; (m) entered into any transactions not in the ordinary course of
business; (n) made any change in the accounting practices of any Seller with
respect to the Business; (o) entered into any agreement to do any of the
foregoing; or incurred any other event or condition which individually or in the
aggregate has materially adversely affected, or, to the Knowledge of any member
of the Seller Group, can be reasonably expected to materially adversely affect,
the Business.
4.15 Intangible Properties.
(a) The Intangible Property Rights listed on Schedule 4.5(v) to this
Agreement are valid and in full force and effect. All patents, copyrights and
trademarks have been duly registered or filed in the United States Patent and
Trademark Office, and such registrations have been properly maintained and
renewed in accordance with all applicable laws, rules and regulations.
(b) Each Seller has good title to and owns or exclusively holds all
rights to use, free and clear of all liens, claims, restrictions, and
infringements, the Intangible Property Rights. The Intangible Property Rights
are valid, subsisting, enforceable and in full force and effect. There is no
infringement or other adverse claim pending against any of the Intangible
Property Rights. No member of the Seller Group has received any notice or has
any Knowledge that any member is
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infringing upon the right or claimed right of any person under or with respect
to any of the Intangible Property Rights, nor do such members have Knowledge of
any valid basis for such a claim. No member of the Seller Group is obligated or
under any liability whatsoever to make any payments by way of royalties, fees or
otherwise with respect to third party patents, trademarks, copyrights or other
intellectual property.
(c) No member of the Seller Group has divulged, furnished to or made
accessible to any third party any confidential information about the Business,
unless disclosed under properly executed and binding confidentiality agreements.
4.16 Changes in Customers or Suppliers. Except for a possible reduction
in business with Honda, no member of the Seller Group has received any notice
that any material customer of the Business to whom any Seller has sold product
during the calendar year ended December 31, 1999 (a "Material Customer") or any
material supplier of the Business from whom any Seller has purchased goods or
services during the calendar year ended December 31, 1999 (a "Material
Supplier") intends to terminate or materially limit or reduce its business
relations with such Seller either currently or following the consummation of the
transactions contemplated by this Agreement. No Material Customer or Material
Supplier in the past twelve month period has terminated, materially reduced or,
to the Knowledge of any member of the Seller Group, threatened to terminate or
materially reduce its purchases from or provision of products or services to the
Business.
4.17 Disclosure. No member of the Seller Group has withheld from
Purchaser any material facts relating to the Assets or the operations, financial
condition or prospects of the Business. To the Knowledge of Sellers no
representation or warranty of any member of the Seller Group in this Agreement
or in any letter, certificate, schedule, statement or other document furnished
or to be furnished pursuant to this Agreement or in connection with the
transactions contemplated by this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to state any material fact
required to be stated herein or therein or necessary to make the statements
herein or therein not misleading.
4.18 No Brokers or Finders. No person, firm or corporation has or will
have, as a result of any act or omission of any member of the Seller Group, any
rights, interest or valid claim against Purchaser for any commission, fee or
other compensation as a finder or broker in connection with the transactions
contemplated by this Agreement.
4.19 ERISA.
(a) Except for the Employee Benefit Plans set forth on Schedule 4.19,
with respect to the Business, no member of the Seller Group of Affiliate thereof
maintains or contributes to any Employee Benefit Plan. For purposes of this
Section, "Employee Benefit Plan(s)" shall mean any plan, program, policy,
payroll practice, contract, or other arrangement providing for compensation,
fringe benefits or other employee benefits of any kind, currently maintained or
under which there is a current, future or contingent liability or obligation,
whether formal or information, funded or unfunded, and whether or not legally
binding, including, without limitation, any "employee benefit
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plan" as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA") that provides benefits to any current or former
employee, officer or director of the Business.
(b) Sellers have delivered to Purchaser true, correct and complete copies
of all Employee Benefit Plans, and summary plan descriptions thereof.
