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EXHIBIT 2.2
EXECUTION COPY
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STOCK PURCHASE AGREEMENT
BY AND AMONG
NEWELL RUBBERMAID INC.,
ANCHOR HOCKING CORPORATION,
MENAGERIE CORPORATION,
NEWELL OPERATING COMPANY
AND
LIBBEY INC.
DATED AS OF JUNE 17, 2001
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TABLE OF CONTENTS
PAGE
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Article I. PURCHASE AND SALE......................................................................................2
Section 1.1 Purchase and Sale of Shares............................................................2
Section 1.2 Closing Payment........................................................................2
Section 1.3 Estimated Closing Balance Sheet........................................................2
Section 1.4 Post-Closing Adjustments...............................................................2
Section 1.5 Closing................................................................................6
Section 1.6 Closing Deliveries by Seller...........................................................7
Section 1.7 Closing Deliveries by Purchaser........................................................8
Article II. REPRESENTATIONS AND WARRANTIES OF SELLER AND PARENT...................................................8
Section 2.1 Organization...........................................................................8
Section 2.2 Authority; Enforceability..............................................................9
Section 2.3 Non-Contravention......................................................................9
Section 2.4 Governmental Consents..................................................................9
Section 2.5 Capital Stock of Newco and AHCGC......................................................10
Section 2.6 Subsidiaries..........................................................................10
Section 2.7 Financial Information.................................................................10
Section 2.8 No Undisclosed Liabilities............................................................12
Section 2.9 Absence of Certain Changes or Events..................................................12
Section 2.10 Contracts.............................................................................12
Section 2.11 Compliance with Law...................................................................14
Section 2.12 Permits...............................................................................14
Section 2.13 Litigation............................................................................15
Section 2.14 Employee Benefits.....................................................................15
Section 2.15 Properties............................................................................17
Section 2.16 Intellectual Property.................................................................19
Section 2.17 Environmental Matters.................................................................21
Section 2.18 Intercompany Contracts, Transactions and Services; Outside Assets; Shared
Assets................................................................................23
Section 2.19 Taxes.................................................................................24
Section 2.20 Newco's Operations....................................................................25
Section 2.21 Brokers...............................................................................25
Section 2.22 Title to Assets.......................................................................25
Section 2.23 Tangible Assets.......................................................................26
Section 2.24 Solvency of Seller....................................................................26
Section 2.25 Accounts Receivable...................................................................26
Section 2.26 Insider Interests.....................................................................27
Section 2.27 Investments...........................................................................27
Section 2.28 Labor and Employees...................................................................27
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Article III. REPRESENTATIONS AND WARRANTIES OF PURCHASER.........................................................28
Section 3.1 Organization..........................................................................28
Section 3.2 Authority; Enforceability.............................................................28
Section 3.3 Non-Contravention.....................................................................28
Section 3.4 Governmental Consents.................................................................28
Section 3.5 Purchase for Investment...............................................................29
Section 3.6 Financial Capability..................................................................29
Section 3.7 Brokers...............................................................................29
Article IV. ADDITIONAL AGREEMENTS................................................................................29
Section 4.1 Conduct of Business Prior to the Closing..............................................29
Section 4.2 Access to Information.................................................................32
Section 4.3 Further Assurances; Monthly Meetings..................................................35
Section 4.4 Hart-Scott-Rodino Act Filings, Cooperation, Control...................................35
Section 4.5 Notice of Development.................................................................38
Section 4.6 Insurance; Risk of Loss...............................................................38
Section 4.7 Surveys...............................................................................39
Section 4.8 Corporate Names.......................................................................39
Section 4.9 Domain Names/Internet Sites...........................................................40
Section 4.10 Intercompany Accounts, Agreements and Transactions....................................41
Section 4.11 Resignations..........................................................................41
Section 4.12 Books and Records.....................................................................41
Section 4.13 Labor Negotiations....................................................................41
Section 4.14 Covenant Not to Compete...............................................................42
Section 4.15 No Solicitation.......................................................................45
Section 4.16 Asset Transfer Transactions...........................................................45
Section 4.17 Canadian Asset Acquisition............................................................48
Section 4.18 Financial Statements..................................................................48
Section 4.19 Auditors Consent and Cooperation......................................................49
Section 4.20 Financing.............................................................................50
Section 4.21 Consents, Notices and Approvals Generally.............................................51
Section 4.22 Company Expenses......................................................................52
Section 4.23 Release...............................................................................53
Section 4.24 Confidentiality.......................................................................53
Section 4.25 Release of Liens......................................................................54
Section 4.26 1995 Restructuring....................................................................54
Section 4.27 Capital Expenditures in 2002..........................................................55
Section 4.28 Release of Guarantors.................................................................55
Section 4.29 Pre-Closing Disclosures...............................................................55
Section 4.30 Material Contracts Prior To Closing. ................................................56
Section 4.31 Kitchen Essentials Trademark License. ...............................................56
Section 4.32 Purchase Orders. ....................................................................56
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Article V. EMPLOYEE MATTERS......................................................................................57
Section 5.1 Company Benefit Plans.................................................................57
Section 5.2 Defined Benefit Plans.................................................................57
Section 5.3 Defined Contribution Plans............................................................60
Section 5.4 Retiree Health........................................................................60
Section 5.5 Welfare Plans.........................................................................60
Section 5.6 Compensation and Bonus Plans..........................................................61
Section 5.7 Purchaser's Plans.....................................................................61
Section 5.8 Severance.............................................................................62
Section 5.9 Cooperation...........................................................................62
Section 5.10 No Third Party Beneficiaries..........................................................62
Article VI. TAX MATTERS..........................................................................................62
Section 6.1 Section 338(h)(10) Election...........................................................62
Section 6.2 Preparation of Tax Returns and Filings................................................63
Section 6.3 Filing of Amended Tax Returns.........................................................64
Section 6.4 Tax Refunds...........................................................................64
Section 6.5 Carrybacks............................................................................65
Section 6.6 Cooperation in Tax Matters............................................................65
Section 6.7 Transfer Taxes........................................................................66
Section 6.8 Treatment of Indemnification Payments.................................................66
Article VII. CONDITIONS TO CLOSING...............................................................................66
Section 7.1 Conditions to Obligations of Seller...................................................66
Section 7.2 Conditions to Obligations of Purchaser................................................67
Article VIII. INDEMNIFICATION....................................................................................69
Section 8.1 Survival..............................................................................69
Section 8.2 Indemnification other than for Tax Matters............................................70
Section 8.3 Limits on Indemnification.............................................................77
Section 8.4 Tax Indemnification...................................................................79
Section 8.5 Exclusivity of Indemnification Remedy.................................................81
Article IX. TERMINATION AND WAIVER...............................................................................81
Section 9.1 Termination...........................................................................81
Section 9.2 Effect of Termination.................................................................83
Article X. DEFINITIONS...........................................................................................83
Section 10.1 Certain Defined Terms.................................................................83
Section 10.2 Other Defined Terms...................................................................92
Section 10.3 Other Interpretive Provisions.........................................................95
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Article XI. GENERAL PROVISIONS...................................................................................96
Section 11.1 Expenses..............................................................................96
Section 11.2 Notices...............................................................................96
Section 11.3 Public Announcements..................................................................97
Section 11.4 Headings; Table of Contents...........................................................97
Section 11.5 Severability..........................................................................97
Section 11.6 Entire Agreement......................................................................98
Section 11.7 Assignment............................................................................98
Section 11.8 No Third Party Beneficiaries..........................................................98
Section 11.9 Amendment.............................................................................98
Section 11.10 Waiver................................................................................98
Section 11.11 Governing Law; Jurisdiction...........................................................99
Section 11.12 Waiver of Jury Trial..................................................................99
Section 11.13 Disclosure Schedule...................................................................99
Section 11.14 Specific Performance.................................................................100
Section 11.15 Counterparts.........................................................................100
Section 11.16 Currency.............................................................................100
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SCHEDULES
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SCHEDULE TITLE
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Schedule 1.3(b) Net Working Capital Schedule (Target Net Working
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Schedule 3.3 Non-contravention
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Schedule 3.4 Governmental Consents
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Schedule 7.2(c)(ii) Required Consents
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EXHIBITS
EXHIBIT TITLE
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Exhibit 3.6 Commitment
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Exhibit 4.14(b) Post-closing Exempt Employees List
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Exhibit 4.14(d)(i) Non-competition Matters
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Exhibit 4.14(e) Map of the Western Hemisphere
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Exhibit 4.15(b) Pre-closing Exempt Employees List
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Exhibit 4.32 Specified Purchaser Order Terms
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Exhibit 7.1(f) Form of Opinion of Latham & Watkins
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Exhibit 7.2(h) Form of Opinion of Schiff Hardin & Waite
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Exhibit 8.2(a)(vi) Indemnification Matters
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Exhibit 8.2(a)(xv) Other Indemnification Matters
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Exhibit 10.1-K Knowledge List
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Exhibit 10.1-T Transition Services Agreement
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STOCK PURCHASE AGREEMENT dated as of June 17, 2001 is by and
among Anchor Hocking Corporation, a Delaware corporation ("SELLER"), Newell
Rubbermaid Inc., a Delaware corporation ("PARENT"), Newell Operating Company, a
Delaware corporation ("OPERATING COMPANY"), Menagerie Corporation, a Delaware
corporation ("NEWCO", together with Seller and AHCGC, collectively the
"COMPANIES" and each individually a "COMPANY") and Libbey Inc., a Delaware
corporation ("PURCHASER").
WITNESSETH:
WHEREAS, Seller owns all outstanding shares of capital stock
of Newco (the "SHARES") and all of the outstanding shares of capital stock of
AHCGC;
WHEREAS, on or prior to the Closing and in accordance with the
terms and conditions of this Agreement, (i) Seller shall, and Parent shall cause
Seller to convey to Newco and Newco shall accept all right, title and interest
in and to the Seller Assets (including all of the issued and outstanding capital
stock of AHCGC) and Newco shall assume the Assumed Seller Liabilities and (ii)
Seller shall and Parent and Seller shall cause their Affiliates to convey to
Newco or AHCGC, as designated by Purchaser, all right, title and interest in and
to the Outside Assets (together with the transactions described in SECTION 4.16
of this Agreement, the "ASSET TRANSFER TRANSACTIONS");
WHEREAS, on or prior to the Closing and in accordance with the
terms and conditions of this Agreement, Seller shall complete the transfer and
conveyance of all rights, title and interest in the assets that were to be
transferred to AHCGC in the 1995 Restructuring Transaction (together with the
transactions described in SECTION 4.26 of this Agreement, the "ASSET DROP-DOWN
TRANSFERS");
WHEREAS, on the Closing, Seller desires to sell and Purchaser
desires to purchase, the Shares, upon the terms and subject to the conditions
set forth in this Agreement (the "SHARE PURCHASE"); and
WHEREAS, concurrently with the execution and delivery of this
Agreement, Newell Industries Canada Inc., an Ontario corporation ("CANADIAN
SELLER"), Purchaser and Parent have entered into the Canadian Purchase Agreement
with the Canadian Purchaser pursuant to which all right, title and interest in
and to the Canadian Assets and the Canadian Liabilities will be transferred to
the Canadian Purchaser (the "CANADIAN ASSET ACQUISITION").
NOW, THEREFORE, in consideration of the respective
representations, warranties, covenants, agreements and premises contained herein
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
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ARTICLE I
PURCHASE AND SALE
SECTION 1.1 PURCHASE AND SALE OF SHARES.
(a) Upon the terms and subject to the conditions of this
Agreement, at the Closing, Parent shall cause Seller to and Seller shall sell,
transfer, convey, assign and deliver to Purchaser, free and clear of any
Encumbrance and Purchaser shall purchase, acquire and accept from Seller, all of
Seller's right, title and interest in and to all of the Shares.
(b) Upon the terms and subject to the conditions of this
Agreement, in consideration for the transfer of all of the Shares, Purchaser
shall, on the Closing Date, pay to Seller the Closing Payment pursuant to
SECTION 1.2 hereof, as adjusted pursuant to SECTION 1.3 hereof.
SECTION 1.2 CLOSING PAYMENT. On the Closing Date, Purchaser
shall pay to Seller an aggregate amount of Three Hundred Thirty Million Dollars
(USD $330,000,000) in cash LESS the Estimated Working Capital Adjustment Amount,
if any (the "CLOSING PAYMENT") (together with the Canadian Purchase Price (as
defined in the Canadian Purchase Agreement) and as finally adjusted pursuant to
SECTION 1.4 and SECTION 5.2, the "PURCHASE PRICE"). Purchaser shall deliver the
Closing Payment to Seller by wire transfer of immediately available funds to
Seller Bank Account.
SECTION 1.3 ESTIMATED CLOSING BALANCE SHEET. At least five (5)
Business Days prior to the Closing Date Seller shall:
(a) Prepare the Estimated Closing Date Balance Sheet and
deliver it to Purchaser.
(b) Prepare and deliver to Purchaser a written estimate, based
on the Estimated Closing Date Balance Sheet, of the Net Working Capital of the
New Group as of the Closing Date (the "ESTIMATED CLOSING NET WORKING CAPITAL").
If the Target Net Working Capital exceeds the Estimated Closing Net Working
Capital, such difference shall be the "ESTIMATED WORKING CAPITAL ADJUSTMENT
AMOUNT" (which shall otherwise be zero). "NET WORKING Capital" shall have the
meaning set forth and be determined pursuant to the methodologies set forth on
SCHEDULE 1.3(B) of this Agreement.
(c) The Estimated Closing Date Balance Sheet and the
calculations made pursuant to SECTION 1.3 (b) above shall be certified to
Purchaser by the Chief Financial Officer of Parent as having been prepared in
good faith.
SECTION 1.4 POST-CLOSING ADJUSTMENTS.
(a) CLOSING DATE BALANCE SHEET. Within sixty (60) days
following the Closing Date, Purchaser shall, solely for the purpose of this
Agreement, (i) prepare or cause to be prepared and delivered to Seller an
unaudited consolidated balance sheet of the New Group as of
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the Closing Date in accordance with GAAP consistent with the accounting
principles and practices applied in preparation of the 2000 Unaudited Financial
Statements (the "CLOSING DATE BALANCE SHEET") and (ii) prepare or cause to be
prepared from the Closing Date Balance Sheet a Schedule of Net Working Capital
of the New Group as of the Closing Date (the "CLOSING NET WORKING CAPITAL")
prepared in accordance with SCHEDULE 1.3(b) and (iii) shall cause a copy of the
Schedule of Net Working Capital to be delivered to Seller together with a report
thereon of Purchaser's accountants stating that the Closing Net Working Capital
was determined in accordance with the methodologies set forth on SCHEDULE 1.3(b)
hereof.
(b) STATEMENT OF OBJECTIONS. Unless Seller provides written
notice to Purchaser setting forth in reasonable detail its good faith objection
to any portion of the Closing Date Balance Sheet relating to the calculation of
the Closing Net Working Capital on the basis that such portion shall not have
been prepared in accordance with GAAP consistent with the accounting principles
and practices applied in preparation of the 2000 Unaudited Financial Statements
and/or that the Closing Net Working Capital was not calculated in accordance
with the methodologies set forth on SCHEDULE 1.3(b) of this Agreement (the
"STATEMENT OF OBJECTIONS") prior to the close of business on the forty-fifth
(45th) day following the receipt by Seller of the Closing Date Balance Sheet
from Purchaser (the "OBJECTION PERIOD"), the Closing Date Balance Sheet (and the
Closing Net Working Capital reflected in and calculated from such Closing Date
Balance Sheet) shall thereafter be binding upon Seller and its Affiliates and
Purchaser for purposes of the post-closing adjustments set forth in this SECTION
1.4. If Seller delivers to Purchaser a Statement of Objections before the
expiration of the Objection Period, then those elements of the Closing Net
Working Capital objected to in the Statement of Objections shall not thereafter
be binding on Seller or its Affiliates until resolved in accordance with this
SECTION 1.4.
(c) RESOLUTION OF OBJECTIONS.
(i) Seller and Purchaser shall discuss the objections set
forth in the Statement of Objections in good faith and shall attempt to resolve
such objections. If Seller and Purchaser reach agreement with respect to any
objection, such agreement shall be reflected in a written amendment to the
Closing Date Balance Sheet by Seller and Purchaser and shall be conclusive,
final and binding on the parties hereto. The Closing Date Balance Sheet, as
amended finally by the parties, and, if necessary, by the Accounting Expert, is
referred to herein as the "FINAL CLOSING DATE BALANCE SHEET" (and the resultant
Closing Net Working Capital as reflected in and calculated from such Final
Closing Date Balance Sheet is referred to herein as the "FINAL CLOSING NET
WORKING CAPITAL") and shall become binding upon Seller, its Affiliates and
Purchaser for purposes of the post-closing adjustments set forth in this SECTION
1.4.
(ii) If Seller and Purchaser do not reach such written
agreement by the close of business on the fourteenth (14th) day following
delivery to Purchaser of the Statement of Objections, Purchaser and Seller will
jointly select the Chicago office of one of the three (3) largest United States
independent certified public accountants (other than Ernst & Young LLP and
Arthur Andersen LLP) (the "ACCOUNTING EXPERT"), which, acting as an expert and
not as an arbitrator, shall resolve those matters in dispute with respect to the
Closing Date Balance Sheet and the Closing Net Working Capital. If Purchaser and
Seller fail to agree on an Accounting Expert within fifteen (15) days after the
receipt by Purchaser of the Statement of Objections,
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either Purchaser or Seller may request the American Arbitration Association to
appoint an Accounting Expert (or another accounting firm if all three (3)
accounting firms decline to accept or are disqualified from accepting the
dispute), and such appointment shall be conclusive and binding upon Seller and
its Affiliates and Purchaser.
(iii) Within ten (10) days after the engagement of the
Accounting Expert, Seller and Purchaser shall provide the Accounting Expert with
copies of (A) this Agreement, (B) the schedule setting forth the Target Net
Working Capital, (C) the Closing Date Balance Sheet and the Schedule of Closing
Net Working Capital, (D) any amendments to the Closing Date Balance Sheet, (E)
the Subsequent Financial Statements, (F) the Final Stub Period Financial
Statements (if then available), (G) the Statement of Objections and (H) a
written submission from each of Seller and Purchaser setting forth their
respective positions with respect to each item remaining in dispute that was
also described in the Statement of Objections or, in the case of Purchaser,
other matters arising directly out of such remaining items in the Statement of
Objections.
(iv) The Accounting Expert's engagement will be limited to
(A) reviewing the items placed in dispute pursuant to clause (iii)(H) above, (B)
reviewing the written submissions provided by Seller and Purchaser pursuant to
clause (iii)(H) above, (C) determining the appropriate and correct amounts for
any item in dispute in the Closing Net Working Capital in accordance with
SECTION 1.4(a) hereof; PROVIDED, that in resolving a disputed item, the
Accounting Expert may not assign a value of any particular item greater than the
greatest value of such item claimed by either party or less than the smallest
value for such item claimed by either party, in each case as presented to the
Accounting Expert and (D) preparing the Final Closing Date Balance Sheet and
calculating the Final Closing Net Working Capital, which will include those
amounts in the Closing Date Balance Sheet accepted by Seller pursuant to SECTION
1.4(b), those amounts agreed to by Seller and Purchaser in any written amendment
to the Closing Date Balance Sheet and those amounts determined by the Accounting
Expert pursuant to subclause (C) of this clause (iv).