4.20 Environmental Matters.
(a) Except as set forth on Schedule 4.20, to the Knowledge of Sellers the
Seller Group has obtained with respect to the Business, all permits, licenses,
consents, approvals, and other authorizations that are required under federal,
state, local, or foreign statutes, laws, common law or equitable principles,
rules, regulations, orders, licenses, codes, plans, decrees, judgments,
injunctions, notices, or demand letters relating to pollution, protection of
workers, the community or the environment, including, but not limited to, those
laws relating to noise, or to Releases of Contaminants into the workplace, the
community, or the environment (including, without limitation, air, surface
water, ground water, land surface or subsurface strata), or otherwise relating
to the generation, manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of Contaminants ("Environmental
Laws"). For purposes of this Agreement, "Release" shall mean any release,
spilling, leaking, migrating, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, depositing, discharging, dispensing, or dumping
into the environment, and "Contaminant" shall mean any hazardous material,
hazardous substance, hazardous waste, pollutant, radioactive substance,
radioactive waste, toxic substance, toxic waste, medical waste, special waste,
petroleum or petroleum-derived substance or waste, asbestos, polychlorinated
biphenyls ("PCBs") or any hazardous or toxic constituent thereof and includes
any substance regulated under Environmental Law. Schedule 4.20 contains a
complete list of all permits, consents, licenses and authorizations required to
be obtained by Seller under the Environmental Laws.
(b) Except as set forth on Schedule 4.20, with respect to the Business, to
the Knowledge of Sellers the Seller Group is in compliance with all terms and
conditions of the required permits, consents, licenses, approvals, and
authorizations and are also in compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules, and timetables contained in Environmental Laws.
(c) Except as set forth on Schedule 4.20, with respect to the Business, to
the Knowledge of Sellers there is no civil, criminal, or administrative action,
suit, demand, claim, hearing, notice or demand letter, notice of violation,
investigation, or proceeding pending or, to the Knowledge of the members of the
Seller Group, threatened against any member of the Seller Group, the Assets, or
the operations and properties currently or previously owned, leased, or used by
the Business relating in any way to the Environmental Laws.
(d) Except as set forth on Schedule 4.20, with respect to the Business, to
the Knowledge of Sellers there are no past or present events, conditions,
circumstances, activities, practices,
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incidents, actions, or plans that interfere with or prevent compliance or
continued compliance with the Environmental Laws or which may give rise to any
liability (whether statutory or common law) or otherwise form the basis of any
claim, action, demand, suit, proceeding, hearing, notice of violation, study, or
investigation arising under any Environmental Law or otherwise based on or
related to the generation, manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling, or the Release into the
workplace, the community, or the environment of any Contaminant.
(e) No environmental lien has attached to any Asset.
4.21 Schedules for Disclosure Purposes Only. The parties agree that the
disclosures, as set forth on the Schedules to this Agreement are for information
purposes only and are not intended to expand the Assumed Liabilities or limit
the indemnification obligation of the Seller Group described in Sections
9.1(a)(ii)(ix).
V. Representations and Warranties of Purchasers.
As a material inducement to the members of the Seller Group to enter into
this Agreement and with the understanding that the members of the Seller Group
will be relying thereon in consummating the transactions contemplated by this
Agreement, Purchasers, jointly and severally, represent and warrant to the
members of the Seller Group as follows:
5.1 Organization and Standing. Each of Purchasers is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has all requisite corporate power to carry on its business as it
is now being conducted.
5.2 Corporate Authorization. Each of Purchasers has full corporate power
and authority to enter into this Agreement and purchase the Assets in accordance
with the terms of this Agreement. The execution, delivery and performance of
this Agreement by Purchasers and all other agreements or instruments to be
executed by Purchasers pursuant to this Agreement have been duly and effectively
authorized by the boards of directors of Purchasers and no other corporate
proceedings on the part of Purchasers are necessary to authorize this Agreement
or the transactions contemplated by this Agreement. This Agreement constitutes,
and such other agreements and instruments will constitute, the legal, valid and
binding obligations of Purchasers which are, or will be, enforceable against
Purchasers in accordance with their respective terms.
5.3 No Breaches; etc. None of Purchasers is in violation of, and the
execution, delivery and performance of this Agreement or the other agreements
contemplated by this Agreement and the consummation of the transactions
contemplated by this Agreement do not and will not result in any breach or
acceleration of, any of the terms or conditions of their respective articles of
incorporation or by-laws, or of any mortgage, bond, indenture, contract,
agreement, license or other
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instrument or obligation to which Purchasers or any one of them is a party. The
execution, delivery and performance of this Agreement or the other agreements
contemplated by this Agreement will not result in the violation of any statute,
regulation, judgment, writ, injunction or decree of any court, or governmental,
administrative or self-regulatory authority or any other third party.
5.4 No Brokers or Finders. No person, firm or corporation has or will have,
as a result of any act or omission of Purchasers any right, interest or valid
claim against any member of the Seller Group for any commission, fee or other
compensation as a finder or broker in connection with the transactions
contemplated by this Agreement.
VI. Post-Closing Agreements
6.1 Confidential Information. No member of the Seller Group will at any
time from and after the Closing Date divulge, furnish to or make accessible to
anyone (i) any knowledge or information with respect to confidential or secret
processes, inventions, discoveries, improvements, formulae, plans, material,
devices or ideas or know-how, whether patentable or not, with respect to any
confidential or secret aspects of the Business (including, without limitation,
customer lists, supplier lists and pricing arrangements with customers or
suppliers) and (ii) any Knowledge or information (financial or other) relating
to the matters described in Section 3.2 (collectively, "Confidential
Information"). Any portion of such information and only such portion, which (i)
at or prior to the time of disclosure was generally available to the public
through no breach of this covenant, (ii) was available to the public on a
nonconfidential basis prior to its disclosure, or (iii) is required to be
disclosed by law or by order of a court of competent jurisdiction, shall not be
deemed Confidential Information for purposes of this Agreement, and the
undertakings in this covenant with respect to Confidential Information shall not
apply thereto.
6.2 Further Assurances. From and after the Closing Date, from time to time,
at Purchasers' request and without further consideration, each member of the
Seller Group will execute and deliver such other instruments and take such other
action as Purchasers may reasonably request to more effectively convey, transfer
to and vest in Purchasers, and to put Purchasers in possession and operating
control of all or any part of the Assets.
6.3 Access to Books and Records.
(a) Shareholder and Purchasers agree that they shall preserve and keep all
books and records relating to the Business for a period of at least seven (7)
years from the Closing Date. During such period, duly authorized representatives
of the party requesting such information shall, upon reasonable notice, have
access to such information during normal business hours at the executive office
of the party of whom the information is being requested to examine, inspect and
copy (at its expense) such books and records for any proper business purpose.
(b) Shareholder and Purchasers shall provide each other with such
cooperation and information as either of them reasonably may request of the
other in filing any tax return,
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determining a liability for Taxes or a right to a refund of Taxes, or in
conducting any audit or other proceeding in respect to Taxes. Such cooperation
and information shall include providing copies of all relevant tax returns,
documents and records. The costs incurred by a party in providing such
cooperation and information, including the cost of providing copies, shall be
paid by the requesting party.
(c) If in order to properly prepare documents required to be filed with any
governmental authority or a party's financial statements, it is necessary that a
party to this Agreement (or Affiliate of such party) be furnished with
additional information relating to the Business and such information is in the
possession of another party hereto, such party agrees to use its best efforts to
timely furnish the information to the other party, at the cost and expense of
the party being furnished such information.
6.4 Collection of Excluded Accounts Receivables. The Seller Group agrees to
use commercially reasonable standards in collecting the Excluded Accounts
Receivable. Carlisle Tire agrees to cooperate with Sellers in the collection of
the Excluded Accounts Receivables.
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VII. Employee Matters
7.1 Lease of Employees.
(a) Commencing on the Closing Date and continuing until June 15, 2000
unless earlier terminated by Purchasers in accordance with Section 7.1(b) (the
"Transition Period"), Sellers shall continue the at will employment of all
"actively employed" employees of the Business listed on Schedule 4.9(a) and
shall cause Titan Wheel Corporation of South Carolina ("Titan South Carolina")
to continue the at will employment of all "actively employed" employees of the
Greenwood, South Carolina facility (the "Greenwood Facility") (subject to any
employee's right to resign) and Sellers and Titan South Carolina (collectively,
"Lessors"), each as an independent contractor, shall lease those employees (the
"Leased Employees") to Purchasers to continue to render the services rendered to
the Business and the Greenwood Facility immediately prior to the Closing Date.
During the Transition Period, the Leased Employees shall remain employed by the
Lessors on the same terms and conditions existing immediately prior to the
Closing Date and shall continue to participate in the Lessors' benefit plans.
Lessors shall invoice and Purchasers shall pay on a monthly basis an amount
equal to (i) Lessors' total, direct out-of-pocket cost for wages, salary and
prorated commissions for such employees, (ii) an amount equal to Lessors'
obligations in respect of insurance premiums for group insurance policies and
worker's compensation, 401(k) contributions, Medicare payments and other benefit
plan liabilities (to the extent such plans have been identified on Schedule
4.19) and (iii) Lessors' actual payments in respect of FICA and FUTA for such
employees.