(v) The Accounting Expert shall complete its preparation
of the Final Closing Date Balance Sheet as soon as practicable and in any event
within forty-five (45) days after its engagement (or such other time as
Purchaser and Seller shall agree in writing), and shall deliver a copy of the
Final Closing Date Balance Sheet (and the associated calculation of the Final
Closing Net Working Capital) to Seller and to Purchaser, together with a report
setting forth each disputed adjustment, the Accounting Expert's determination
with respect thereto and a statement of the Accounting Expert's reasons for such
determination. The Final Closing Date Balance Sheet prepared by the Accounting
Expert and the Final Closing Net Working Capital calculated by the Accounting
Expert shall be conclusive and binding on Seller and its Affiliates and
Purchaser and its Affiliates.
(vi) Notwithstanding any other provision of this
Agreement, including, but not limited to, any provision stating that remedies
shall be cumulative and not exclusive, this SECTION 1.4 provides the sole and
exclusive method for resolving any and all disputes of each and every nature
whatever that may arise between or among the parties with respect to the Closing
Net Working Capital and the Closing Date Balance Sheet. All parties hereto
hereby
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irrevocably waive, relinquish and surrender all rights to, and agree that they
will not attempt to resolve any such dispute or disputes in any manner other
than as set forth in this SECTION 1.4(c), including, but not limited to,
litigation. All parties hereto further agree that if one or more of them should
initiate any attempt to resolve any such dispute or disputes in any manner other
than the sole and exclusive manner set forth in THIS SECTION 1.4(c), such
initiator or initiators shall pay and reimburse all fees, costs and expenses
incurred by any other party hereto as a result of, in connection with or related
to said attempt or attempts. The parties hereto intend their respective
agreements in this SECTION 1.4(c) to be binding on all of their respective
Affiliates and Representatives that seek to assert any claim or action in their
name or on their behalf.
(d) NET WORKING CAPITAL ADJUSTMENT.
(i) If (A) the Target Net Working Capital exceeds the
Final Closing Net Working Capital and (B) the Estimated Closing Net Working
Capital exceeds the Final Closing Net Working Capital, Seller shall pay to
Purchaser an amount equal to (x) the Target Net Working Capital MINUS the
Estimated Working Capital Adjustment Amount (if any), MINUS (y) the Final
Closing Net Working Capital.
(ii) If (A) the Target Net Working Capital exceeds or
equals the Final Closing Net Working Capital and (B) the Estimated Closing Net
Working Capital is less than the Final Closing Net Working Capital, Purchaser
shall pay to Seller an amount equal to (x) the Final Closing Net Working Capital
MINUS (y) the Estimated Closing Net Working Capital.
(iii) If (A) the Final Closing Net Working Capital exceeds
the Target Net Working Capital by at least $2.5 million and (B) the Closing
occurs during a Two-Way Adjustment Period as set forth on the table in Section D
of SCHEDULE 1.3(b) hereof, Purchaser shall pay to Seller an amount equal to (x)
one-half (1/2) of the lesser of (1) (I) the Final Closing Net Working Capital
minus the Target Net Working Capital, minus (II) $2.5 million, or (2) $2.5
million, plus (y) the Estimated Working Capital Adjustment Amount (if any).
(iv) If (A) the Final Closing Net Working Capital exceeds
the Target Net Working Capital, but the excess is less than $2.5 million, and
(B) the Closing occurs during a Two-Way Adjustment Period as set forth on the
table in SECTION D of SCHEDULE 1.3(b) hereof, Purchaser shall pay to Seller an
amount equal to the Estimated Working Capital Adjustment Amount (if any).
(v) If (A) the Final Closing Net Working Capital exceeds
the Target Net Working Capital and (B) the Closing occurs during a One-Way
Adjustment Period as set forth on the table in SECTION D of SCHEDULE 1.3(b)
hereof, Purchaser shall pay to Seller an amount equal to the Estimated Working
Capital Adjustment Amount (if any).
(vi) Any payment required to be made pursuant to this
SECTION 1.4(d) shall be paid by Seller to Purchaser, or by Purchaser to Seller,
as the case may be, within five (5) Business Days of the final determination of
the Final Closing Net Working Capital.
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(e) PAYMENT OF ADJUSTMENT AMOUNTS. All payments under this
SECTION 1.4 shall be made in cash by wire transfer of immediately available
funds to a bank account or bank accounts designated by Purchaser or Seller, as
appropriate, in writing. Any amount payable under this SECTION 1.4 shall be paid
within five (5) Business Days of the time such amounts are finally determined
and become binding on the parties hereto pursuant to THIS SECTION 1.4, such
final determination to be evidenced by a written acknowledgment of Purchaser and
Seller to such effect or, in the absence thereof, a written determination
pursuant to SECTION 1.4(c) of this Agreement by the Accounting Expert.
(f) FEES OF ACCOUNTING EXPERT. In the event any dispute is
submitted to the Accounting Expert for resolution as provided in SECTION 1.4(c)
of this Agreement, Seller and Purchaser shall each be responsible for 50% of the
fees, charges and expenses of the Accounting Expert and any arbitrator appointed
pursuant to this SECTION 1.4, if applicable.
(g) ACCESS TO INFORMATION. Purchaser and its accountants and
Parent and its accountants will make the work papers and back-up materials used
in preparing the Balance Sheet and the Closing Date Balance Sheet, and the
books, records and financial staff of the Companies, available to the other
party and their accountants and other Representatives, and to the Accounting
Expert at reasonable times and upon reasonable notice at any time during (i) the
preparation by Purchaser of the Closing Date Balance Sheet, (ii) the review by
Seller of the Closing Date Balance Sheet, and (iii) the resolution by the
parties hereto and the Accounting Expert of any objections thereto. If
requested, Purchaser and its Affiliates' and Purchaser's accountants will sign a
customary accountants' letter required by Parent's accountants prior to a review
of work papers and Parent and its Affiliates and Parent's accountants will sign
a customary accountants' letter required by Purchaser's accountants prior to a
review of work papers.
(h) ALLOCATION OF CANADIAN PURCHASE PRICE. The net book value
(in USD) of the inventories and accounts receivable which are included in the
Canadian Assets LESS the Canadian Liabilities (each, as reflected in the Final
Closing Date Balance Sheet) plus $100,000 shall be deemed for all purposes of
this Agreement and the Canadian Purchase Agreement to be the "CANADIAN PURCHASE
PRICE" (as defined in the Canadian Purchase Agreement), and if such amount is
greater or less than the Canadian Purchase Price initially established in the
Canadian Purchase Agreement, the initial Purchase Price of $330,000,000
hereunder shall be deemed to have been decreased or increased by a corresponding
amount.
SECTION 1.5 CLOSING. Upon the terms and subject to the
conditions of this Agreement, unless previously terminated in accordance with
ARTICLE IX of this Agreement, the closing of the transactions contemplated
hereby (the "CLOSING") shall be held at the offices of Latham & Watkins, 233 S.
Wacker Drive, Sears Tower, Suite 5800, Chicago, Illinois on the fifth Business
Day following the satisfaction or waiver of all conditions to the obligations of
the parties set forth in ARTICLE VII of this Agreement (other than conditions
which are not capable of being satisfied until the Closing Date), or at such
other place or at such other time as Seller and Purchaser may agree upon in
writing (the day on which the Closing takes place being the "CLOSING DATE"). For
purposes of this Agreement, the time of the Closing shall be deemed to be at
6:59 a.m., local time in Monaca, Pennsylvania, regardless of the actual time of
Closing on the Closing Date.
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SECTION 1.6 CLOSING DELIVERIES BY SELLER. At the Closing,
Seller shall deliver to Purchaser each of the following deliverables:
(a) STOCK CERTIFICATES. Certificates evidencing (i) the
Shares, duly endorsed in blank or accompanied by stock powers duly executed in
blank, in form reasonably satisfactory to Purchaser and with any required stock
transfer tax stamps affixed and (ii) all equity interests in AHCGC.
(b) RECEIPT. A receipt for the Closing Payment.
(c) OFFICER'S CERTIFICATE. A certificate signed by an
appropriate officer of Parent to the effect that each of the conditions
specified in SECTIONS 7.2(a) and (b) hereof has been satisfied.
(d) SECRETARY'S CERTIFICATE. A certificate executed by the
Secretary or an Assistant Secretary of each of Parent, Operating Company and
each of the Companies certifying as of the Closing Date (a) a true and complete
copy of the certificate of incorporation of each of the Companies; (b) a true
and complete copy of the bylaws of each of the Companies; (c) a true and correct
copy of the resolutions of the board of directors of Parent, Seller, Operating
Company (including as a stockholder of Seller), Canadian Seller and Newco
authorizing the execution, delivery and performance by Parent, Seller, Operating
Company, Canadian Seller and Newco of this Agreement and the Ancillary
Agreements to which each is a party and the consummation of the transactions
contemplated by this Agreement; (d) true and complete written consents (in lieu
of a meeting) of Operating Company, as shareholder of Seller, approving the
transactions contemplated by this Agreement and (e) incumbency matters.
(e) ANCILLARY AGREEMENTS. Executed Ancillary Agreements to
which Parent, the Companies or any of their respective Affiliates is a party.
(f) GOOD STANDING CERTIFICATES. Certificates of the
appropriate Secretary of State or Governmental Authority certifying the good
standing of Parent, Canadian Seller and each of the Companies in its respective
state or jurisdiction of incorporation and each of the Companies' good standing,
to the extent applicable, in the states of Ohio and Pennsylvania.
(g) ASSET TRANSFER DOCUMENTS. Executed Asset Transfer
Documents, in form and substance reasonably satisfactory to Purchaser.
(h) FIRPTA CERTIFICATE. A statement (in form and substance
reasonably satisfactory to Purchaser) that satisfies Purchaser's obligations
under Regulation Section 1.1445-2(b)(2).
(i) CUSTOMER BUYBACKS. A list of all Contracts with respect to
which any of the Companies may be obligated to, during the twelve (12) months
following the Closing, repurchase $50,000 or more of products from customers
pursuant to "buyback" or similar repurchase commitments in such Contracts.
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SECTION 1.7 CLOSING DELIVERIES BY PURCHASER. At the Closing,
Purchaser shall deliver to Seller each of the following deliverables:
(a) CLOSING PAYMENT. The Closing Payment by wire transfer in
immediately available funds to Seller Bank Account.
(b) RECEIPT. A receipt for the Shares.
(c) OFFICER'S CERTIFICATE. A certificate signed by an
appropriate officer of Purchaser as to the effect that each of the conditions
specified above in SECTIONS 7.1(a) and (b) hereof has been satisfied.
(d) SECRETARY'S CERTIFICATE. A certificate executed by the
Secretary or an Assistant Secretary of Purchaser and Canadian Purchaser
certifying as of the Closing Date a true and correct copy of the resolutions of
the board of directors of Purchaser and Canadian Purchaser authorizing the
execution, delivery and performance by Purchaser and its Affiliates of this
Agreement and the Ancillary Agreements to which each is a party and the
consummation of the transactions contemplated by this Agreement.
(e) ANCILLARY AGREEMENTS. Executed Ancillary Agreements to
which Purchaser or any of its Affiliates is a party.
(f) GOOD STANDING CERTIFICATE. A certificate of the Secretary
of State or other Governmental Authority certifying the good standing of
Purchaser and Canadian Purchaser in their respective states or jurisdictions of
incorporation.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER AND PARENT
Seller and Parent, jointly and severally, represent and
warrant to Purchaser as follows:
SECTION 2.1 ORGANIZATION. Each of the Companies is a
corporation, duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization, has all requisite power to own its
properties and to carry on its business as it is now being conducted and is duly
licensed or qualified to do business in each jurisdiction in which the nature of
its business or the ownership or leasing of its properties makes such license or
qualification necessary, except where the failure to be so licensed or qualified
would not materially and adversely affect such Company's rights or privileges in
Ohio or Pennsylvania or otherwise have a Material Adverse Effect. Complete and
correct copies of the certificate of incorporation and bylaws of each of the
Companies have been made available to Purchaser. The minute books (containing
the records of meetings of the stockholders, the board of directors, and any
committees of the board of directors), the stock certificate books and the stock
record books of the Companies have been made available to Purchaser and such
materials are correct and complete with respect to Newco and correct in all
material respects with respect to AHCGC.
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SECTION 2.2 AUTHORITY; ENFORCEABILITY. Each of Parent,
Operating Company, Seller and Newco have the requisite corporate power and
authority to execute and deliver this Agreement and the Ancillary Agreements to
which each is or will be a party and to perform their respective obligations
hereunder and thereunder and to consummate the transactions contemplated by this
Agreement. The execution and delivery by Parent, Operating Company, Seller and
Newco of this Agreement and the Ancillary Agreements to which each is or will be
a party and the performance by Parent, Operating Company, Seller and Newco of
their respective obligations hereunder and thereunder have been duly authorized
by all necessary corporate action on the part of Parent, Operating Company,
Seller and Newco. The Agreement and the Canadian Purchase Agreement have been
and each of the other Ancillary Agreements will be executed and delivered, by
Parent, Operating Company, Seller and Newco, each to the extent party thereto,
and, assuming due authorization, execution and delivery by Purchaser or its
Affiliate party thereto, constitute, or upon execution will constitute, a legal,
valid and binding agreement of Parent, Seller, Newco and Operating Company, each
to the extent party thereto, enforceable against such party in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar Laws relating to or
affecting creditors' rights generally and general equitable principles (whether
considered in a proceeding in equity or at law).
SECTION 2.3 NON-CONTRAVENTION. Except as set forth in SECTION
2.3 of the Disclosure Schedule attached hereto (the "DISCLOSURE SCHEDULE"), the
execution, delivery and performance by Parent, Operating Company, Canadian
Seller and each of the Companies of this Agreement and the Ancillary Agreements
to which each of the foregoing are or will be a party and the consummation of
the transactions contemplated by this Agreement do not and will not (a) violate,
conflict with or result in the breach of any provision of the certificate of
incorporation or by-laws of Parent, Operating Company, Canadian Seller or the
Companies, (b) violate any Law or Governmental Order applicable to Parent,
Operating Company, Canadian Seller, the Companies or any of their respective
assets or properties, which violation would be reasonably likely (i) to affect
or limit materially and adversely the ownership, use or operation of (I) any Key
Facility or material portion thereof, (II) any Asset material to the operation
of the Business as presently conducted or (III) any material aspect of the
Business or (ii) to result in a penalty or fine in excess of $10,000 or (iii) to
result in any criminal liability or (iv) to have a Material Adverse Effect, (c)
result in any breach of, constitute a default (or event which with the giving of
notice or lapse of time, or both, would become a default) under, require any
Consent under (other than Consents from Governmental Authorities, which are
subject to SECTION 2.4), or give to others any rights of termination, amendment
or acceleration of any Material Contract, or (d) result in the creation of any
material Encumbrance on any of the Shares or on any Asset material to the
operation of the Business as presently conducted.
SECTION 2.4 GOVERNMENTAL CONSENTS. Except for (a) the Consents
set forth in SECTION 2.4 of the Disclosure Schedule, (b) filings required under
the HSR Act or similar competition or antitrust Laws of any foreign jurisdiction
and (c) filings that may be required under the Exchange Act, no Consent is
required to be obtained by Parent, Operating Company or the Companies or any
Affiliate thereof, and no notice or filing is required to be given by or made by
Parent or the Companies or any of their respective Affiliates with, any
Governmental Authority in
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connection with the execution, delivery and performance by Parent, Operating
Company or the Companies of this Agreement or any Ancillary Agreements to which
any of them is or will be a party or the consummation of the transactions
contemplated by this Agreement or any Ancillary Agreement, which if not obtained
would be reasonably likely (i) to affect or limit materially and adversely the
ownership, use or operation of (I) any Key Facility or material portion thereof,
(II) any Asset material to the operation of the Business as presently conducted
or (III) any material aspect of the Business or (ii) to result in a penalty or
fine in excess of $10,000 or (iii) to result in any criminal liability or (iv)
to have a Material Adverse Effect.
SECTION 2.5 CAPITAL STOCK OF NEWCO AND AHCGC. Set forth on
SECTION 2.5 of the Disclosure Schedule is the number of authorized, issued and
outstanding shares of capital stock of each of Newco and AHCGC. All of the
Shares have been validly issued, are fully paid and nonassessable and have not
been issued in violation of any preemptive or similar rights or any Law. There
are no outstanding options, warrants, calls, rights or any other agreements
relating to the sale, issuance or voting of any shares of the capital stock of
Newco or AHCGC, or any securities or other instruments convertible into,
exchangeable for or evidencing the right to purchase any shares of capital stock
of Newco or AHCGC. There are no outstanding or authorized stock appreciation,
phantom stock, profit participation, or similar rights with respect to AHCGC or
Newco. The transfer and delivery of the Shares by Seller to Purchaser as
contemplated by this Agreement will transfer good and valid title to the Shares
to Purchaser, free and clear of all Encumbrances.
SECTION 2.6 SUBSIDIARIES. Except as set forth on SECTION 2.6
of the Disclosure Schedule, there is no Person in which any of the Companies
directly or indirectly owns any equity or other ownership interest other than
Newco and AHCGC. All of the shares of capital stock of Newco and AHCGC are owned
beneficially and of record by Seller, free and clear of any Encumbrances and
upon the consummation of the Asset Transfer Transaction, all of the shares of
capital stock of AHCGC will be owned, free and clear of any Encumbrances by
Newco.
SECTION 2.7 FINANCIAL INFORMATION.
(a) SECTION 2.7(i) of the Disclosure Schedule contains true,
correct and complete copies of the (i) the unaudited consolidated balance sheets
of the Division at December 31, 2000 (the "BALANCE SHEET," and the date of such
Balance Sheet, the "BALANCE SHEET DATE") and the unaudited consolidated
statements of income, cash flows and stockholders equity of the Division for the
year ended December 31, 2000 (the "2000 UNAUDITED FINANCIAL Statements") and
(ii) unaudited consolidated balance sheet of the Division at March 31, 2001 and
the unaudited consolidated statements of income, cash flows and stockholders
equity of the Division for the three month period ended March 31, 2001 (all of
the financial statements referred to in clauses (i) and (ii) are collectively
referred to herein as the "INITIAL FINANCIAL STATEMENTS"). The Initial Financial
Statements (A) except as set forth in SECTION 2.7(ii) of the Disclosure
Schedule, each fairly present in all material respects the consolidated
financial condition, results of operations, cash flows and stockholders equity
of the Division as of the dates thereof or for the periods covered thereby and
are consistent in all material respects with the Books and Records of Parent and
its Affiliates (as so consolidated) and (B) have been prepared in accordance
with GAAP consistent with the accounting principles and practices applied in
preparation of the 2000
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Unaudited Financial Statements, applied on a consistent basis throughout the
periods indicated (except as may be clearly and specifically indicated in the
notes to the 2000 Unaudited Financial Statements), subject, in the case of the
unaudited consolidated financial statements for the three month period ended
March 31, 2001, to normal and recurring year-end adjustments that are not
expected to be material in amount. The foregoing representation as to the
Initial Financial Statements shall terminate upon waiver or expiration of the
termination right of Purchaser set forth in SECTION 9.1(c) or, if no such
termination right shall ever arise upon the delivery of the Audited Financial
Statements to Purchaser pursuant to SECTION 4.18.