(b) The Purchasers shall have the right to terminate the lease arrangement
described in Section 7.1(a) prior to June 15, 2000 by providing Sellers with ten
(10) days prior written notice of termination.
(c) On the last day of the Transition Period (the "Transition Date"),
Carlisle shall offer employment on an at-will basis to at least seventy-five
percent (75%) of all "actively employed" employees of the Business and the
Greenwood Facility on the Transition Date, calculated on a facility-by-facility
basis. All employees who accept Carlisle Tire's offer of employment are
hereinafter collectively referred to as the "Transferred Employees." The terms,
including benefits, of each offer shall be determined by Carlisle Tire. Nothing
in this Agreement shall constitute a guarantee that any Transferred Employee
shall be entitled to remain in the employment of Carlisle Tire for a specified
period of time. Each member of the Seller Group shall cooperate and use such
member's best efforts to assist Carlisle Tire in obtaining the continued
employment of the Transferred Employees.
(d) Each member of the Seller Group shall remain responsible and liable for
any and all obligations including, without limitation, compliance (if required)
with the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
("COBRA") and the Workers' Adjustment and Retraining Notification Act of 1998,
as amended ("WARN Act"), and all applicable state laws relating to the
termination of employment of any employee of the Seller Group or its Affiliates
who (i) is not offered employment by Purchasers or (ii) is offered employment by
Purchasers but refuses to accept such employment. In addition, with respect to
the Transferred Employees, each member
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of the Seller Group shall remain responsible for all obligations accruing
through and including the Transition Date (subject only to Purchasers
reimbursement obligation described in Section 7.1(a)).
VIII. Closing
8.1 Time and Place. The closing (the "Closing") shall take place
concurrently with the execution of this Agreement at a mutually agreeable
location at 10:00 A.M. local time on April 14, 2000(the "Closing Date").
8.2 Seller Group Deliveries Concurrently with the execution of this
Agreement, the members of the Seller Group shall deliver to Purchasers' physical
possession of the tangible Assets and shall execute (where applicable in
recordable form) and/or deliver the following:
(a) Certificates of good standing for each member of the Seller Group,
issued not earlier than sixty (60) days prior to the Closing Date by the
Secretary of State for the jurisdiction of such member's incorporation.
(b) An incumbency and specimen signature certificate with respect to
the officers of each member of the Seller Group executing this Agreement and any
ancillary agreement.
(c) Certified copy of resolutions of each Seller's board of directors
and Shareholder's board of directors, authorizing the execution, delivery and
performance of this Agreement and any ancillary agreement.
(d) A bill of sale, assignment and assumption agreement conveying the
Assets to Purchaser and, with respect to the Intangible Property Rights,
separate assignments in the form required by the applicable governmental
agencies with whom the assignment must be filed.
(e) UCC1, UCC2, Federal and State tax lien searches with respect to
each Seller for the states and counties in which the Business is conducted.
(f) Releases of all liens and other Encumbrances held in respect of any
of the Assets, including UCC-3 partial release statements providing for the
complete release of all Encumbrances in respect of the Assets to which all prior
financing statements relate.
(g) A general warranty deed and a certificate in compliance with the
Foreign Investment in Real Property Tax Act ("FIRPTA") certifying that no member
of the Seller Group is a person or entity subject to withholding under FIRPTA
with respect to each parcel of Real Estate, together with any necessary transfer
tax declarations.
(h) Consents for the assignments of all Assigned Contracts and
Government Authorizations listed on Schedule 4.5(vii)(vi) or alternate
arrangements with respect thereto.
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(i) Certificates of title with respect to all vehicles included among
the Assets or alternate arrangements with respect thereto.
(j) The written opinion of Bodman, Longley & Dahling LLP, counsel
to the Seller Group, in a form reasonably acceptable to Purchasers.
(k) Commitment from [insert name of title company], dated the Closing
Date, to issue an ALTA Owner's Title Insurance Policy in respect of each parcel
of Real Estate.
(l) All other documents reasonably required from the Seller Group to
consummate the transactions contemplated hereby.
8.3 Purchasers' Deliveries Concurrently with the execution of this
Agreement, Purchasers shall execute and/or deliver to the Seller Group the
following:
(a) The $94,063,000 of the Purchase Price described in Section 3.1 of
this Agreement.
(b) Certificates of good standing for Purchasers, issued not earlier
than thirty (30) days prior to the Closing Date by the Secretary of State of
Delaware.
(c) An incumbency and specimen certificate with respect to the officers
of Purchasers executing this Agreement and any ancillary agreement.
(d) A certified copy of resolutions of each Purchasers' boards of
directors authorizing the execution, delivery and performance of this Agreement
and any ancillary agreement.
(e) A bill of sale, assignment and assumption agreement executed by
Purchasers providing for the assumption of the Assumed Liabilities.
(f) The written opinion of Steven J. Ford, counsel to Purchasers, in a
form reasonably acceptable to the Seller Group.
(g) All other documents required from Purchasers to consummate the
transactions contemplated hereby.
8.4 Joint Deliveries Concurrently with the execution of this Agreement, the
parties hereto shall execute and deliver the following:
(a) The License Agreement.
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(b) A Supply Agreement between Shareholder and Carlisle Tire in the
form attached as Exhibit C.
(c) A Transition Services Agreement between Shareholder and Carlisle
Tire in the form attached as Exhibit D.
(d) A Noncompetition Agreement between Shareholder and Carlisle in the
form attached as Exhibit E.
(e) The Real Property Lease.
(f) Section 1031 Exchange Acknowledgements.
IX. Survival of Representations and Warranties; Indemnification
9.1 Seller Group's Agreement to Indemnify
(a) Subject to Section 9.5(a), each member of the Seller Group, jointly and
severally, will fully indemnify and hold harmless Purchasers, their respective
officers, directors, employees and Affiliates against and in respect of any and
all liabilities, losses, damages, deficiencies, costs, or expenses (including,
without limitation, the reasonable fees and expenses of investigation and
counsel) (collectively, "Losses") resulting from, relating to or arising out of:
(i) any misrepresentation or breach of any representation or warranty
by any member of the Seller Group made in this Agreement (including,
without limitation, the Schedules and Exhibits to this Agreement and the
certificates delivered under this Agreement);
(ii) any claims, proceedings, actions or investigations made or
brought by third parties based on or arising from acts, omissions or states
of fact relating to any member of the Seller Group, the Assets or the
Business and occurring or in existence prior to the Closing Date;
(iii) the failure of any member of the Seller Group to pay, perform or
discharge when due any of the Retained Liabilities or any covenant or
agreement contained in this Agreement;
(iv) any liability or obligations resulting from, relating to, or
arising from a breach of warranty or similar claim relating to goods, or
products which have been manufactured by Sellers on or prior to the Closing
Date;
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(v) any liability or obligation resulting from, relating to, or
arising out of any product liability or similar claim relating to any
goods, or products which have been manufactured by Sellers on or prior to
the Closing Date;
(vi) the non-compliance with any Bulk Sales Law;
(vii) the failure of any member of the Seller Group to timely pay any
Taxes relating to or resulting from the operation of the Business for any
and all periods through and including the Closing Date;
(viii) any environmental claim made by any person or entity (including,
but not limited to, any claim arising out of, in any way relating to, or
resulting from, directly or indirectly, (A) a Release or threatened Release
of a Contaminant at any location, (B) a violation or alleged violation of
or noncompliance with or alleged noncompliance with any Environmental Law,
(C) the presence of any Contaminant at any location, or (D) any other loss
of or damage or injury to (or threatened loss of or damage or injury to)
any property, person or the environment) to the extent arising from events,
circumstances, or conditions occurring, or existing on or prior to the
Closing Date relating to the Assets or Business, whether disclosed or
undisclosed; or
(ix) any liability or obligation of the Seller Group arising under
Article VII Employee Matters of this Agreement.
(b) With respect to indemnification pursuant to Section 9.1(a)(i), no
claim may be made against the Seller Group in respect of any breach of a
representation or warranty unless such claim is made within two (2) years of the
date hereof.