(b) The (i) audited consolidated balance sheets of the
Division at December 31, 2000, December 31, 1999 and December 31, 1998, (ii) the
audited consolidated statements of income, cash flows and stockholders equity of
the Division for the years ended December 31, 2000, 1999 and 1998 (all of the
financial statements referred in clauses (i) and (ii) are collectively referred
to herein as the "AUDITED FINANCIAL STATEMENTS") and (iii) unaudited
consolidated balance sheet and statement of income, cash flows and stockholders
equity at and for the three month period ended March 31, 2001 (the "INTERIM
FINANCIAL STATEMENTS," which together with the Audited Financial Statements, are
collectively referred to herein as the "SUBSEQUENT FINANCIAL STATEMENTS") shall
(A) except as set forth in SECTION 2.7(ii) of the Disclosure Schedule as of the
date hereof, each fairly present in all material respects the consolidated
financial condition, results of operations, cash flows and stockholders equity
of the Division as of the dates thereof or for the periods covered thereby and
shall be consistent in all material respects with the Books and Records of
Parent and its Affiliates (as so consolidated) and (B) have been prepared in
accordance with (x) GAAP consistent with the accounting principles and practices
applied in preparation of the 2000 Unaudited Financial Statements, applied on a
consistent basis throughout the periods indicated (except as may be clearly and
specifically indicated in the notes to the Audited Financial Statements),
subject, in the case of the Interim Financial Statements, to normal and
recurring year-end adjustments that are not expected to be material in amount
and (y) Regulation S-X.
(c) The unaudited consolidated balance sheets and year to date
statements of income, cash flows and stockholders equity of the Division at and
for the most recently ended year to date quarterly period between the date
hereof (or if the Closing shall occur after December 31, 2001, December 31,
2001) and the Closing Date (the "FINAL STUB PERIOD FINANCIAL STATEMENTS") when
provided pursuant to SECTION 4.18(b) will (a) except as set forth in SECTION
2.7(ii) of the Disclosure Schedule as of the date hereof, fairly present in all
material respects the consolidated financial condition, results of operations,
cash flows and stockholders equity of the Division as of the date thereof or for
the period covered thereby and shall be consistent in all material respects with
the Books and Records of Parent and its Affiliates (as so consolidated) and (B)
have been prepared in accordance with (x) GAAP consistent with the accounting
principles and practices applied in preparation of the 2000 Unaudited Financial
Statements, applied on a consistent basis throughout the periods indicated,
subject to normal and recurring year-end adjustments that are not expected to be
material in amount and (y) Regulation S-X.
(d) If provided to Purchaser pursuant to SECTION 4.18(e), the
audited consolidated balance sheet of the Division at December 31, 2001 and the
audited consolidated
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statements of income and cash flows of the Division for the year ended December
31, 2001 (the "2001 AUDITED FINANCIAL STATEMENTS") when provided will (A) except
as set forth in SECTION 2.7(ii) of the Disclosure Schedule as of the date
hereof, fairly present in all material respects the consolidated financial
condition, results of operations and cash flows of the Division as of the date
thereof or for the period covered thereby and shall be consistent in all
material respects with the Books and Records of Parent and its Affiliates (as so
consolidated) and (B) have been prepared in accordance with GAAP consistent with
the accounting principles and practices applied in preparation of the 2000
Unaudited Financial Statements, applied on a consistent basis throughout the
periods indicated.
SECTION 2.8 NO UNDISCLOSED LIABILITIES. Except as set forth in
SECTION 2.8 of the Disclosure Schedule, the Business has no Liabilities of the
type required by GAAP to be set forth on a balance sheet, other than Liabilities
(a) reflected or reserved against on the Balance Sheet or (b) incurred since the
Balance Sheet Date in the Ordinary Course of Business.
SECTION 2.9 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since
December 31, 2000 through the date of this Agreement, except as set forth in
SECTION 2.9 of the Disclosure Schedule, the Companies and the Canadian Seller
have conducted the Business in the Ordinary Course of Business and, since such
date, there has not been (a) any event, occurrence, change, circumstance or
development that has had or would, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect, or (b) any action taken by the
Companies or with respect to the Business during the period from December 31,
2000 through the date of this Agreement that, if taken during the period from
the date of this Agreement through the Closing Date, would constitute a breach
of SECTION 4.1 hereof (excluding subparts (ii), (v), (xvii) and (xxv) of SECTION
4.1), other than as expressly provided hereunder or described in SECTION 2.9 the
Disclosure Schedule.
SECTION 2.10 CONTRACTS
(a) SECTION 2.10 of the Disclosure Schedule sets forth a true,
complete and correct list of the following Contracts relating to the Business or
to which AHCGC is a party which are in effect as of the date of this Agreement
(the "MATERIAL CONTRACTS" which term shall include the Contracts required to be
disclosed pursuant to SECTION 2.16(c), SECTION 2.16(d) and SECTION 2.15(b)),
other than (1) the Ancillary Agreements, (2) the Contracts included in the
Excluded Seller Assets and (3) those Contracts required to be listed or
described in SECTIONS 2.14(a), 2.15(b), 2.16(c)(i), 2.16(c)(ii), 2.16(d),
2.16(e), 2.18(a) or 2.28(c) of the Disclosure Schedule:
(i) any Contract containing covenants limiting the freedom
of any of the Companies after the date hereof to engage in any line of business
in any geographic area or to compete with any Person;
(ii) any Contract establishing a partnership, limited
liability company or joint venture;
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(iii) any Contract relating to the obligation of any of
the Companies to officers or directors (other than in their capacity as an
Employee) of any of the Companies or any Affiliate thereof;
(iv) any Contract with any Company relating to the
creation, incurrence, assumption or guarantee of indebtedness for borrowed money
(including capitalized lease obligations);
(v) any Contract for the lease of personal property to or
from any Person providing for lease payments (individually or in the aggregate
under any master or universal lease agreement) in excess of $100,000 per annum
with respect to the Business;
(vi) any Encumbrance on the Assets (other than Permitted
Encumbrances);
(vii) any guaranty of performance or any guaranty of
Liabilities of any Person other than a Company;
(viii) any Contract (other than one subject to clause (ix)
below) relating to the purchase or disposition of any assets, properties or
business involving consideration or assets having a fair market value in excess
of $500,000 with respect to the Business;
(ix) any Contract (or series of related Contracts) (other
than customer Contracts which are subject to clause (xvii) below) for the
purchase of raw materials, commodities, supplies, products, or other personal
property, or for the furnishing or receipt of services, the performance of which
is reasonably anticipated to extend over a period of more than twelve (12)
months or involve consideration in excess of $500,000 with respect to the
Business from one supplier, excluding those which are cancelable by the
applicable Company within ninety (90) days after notice without premium, penalty
or a termination payment;
(x) any Contracts for capital expenditures in excess of
$500,000 individually with respect to the Business;
(xi) any hedging arrangements with respect to the
Business;
(xii) any written Contract (other than a Company Benefit
Plan and other than Contracts that are Excluded Seller Assets and Excluded
Seller Liabilities) concerning the employment of any Person on a full-time,
part-time, consulting, or other basis whose compensation, including bonuses paid
in the past twelve (12) months and excluding benefits under Company Benefit
Plans, is in excess of $75,000 per annum;
(xiii) any Contract for the advance or loan of any amount
to any director, officer or employee of the Companies other than for
reimbursement of expenses in the Ordinary Course of Business;
(xiv) any Contract with a distributor or sales
representative for the distribution or sale of products, materials or supplies
for which payments in excess of $500,000
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per annum have been made or received, which Contract is not cancelable by the
Company within ninety (90) days after notice without premium, penalty or a
termination payment;
(xv) any Contract (other than any Contract listed or
described in SECTION 2.10 of the Disclosure Schedule or the Contracts required
to be listed or described in SECTIONS 2.14(a), 2.15(b), 2.16(c)(i), 2.16(c)(ii),
2.16(d), 2.16(e), 2.18(a) or 2.28(c) of the Disclosure Schedule), with respect
to which the consequences of an Adverse Event would be reasonably expected to
have a Material Adverse Effect;
(xvi) any Contract (other than an Excluded Seller Asset)
with any Governmental Authority;
(xvii) any Contract (or series of related Contracts) for
the sale to customers of products of the Business, the performance of which is
reasonably anticipated to extend over a period of more than twelve (12) months;
or
(xviii) any other Contracts involving payments of $250,000
with respect to the Business in any twelve (12) month period, entered into
outside the Ordinary Course of Business.
(b) Seller has delivered or made available to Purchaser a
correct and complete copy of each Material Contract. Except as set forth on
SECTION 2.10(b) of the Disclosure Schedule, with respect to each of the Material
Contracts, (i) such Material Contract is legal, valid and binding on the Company
that is party to such Contract and, to Seller's Knowledge, each other party
thereto, and is in full force and effect as to each Company party thereto and,
to Seller's Knowledge, each other party thereto, (ii) such Material Contract is
enforceable against each Company party thereto and, to Seller's Knowledge, each
other party thereto; (iii) none of Seller, Parent, the Companies or any of their
Affiliates is in breach or default thereunder and, to Seller's Knowledge (A) no
other party is in material breach or default thereunder, and (B) no event has
occurred which with notice or lapse of time would constitute a material breach
or default, or permit termination, material modification, or acceleration
thereunder and (iv) to Seller's Knowledge, there are no pending renegotiations
of any material provisions thereof outside the Ordinary Course of Business.
SECTION 2.11 COMPLIANCE WITH LAW. Except as disclosed on
SECTION 2.11 of the Disclosure Schedule, each of the Companies is in compliance
in all material respects with all Laws and Governmental Orders applicable to it
or the Business. This SECTION 2.11 shall not apply to compliance matters which
are the subject of SECTION 2.14(d) or SECTION 2.17.
SECTION 2.12 PERMITS. Except as disclosed in SECTION 2.12 of
the Disclosure Schedule, (i) Seller and AHCGC possess, and upon consummation of
the transactions contemplated by this Agreement Newco, AHCGC and Canadian
Purchaser will possess, all of the Material Permits; (ii) each of the Material
Permits is in full force and effect in all material respects in accordance with
its terms; (iii) none of the Companies or Canadian Seller has received any
written notice of any violation of any Material Permit and no proceeding is
pending or, to Seller's Knowledge, threatened, which could result in the
revocation, termination or material limitation of
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any Material Permit; (iv) the Companies and Canadian Seller are in compliance in
all material respects with the requirements of each Material Permit and (v)
neither the execution of this Agreement or the Ancillary Agreements, nor the
consummation of the transactions contemplated by this Agreement will cause or
result in an Adverse Event as to a Material Permit.
SECTION 2.13 LITIGATION. Except as disclosed in SECTION
2.13(i) of the Disclosure Schedule, there is no action, suit, arbitration,
hearing or proceeding by or before any Governmental Authority or arbitral body
pending or, to Seller's Knowledge, threatened against the Companies or any of
their respective officers or directors in their capacities as officers or
directors of a Company. None of the Companies is a party to, nor is any Company
or the Business subject to or in default under, any Governmental Order. To
Seller's Knowledge, no pending investigations exist that could give rise to any
Action against any of the Companies or any of their respective officers or
directors or the Business which would be reasonably likely to have a Material
Adverse Effect. To Seller's Knowledge, SECTION 2.13(ii) of the Disclosure
Schedule lists all legal proceedings (other than legal proceedings relating to
workers' compensation or collective bargaining) initiated, pending, settled or
otherwise concluded (whether or not subject to appeal) within the period between
October 1, 1998 and the date hereof involving or relating to the Companies or
the Business (including all legal proceeding initiated by current or former
Employees or initiated by a Governmental Authority) that (a) have sought
equitable relief being granted with respect to the Companies or the Business,
(b) have sought any damages of $100,000 or more in any claim or an aggregate of
$100,000 or more in any series of related claims or (c) were class actions or
sought certification or other recognition as such.
SECTION 2.14 EMPLOYEE BENEFITS.
(a) SECTION 2.14(a) of the Disclosure Schedule identifies each
of the Company Benefit Plans in effect on the date hereof. As used herein,
"COMPANY BENEFIT PLANS" shall mean each "employee benefit plan", as defined in
Section 3(3) of ERISA (other than any plan described in SECTION 4(b)(4) of
ERISA), each severance or termination, supplemental unemployment or deferred
compensation plan or arrangement and each other material employee fringe benefit
plan or arrangement that is currently maintained by, or otherwise contributed to
for the benefit of the Employees or terminated or retired Employees of the
Companies (or any of their eligible beneficiaries and dependents).
(b) Seller has delivered or otherwise made available to
Purchaser true, correct and complete copies of (i) each Company Benefit Plan
listed on SECTION 2.14(a) of the Disclosure Schedule (or, if not written, a
written summary of its material terms), including all plan documents and all
amendments thereto, (ii) all summaries and summary plan descriptions, including
any summary of material modifications, (iii) the most recent actuarial report
and other financial statements relating to each Company Benefit Plan listed on
SECTION 2.14(a) of the Disclosure Schedule and (iv) the most recent
determination or opinion letter, if any, issued by the IRS with respect to any
Company Benefit Plan listed on SECTION 2.14(a) of the Disclosure Schedule and
any pending request for such a determination letter.
(c) (i) none of the Employees is covered by a "multiemployer
plan" (as defined in Section 3(37) of ERISA) ("MULTIEMPLOYER PLAN") and (ii)
except as set forth on
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SECTION 2.14(c) of the Disclosure Schedule, none of the Company Benefit Plans
provides or promises post-retirement health or life benefits to current or
former Employees, except to the extent required under any applicable state law
or under Section 601 of ERISA.
(d) Other than with respect to the Company Benefit Plans
listed on SECTION 2.14(a) of the Disclosure Schedule, none of Parent, Operating
Company or the Companies has incurred any cost, fee, expense, Liability, claim,
suit, obligation or other damage under Title IV of ERISA that could give rise to
the imposition of any liability, cost, fee, expense or obligation which would be
reasonably expected to become a liability of Purchaser or any of its Affiliates
and, to Seller's Knowledge, no facts or circumstances exist that could give rise
to any such cost, fee, expense, Liability, claim, suit, obligation or other
damage, which would be reasonably expected to become a liability of Purchaser or
any of its Affiliates. Each Company Benefit Plan which is an "employee pension
benefit plan" as defined in Section 3(2) of ERISA ("COMPANY PENSION PLAN") has
been administered in all material respects in accordance with its terms and all
applicable Laws, including ERISA and the Code, and contributions required to be
made on behalf of Employees under the terms of any of Company Benefit Plans as
of the date of this Agreement have been timely made or, if not yet due, have
been properly reflected on the Initial Financial Statements of the Division at
March 31, 2001.
(e) Except as disclosed on SECTION 2.14(e) of the Disclosure
Schedule: (i) each Company Pension Plan that is intended to qualify under
Section 401(a) of the Code has either received a favorable determination letter
from the IRS as to its qualified status or the remedial amendment period for
such Company Pension Plan has not yet expired, and each trust established in
connection with any Company Pension Plan which is intended to be exempt from
federal income taxation under Section 501(a) of the Code is so exempt, and to
Seller's Knowledge, no fact or event has occurred that could adversely affect
the qualified status of any such Company Pension Plan or the exempt status of
any such trust; (ii) to Seller's Knowledge, there has been no prohibited
transaction (within the meaning of Section 406 of ERISA or Section 4975 of the
Code and other than a transaction that is exempt under a statutory or
administrative exemption) with respect to any Company Pension Plan that could
result in a material Liability to the Companies, (iii) no material Liability
under Title IV of ERISA has been incurred by the Companies, Parent, the
Operating Company or any of their respective Affiliates or any entity required
to be combined with any of the foregoing entities under Section 414(b), Section
414(c), Section 414(m), or Section 414(o) of the Code (an "ERISA AFFILIATE")
that has not been satisfied in full, and no condition exists that presents a
material risk to the Companies or any ERISA Affiliate of incurring or being
subject (whether primarily, jointly or secondarily) to a material Liability
thereunder and (vii) none of the Companies has any Liability under ERISA Section
502.
(f) With respect to each Company Pension Plan that is subject
to Title IV or Part 3 of Title I of ERISA or Section 412 of the Code (other than
a Multiemployer Plan), (i) no filing has been made or is required by law to have
been made with the Pension Benefit Guaranty Corporation ("PBGC") and no
proceeding has been commenced by the PBGC to terminate any Company Pension Plan
and no condition exists which could constitute grounds for the termination
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of any such Company Pension Plan by the PBGC and (ii) all premiums (and interest
charges and penalties for late payment, if applicable) have been paid to the
PBGC.
(g) (i) Each Company Benefit Plan can be amended, terminated
or otherwise discontinued at any time in accordance with its terms, without a
material Liability (other than Liability for ordinary administrative expenses
typically incurred in a termination event to the Companies and (ii) no suit,
administrative proceeding, action or other litigation involving benefits
attributable to any Employee has been brought, or to Seller's Knowledge, is
threatened, against or with respect to any such Company Benefit Plan, including
any audit or inquiry by the IRS or United States Department of Labor (other than
routine benefits claims).
(h) Except as set forth on SECTION 2.14(h) of the Disclosure
Schedule, no amount that could be received (whether in cash or property or the
vesting of property) as a result of the consummation of the transactions
contemplated by this Agreement by any Employee, officer or director of the
Companies who is a "disqualified individual" (as such term is defined in
proposed Treasury Regulation Section 1.280G-1) under any Company Benefit Plan
could be characterized as an "excess parachute payment" (as defined in Section
280G(b)(1) of the Code).
(i) The Companies are in material compliance with (i) the
requirements of the applicable health care continuation and notice provisions of
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended and the
regulations (including proposed regulations) thereunder and any similar state
law and (ii) the applicable requirements of the Health Insurance Portability and
Accountability Act of 1996, as amended, and the regulations (including the
proposed regulations) thereunder.
SECTION 2.15 PROPERTIES.