9.2 Intentionally Omitted.
9.3 Purchasers' Agreement to Indemnify.
(a) Subject to Section 9.5(b), Purchasers, jointly and severally, will
fully indemnify and hold harmless each member of the Seller Group, their
officers, directors, shareholders, employees and Affiliates against and in
respect of any and all Losses resulting from, relating to or arising out of:
(i) any misrepresentation or breach of any representation, warranty,
covenant or agreement by Purchasers made in this Agreement (including,
without limitation, the Schedules and Exhibits to this Agreement and the
certificates delivered under this Agreement) or as provided in this
Agreement;
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(ii) any claims, proceedings, actions or investigations made or brought by
third parties based on or arising from acts, omissions or states of fact
relating to any of the Purchasers, the Assets or the Business and occurring
after the Closing Date;
(iii) the failure by Purchasers to pay, perform or discharge when due any
Assumed Liability or any covenant, agreement or obligation contained in this
Agreement;
(iv) any liability or obligations resulting from, relating to, or arising
from a breach of warranty or similar claim relating to goods or products which
have been manufactured by Purchasers after the Closing Date;
(v) any liability or obligation resulting from, relating to, or arising out
of any product liability or similar claim relating to any goods or products
which have been manufactured by Purchasers after the Closing Date;
(vi) the failure of any Purchaser to timely pay any Taxes relating to or
resulting from the operation of the Business for any and all periods after the
Closing Date;
(vii) any environmental claim made by any person or entity (including, but
not limited to, any claim arising out of, in any way relating to, or resulting
from, directly or indirectly, (A) a Release or threatened Release of a
Contaminant at any location, (B) a violation or alleged violation of or
noncompliance with or alleged noncompliance with any Environmental Law, (C) the
presence of any Contaminant at any location, or (D) any other loss of or damage
or injury to (or threatened loss of or damage or injury to) any property, person
or the environment) to the extent arising from events, circumstances, or
conditions occurring after the Closing Date relating to the Assets or Business;
or
(viii) Any liability or obligation of Purchasers under Article VII -
Employee Matters of this Agreement.
(b) With respect to indemnification pursuant to Section 9.3(a)(i), no
claim may be made against the Purchasers in respect of any breach of a represen-
tation or warranty unless such claim is made within two (2) years of the date
hereof.
9.4 Procedure for Indemnification.
(a) Any person entitled to indemnification under this Agreement shall (i)
give prompt notice to the indemnifying party of any third party claim with
respect to which it seeks indemnification and (ii) permit such indemnifying
party to assume the defense of such claim with counsel reasonably satisfactory
to the indemnified party; provided, that any person entitled to
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indemnification under this Agreement shall have the right to employ separate
counsel and to participate in the defense of such claim, but the fees and
expenses of such counsel shall be at the expense of such person unless (A) the
indemnifying party has agreed to pay such fees or expenses, (B) the indemnifying
party shall have failed to assume the defense of such claim and employ counsel
reasonably satisfactory to such person or (C) in the reasonable judgment of any
such person, based upon advice of its counsel, conflict of interest may exist
between such person and the indemnifying party with respect to such claims (in
which case, if the person notifies the indemnifying party in writing that such
person elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such claim on behalf of such person). If such defense is not assumed by the
indemnifying party, the indemnifying party will not be subject to any liability
for any settlement made without its consent (but such consent will not be
unreasonably withheld, delayed or conditioned). An indemnifying party who is not
entitled to, or elects not to, assume the defense of a claim shall not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless in the
reasonable judgment of any indemnified party and any other of such indemnified
parties with respect to such claim, there may be legal defenses available to one
which are different from or additional to those available to the other, in which
event the indemnifying party shall be obligated to pay the fees and expenses of
such additional counsel or counsels. No indemnifying party shall, except with
the consent of each indemnified party, consent to any settlement of a claim
which includes any material terms other than the payment of money, the
unconditional release of the indemnified parties from all liability in respect
of such claim and the requirement that the settlement and its terms be kept
confidential. The indemnified party shall not unreasonably withhold its consent
to any proposed settlement requiring its consent.
9.5 Indemnification Limits.
(a) Notwithstanding anything herein to the contrary, the Seller Group shall
have no liability for indemnification with respect to the matters described in
Section 9.1(a)(i): (A) unless and until the aggregate gross amount of all Losses
for which indemnification is sought from the Seller Group under Section
9.1(a)(i) exceeds $100,000 (the "Deductible"); or (B) to the extent that the
amount of all payments made by the Seller Group under Section 9.1(a)(i) hereon
on account of Losses would exceed the Purchase Price (the "Cap"). The parties
agree and acknowledge that indemnification claims with respect to matters
described in Section 9.1(a)(ii) - (ix) shall not be subject to the Deductible,
the Cap or any time limitation.
(b) The Buyer shall have no liability for indemnification with respect to
the matters described in Section 9.3(a)(i): (A) unless and until the aggregate
gross amount of all Losses for which indemnification is sought from the Buyer
under Section 9.3(a)(i) exceeds the Deductible; or (B) to the extent that the
amount of all payments made by the Buyer under Section 9.3(a)(i) on account of
Losses would exceed the Cap. (the "Cap"). The parties agree and acknowledge that
indemnification claims with respect to matters described in Section 9.3(a)(ii)
- -(viii) shall not be subject to the Deductible, the Cap or any time limitation.