(a) SECTION 2.15 of the Disclosure Schedule lists and
describes by reference to the owner and common street address all real property
owned legally or beneficially by Seller and used in the Business or owned
legally or beneficially by AHCGC or which is an Outside Asset ("OWNED
PROPERTIES"). Except as described in SECTION 2.15(a) of the Disclosure Schedule,
with respect to each of the parcels constituting the Owned Properties:
(i) the identified owner is the sole beneficial and (where
its interests are registerable) the sole registered owner of its respective
parcel of such Owned Properties, and has good and marketable title to its
respective parcel of such Owned Properties in fee simple, free and clear of any
Encumbrance, except for Permitted Encumbrances;
(ii) there are no pending or, to Seller's Knowledge,
threatened expropriation or condemnation proceedings relating to any of the
Owned Properties which in the aggregate would materially and adversely affect
the current use, occupancy, value or marketability of any of the Owned
Properties;
(iii) there are no material structural defects in any of
the buildings or material improvements situated on any of the Owned Properties;
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(iv) the building systems (including HVAC systems,
plumbing, electrical, security, utility and fire systems), structures, fixtures
or improvements, owned, leased or used on the Owned Properties are in all
material respects in satisfactory condition and working order (reasonable wear
and tear excepted) and, assuming customary maintenance, repair and rebuilding,
adequate for the operation of the Business as presently conducted;
(v) other than tenants under any leases, concession
agreements, licenses and the like disclosed in SECTION 2.15(b) of the Disclosure
Schedule who are in possession of space to which they are entitled, there are no
leases, subleases, licenses, concessions, or other agreements (including, with
respect to food services, parking and other concessions), written or oral,
granting to any party or parties the right of use or occupancy of any portion of
the parcels of the Owned Properties;
(vi) there are no outstanding options to purchase, lease
or use, or rights of first refusal to purchase any of the Owned Properties or
any portions thereof or interests therein or contracts relating to the right to
receive any portion of the income or profits from the sale, operation or
development thereof;
(vii) no default or breach exists under any recorded
easement, agreement, covenant or restriction affecting any of the Owned
Properties which would materially detract from the occupancy, marketability or
value of the Owned Property, or materially impair the use of the Owned
Properties by the Company in the operation of the Business as presently
conducted;
(viii) there are no parties other than the Companies (or
Seller, Parent and their Affiliates, to the extent any of the Owned Properties
is part of the Outside Assets) in possession of or having a right to occupy any
of the Owned Properties, other than tenants under any leases, concession
agreements, licenses and the like disclosed in SECTION 2.15(b) of the Disclosure
Schedule who are in possession of space to which they are entitled; and
(ix) all Facilities located on the Owned Properties are serviced and supplied
with utilities and other services necessary for the operation of such
facilities, as currently operated.
(b) SECTION 2.15(b) of the Disclosure Schedule lists, as
of the date hereof, all Leased Properties and indicates the entity which is the
lessee, sublessee or licensee thereof. As used herein, "LEASED PROPERTIES" shall
mean all real property leased, subleased or licensed in connection with the
Business or by AHCGC (the Owned Properties and the Leased Properties are
together the "COMPANY PROPERTIES"). Seller has delivered or made available to
Purchaser correct and complete copies of the leases and subleases listed in
SECTION 2.15(b) of the Disclosure Schedule (as amended to date). With respect to
each lease and sublease for a Leased Property:
(i) to the extent the Companies are a subtenant under a
sublease, to Seller's Knowledge, neither the sublessor nor the master landlord
is in breach or default of the master lease and no event has occurred which,
with notice or lapse of time, would constitute a breach or default or permit
termination by either party under the master lease;
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(ii) to Seller's Knowledge, there are no disputes, oral
agreements, or forbearance programs in effect as to any lease or sublease;
(iii) to Seller's Knowledge, with respect to each
sublease, the representations and warranties set forth in subsections (i) and
(ii) above are true and correct with respect to the master lease;
(iv) no tenant or subtenant, as the case may be, has
repudiated in writing any material provision thereof;
(v) there are no material rent deposits not reflected on
the Balance Sheet;
(vi) none of the Companies (and none of Seller, Parent and
their Affiliates, to the extent it relates to the Outside Assets or the Canadian
Assets) has assigned, transferred, conveyed, mortgaged, deeded in trust or
encumbered any interest in the leasehold or subleasehold (except as otherwise
contemplated by the terms of this Agreement);
(vii) to Seller's Knowledge, there are no material
structural defects in any of the buildings or material improvements situated on
the Leased Properties;
(viii) to Seller's Knowledge, the building systems
(including HVAC systems, plumbing, electrical, utility and fire), structures,
fixtures or improvements used by the Companies or Canadian Seller on the Leased
Properties are in all material respects in satisfactory condition and working
order (reasonable wear and tear excepted) and, assuming customary maintenance,
repair and rebuilding, are adequate for the operation of the Business as
presently conducted;
(ix) all Facilities leased or subleased thereunder are
supplied and serviced with utilities and other services necessary for the
operation of said Facilities as currently operated; and
(x) peaceful and undisturbed possession of all of the
Leased Properties are enjoyed by the Company, Parent or Affiliates, indicated as
the lessee, sublessee or licensee on SECTION 2.15(b) of the Disclosure Schedule.
SECTION 2.16 INTELLECTUAL PROPERTY.
(a) Except as set forth in SECTION 2.16(a) of the Disclosure
Schedule, all Intellectual Property necessary for or used in connection with the
conduct of the Business (other than the Excluded Seller Assets) as presently
conducted is owned or licensed for use by the Companies.
(b) SECTION 2.16(b) of the Disclosure Schedule sets forth, as
of the date hereof, a complete and correct list of all patents, registered
copyrights, registered trademarks and service marks, tradenames, Internet domain
names and all applications for any of the foregoing, owned by the Companies or
any of their Affiliates and necessary for or used in connection with the conduct
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of the Business (other than the Excluded Seller Assets) as presently conducted,
and all such Intellectual Property is owned by the Companies or their Affiliates
free and clear of all Encumbrances, and except for fees and costs required to
prosecute and maintain such Intellectual Property in effect, none of the
Companies are obligated to make any payments of any kind in respect thereof. The
Companies or their Affiliates have properly maintained and renewed all
registrations and related filings with respect to any registered Intellectual
Property owned by the Companies or any of their Affiliates and necessary for or
used in connection with the conduct of the Business as presently conducted
(other than the Excluded Seller Assets), and have used commercially reasonable
efforts to enforce their rights therein against infringement or dilution by
third parties.
(c) SECTION 2.16(c)(i) of the Disclosure Schedule sets forth a
complete list of all licenses granted by any of the Companies with respect to
any Intellectual Property. SECTION 2.16(c)(ii) of the Disclosure Schedule sets
forth, as of the date hereof, a complete list of all licenses granted to any of
the Companies with respect to any Intellectual Property (other than computer
software and the Excluded Seller Assets) necessary for or used in connection
with the conduct of the Business as presently conducted. All Intellectual
Property (other than the Excluded Seller Assets) licensed to any of the
Companies and necessary for or used in connection with the conduct of the
Business as presently conducted is licensed, leased or otherwise used, but not
owned by, the Companies pursuant to terms of a binding Contract (with a Person
other than Parent or its Affiliates) under which the Companies have the right to
use such Intellectual Property as currently used or intended to be used in the
Business and there are no royalty or other fees associated with any such
Intellectual Property, at the date hereof, except as set forth in written
Contracts listed on SECTION 2.16(c)(ii) of the Disclosure Schedule.
(d) "DESKTOP SOFTWARE" means any third party computer software
that is licensed for use on desktop or laptop "PC-class" computers or related
local area network servers other than by a written agreement executed by the
licensee. Desktop Software includes, but is not limited to, software licensed by
shrink wrap or click wrap licenses, the Microsoft Windows class of operating
system software, and Microsoft Office or similar office productivity software
(including individual programs contained therein). SECTION 2.16(d) of the
Disclosure Schedule contains a complete and accurate list, as of the date
hereof, of all Licensed Software. As used herein, "LICENSED SOFTWARE" shall mean
all computer software necessary for the operation of the Business as presently
conducted, that is used by and is licensed or leased to the Companies (or as to
which the Companies have otherwise obtained the right to use) excluding Desktop
Software, computer software and firmware in or used to control or operate any of
the machinery or equipment of the Business, and any software constituting part
of the Excluded Seller Assets. Prior to the date of this Agreement, except as
otherwise disclosed in SECTION 2.16(d) of the Disclosure Schedule, Parent and
Seller have delivered or made available to Purchaser true and complete copies of
all agreements under which the Companies have the right to use the Licensed
Software. The Companies are in compliance in all material respects with all
provisions of any license, lease or other similar agreement pursuant to which
the Companies have rights to use the Licensed Software. To Seller's knowledge,
the Companies are in compliance in all material respects with all provisions of
any license, lease or other similar agreement pursuant to which the Companies
have rights to use the Desktop Software.
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(e) SECTION 2.16(e) of the Disclosure Schedule contains a
list, as of the date hereof, of all Owned Software. As used herein, "OWNED
SOFTWARE" shall mean all computer software that is owned by the Companies and is
necessary for or material to the conduct of the Business as presently conducted.
The Owned Software together with the Licensed Software is referred to as the
"COMPANIES' SOFTWARE." To Seller's Knowledge, (i) none of Seller, Parent or the
Companies are infringing or diluting any Intellectual Property rights of any
other Person with respect to the Companies' Software, and (ii) no other Person
is infringing any Intellectual Property rights of the Companies with respect to
the Companies' Software.
(f) To the extent that any material Intellectual Property
(excluding Excluded Seller Assets) necessary for the conduct of the Business as
presently conducted was created for the Companies or Parent or any of its
Affiliates by or with the aid or assistance of a non-employee, consultant or
independent contractor, the Companies have received all necessary written
assignments to the rights, title and interest in such Intellectual Property to
obtain for the Companies all rights, title and interest in such Intellectual
Property.
(g) None of Seller, Parent or the Companies or any of their
Affiliates are currently in receipt of any written or, to Seller's Knowledge,
oral notice that the conduct of the Business violates the Intellectual Property
rights of any other Person. To Seller's Knowledge, (i) none of the Companies are
violating any Person's Intellectual Property rights, (ii) the use by the
Companies, Parent or any of their Affiliates of any Intellectual Property used
in connection with the Business is not violating any other Person's Intellectual
Property rights and (iii) no Person has threatened or claimed that the use by
the Companies, Parent or its Affiliates of any Intellectual Property in
connection with the Business is violating such Person's Intellectual Property
rights. To Seller's Knowledge, no Person has claimed or is threatening to claim
the right to use or license any of the Intellectual Property of the Companies
except in accordance with the licenses granted by the Companies as provided in
SECTION 2.16(c).
SECTION 2.17 ENVIRONMENTAL MATTERS.
(a) Except as disclosed on SECTION 2.17(a) of the Disclosure
Schedule, the Companies are in compliance with all Environmental Laws in all
material respects. Except as disclosed on SECTION 2.17(a) of the Disclosure
Schedule, none of Parent, Operating Company or the Companies have received any
notice to the effect that, nor does Seller have Knowledge that, (i) any of the
Companies is not in compliance in all material respects with, or is in violation
in any material respect of, any Environmental Laws or (ii) any currently
existing circumstances are reasonably likely to result in a failure of any of
the Companies to comply with, or a violation by any of the Companies of, any
Environmental Laws. Except as disclosed on SECTION 2.17(a) of the Disclosure
Schedule, the Companies have not received any written notice during the previous
five (5) years of any alleged failure to comply with any Environmental Laws.
(b) Except as disclosed in SECTION 2.17(b) of the Disclosure
Schedule, there are no existing or, to Seller's Knowledge, threatened,
Environmental Claims against any of the Companies. Except as disclosed in
SECTION 2.17(b) of the Disclosure Schedule, none of Parent or the Companies has
received any written notification, nor does Seller have Knowledge, of any
allegation of any actual, or potential responsibility for, or any inquiry or
investigation regarding,
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any disposal, release or threatened release of any Hazardous Substance either
generated at or transported from any Facility or Former Property. Except as
disclosed in SECTION 2.17(b) of the Disclosure Schedule, none of Parent or the
Companies has, in the past ten (10) years, received, and to Seller's Knowledge
there has not in such period been, any claim, demand, suit or cause of action
alleging any form of bodily injury, sickness or disease, including but not
limited to asbestosis, silicosis or any form of cancer, arising from any
exposure to or contact with any materials or substances at any time either
present at any Facility or Former Property or contained within any products or
materials transported from any Facility or Former Property.
(c) Except as disclosed in SECTION 2.17(c) of the Disclosure
Schedule, (i) no underground tank or other underground storage receptacle for
Hazardous Substances is currently or, to Seller's Knowledge, has in the past
been located at any of the Facilities, or to Seller's Knowledge, the Former
Properties, and there have been no releases of any Hazardous Substances from any
such current, or to Seller's Knowledge, former underground tank or related
piping; (ii) there have been no current or, to Seller's Knowledge, past releases
(i.e., any past or present releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing, or
dumping) of Hazardous Substances in quantities exceeding those authorized by
Environmental Laws required thereunder, upon or into the Facilities, or to
Seller's Knowledge, the Former Properties; (iii) there are no polychlorinated
biphenyls (PCBs) or asbestos located at or on the Facilities or to Seller's
Knowledge, at or on the Former Properties, except in compliance with
Environmental Laws, (iv) to Seller's Knowledge, no PCBs or asbestos have been
used in the manufacturing processes of, or contained in products manufactured
at, the Facilities, or, to Seller's Knowledge, the Former Properties, (v) to
Seller's Knowledge, no part of the Facilities or to Seller's Knowledge, the
Former Properties has been used as a landfill or for the disposal of Hazardous
Substances.
(d) Except as disclosed in SECTION 2.17(d) of the Disclosure
Schedule, none of the Companies is a party, whether as a direct signatory or as
successor, assign or third-party beneficiary, or otherwise bound, to any lease
or other Contract (excluding insurance policies disclosed on the Schedules)
under which any of the Companies is obligated by or entitled to the benefits of,
directly or indirectly, any representation, warranty, indemnification, covenant,
restriction or other undertaking concerning Environmental Conditions.
(e) None of the Companies has released any other Person from
any claim under any Environmental Law or waived any rights concerning any
Environmental Condition except in connection with a complete release of
liability of the Company in all associated matters.
(f) Complete and accurate copies of the Environmental Reports,
as well as all other written environmental reports, audits or assessments which
have been conducted, by any of Parent, Seller or the Companies or any of their
respective Affiliates, or any Person engaged by Parent, Seller or the Companies
or any of their respective Affiliates for such purpose, with respect to any
Facility or Former Property have been made available to Purchaser and its
Representatives and a list, as of the date hereof, of all such reports, audits
and assessments prepared by any third party, including any Governmental
Authority, contractor, consultant or laboratory or prepared or received by the
department of Environmental Affairs of Parent is set forth on SECTION 2.17(f) of
the Disclosure Schedule.
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SECTION 2.18 INTERCOMPANY CONTRACTS, TRANSACTIONS AND
SERVICES; OUTSIDE ASSETS; SHARED ASSETS.
(a) SECTION 2.18(a) of the Disclosure Schedule sets forth each
material written Contract in effect as of the date hereof between any of the
Companies, on the one hand, and Parent or its Affiliates (other than Newco or
AHCGC) on the other hand, which affects or relates to the Companies or the
Business.
(b) SECTION 2.18(b) of the Disclosure Schedule lists (x) the
categories of material services that Parent or its Affiliates (other than Newco
or AHCGC) provide to the Companies in connection with the operation of the
Business as presently conducted and (y) the categories of goods bought or sold
between Parent or its Affiliates (other than Newco or AHCGC) on the one hand,
and the Companies on the other hand, other than in the case of (x) and (y), (i)
the services described in Exhibit A to the form of Transition Services Agreement
and (ii) the services provided under the Contracts listed or described in
SECTION 4.16(b) of the Disclosure Schedule.
(c) SECTION 2.18(c) of the Disclosure Schedule provides (i) a
reasonably detailed listing of the assets that are used primarily or held
primarily for use in the operation of the Business as presently conducted which
are not owned by the Companies, other than (A) those used or held for use by the
Companies pursuant to Contracts (with a Person other than Parent or its
Affiliates) included in the Assets, (B) the Canadian Assets and (C) the Excluded
Seller Assets and (ii) identifies the owner or holder of such assets. The assets
listed in SECTION 2.18(c) of the Disclosure Schedule are referred to herein as
the "OUTSIDE ASSETS."
(d) SECTION 2.18(d) of the Disclosure Schedule identifies any
asset, right, privilege, Contract, Permit or arrangement which materially
benefits the Companies or the Business and as to which none of the Companies
would have a direct ownership or Contract right (with a Person other than Parent
or its Affiliates) to continue use or ownership thereof, upon the terms in
effect on the date hereof (as modified in the Ordinary Course of Business after
the date hereof), following consummation of the transactions contemplated by
this Agreement, other than (i) the assets, rights, privileges, Permits and
Contracts listed on SECTION 4.16(b) of the Disclosure Schedule, (ii) the assets
(x) owned, leased or licensed and used by Parent or its Affiliates (other than
Seller or AHCGC) in providing services that are listed in SECTION 2.18(b) of the
Disclosure Schedule and (y) not located at any Facility, (iii) the working
capital assets and other financial assets provided by Parent and its Affiliates
(other than Newco or AHCGC) which are not included in the definition of Net
Working Capital, (iv) the assets (x) owned, leased or licensed that will be used
by Parent or its Affiliates (other than Seller or AHCGC) to provide services to
Purchaser and the New Group under the Transition Services Agreement and (y) not
located at any Facility, (v) the capital stock and other equity interests of any
Person other than AHCGC and Newco held by Seller and (vi) the Former Properties.
The assets, rights, privileges, Contracts and Permits listed in SECTION 2.18(d)
of the Disclosure Schedule are collectively referred to herein as the "SHARED
ASSETS".
(e) Notwithstanding anything to the contrary contained in the
foregoing, none of Parent, Seller, Operating Company or Newco shall have any
liability under SECTION 2.18(a),
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2.18(b) or 2.18(d) for failing to disclose any service or Contract that is
required thereby to be listed on SECTION 2.18(a), 2.18(b) or 2.18(d), as
applicable, of the Disclosure Schedule if either (i) Purchaser currently
provides such service in the operation of its business to its existing business
units, or has a Contract with a third-party vendor with respect to the services
provided to the Business under such Contract and such service of Purchaser or
provided by the third-party vendor can be adapted without material burden to
perform such service for the Business or (ii) the New Group is able to obtain
(after using commercially reasonable efforts) such products or services on
substantially equivalent terms and conditions (as to the Business) from a no
less qualified third-party vendor.
SECTION 2.19 TAXES. Except as set forth on SECTION 2.19 of the
Disclosure Schedule:
(a) All material Tax Returns required to be filed by or with
respect to each of the Companies, either separately or as a member of a group of
corporations, have been filed with the appropriate Taxing Authorities. All such
Tax Returns are accurate, true and complete in all material respects. Parent has
made available to Purchaser complete and accurate copies of all such Tax Returns
(or, in the case of consolidated, combined or unitary Tax Returns, the portions
thereof relating to the Companies) relating to any open Tax Periods of any of
the Companies.
(b) Each of the Companies has timely paid or made provision
for the payment of all Taxes that are shown as due on the Tax Returns filed with
the appropriate Tax Authorities or that may become due with respect to Tax
Periods (or portions thereof) ending on or before the date hereof. The accruals
and reserves with respect to such Taxes (other than any reserve for deferred
Taxes established to reflect timing differences between book and Tax income)
provided in the Balance Sheet are adequate (determined in accordance with GAAP)
to cover all Taxes accruing or payable with respect to Tax Periods (or portions
thereof) ending on or before the date hereof. All material Taxes (including
sales and use and employment Taxes) that any of the Companies is or was required
by Law to withhold or collect have been duly withheld or collected and, to the
extent required, have been timely paid to the proper Taxing Authority.
(c) There are no liens for Taxes (other than for current Taxes
not yet due and payable) upon any of the Seller Assets, the Canadian Assets, the
AHCGC Assets or the Outside Assets.
(d) There are currently no deficiencies for Taxes that have
been claimed, proposed or assessed by any Taxing Authority against any of the
Companies that have been received in writing by Parent, Operating Company,
Seller or the other Companies or any of their respective Affiliates, or to
Seller's Knowledge have otherwise been claimed, proposed or assessed. There are
no pending or, to Seller's Knowledge, threatened audits, investigations or
claims for or relating to any liability of the Companies in respect of Taxes,
and as of the date hereof, there are no matters under discussion with any Taxing
Authority with respect to Taxes of the Companies. Section 2.19(d) of the
Disclosure Schedule sets forth for each of the Companies the Tax Returns which
have been audited within the three (3) years prior to the date hereof by the
relevant Taxing Authority for each period set forth on SECTION 2.19(d) of the
Disclosure Schedule. No power of attorney has been executed by or on behalf of
any of the Companies with respect to
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any matters relating to Taxes that is currently in force. No extension or waiver
of a statute of limitations relating to Taxes is in effect with respect to any
of the Companies. Set forth in SECTION 2.19(d) of the Disclosure Schedule for
each Company are the jurisdictions in which such Company has filed Tax Returns
within the three (3) tax years prior to the date hereof. No claim has been made
within the three (3) years prior to the date hereof by a Taxing Authority in a
jurisdiction where a Company does not file Tax Returns that such Company may be
subject to taxation in that jurisdiction.
(e) None of the Companies is a party to any Tax sharing,
indemnity, allocation or similar agreement. The Companies have no contractual
obligations to indemnify any other Person with respect to Taxes.
(f) None of the Companies is subject to any joint venture,
partnership or other agreement, arrangement, or contract that is treated as a
partnership for Tax purposes.
(g) To Seller's Knowledge, none of Parent, Operating Company,
Seller or the other Companies or any of their respective Affiliates has
requested or received any ruling from any Taxing Authority, or signed any
binding agreement with any Taxing Authority (including any advance pricing
agreement) that would materially impact the amount of Tax Liability of any of
the Companies after the Closing Date.
(h) Parent is the common parent of an affiliated group of
corporations that includes each of the Companies, and such affiliated group
files a consolidated Tax Return for Federal income tax purposes that includes
each of the Companies as members.
SECTION 2.20 NEWCO'S OPERATIONS. Newco was formed solely for
the purpose of engaging in the transactions contemplated by this Agreement and
has not engaged in any business activities or conducted any operations, and has
not incurred, directly or indirectly, any obligations or liabilities or entered
into any agreement or arrangements with any Person other than (a) as
contemplated by SECTION 4.16, (b) the operation of the Business after the
consummation of the transactions contemplated by SECTION 4.16 and (c) as
expressly provided by this Agreement.
SECTION 2.21 BROKERS. Except for Robert W. Baird & Co.
Incorporated, no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Parent or Seller. Parent is solely responsible for the fees and
expenses of Robert W. Baird & Co. Incorporated.
SECTION 2.22 TITLE TO ASSETS.
(a) TITLE TO ASSETS PRIOR TO ASSET TRANSFERS.
(i) The Companies and Canadian Seller own or have a
leasehold or license interest in, or rights to all of the rights, properties and
other assets necessary to operate the Business as presently conducted, except
for (A) the Outside Assets and (B) the Excluded Seller Assets.
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(ii) The Assets are free and clear of Encumbrances, except
for (A) Encumbrances identified in SECTION 2.22(a) of the Disclosure Schedule
and (B) Permitted Encumbrances.
(iii) Parent and its Affiliates have good and valid title
to all of the Assets not leased or licensed.
(b) TITLE TO ASSETS UPON CLOSING.
(i) At the Closing, Newco, AHCGC or Canadian Purchaser
will own or have a valid and enforceable (other than due to failure to obtain a
Consent in connection with transactions contemplated by this Agreement)
leasehold or license interest in, or other valid and enforceable (other than due
to failure to obtain a Consent in connection with transactions contemplated by
this Agreement) rights to all of the Assets, which constitute all of the assets,
rights and privileges (1) reflected on the Final Closing Date Balance Sheet or
(2) necessary to run or operate the Business as presently conducted, except in
the case of clause (2) for the Excluded Seller Assets.
(ii) The Assets will be free and clear of Encumbrances,
except for (x) Encumbrances identified in SECTION 2.22(a) of the Disclosure
Schedule and (y) Permitted Encumbrances.
(iii) At the Closing, Newco, AHCGC or Canadian Purchaser
will have good and valid title to all Assets not leased or licensed.
(c) All of the AHCGC Assets relate to or are used in
connection with the design, development, manufacture, distributions, servicing,
sale or marketing of consumer or specialty glass products, except for the
Excluded Seller Assets.
SECTION 2.23 TANGIBLE ASSETS. Except as set forth in SECTION
2.23 of the Disclosure Schedule, excluding Inventory and all Company Properties,
each tangible Asset (other than the Excluded Seller Assets) material to the
Business as presently conducted or material to the operation or use, as
presently conducted, of any Key Facility or any material portion thereof is free
of material defects, has been maintained in accordance with normal industry
practice, is in satisfactory operating condition and repair (subject to normal
wear and tear), and is adequate for the purposes for which it presently is used
and presently proposed to be used. SECTION 2.23 of the Disclosure Schedule sets
forth a true and correct copy of the Companies' capital budget plan for the year
2001 (the "2001 CAPITAL BUDGET PLAN").
SECTION 2.24 SOLVENCY OF SELLER. After giving effect to the
consummation of the transactions contemplated by this Agreement, (i) Seller will
be able to satisfy all Liabilities of Seller existing or likely to arise at or
in the period following the Closing and (ii) Seller will not be insolvent.
SECTION 2.25 ACCOUNTS RECEIVABLE. All accounts receivable of
the Companies reflected in the Final Closing Date Balance Sheet will represent
bona fide claims against debtors
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for sales made, services performed or other charges arising on or before the
Closing Date, and all of the goods delivered and services performed that give
rise to such accounts were delivered or performed in accordance with applicable
orders, Contracts or customer requirements.
SECTION 2.26 INSIDER INTERESTS. To Seller's Knowledge and
except as set forth in SECTION 2.26 of the Disclosure Schedule, no officer or
director of any of the Companies, Operating Company or Parent owns, directly or
indirectly, any material interest in any Person that is engaged in business,
other than on an arm's-length basis, as a competitor, lessor, lessee, customer
or supplier of the Companies.
SECTION 2.27 INVESTMENTS. Except as set forth in SECTIONS 2.6
OR 2.27 of the Disclosure Schedule, the Companies do not own or have the right
to acquire, directly or indirectly, (i) any interest or investment (whether
equity or debt) in any Person or (ii) any assets of any Person, other than trade
payables in the Ordinary Course of Business.
SECTION 2.28 LABOR AND EMPLOYEES.
(a) Except as set forth in SECTION 2.28(a) of the Disclosure
Schedule, (i) as of the date hereof, none of the employment terms of the
Employees are subject to the terms of a current collective bargaining agreement
or a collective bargaining agreement under current negotiation, (ii) none of
Parent or the Companies has received written notice of any complaint against or
arbitration proceeding involving any of the Companies which is currently pending
before the National Labor Relations Board or the Equal Employment Opportunity
Commission or before any analogous entity in any country with respect to any
Employee or former Employee or, to Seller's Knowledge, threatened against any of
the Companies or affecting the Facilities and (iii) there are no labor strikes,
disputes, material grievances pending under any collective bargaining
agreements, slowdowns, work stoppages or other labor disturbances or
difficulties pending or to Seller's Knowledge, threatened against the Companies
and in the past five (5) years the Companies have not experienced a labor strike
or dispute, slowdown, work stoppage or other labor disturbance or difficulty.
(b) None of the Companies is delinquent in any material
payments to any of the Employees for any wages, salaries, commissions, bonuses
or other direct compensation for any services performed for it or amounts
required to be reimbursed to such Employees. The Companies are not liable for
any arrears of wages in excess of $50,000. The Companies have made all required
payments to any trust or other fund or to any Governmental Authority with
respect to unemployment compensation benefits, social security or other benefits
or obligations for employees, other than payments which do not exceed $100,000
individually or in the aggregate. To Seller's Knowledge, no Employees are in any
material respect in violation of any term of any employment contract,
non-disclosure agreement, non-competition agreement or any restrictive covenant
to a former employer relating to the right of any such Employee to be employed
by the Companies because of the nature of the business conducted or presently
proposed to be conducted by the Companies or to the use of trade secrets or
proprietary information of others.
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(c) Parent has identified on SECTION 2.28(c) of the Disclosure
Schedule and has made available to Purchaser true and complete
copies of (i) all severance agreements with directors,
officers and Employees of the Companies in effect as of the
date of this Agreement or which, as of the date of this
Agreement, the Companies intend to enter into prior to the
Closing; (ii) all severance programs and policies applicable
to the Employees in effect as of the date hereof; (iii) all
plans, programs, agreements and other arrangements with or
relating to directors, officers, Employees or consultants of
the Companies which contain change in control provisions as of
the date hereof; and (iv) any written material relating to the
material personnel policies of the Companies in effect as of
the date hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller and Parent
as follows:
SECTION 3.1 ORGANIZATION. Purchaser is duly incorporated,
validly existing and in good standing under the laws of the State of Delaware.
SECTION 3.2 AUTHORITY; ENFORCEABILITY. Purchaser has the
requisite corporate power and authority to execute and deliver this Agreement
and the Ancillary Agreements to which it is or will be party and to perform its
obligations hereunder and thereunder. The execution and delivery by Purchaser of
this Agreement and the Ancillary Agreements to which it is or will be party and
the performance by Purchaser of its obligations hereunder and thereunder have
been duly authorized by all necessary corporate action on the part of Purchaser.
This Agreement and the Ancillary Agreements to which it is party have been or
will be duly executed and delivered by Purchaser and each constitutes a legal,
valid and binding agreement of Purchaser, enforceable against Purchaser in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar Laws
relating to or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law).
SECTION 3.3 NON-CONTRAVENTION. Except as set forth in SCHEDULE
3.3, the execution, delivery and performance by Purchaser of this Agreement and
the Ancillary Agreements to which it is or will be a party do not and will not
(a) violate or result in the breach of any provision of the certificate of
incorporation or bylaws of Purchaser, (b) violate any Law or Governmental Order
applicable to Purchaser or any of its assets or properties, or (c) result in any
breach of, constitute a default (or event which with the giving of notice or
lapse of time, or both, would become a default) under or give to others any
rights of termination, amendment or acceleration of, or result in the creation
of any Encumbrance on any of the assets or properties of Purchaser pursuant to
any Contract to which Purchaser is a party or by which any of its assets or
properties is bound or affected.
SECTION 3.4 GOVERNMENTAL CONSENTS. Except as described in
SCHEDULE 3.4 and for (a) filings required under the HSR Act or similar
competition or antitrust Laws of any foreign jurisdiction and (b) filings that
may be required under the Exchange Act, no Consent is required to be obtained by
Purchaser, and no notice or filing is required to be given by Purchaser or any
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Affiliate thereof or made by Purchaser or any Affiliate thereof with, any
Governmental Authority or other Person in connection with the execution,
delivery and performance by Purchaser of this Agreement or any Ancillary
Agreements to which it will be a party, nor are any Consents required under any
Contracts to which Purchaser is a party as a result of the consummation of the
transactions contemplated by this Agreement, except for such Consents as to
which the failure to obtain such Consent will not have a material adverse effect
on the Purchaser or its ability to timely effect the consummation of the
transactions contemplated hereby.
SECTION 3.5 PURCHASE FOR INVESTMENT.
(a) Purchaser acknowledges that the sale of the Shares
contemplated hereby has not been registered under the Securities Act or
qualified under securities or "blue sky" Laws of applicable states, Parent
having advised Purchaser of its reliance upon exemptions from registration or
qualification thereunder.
(b) Purchaser (i) is not an underwriter as such term is
defined under the Securities Act, (ii) is acquiring the Shares for its own
account solely for investment with no present intention to subdivide or
distribute any of the Shares to any Person other than an Affiliate and (iii)
will not sell, offer, transfer, assign, pledge, hypothecate or otherwise dispose
of any of the Shares, except in compliance with the registration requirements or
exemption provisions of the Securities Act and any other applicable federal or
state securities Laws.
SECTION 3.6 FINANCIAL CAPABILITY. Purchaser has received a
fully executed written commitment, a copy of which is attached as EXHIBIT 3.6
hereto, from the Persons indicated thereon (the "COMMITMENT") to provide, in the
aggregate, monies sufficient to fund the entire Closing Payment (and adjustments
thereto), transaction fees and expenses and the ongoing working capital needs of
the Companies (the "FINANCING"). As of the date hereof, (i) the Commitment has
not been amended or modified from that attached as EXHIBIT 3.6 hereto and (ii)
there is no breach or default by Purchaser, or, to Purchaser's Knowledge, by the
counterparty, existing under the Commitment.
SECTION 3.7 BROKERS. Except for Bear, Stearns & Co. Inc. and
Banc of America Securities LLC, no broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Purchaser. Purchaser shall be solely responsible for
payment of the fees and expenses of Bear, Stearns & Co. Inc. and Banc of America
Securities LLC.
ARTICLE IV
ADDITIONAL AGREEMENTS
SECTION 4.1 CONDUCT OF BUSINESS PRIOR TO THE CLOSING.
(a) Except as contemplated by this Agreement and except as set
forth on SECTION 4.1 of the Disclosure Schedule, pending the Closing, Seller
shall cause each of the Companies and Canadian Seller (as to the Business) to
conduct the Business in the Ordinary
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Course of Business, to use commercially reasonable efforts to preserve
substantially intact the business organization of the Business, and to use
commercially reasonable efforts to preserve the business relationships of the
Business (as of the date hereof). Without limiting the generality of the
foregoing, except as contemplated by this Agreement and except as set forth in
SECTION 4.1 of the Disclosure Schedule, Seller shall not permit any of the
Companies to do any of the following without the prior written consent of
Purchaser (which consent shall not be unreasonably withheld or delayed):
(i) sell, lease, transfer, or assign any material Asset,
other than in the Ordinary Course of Business (but specifically excluding any of
the Owned Property);
(ii) enter into any Contract (other than customer
Contracts) (or series of related Contracts, other than customer Contracts)
either involving consideration in excess of $500,000 under each such Contract or
series of related Contracts (other than the renewal of existing Contracts on
generally similar terms) or outside the Ordinary Course of Business, excluding
those Contracts which are intended to be fully performed by the applicable
Company within ninety (90) days after the date entered into or which are
cancelable by the applicable Company within ninety (90) days after notice
without penalty, premium or a termination payment;
(iii) accelerate, terminate, materially modify or cancel
any Contract (or series of related Contracts) involving consideration in excess
of $500,000 under each such Contract or series of related Contracts to which any
of the Companies is a party or by which any of them is bound, except as effected
in the Ordinary Course of Business as to Contracts relating to sales of products
or Contracts relating to licensing of Intellectual Property rights of third
parties permitting the sale of products by the Companies bearing such licensed
Intellectual Property;
(iv) merge or consolidate with, or make any capital
investment in, any loan to, or any acquisition of the securities or assets of,
any other Person;
(v) issue any note, bond, or other debt security or
create, incur, assume, or guaranty any indebtedness for borrowed money;
(vi) delay or postpone the payment of accounts payable and
other Liabilities outside the Ordinary Course of Business;
(vii) cancel, compromise, waive or release any right or
claim (or series of related rights and claims) either involving more than
$500,000 in the aggregate or outside the Ordinary Course of Business;
(viii) grant any license or sublicense of any rights under
or with respect to any Intellectual Property other than in the Ordinary Course
of Business;
(ix) enter into any hedging arrangement or forward
purchase agreement for a period greater than twelve (12) months or extend any
existing hedging arrangement or forward purchase agreement for a period greater
than twelve (12) months;
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(x) issue, sell, or otherwise dispose of any of its
capital stock or grant any options, warrants or other rights to purchase or
obtain (including upon conversion, exchange, or exercise) any of its capital
stock;
(xi) declare, set aside or pay any dividend or make any
distribution with respect to its capital stock (other than cash dividends) or
redeem, purchase, or otherwise acquire any of its capital stock;
(xii) make any loan to, or enter into any other
transaction with, any of its directors, officers or Employees outside the
Ordinary Course of Business;
(xiii) enter into any written Employment Agreement or
materially modify the terms of any such existing Employment Agreement, other
than to extend or renew an existing Employment Agreement on generally similar
terms as in effect on the date hereof or to hire an employee in the Ordinary
Course of Business;
(xiv) except in the Ordinary Course of Business or as
required by Law or the terms of any existing Contract, increase the salary,
wage, rate of compensation, commission, bonus or other direct or indirect
remuneration payable to, or other compensation of any salaried or hourly
Employees (excluding Employees subject to collective bargaining), independent
contractor or officer of the Companies or enter into any Contract or other
binding commitment in respect of such increase, but in no event shall aggregate
increases under this clause (xiv) exceed 5% of the Companies' current payroll
costs for base wages for such salaried or hourly Employees (excluding Employees
subject to collective bargaining), in the aggregate;
(xv) except as required by Law or by the terms of this
Agreement, adopt, amend, modify, or terminate any Company Benefit Plan as it
pertains to Employees (excluding amendments and modifications to Company Benefit
Plans resulting directly from collective bargaining);
(xvi) pledge to make any charitable or other capital
contribution outside the Ordinary Course of Business;
(xvii) mortgage, pledge or encumber any of the Assets,
other than pursuant to Permitted Encumbrances;
(xviii) make any commitment for any capital expenditure in
excess of $500,000 individually or $2,000,000 in the aggregate, except as to the
categories of items set forth in the 2001 Capital Budget Plan or which shall be
set forth in the 2002 Capital Budget Plan, provided that Seller shall not permit
any of the Companies to make any capital commitments or expenditures with
respect to the Business in excess of $20 million in the aggregate for the year
ending December 31, 2002;
(xix) amend its certificate of incorporation or by-laws;
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(xx) make any change in any material accounting practices
customarily followed by it, excluding any standard cost revisions effected as of
January 1, 2002 in the Ordinary Course of Business or changes required by GAAP;
(xxi) make any changes in its sales practices or
procedures other than in the Ordinary Course of Business;
(xxii) fail to maintain the material Assets in
substantially their current state of repair, excepting normal wear and tear, or
fail to replace (consistent with the Companies' past practice) inoperable,
worn-out or obsolete material Assets, or fail to repair, replace, or refurbish
any material Asset which has been damaged or destroyed after the date hereof
(whether or not insured);
(xxiii) make any election with respect to Taxes that may
materially increase the amount of Tax liability of any of the Companies after
the Closing Date (but Purchaser's consent shall be deemed to be provided if such
election is consistent with past practices and custom of the Companies or the
requirements of applicable Law);
(xxiv) enter into any closing agreement or settlement or
agreement to settle any claim or assessment for Taxes entered into on a basis
that may materially increase the amount of Tax liability of any of the Companies
after the Closing Date (but Purchaser's consent shall be deemed to be provided
if such agreement or settlement is consistent with the past practices and custom
of the Companies or the requirements of applicable Law);
(xxv) enter into any Contract described in clauses (i),
(ii) or (xvi) of SECTION 2.10(a);
(xxvi) enter into any customer Contract in which the
"buyback" commitment or similar repurchase commitment, with respect to such
Contract, would be reasonably likely to exceed 20% of the estimated first year
sales under such Contract;
(xxvii) enter into or materially modify any collective
bargaining agreement other than in the Ordinary Course of Business; or
(xxviii) enter into any contract or other agreement to do
any of the foregoing.