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X. Miscellaneous
10.1 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of and be enforceable against the parties and their respective
successors and permitted assigns.
10.2 Governing Law. This Agreement shall in all respects be governed
by, and enforced and interpreted in accordance with the laws of the State of New
York without giving effect to choice of law principles.
10.3 Notices. All notices, consents, requests, demands, instructions or
other communications provided for in this Agreement shall be in writing and
shall be deemed validly given, made and served if delivered personally, or sent
by certified or registered mail, postage prepaid, overnight courier or by
telephone facsimile, pending the designation of another address, addressed as
set forth below, and shall be deemed delivered (i) when actually delivered, if
delivered personally or by facsimile, (ii) one (1) business day after being sent
by courier or overnight delivery service, or (iii) five (5) business days after
being sent by mail:
If to Seller or Maurice M. Taylor, Jr.
any member of the Titan Wheel International Inc.
Seller Group: 2701 Spruce Street
Quincy, IL 62301
Fax: 217-228-3166
With a copy to: Cheri T. Holley
General Counsel
Titan Wheel International Inc.
2701 Spruce Street
Quincy, IL 62301
Fax: 217-228-3040
With a second copy to: Robert J. Diehl, Jr.
Bodman, Longley & Dahling LLP
34th Floor, 100 Renaissance Center
Detroit, MI 48243
Fax: 313-393-7579
If to Purchasers: Carlisle Tire & Wheel Company
23 Windham Boulevard
Aiken, South Carolina 29805-9348
Attn: Barry Littrell, President
Fax: 803-643-2919
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With a copy to: Carlisle Companies Incorporated
250 South Clinton Street, Suite 201
Syracuse, New York 13202-1258
Attn: Secretary and General Counsel
Fax No. 315-474-2008
10.4 Entire Agreement and Counterparts. This Agreement and the attached
Exhibits and Schedules evidence the entire agreement among the members of the
Seller Group and Purchasers relating to the purchase and sale of the Assets and
supersede in all respects any and all prior oral or written agreements or
understandings.
10.5 Amendments. This Agreement shall be amended or modified only by
written instrument signed by the members of the Seller Group and Purchasers.
10.6 Counterparts. This Agreement may be executed in counterparts.
10.7 No Third-Party Beneficiaries. This Agreement is for the sole
benefit the parties. There are no third-party beneficiaries. Nothing expressed
or implied shall give or be construed to give any person not a party any legal
or equitable rights under this Agreement.
10.8 Headings. Section and article headings used in this Agreement have
no legal significance and are used solely for convenience of reference.
10.9 Expenses. Each party shall pay for its own legal, accounting and
other similar expenses incurred in connection with the transactions contemplated
by this Agreement, whether or not such transactions are consummated.
10.10 Bulk Sales Laws. Purchasers and the members of the Seller Group
waive compliance with the provisions of any bulk sales laws, including Article 6
of the Uniform Commercial Code as it may be in effect in any applicable
jurisdiction ("Bulk Sales Laws").
10.11 Taxes. Any sales, use or excise taxes payable in connection with
these transactions shall be paid equally by the Seller Group and Purchasers.
Each party agrees to execute all of the documents and to take such other action
or corporate proceedings as may be necessary or desirable to structure the
transaction which is the subject of this Agreement as an "exempt occasional
sale" under applicable tax law, to obtain the relevant tax exemption
certificates and to provide copies of such certificates to the other parties
hereto. All transfer taxes on the transfer of any Real Estate shall be paid
equally by the Seller Group and the Purchasers.
10.12 Severability. Each and every provision of this Agreement shall be
deemed valid, legal and enforceable in all jurisdictions to the fullest extent
possible. Any provision of this Agreement that is determined to be invalid,
illegal or unenforceable in any jurisdiction shall, as to that jurisdiction, be
adjusted and reformed rather than voided, if possible, in order to achieve the
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intent of the parties. Any provision of this Agreement that is determined to be
invalid, illegal or unenforceable in any jurisdiction which cannot be adjusted
and reformed shall for the purposes of that jurisdiction, be voided. Any
adjustment, reformation or voidance of any provision of this Agreement shall
only be effective in the jurisdiction requiring such adjustment or voidance,
without affecting in any way the remaining provisions of this Agreement in such
jurisdiction or adjusting, reforming, voiding or rendering that provision or any
other provision of this Agreement invalid, illegal or unenforceable in any other
jurisdiction.