(b) For purposes of this Agreement, the term "commercially
reasonable efforts" shall not be deemed to require any Person to give any
guarantee or other consideration of any nature, including in connection with
obtaining any consent or waiver or to consent to any change in the terms of any
Contract.
SECTION 4.2 ACCESS TO INFORMATION.
(a) From the date hereof until the Closing, Seller and Parent
shall cause the Companies and Canadian Seller to promptly afford Purchaser and
its Representatives, at Purchaser's sole expense, with reasonable access, during
normal business hours and upon
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reasonable advance notice, to the offices, properties, facilities, Books and
Records, Tax Returns (including Tax records) or other information reasonably
requested by Purchaser and related to the Business, as Purchaser reasonably
deems necessary or advisable, and to those employees and personnel of the
Companies, Operating Company, Canadian Seller and Parent to whom Purchaser
reasonably requests access, including access to personnel to facilitate the
transition at Closing of functions relating to general ledger, accounts payable,
payroll, purchasing and information systems relating to the Business, PROVIDED,
HOWEVER, that (i) Seller and Parent may limit access to information, materials
or data that relate to matters which it advises Purchaser in writing it has
reasonably and in good faith determined, based upon advice of outside counsel,
the disclosure thereof would violate any Laws and commercially reasonable
arrangements cannot be effected to resolve such concerns of Law; (ii) neither
Purchaser nor any of its Representatives shall unreasonably disrupt the
personnel or operations of Parent, Operating Company or the Companies, (iii)
until such time as the condition set forth in SECTIONS 7.1(e) and 7.2(j) hereof
has been satisfied, Seller and Parent may reasonably limit access to customer
pricing information and related terms, the disclosure of which would be
reasonably likely to result in material competitive harm to the Business if the
transactions contemplated by this Agreement are not completed, (iv) Seller and
Parent may limit access to information and materials which are subject to a
third party confidentiality agreement which would prohibit the disclosure of the
information or materials which has been requested by Purchaser PROVIDED that,
upon request of Purchaser, Parent shall, and shall cause its Affiliates to, use
commercially reasonable efforts to obtain a waiver to such confidentiality
agreement from the other party thereto to permit such disclosure; and (v) Seller
and Parent may reasonably limit access to Books and Records (or portions
thereof) to the extent such Books and Records (or portions thereof) do not
relate in any manner to the Business; PROVIDED, that with respect to clause (v),
Seller and Parent shall use their reasonable best efforts to separate or
extricate such data and materials which relate to the Business from the data and
materials which do not relate to the Business and provide Purchaser with such
data or materials relating to the Business in usable electronic or hard copy
form. The access and production of information and materials provided for in
this SECTION 4.2(a) shall be coordinated by Andrea L. Horne, Vice President -
Corporate Development at Parent (the "COORDINATOR") or by such other person as
the Coordinator designates from time to time and Purchaser and its Affiliates
and Representatives will contact the Coordinator or persons designated by the
Coordinator with respect to coordinating and obtaining such access or
information and materials. No information or knowledge obtained in any
investigation pursuant to this SECTION 4.2 shall affect or be deemed to modify
any representation or warranty contained in the Agreement or the conditions to
the obligations of the parties to consummate the transactions contemplated by
this Agreement. All documents and information supplied to Purchaser by the
Companies, Seller and Parent under this SECTION 4.2 shall be kept confidential
in accordance with the Confidentiality Agreement and SECTION 4.24 hereof;
PROVIDED, that Purchaser's obligations under the Confidentiality Agreement with
respect to the Confidential Information (as defined in the Confidentiality
Agreement), which relates solely to the Business, Newco or AHCGC, shall
terminate upon Closing.
(b) In order to facilitate the resolution of any claims made
by or against or incurred by Operating Company, Canadian Seller, Parent or the
Companies prior to the Closing or for any other reasonable purpose (excluding
any Action among the parties hereto), for a period of five (5) years following
the Closing (or, with respect to any Books and Records necessary for the
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preparation and filing of any Tax Returns, reports or forms or the defense of
any Tax audit, claim or assessment, until ninety (90) days after the expiration
of the applicable statute of limitations period), the New Group shall, and
Purchaser shall cause the New Group to (i) retain the Books and Records of the
Companies relating to periods prior to the Closing and (ii) upon reasonable
notice, afford Seller and its Representatives reasonable access (including the
right to make photocopies, at Seller's or Parent's expense), during normal
business hours, to such Books and Records; provided that Seller shall reimburse
Purchaser promptly upon demand for all out-of-pocket expenses incurred by
Purchaser in connection therewith.
(c) In order to facilitate the resolution of any claims made
by or against or incurred by Purchaser, Newco, AHCGC or Canadian Purchaser after
the Closing or for any other reasonable purpose (excluding any Action among the
parties hereto), for a period of five (5) years following the Closing (or, with
respect to any Books and Records necessary for the preparation and filing of any
Tax Returns, reports or forms or the defense of any Tax audit, claim or
assessment, until ninety (90) days after the expiration of the applicable
statute of limitations period), Seller, Operating Company and Parent shall each
respectively (i) retain the Books and Records of Seller, Operating Company and
Parent, as applicable, which relate to the Companies for periods prior to the
Closing and which shall not otherwise have been delivered to Purchaser or the
New Group and (ii) upon reasonable notice, afford Purchaser, Newco, AHCGC or
Canadian Purchaser or any of their respective Representatives reasonable access
(including the right to make photocopies, at the expense of Purchaser), during
normal business hours, to such Books and Records; provided that Purchaser shall
reimburse Seller or Parent promptly upon demand for all out-of-pocket expenses
incurred by Seller or Parent in connection therewith.
(d) In the event and for so long as Purchaser, Newco, AHCGC or
Canadian Purchaser actively is contesting or defending against any Action,
investigation, charge, complaint, claim, or demand in connection with any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act or transaction on or prior
to the Closing Date involving New Group or the Companies (other than matters
subject to Article VIII hereof), Seller and Parent will use commercially
reasonable efforts to cooperate, and shall use commercially reasonable efforts
to cause their Affiliates to cooperate, with Purchaser and its counsel in the
contest or defense, make available their personnel, and provide such testimony
and access to their Books and Records as shall be necessary in connection with
the contest or defense, all at the sole cost and expense of Purchaser (except to
the extent Purchaser is entitled to indemnification therefor under Article VIII
hereof).
(e) In the event and for so long as Parent or Seller actively
is contesting or defending against any Action, investigation, charge, complaint,
claim, or demand in connection with any fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction on or prior to the Closing Date involving the
Companies or the Business (other than matters subject to ARTICLE VIII hereof),
Purchaser will use commercially reasonable efforts to cooperate, and shall use
commercially reasonably efforts to cause the New Group and its other Affiliates
to cooperate, with Parent and Seller and counsel for Parent or Seller in the
contest or defense, make available the personnel of Purchaser, the New Group and
Purchaser's other Affiliates, and provide such testimony and access to their
Books and
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Records as shall be necessary in connection with the contest or defense, all at
the sole cost and expense of Parent and Seller.
SECTION 4.3 FURTHER ASSURANCES; MONTHLY MEETINGS.
(a) Upon the terms and subject to the conditions contained
herein, the parties hereto agree, both before and after the Closing, (i) to use
all commercially reasonable efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement,
including, all actions necessary to satisfy the conditions to Closing set forth
in ARTICLE VII hereof, (ii) to execute any documents, instruments or conveyances
of any kind which may be reasonably necessary or advisable to carry out any of
the transactions contemplated by this Agreement, and (iii) to cooperate with
each other in connection with the foregoing.
(b) Subject to the limitations set forth in SECTION 4.2
hereof, key management personnel for the Companies and to the extent reasonably
requested by Purchaser, key management personnel of Parent who are involved in
managing any material aspect of the Business, shall meet with management
personnel of Purchaser on a monthly basis prior to Closing to discuss the
financial and operational results, condition, plans and prospects of the
Business and the Companies. Each meeting will be held at a time and location
mutually agreeable to the parties hereto. As part of such meetings, subject to
the limitations of SECTION 4.2, Purchaser shall be permitted to inquire as to,
and management of the Companies and Parent shall undertake commercially
reasonable efforts to respond to, all material matters relating to the Business,
including: the information provided pursuant to SECTION 4.18(d) and variations
from budgets and forecasts; material transactions relating to the Business which
have been entered into or have been proposed to be entered into (including any
Material Contracts relating to the Business); and plans for and the status and
results of the rebuild of any furnaces at the Key Facilities (and, independent
of such meetings, the Companies and Parent shall undertake commercially
reasonable efforts to promptly provide to Purchaser all material plans and
proposals regarding any such furnace rebuild).
SECTION 4.4 HART-SCOTT-RODINO ACT FILINGS, COOPERATION,
CONTROL.
(a) Each of Purchaser, Seller and Parent shall, and Seller
shall cause the Companies to (i) make or cause to be made the filings required
of such party or any of its Affiliates under the HSR Act and any other
applicable Antitrust Laws with respect to the Share Purchase and the other
transactions contemplated by this Agreement as promptly as is reasonably
practicable and in any event with respect to the HSR Act within five (5)
Business Days after the date of this Agreement, (ii) comply at the reasonably
earliest practicable date with any request under the HSR Act or other Antitrust
Laws for additional information, documents or other materials received by such
party or any of its Affiliates from the Federal Trade Commission or the
Department of Justice or any other Governmental Authority in respect of such
filings or the Share Purchase and the other transactions contemplated by this
Agreement, and (iii) cooperate with the other parties hereto in connection with
making any filing under the HSR Act or other Antitrust Laws (including, with
respect to the party making a particular filing, giving due consideration to all
reasonable additions, deletions or changes suggested in connection therewith)
and in
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connection with any filings, conferences or other submissions related to
resolving any investigation or other inquiry by any such Governmental Authority
under any Antitrust Laws with respect to the Share Purchase and the other
transactions contemplated by this Agreement. Each of Seller, Parent and
Purchaser shall, and shall cause their respective Affiliates to, furnish to the
other all information necessary or desirable for any application or other filing
to be made pursuant to any Antitrust Law in connection with the Share Purchase
and the other transactions contemplated by this Agreement. Each of Seller,
Parent and Purchaser shall promptly inform the other of any communication with,
and any proposed understanding, undertaking or agreement with, any Governmental
Authority regarding any such filings or any such transaction. In the event a
party intends to independently participate in any meeting with any Governmental
Authority in respect of any such filings, investigation or other inquiry that
party shall give the other party reasonable prior notice of such meeting.
Subject to the provisions of the joint defense and confidentiality agreement
previously entered into among counsel to the parties, the parties hereto will
consult and cooperate with one another in connection with any analyses,
appearances, presentations, memoranda, briefs, arguments, opinions and proposals
made or submitted by or on behalf of any party hereto in connection with all
meetings, actions and proceedings under or relating to the HSR Act or other
Antitrust Laws.
(b) Each of Purchaser and Parent shall, and shall cause their
respective Subsidiaries (including the Companies) to, use their reasonable best
efforts to (i) cause the expiration of the notice periods under the HSR Act or
other Antitrust Laws with respect to the Share Purchase and the other
transactions contemplated by this Agreement as promptly as is reasonably
practicable after the execution of this Agreement and (ii) resolve such
objections, if any, as may be asserted by any Governmental Authority with
respect to the Share Purchase or any other transactions contemplated by this
Agreement under the Antitrust Laws, all subject to the limitations set forth in
this SECTION 4.4(b). In connection therewith, if any administrative or judicial
action or proceeding is instituted (or threatened to be instituted) challenging
the Share Purchase or any other transaction contemplated by this Agreement as
violative of any Antitrust Law, each of Parent, Seller and Purchaser shall, and
shall cause their respective Subsidiaries to, cooperate and use their reasonable
best efforts to contest and resist, except insofar as Parent and Purchaser may
otherwise agree, any such action or proceeding, including any action or
proceeding that seeks a temporary restraining order or preliminary injunction
that would prohibit, prevent or restrict consummation of the Share Purchase or
any other transaction contemplated by this Agreement; PROVIDED, HOWEVER, that
Parent and Purchaser shall have no obligation to contest or resist any action or
proceeding after issuance of a preliminary injunction under the Antitrust Laws
by any United States federal court. Should any preliminary or permanent
injunction or similar order granting injunctive relief (other than a temporary
restraining order) under the Antitrust Laws be issued by any United States
federal court, Purchaser may elect (upon written notice within five (5) Business
Days after issuance), but (notwithstanding any provision of this SECTION 4.4)
shall not be required, to seek to have such preliminary injunction, order or
stay vacated, lifted or otherwise set aside, but in the event Purchaser so
elects, Purchaser, Seller and Parent shall be obligated to use their reasonable
best efforts to contest and resist thereafter until such time, if any, as
Purchaser decides (and it shall be entitled in its sole discretion to so decide)
to cease contesting or resisting such preliminary injunction, order or stay or
termination of this Agreement and has notified Parent of its determination
pursuant to SECTION 4.4(d) hereof. Under
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no circumstances shall Purchaser or Parent or any of their respective Affiliates
be required to hold separate (including by trust or otherwise) or divest or
dispose of any of its businesses or assets (categories of assets) or waive any
of the conditions to the Share Purchase or the other transactions contemplated
by this Agreement set forth in Article VII of this Agreement as they apply to
such party, nor shall Purchaser or any of its Affiliates be required to hold
separate (including by trust or otherwise) or divest or dispose of any of the
Assets or any portion of the Business.
(c) Notwithstanding any other provisions of this SECTION 4.4,
Purchaser shall make all strategic and tactical decisions as to the manner in
which to contest, resist or respond to all inquiries, investigations, actions or
proceedings (or threatened investigations, actions or proceedings) under or
relating to the HSR Act or other Antitrust Laws, including all decisions with
respect to: (i) communicating with Governmental Authorities, (ii) whether or not
to continue contesting and resisting any action or proceeding after issuance of
any preliminary injunction under the Antitrust Laws by any United States federal
or state court, and (iii) on what terms Purchaser and Parent shall resolve any
objection, or any action or proceeding instituted (or threatened to be
instituted) under any Antitrust Law challenging the Share Purchase or any of the
transactions contemplated by this Agreement. Seller and Parent shall, and shall
direct their counsel and other Representatives to, cooperate with Purchaser and
act in accordance with any direction given by Purchaser in connection with any
action to be taken under SECTION 4.4(b) or under this SECTION 4.4(c) of which
Seller and Parent has received notice under this SECTION 4.4(c), unless Seller
and Parent shall conclude, after consultation with its legal counsel, that a
particular action or failure to act would likely violate an applicable legal
duty or prohibition.
(d) Purchaser shall promptly advise Seller and Parent in
writing if it determines pursuant to this SECTION 4.4 to cease contesting and
resisting actions relating to the Antitrust Laws. The preceding sentence shall
not be construed to afford Purchaser any right to cease actions under SECTION
4.4, which rights shall solely be established under SECTION 4.4(a)-(c). All
directions, requests, notices and other communications by Purchaser to Seller
and Parent under this SECTION 4.4 shall be in writing and shall set forth in
reasonable specificity the subject direction, request or notice.
(e) Any factual information, documents, opinions, strategies
or other materials exchanged or communicated by Seller and Parent to Purchaser,
or by Purchaser to Seller and Parent, in the course of the parties'
negotiations, respective due diligence or joint defense efforts related to the
subject matter hereunder shall be subject to the terms of a joint defense and
confidentiality agreement previously entered into among counsel to the parties.
(f) As used in this Agreement, the term "ANTITRUST LAWS" means
the HSR Act, the Sherman Act, as amended, the Clayton Act, as amended, the
Federal Trade Commission Act, as amended, and any other federal, state or
foreign statutes, rules, regulations, orders, decrees, administrative or
judicial doctrines or other laws that are designed to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint of
trade or otherwise denominated as competition laws of the particular
jurisdiction.
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SECTION 4.5 NOTICE OF DEVELOPMENT. Between the date of this
Agreement and the Closing, the Companies or Seller and/or Parent, as applicable,
on the one hand, and Purchaser, on the other hand, shall give prompt notice to
the other of any event, or the failure of a party hereto or any Affiliate of any
party hereto to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it hereunder, which occurrence or failure would
be reasonably likely to make the satisfaction of the conditions of ARTICLE VII
impossible or unlikely; PROVIDED, HOWEVER, that such disclosure shall not be
deemed to modify or amend the representations or warranties made by Seller,
Parent or Purchaser herein for any purpose under this Agreement, including the
satisfaction of the conditions to Closing under ARTICLE VII or Seller's,
Parent's or Purchaser's indemnification obligations under ARTICLE VIII, except
as otherwise provided by SECTION 8.3(g) hereof, or to cure any breach of a
representation or warranty when made or any covenant or agreement or to satisfy
any condition herein. Without limiting the foregoing, between the date of this
Agreement and the Closing, Purchaser shall give prompt notice to Seller and
Parent of any amendment, modification or termination of the Commitment.
Purchaser shall also (i) respond, from time to time, to reasonable inquiries of
Parent as to the status of the Financing contemplated by the Commitment and (ii)
promptly notify Seller and Parent upon receipt of written notice from the
lenders that (A) a condition to funding under the Commitment has become
incapable of being satisfied (beyond any applicable cure period, if any), (B)
the Commitment has lapsed or (C) the Commitment has been terminated by the
lenders under the Commitment.
SECTION 4.6 INSURANCE; RISK OF LOSS.
(a) To the extent that, after the Closing Date, the Companies
or Seller or Parent require any information regarding claim data, payroll or
other information in order to make filings with insurance carriers, Seller shall
promptly supply such information to the New Group and Purchaser shall cause the
New Group to promptly to supply such information to Seller or Parent.
(b) Parent will cause the Companies to obtain the following
title insurance commitments, policies, riders and endorsements in preparation
for the Closing and will cause Seller to deliver such documents and materials to
Purchaser at Closing: with respect to each parcel of Owned Property which is
listed in SECTION 2.15(a) of the Disclosure Schedule, an extended coverage ALTA
Owner's Policy of Title Insurance (or equivalent policy reasonably acceptable to
Purchaser if the real property is located in a state in which ALTA Owner's
Policy of Title Insurance is not available), dated as of the Closing, issued by
Chicago Title Insurance Company or other commercially equivalent title insurer
reasonably satisfactory to Purchaser, in such amount as Purchaser and Seller
reasonably may determine to be the fair market value of such real property
(including all improvements located thereon), insuring fee title to such real
property to be in the applicable Companies as of the Closing (subject only to
title exceptions which are Permitted Encumbrances).