10.13 Like-Kind Exchange. Seller Group, or Seller Group's assigns,
shall have the right to exchange all or a portion of the real property and/or
equipment for other property of like-kind and qualifying use within the meaning
of Section 1031 of the Internal Revenue code of 1986 as amended. Seller Group
reserves the right to assign its right, title and interest, but not Seller
Group's obligations, under this Agreement for such purpose, to a qualified
intermediary on or before the Closing Date, and Purchasers agree to cooperate
reasonably with Seller Group in the like-kind exchange.
10.14 Definitions The following terms shall have the respective
meanings specified in the indicated sections of this Agreement:
Term Agreement Section
---- -----------------
Affiliate 10.5(c)
Allocation 3.2(a)
Applicable Operations Exhibit C
Assets 1.1
Assigned Contracts 1.1(d)
Assumed Liabilities 2.1(a)
Bulk Sales Law 10.10
Business Recitals
Cap 9.5(a)
COBRA 7.1(d)
Code 3.2(a)
Closing 8.1
Closing Date 8.1
Confidential Information 6.1
Contaminant 4.20(a)
Deductible 9.5(a)
Employee Benefit Plans 4.19(a)
ERISA 4.19(a)
Encumbrances 4.3
Environmental Laws 4.20(a)
Excluded Accounts Receivable 1.3(b)
Excluded Assets 1.3
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FIRPTA 8.2(g)
GAAP 4.4
Government Authorizations 4.5(vi)
Greenwood Lease 7.1(a)
Intangible Property Rights 1.1(g)
Knowledge 10.15(a)
Leased Employees 7.1(a)
License Agreement 1.3(d)
Losses 9.1(a)
Management Preamble
Material Customer 4.16
Material Supplier 4.16
1999 EBIT 4.4
Nonassignable Rights 2.3
Other Contracts 1.1(d)
PCBs 4.20(a)
Personal Property Leases 1.1(c)
Purchase Price 3.1(a)
Purchaser Preamble
Real Estate 1.1(b)
Real Property Lease Recitals
Release 4.20(a)
Retained Liabilities 2.2
Sellers or Seller Group Preamble
Shareholder Preamble
Tax or Taxes 10.15(b)
Transferred Employees 7.1(c)
Transition Date 7.1(c)
Transition Period 7.1(a)
WARN Act 7.1(d)
10.15 Definitions.
(a) "To the Knowledge of" or similar language shall mean the knowledge,
actual or constructive, after reasonable inquiry, of any person who, on the date
hereof is an officer or director of any member of the Seller Group.
(b) The term "Taxes" or "Tax" shall mean all taxes, charges, fees, levies,
penalties or other assessments, including, without limitation, net income,
capital gain, gross income, gross receipts, ad valorem, excise, property,
payroll, license, withholding, employment, severance, occupation, premium,
customs duties, stamp, windfall profits, sales, use, and franchise taxes,
imposed by the United States, or any state, county, local or foreign government
or a subdivision or agency thereof, and including any interest, penalties, or
additions attributable thereto.
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(c) "Affiliate" with respect to any specified Person, any other Person,
directly or indirectly Controlling or Controlled by or under direct or indirect
common control with such specified Person.
Signature page to follow
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IN WITNESS WHEREOF, each of the parties hereto have executed this Agreement
as of the date set forth in the first paragraph.
CARLISLE COMPANIES INCORPORATED
By: /s/ Michael Roberson
---------------------
Name
Title: Assistant General Counsel
CARLISLE TIRE & WHEEL COMPANY
By: /s/ Michael Roberson
---------------------
Name
Title: Assistant Secretary
CARLISLE MANAGEMENT COMPANY
By: /s/ Michael Roberson
---------------------
Name
Title: Assistant Secretary
TITAN TIRE CORPORATION OF TENNESSEE
By: /s/ Maurice M. Taylor, Jr.
---------------------------
Name
Title: President
TITAN WHEEL CORPORATION OF WISCONSIN
By: /s/ Maurice M. Taylor, Jr.
---------------------------
Name
Title: President
TITAN INTERNATIONAL, INC.
By: /s/ Maurice M. Taylor, Jr.
---------------------------
Name
Title: President