To the extent available in the applicable jurisdiction, and
without the requirement that Parent or any of its Affiliates provide any
indemnification or affidavits to the title insurance company (other than ALTA
"Owner's Affiliates", gap indemnities and mechanics' lien indemnities), each
title insurance policy delivered under SECTION 4.6(b) above shall not include a
creditor's rights
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exception and shall (i) insure title to the real property and all recorded
easements benefiting such real property, (ii) contain an "extended coverage
endorsement" insuring over the general exceptions contained customarily in such
policies, (iii) contain an ALTA Zoning Endorsement 3.1 (or equivalent), (iv)
contain an endorsement insuring that the real property described in the title
insurance policy is the same real estate as shown on the Survey delivered with
respect to such property, (v) contain an endorsement insuring that each street
adjacent to the real property is a public street and that there is direct and
unencumbered pedestrian and vehicular access to such street from the real
property, (vi) if the real property consists of more than one record parcel,
contain a "contiguity" endorsement insuring that all of the record parcels are
contiguous to one another, (vii) contain a "non-imputation" endorsement to the
effect that title defects known to the officers, directors, and stockholders of
the owner prior to the Closing shall not be deemed "facts known to the insured"
for purposes of the policy, (viii) contain any owner's comprehensive, tax parcel
and plat and subdivision endorsements, (ix) contain affirmative coverage over
failure of closure of the legal description to the Owned Property and (x)
contain such other endorsements and coverages as may be reasonably requested by
Purchaser. Purchaser shall be responsible for all of the costs and expenses
associated with purchasing the title insurance policies and endorsements
contemplated above, PROVIDED, HOWEVER, that Seller shall pay any title fees or
charges for the preliminary title commitments or other appropriate evidence of
title as if the title insurance policies are not actually purchased and the
costs and expenses associated with obtaining the surveys required pursuant to
SECTION 4.7 hereof.
SECTION 4.7 SURVEYS. With respect to each of the Owned
Properties as to which a title insurance policy is to be procured pursuant to
SECTION 4.6(b) above, Parent will cause the Companies to procure in preparation
for the Closing (and in time for the preparation and issuance of the title
policies required at Closing by Section 4.6 hereof) and will cause Seller to
deliver at Closing, a current survey of the real property certified to
Purchaser, prepared by a licensed surveyor and conforming to current ALTA
Minimum Detail Requirements for Land Title Surveys or similar local criteria,
disclosing the location of all improvements, easements, party walls, sidewalks,
roadways, utility lines, and other matters shown customarily on such surveys,
and showing access affirmatively to public streets and roads and showing that
the improvements (including, all building and loading docks and packaging lots
appurtenant thereto) are entirely located on the Owned Properties (the
"SURVEY"). The Survey shall not disclose any Encumbrance which is not a
Permitted Encumbrance.
SECTION 4.8 CORPORATE NAMES.
(a) To the extent the trademarks, service marks, brand names,
logos or trade, corporate or business names of Parent, Seller or of any of
Parent's Affiliates ("PARENT'S IP") are not included in the Assets but are used
by the Business on packaging or printed advertising and promotional materials,
Inventories or like materials (collectively, the "PACKAGING") included in the
Assets, Purchaser and the New Group may use such Packaging or sell such
Inventories after the Closing Date (without altering or modifying such Packaging
and Inventories) until such Packaging is exhausted and in any event no more than
one (1) year after the Closing Date. Parent, Seller and Affiliates, as
applicable, hereby grant to Purchaser a non-exclusive, nontransferable,
non-sublicensable (except to Purchaser's Affiliates) license to use Parent IP in
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such countries as Parent, Seller or their Affiliates, as applicable, have rights
in such Parent IP, during such period as the Packaging is being used up by the
New Group. In the event that the New Group manufactures or produces products
after the Closing Date for use with Packaging, Seller may reasonably request,
and the New Group shall provide, samples of such products to examine and ensure
that such products are of a quality level not materially different from the
existing Inventory at Closing. In the event that the products used with the
Packaging are of materially inferior quality, Seller may request that the New
Group raise the quality of the products being manufactured for use with the
Packaging. If the New Group has not, within forty-five (45) days of such notice
by Seller to the New Group, provided Seller with evidence that the quality of
its products used in connection with Packaging is substantially similar in level
to the products manufactured prior to Closing, the New Group shall cease to use
such Packaging in connection with such products.
(b) Prior to Closing, Parent shall cause Newco to change its
corporate name to "Anchor Hocking Inc." No later than two (2) Business Days
after the Closing, Seller shall, and Parent shall cause Seller to, change its
corporate name from "Anchor Hocking Corporation" to another corporate name and
none of Parent or its Affiliates shall use the name "Anchor Hocking" or any name
similar thereto or derivative thereof, as a corporate name or business alias at
any time after the second Business Day following the Closing.
SECTION 4.9 DOMAIN NAMES/INTERNET SITES.
(a) Notwithstanding SECTION 4.8 and except as expressly
provided herein, Parent agrees that neither it nor its Affiliates shall at any
time adopt or use any domain names, URLs, e-mail addresses, meta tags, search
terms for Internet portals or search engines and the like containing any item
set forth in SECTION 2.16(b) of the Disclosure Schedule, or any term confusingly
similar to any of the foregoing.
(b) Within thirty (30) days after the Closing Date, Parent
shall and shall cause Seller and each of its Affiliates to transfer, convey and
assign to Purchaser all of Parent's, Seller's and their respective Affiliates'
right, title and interest in and to the domain names listed in SECTION 2.16(b)
of the Disclosure Schedule.
(c) Effective as of the Closing Date, Parent and Seller shall,
and shall cause their respective Affiliates to, transfer to Purchaser all of the
Internet and Intranet web sites, web pages and site content (including, but not
limited to, software, scripts, HTML pages, file structures, artwork, drawings,
illustrations, photographs, videos, logos, text, slogans, mechanicals,
transparencies, data, data structures, data paths, system specifications and
configurations, and related information and documentation) operated or
maintained by or on behalf of the Companies, but only to the extent such
materials and contents relate to the Business ("BUSINESS INTERNET CONTENT").
Parent and Seller further agree to remove, and to cause their respective
Affiliates to remove, all such Business Internet Content from any Internet or
Intranet sites they operate or have operated for themselves or their Affiliates
within fifteen (15) days after the Closing. In connection with such transfer,
Purchaser shall as promptly as practicable, no later than fifteen (15) days
after the Closing, remove all Seller, Parent and other non-Business trademarks,
brandnames and logos from such materials.
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SECTION 4.10 INTERCOMPANY ACCOUNTS, AGREEMENTS AND
TRANSACTIONS. Parent and Seller shall cause all Contracts and arrangements
between or among Parent, Seller or any of their Affiliates (other than Newco and
AHCGC), on the one hand, and any of the Companies (other than Seller), on the
other hand, including (a) all inter-company notes and (b) all Contracts and
arrangements set forth on SECTION 2.18(a) of the Disclosure Schedule, to be
terminated immediately prior to the Closing with no further Liabilities on the
part of any party thereto.
SECTION 4.11 RESIGNATIONS. On the Closing Date, Parent and
Seller shall use commercially reasonably efforts to cause to be delivered to
Purchaser duly signed resignations, effective at the time of Closing, of all
directors and officers of Newco and AHCGC other than the persons identified in
writing by Purchaser within ten (10) days prior to Closing.
SECTION 4.12 BOOKS AND RECORDS.
(a) After the Closing, upon reasonable written notice,
Purchaser and Parent shall furnish or cause to be furnished to each other and
their respective Representatives reasonable access, during normal business
hours, to such information and assistance relating to the Companies as is
reasonably necessary for financial reporting , accounting matters and personnel
management, the preparation and filing of any Tax Returns, reports or forms or
the defense of any Tax audit, claim or assessment. Each party shall reimburse
the other for reasonable out-of-pocket costs and expenses incurred in assisting
the other pursuant to this SECTION 4.12(a).
(b) As soon as reasonably practical after the Closing Date,
Seller and Parent shall deliver or cause to be delivered to Purchaser all of the
Books and Records in the possession of Seller, Parent or their Affiliates
relating primarily to the Business; PROVIDED, HOWEVER, that:
(i) Purchaser recognizes that certain Books and Records
may relate primarily to Parent or to subsidiaries or divisions of Parent other
than the Companies and that Parent may retain such Books and Records; PROVIDED,
Parent shall use its reasonable best efforts to separate or extricate such data
and materials which relate to the Business from the data and materials which do
not relate to the Business and provide Purchaser with such data or materials
relating to the Business in usable electronic or hard copy form upon Purchaser's
request; and
(ii) Parent may retain any Tax Returns, reports or forms,
and Purchaser shall be provided with copies of such Tax Returns (or relevant
portions thereof), reports or forms only to the extent that they relate to
separate Tax Returns (including relevant portions of such Tax Returns that are
included in part of a consolidated, combined or unitary Tax Return relating to
Parent and its Affiliates) or separate Tax liability of any of the Companies;
PROVIDED that in no event shall Purchaser or any of the Companies be denied
access to any information necessary for the preparation and filing of any Tax
Returns that include any of the Companies after the Closing Date.
SECTION 4.13 LABOR NEGOTIATIONS. Parent, Seller and the
Companies agree to keep Purchaser apprised of the status of any and all
negotiations with its collective bargaining units on any new collective
bargaining agreement and material contacts pertaining thereto (including all
material proposals made or received and all documents pertinent thereto),
including,
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at least ten (10) days prior to the commencement of any negotiation, by advising
Purchaser of its financial and other negotiation objectives and strategies in
the areas of pay, active and retiree health and welfare benefits, pension
benefits, severance, work rules and material contract modifications. Parent
shall use commercially reasonable efforts to provide Purchaser with updated
information on the bargaining effort on a weekly basis or more frequently as
material developments arise, including its intent to accept any alterations to
the collective bargaining agreement which are materially different from the
objectives provided to Purchaser.
SECTION 4.14 COVENANT NOT TO COMPETE
(a) For a period of five (5) years from and after the Closing
Date (the "NON-COMPETE PERIOD"), Parent and Parent's Affiliates shall not, and
Parent shall cause its Affiliates not to, Participate anywhere in the Western
Hemisphere in a Competing Business, except with respect to the services to be
provided to the New Group and Purchaser pursuant to the Transition Services
Agreement or as permitted below.
(b) For a period of two (2) years from and after the Closing
Date, Parent and its Affiliates shall not, and Parent shall cause its Affiliates
not to, directly or indirectly solicit or seek to induce any of the employees of
the New Group, or any of the employees of Purchaser who were former Employees,
on or after the Closing Date to leave their employment or positions with the New
Group or Purchaser, PROVIDED, HOWEVER, that "solicit or seek to induce" shall
not include, and none of Parent or any of its Affiliates shall be prohibited
from (A) advertising employment opportunities in any national newspaper, trade
journal or other publication in a major metropolitan area, e.g. Columbus, Ohio
or Pittsburgh, Pennsylvania, or any third party Internet website posting, or
negotiating with, offering employment to or employing such persons contacted
through such medium, (B) participating in any third party hiring fair or similar
event open to the public or negotiating with, offering employment to or
employing such persons contacted through such medium, (C) soliciting,
negotiating with, offering employment to or employing a former employee of the
New Group at any time (x) following the six-month anniversary of the termination
by such employee of his or her employment with the New Group or (y) at any time
after the termination by Purchaser or the New Group of such employee's
employment with the New Group or (D) soliciting, negotiating with or offering
employment to the Persons listed on EXHIBIT 4.14(b) prior to the Closing,
PROVIDED, HOWEVER, such Persons shall not be hired by or transferred to Parent
or any of its Affiliates (other than Seller or AHCGC) prior to the Closing Date.
Parent shall be responsible for any violation of this covenant by any of its
Affiliates or employees.
(c) During the Non-Compete Period, Parent and Parent's
Affiliates shall not, and Parent shall cause its Affiliates not to, disparage
the New Group, including its products or services; provided that the provisions
of this SECTION 4.14(c) shall not preclude (x) good faith compliance with
legally compelled statements as responses or testimony, such as responding or
testifying to a subpoena, interrogatory, investigative demand or similar legal
process, or (y) enforcing rights and asserting defenses under this Agreement or
the Ancillary Agreements or with respect to any Third Party Claim.
(d) Nothing in the foregoing provisions of this SECTION 4.14
shall:
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(i) restrict the activities described in EXHIBIT 4.14(d)(i)
hereof;
(ii) prohibit, restrict or limit in any manner the design,
development, distribution, servicing, sale or marketing by Parent or any of its
Affiliates of any products that contain, use or include glass parts as
components of products that are not primarily made of glass (e.g., a glass lid
for a metal frying pan), PROVIDED that such glass components are not
manufactured by Parent or any of its Affiliates (other than at the Exempt
Facilities);
(iii) prohibit any Person not previously an Affiliate of
Parent that becomes a controlling Affiliate of Parent following the Closing
Date, by way of a bonafide third-party acquisition of Parent (by way of merger,
asset sale or other combination or otherwise not intended to be a device for the
purpose of avoiding these covenants herein), from continuing to engage in a
Competing Business in which it is engaged at the time it becomes such a
controlling Affiliate of Parent, so long as the management of Parent, Operating
Company or Seller are not involved in such Competing Business;
(iv) prohibit Parent or any of its Affiliates from acquiring
equity interests in, or the assets of, a Person (such Person, together with any
Affiliate (or portion of any Affiliate) acquired with such Person, the "ACQUIRED
PERSON"), PROVIDED (A) if the revenues of such Acquired Person (or generated
from such Acquired Person's acquired assets) and any Affiliates of Parent from
the Competing Business in the Western Hemisphere in the last twelve (12) full
months prior to such acquisition are greater than $10 million in such period,
Parent shall, and Parent shall cause such Acquired Person and such Affiliates of
Parent to, divest itself or themselves of the assets and operations of such
Acquired Person and such Affiliates of Parent that relate to the Competing
Business in the Western Hemisphere within twelve (12) months following the date
of such acquisition and (B) if the revenues of such Acquired Person (or
generated from such Acquired Person's acquired assets) and any Affiliates of
Parent from the Competing Business in the Western Hemisphere in the last twelve
(12) full months prior to such acquisition are less than $10 million, and after
the acquisition, the revenues of such Acquired Person (or generated from the
acquired assets of such Acquired Person) and any Affiliates of Parent from the
Competing Business in the Western Hemisphere shall in any twelve (12) month
period during the Non-Compete Period exceed $15 million, Parent shall, and
Parent shall cause such Acquired Person and such Affiliates of Parent to, divest
itself or themselves of the assets and operations of such Acquired Person and
such Affiliates of Parent that relate to the Competing Business in the Western
Hemisphere within twelve (12) months following the end of the period in which
the $15 million revenue threshold was exceeded;
(v) prohibit the sale of the glass products purchased from
Seller (the "AH PRODUCTS") in the Ordinary Course of Business by Newell
International, a division of Operating Company, and Newell Limited; PROVIDED,
that (A) such AH Products may be sold only for use or resale outside North
America and (B) the AH Products may be sold and delivered by Newell
International, a division of Operating Company, and Newell Limited only for a
period of one hundred eighty (180) days after the Closing Date; or
(vi) require Parent or its Affiliates to prohibit the resale
in the Western Hemisphere by any customer not affiliated with Parent or Seller
of products manufactured at the
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Exempt Facilities, PROVIDED none of Parent or Seller or their respective
Affiliates may solicit any customer in the Western Hemisphere relating to the
Competing Business or have a branch office in the Western Hemisphere relating to
a Competing Business.
(e) As used in this SECTION 4.14, (i) "COMPETING BUSINESS"
shall mean the design, development, manufacture, distribution, servicing, sale
or marketing of glass products that have been manufactured or sold by the
Companies within the two (2) year period prior to the Closing and any other
glass products similar in design or function; (ii) "PARTICIPATE" shall mean to
have any direct or indirect interest (economic or otherwise) in any enterprise,
whether as a manufacturer, distributor, reseller, officer, director, employee,
partner, stockholder, member, sole proprietor, agent, representative,
independent contractor, consultant, franchiser, franchisee, creditor, owner or
otherwise and including sales (whether direct or to a Person who directly or
indirectly resells in the Western Hemisphere), but shall not include the
ownership of less than one percent (1%) of the stock of a publicly-held
corporation whose stock is traded on a national securities exchange or listed
with the Nasdaq Stock Market and (iii) "WESTERN HEMISPHERE" shall mean the
geographic area set forth on the map attached hereto as EXHIBIT 4.14(e),
including North America, South America, Central America, the Caribbean islands
and the Hawaiian islands.
(f) If the final judgment of a court of competent jurisdiction
declares that any term or provision of this SECTION 4.14 is invalid or
unenforceable, the parties hereto agree that the court making the determination
of invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
(g) Seller and Parent agree that the New Group and Purchaser
and its Affiliates may suffer irreparable harm from a breach of any of the
covenants and/or agreements contained in this SECTION 4.14. In the event of an
alleged or threatened breach by Parent or any of its Affiliates of any of the
provisions of this SECTION 4.14, the New Group or Purchaser or their Affiliates
or its successors and assigns may, in addition to all other rights and remedies
existing in their favor, apply to any court of competent jurisdiction for
specific performance and/or injunctive or other relief in order to enforce or
prevent any violations of the provisions hereof (including the extension of the
Non-Compete Period by a period equal to the length of the violation of this
SECTION 4.14). In the event an alleged breach or violation by Parent or any of
its Affiliates of any of the provisions of this SECTION 4.14, the Non-Compete
Period shall be tolled if such alleged breach or violation is resolved against
Parent or its Affiliates.
(h) The parties hereto acknowledge that the covenants in this
SECTION 4.14 are intended to benefit Purchaser, the New Group and any Affiliates
of Purchaser from and after the Closing.
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SECTION 4.15 NO SOLICITATION.
(a) From the date of this Agreement through the Closing,
Parent, Operating Company, Canadian Seller and the Companies and their
respective Representatives shall not, directly or indirectly, enter into,
solicit or initiate any discussions or negotiations with, or encourage or
respond to any inquiries or proposals by, or participate in any negotiations
with, or provide any information to, or otherwise cooperate in any other way
with, any Person, other than Purchaser and its Representatives, concerning any
sale of all or any material portion of the Business, or of the Shares or any
equity securities of the Companies, or any merger, consolidation, liquidation,
dissolution or similar transaction involving the Companies or any material
portion of the Assets (a "PROPOSED ACQUISITION"). Parent and Seller agree that
they will immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties (other than Purchaser) heretofore
conducted, or the provision by Parent or its Affiliates, including the Companies
or any of their respective Representatives of information to any party (other
than Purchaser) to which information heretofore has been provided with respect
to a Proposed Acquisition. If, after the date hereof, Parent or its Affiliates,
including the Companies or any of their respective Representatives receives any
such inquiry or proposal or request for information, or offer to discuss or
negotiate with respect to any Proposed Acquisition, Parent and Seller will, and
Parent shall cause its Affiliates, including the Companies and Canadian Seller,
to (i) not respond to any such inquiry or proposal or request and (ii)
immediately provide notice thereof to Purchaser, including all material terms of
the Proposed Acquisition and the identity of the proposing party or parties.
(b) From the date of this Agreement through the Closing,
Parent shall not, and shall cause its Affiliates and Parent's and such
Affiliates' respective employees not to, (i) directly or indirectly solicit or
seek to induce any Employee to leave his or her employment or positions with the
Companies or (ii) hire or transfer or permit any hire or transfer of any
Employee or any person who was an Employee within the ninety (90) days prior to
the date of such hire or transfer to positions or employment with Parent or any
of its Affiliates, PROVIDED, Parent and its Affiliates may solicit, offer
employment to and employ the persons set forth on EXHIBIT 4.15(b) hereof.
SECTION 4.16 ASSET TRANSFER TRANSACTIONS.
(a) SELLER ASSETS. Prior to the Closing, Seller shall, in
accordance with all applicable Laws, transfer, convey and deliver to Newco, and
Newco shall accept and assume, all right, title and interest of Seller in and to
(i) (1) all tangible assets located at the Facilities, (2) all tangible assets
not located at the Facilities which are used primarily or held for use primarily
in connection with, or that relate primarily to, the design, development,
manufacture, distribution, servicing, sale or marketing of consumer or specialty
glass products, (3) all the software and firmware embedded in or used to control
or operate the tangible assets described in clauses (1) or (2) above, (4) all
intangible assets (including all rights, privileges, Permits and Contracts) not
described in clause (3) above primarily used or held for use or used primarily
in connection with, or that relate primarily to, the design, development,
manufacture, distribution, servicing, sale or marketing of consumer or specialty
glass products, (5) all Employees of the Companies (other than (I) Canadian
Employees, (II) the employees listed on EXHIBIT 4.15(b) and (iii) if hired by or
transferred to Parent or any of its Affiliates effective as of the Closing, the
employees listed on
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EXHIBIT 4.14(b)) and (6) all assets reflected on the Final Closing Date Balance
Sheet, and (ii) without limiting the foregoing, the Specified Seller Assets
(collectively, the "SELLER ASSETS"). Notwithstanding the foregoing, the Seller
Assets shall not include any of the Excluded Seller Assets. "SPECIFIED SELLER
ASSETS" shall mean (A) all of the Company Properties not owned or leased by
AHCGC, (B) all Contracts set forth on SECTION 4.16(a)(B) of the Disclosure
Schedule, (C) all Intellectual Property set forth on SECTION 4.16(a)(C) of the
Disclosure Schedule, (D) certain other assets set forth on SECTION 4.16(a)(D) of
the Disclosure Schedule and (E) all of the issued and outstanding capital stock
of AHCGC.
(b) EXCLUDED SELLER ASSETS. Notwithstanding any other
provision of this Agreement, Parent and its Affiliates shall retain, and shall
not transfer to Newco hereunder or otherwise, and if held by AHCGC, shall cause
AHCGC to transfer to Seller or another Affiliate of Parent (other than Newco),
as directed by Parent, (i) the assets, rights, privileges, Permits and Contracts
listed on SECTION 4.16(b) of the Disclosure Schedule, (ii) the assets which are
both (x) owned, leased or licensed and used by Parent or its Affiliates (other
than Seller or AHCGC) in providing services that are listed in SECTION 2.18(b)
of the Disclosure Schedule and (y) if a tangible asset, not located at any
Facility, (iii) the working capital assets and other financial assets provided
by Parent and its Affiliates (other than Newco or AHCGC) which are not included
in the definition of Net Working Capital, (iv) the assets (x) owned, leased or
licensed that will be used by Parent or its Affiliates (other than Seller or
AHCGC) to provide services to Purchaser and the New Group under the Transition
Services Agreement and (y) are not located at any Facility, (v) the capital
stock and other equity interests of any Person other than AHCGC and Newco held
by Seller, (vi) the Former Properties, and (vii) the Shared Assets (the
privileges, assets, rights, Permits and Contracts described in clauses (i)-(vii)
above are collectively referred to herein as the "EXCLUDED SELLER ASSETS").
Notwithstanding the foregoing, the Excluded Seller Assets shall not include any
Specified Seller Asset.
(c) ASSUMPTION OF SELLER LIABILITIES. Subject to CLAUSE (D)
below, prior to the Closing, Parent and its Affiliates shall transfer to Newco
and Newco shall assume and thereafter pay, honor and discharge when due, all
Liabilities (other than (i) Tax Liabilities, (ii) Liabilities to be cancelled
pursuant to SECTION 4.10 or 4.23 hereof and (iii) all Liabilities associated
with or relating to the Excluded Seller Assets) of Seller relating exclusively
to the Business, all Liabilities relating exclusively to the Outside Assets, all
Liabilities related to collective bargaining grievances including those
grievances set forth in SECTION 2.28(a)(iii) of the Disclosure Schedule, and all
Liabilities reflected in the Final Closing Net Working Capital (collectively,
and excluding the Excluded Seller Liabilities, the "ASSUMED SELLER
LIABILITIES").
(d) EXCLUDED SELLER LIABILITIES. Notwithstanding any other
provision of this Agreement, Newco shall not assume, incur or otherwise be
responsible for any Liabilities of Seller, other than the Assumed Seller
Liabilities and other than as provided for in ARTICLE VIII, whether actual or
contingent, matured or unmatured, liquidated or unliquidated, or known or
unknown, whether arising out of the occurrences prior to, at or after the date
hereof (and in no event, whether or not included within the definition of
Assumed Seller Liabilities, shall Newco assume, incur or otherwise be
responsible for (i) any Seller Retained Liability or (ii) any Liability arising
out of a matter described in clauses (vii), (ix), (xi), (xii) or (xiii) of
SECTION 8.2(a) or (iii)
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any Liability associated with or relating to any Excluded Seller Asset)
(collectively, the "EXCLUDED SELLER LIABILITIES").
(e) OUTSIDE ASSETS. Prior to the Closing, Parent shall and
Parent shall cause its Affiliates to, in accordance with all applicable Law,
effect the assignment and transfer of all of their right, title and interest in
and to the Outside Assets to Newco or AHCGC, as designated in writing by
Purchaser within twenty (20) Business Days after the date hereof.
(f) INSTRUMENTS OF ASSIGNMENT AND ASSUMPTION.
(i) ASSIGNMENT OF SELLER ASSETS. To effect the assignment
of the Seller Assets and the assumption of the Assumed Seller Liabilities
contemplated by this SECTION 4.16, Parent will, and Parent will cause Seller and
Newco to execute and deliver to one another prior to Closing the following
documents, each of which will be reasonably satisfactory in form and substance
to Purchaser:
(A) a bill of sale conveying to Newco all of Seller's
personal property included in the Seller Assets;
(B) assignments of all Contracts included in the
Seller Assets which shall assign to Newco all of Seller's
right, title and interest therein and thereto;
(C) assignments of patents and trademarks and other
Intellectual Property rights included in the Seller Assets in
recordable form to the extent necessary to assign such rights
to Newco;
(D) a special warranty deed with respect to each
parcel of Owned Property, together with any necessary transfer
declarations or other filings;
(E) an assignment of lease with respect to each lease
included in the Company Properties, together with any
necessary transfer declarations;
(F) certificates of title to all motor vehicles
included in the Seller Assets, duly endorsed for transfer to
Newco; and
(G) such other instruments and documents as are
necessary to properly transfer and assign the Seller Assets to
Newco in accordance with the provisions of this SECTION 4.16.
(ii) ASSUMPTION OF ASSUMED LIABILITIES. Prior to Closing,
Newco shall deliver to Parent and Seller an instrument of assumption evidencing
Newco's assumption of the Assumed Seller Liabilities, in form and substance
reasonably satisfactory to Purchaser.
(iii) OUTSIDE ASSETS. All assignment and assumption
instruments and documents used to transfer the Outside Assets to Newco or AHCGC
prior to Closing shall be reasonably satisfactory in form and substance to
Purchaser.
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(iv) ASSET TRANSFER DOCUMENTS. Each of the transfer,
assignment and assumption documents required for the Asset Transfer Transactions
and described in this SECTION 4.16(f) shall be referred to herein as the "ASSET
TRANSFER DOCUMENTS."
(g) FURTHER ACTIONS. To the extent that time does not permit
proper recordation of such assignments contemplated by this SECTION 4.16, as for
example in the case of certain assignments of Intellectual Property, Seller
shall cause the assignment of beneficial title therein to be effected prior to
the Closing and, subsequent to the Closing, will provide all assistance and
cooperation as is necessary to effectuate recordable assignment of such assets.
If for a period of twenty-four (24) months after the Closing Date, it is
discovered by either of the parties hereto that (i) certain assets and
properties of the Business were not properly included in the Outside Assets and
assigned to the New Group owned or (ii) certain assets and properties of Seller
which relate to the Business were not properly included in the Seller Assets and
assigned to Newco or (iii) certain assets and properties of Canadian Seller
which were required to be transferred to Canadian Purchaser pursuant to the
Canadian Purchase Agreement and were not properly transferred to Canadian
Purchaser at Closing, Seller shall promptly and Parent shall cause its
Affiliates (including Operating Company, Seller and Canadian Seller) to promptly
take all actions necessary to effect the proper assignment and transfer of all
right, title and interest in all such assets and properties to Newco or AHCGC,
as designated by Purchaser, PROVIDED that Contracts that were not properly
assigned shall be subject to the limitations set forth in SECTION 4.21 hereof.
If for a period of twenty-four (24) months after the Closing Date, it is
discovered by either of the parties hereto that (i) any Excluded Seller Asset
was improperly assigned to Newco or retained by or assigned to AHCGC or (ii) any
Assumed Seller Liability was not properly assumed by Newco prior to the Closing
or (iii) any Canadian Liability (other any Excluded Canadian Liability, as such
term is defined in the Canadian Purchase Agreement) which was required to be
assumed by Canadian Purchaser pursuant to the Canadian Purchase Agreement and
was not properly assumed by Canadian Purchaser at the Closing, Purchaser shall,
and Purchaser shall cause its Affiliates to, take all actions necessary to
effect the assignment back to Parent or one of its Affiliates, as designated by
Parent, of such Excluded Seller Assets, or the assumption by Purchaser or one of
its Affiliates, as designated by Purchaser, of such Assumed Seller Liabilities
or Canadian Liabilities, as the case may be.
SECTION 4.17 CANADIAN ASSET ACQUISITION. Subject to the terms
and conditions hereto, Parent shall cause Canadian Seller to and Purchaser shall
cause Canadian Purchaser to consummate the transactions contemplated by the
Canadian Purchase Agreement effective upon the Closing.
SECTION 4.18 FINANCIAL STATEMENTS.
(a) Within fifteen (15) days after the date hereof, Parent
shall (i) prepare, and shall cause its auditors to provide a report with respect
to the Audited Financial Statements and deliver such financial statements and an
associated unqualified opinion of Parent's auditors to Purchaser and (ii)
prepare the Interim Financial Statements and deliver to Purchaser such financial
statements and cause Parent's auditors to provide an associated review report
under SAS 71.
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(b) Parent shall also prepare the Final Stub Period Financial
Statements and shall cause its auditors to provide an associated review report
under SAS 71, both of which shall be provided to Purchaser within forty-five
(45) days after the end of the applicable calendar quarter (whether or not such
45th day is after the Closing Date).
(c) Parent shall also prepare unaudited consolidated balance
sheets, three month and year-to-date statements of income, cash flows and
stockholders equity of the Division at and for each of the calendar quarters
ending between the date hereof and the Closing Date (collectively the "QUARTERLY
PERIOD FINANCIAL STATEMENTS") which Quarterly Period Financial Statements shall
be provided to Purchaser within thirty (30) days of the end of each applicable
calendar quarter (other than, if applicable, the calendar quarter ending
December 31, 2001). Each of the Quarterly Period Financial Statements shall (A)
except as set forth in SECTION 2.7(ii) of the Disclosure Schedule as of the date
hereof, fairly present in all material respects the consolidated financial
condition, results of operations, cash flows and stockholders equity of the
Division as of the date thereof or for the period covered thereby and shall be
consistent in all material respects with the Books and Records of Parent and its
Affiliates (as so consolidated) and (B) have been prepared in accordance with
GAAP consistent with the accounting principles and practices applied in
preparation of the 2000 Unaudited Financial Statements, applied on a consistent
basis throughout the periods indicated, subject to normal and recurring year-end
adjustments that are not expected to be material in amount. Except as provided
in SECTION 2.7(c), none of Parent or its Affiliates makes any representation or
warranty, express or implied, as to the Quarterly Period Financial Statements.
(d) Between the date hereof and Closing, Parent shall provide
Purchaser monthly "blue book" reports (including the accompanying analysis and
reports) with respect to the Companies and the Business within three (3)
Business Day after such report is produced at the Companies. None of Parent or
its Affiliates makes any representation or warranty, express or implied, as to
the blue book reports.
(e) If the Closing does not occur prior to December 31, 2001,
Parent shall also prepare, and cause its auditors to provide an associated
unqualified opinion with respect to, the 2001 Audited Financial Statements,
which 2001 Audited Financial Statements shall be provided to Purchaser within
fifty (50) days of the end of calendar year 2001.
SECTION 4.19 AUDITORS CONSENT AND COOPERATION.
(a) Simultaneously with the execution and delivery of the
Subsequent Financial Statements, Parent shall cause Arthur Andersen LLP ("ARTHUR
ANDERSEN") to deliver to Purchaser a duly executed letter in which Arthur
Andersen: (i) acknowledges that it understands that Purchaser intends to file
the Audited Financial Statements, the Final Stub Period Financial Statements
and/or the Interim Financial Statements (as required by the Securities Exchange
Commission (the "SEC") pursuant to the Securities Act and the Exchange Act ("SEC
FILINGS")), and if provided, the 2001 Audited Financial Statements in statements
and reports required to be filed by Purchaser and its successors from time to
time with the SEC pursuant to SEC Filings, (ii) subject to its usual procedures
and professional standards and after being given reasonable opportunity to
review such SEC Filings and documents incorporated by reference therein, agrees
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that it shall consent to the inclusion of any of its audit reports on the
Audited Financial Statements and, if PROVIDED, the 2001 Audited Financial
Statements in any SEC Filing, until such financial statements and consents are
no longer required to be included in such SEC Filing by the Securities Act or
the Exchange Act and (iii) acknowledges that Purchaser will be providing the
Subsequent Financial Statements, the Final Stub Period Financial Statements and
if provided prior to the Closing, the 2001 Audited Financial Statements, to
potential lenders for the transactions contemplated hereby, including those
under the Commitment. Parent shall use commercially reasonably efforts to cause
Arthur Andersen, including by providing customary representation letters and
other customary documents and instruments, (I) to consent to the inclusion of
any of its audit reports on the Audited Financial Statements, and if provided,
the 2001 Audited Financial Statements, in any SEC Filing and (II) to issue
customary comfort letters (concerning matters which are the subject of the
Audited Financial Statements or the Final Stub Period Financial Statements, or,
if provided, the 2001 Audited Financial Statements) that may be required in
connection with any offering of debt or equity securities by Purchaser or its
successors (after being given reasonable opportunity to review such offering
documents).
(b) If Arthur Andersen fails, for any reason whatsoever, to
consent to the inclusion of any such audit reports on the Audited Financial
Statements and, if provided, the 2001 Audited Financial Statements in any SEC
Filing or to provide such comfort letters, Parent shall, and shall cause Seller
to, (i) provide Purchaser's Representatives access to its Books and Records and
personnel commensurate with what it provided Arthur Andersen in connection with
its audit of the Audited Financial Statements and, if provided, the 2001 Audited
Financial Statements and its review of the Final Stub Period Financial
Statements so that Purchaser may expeditiously cause any or all of such
financial statements to be reaudited, again reviewed or to be so confirmed by
"comfort" letters as the case may be, (ii) use commercially reasonable efforts
to cause Arthur Andersen to cooperate with the auditors engaged by Purchaser to
conduct such audit or review and (iii) provide customary representation letters
and other customary documents and instruments. Seller and Parent acknowledge
that if Arthur Andersen fails to consent to the inclusion of any such audit
reports in any SEC Filing and Purchaser or any of its successors is denied in
any manner whatsoever the access provided for in this SECTION 4.19(b), Purchaser
and its successors (if any) will suffer irreparable injury and damage.
Therefore, Seller and Parent agree that if Purchaser or its successors is denied
access provided for in this SECTION 4.19(b) in any manner whatsoever, Purchaser
and its successors (if any) will be entitled to, in addition to all other
remedies available to it, injunctive relief and specific performance to prevent
the breach of and to secure the enforcement of this SECTION 4.19(b).
SECTION 4.20 FINANCING.
(a) Purchaser agrees to use all commercially reasonable
efforts to obtain the funding under the Commitment and renew the Commitment if
expired or lapsed (which, if so renewed, shall constitute the "COMMITMENT"). In
particular, Purchaser agrees to use all commercially reasonably efforts (i) to
obtain all necessary consents, opinions, certificates and other documentation
necessary to obtain funding under the Commitment and (ii) to negotiate and
document the Financing in an expeditious manner, commencing promptly after the
date of this
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Agreement and completing such documentation as soon as reasonably practicable
after receipt of the Subsequent Financial Statements.
(b) Prior to the Closing Date, Parent agrees to use all
commercially reasonably efforts to provide and to cause any of its Affiliates
(including Seller) and their respective Representatives to provide all necessary
cooperation in connection with arrangement of Financing in respect of the
transactions contemplated by this Agreement, including participating in
meetings, due diligence sessions, preparation of any financing documents or
other reasonably requested certificates or documents.
SECTION 4.21 CONSENTS, NOTICES AND APPROVALS GENERALLY
(a) Parent shall (and to the extent necessary, shall cause its
Affiliates to) use all commercially reasonable efforts to obtain all Consents of
all Governmental Authorities and all other Persons (i) that are necessary for
that party's execution and delivery of, and the performance of its obligations
pursuant to this Agreement and the Ancillary Agreements and the consummation of
the transactions contemplated by this Agreement, (ii) that are required with
respect to any Material Permits, Material AHCGC Permits or Material Contracts,
(iii) that are required with respect to a Contract or Permit listed on SCHEDULE
7.2(C)(II) or (IV) as may be reasonably requested by Purchaser in writing in a
timely manner and will cooperate with the other parties hereto in promptly
seeking to obtain all such Consents; PROVIDED that (x) with respect to all
antitrust matters, such matters shall be governed by SECTION 4.4 hereof and (y)
to the extent expenses and costs associated with obtaining such Consents are
established or required by the terms of the Contract or the Permit, they shall
be solely for the account of and paid by Parent. Parent's and Purchaser's
obligations under this SECTION 4.21(a) shall terminate one (1) year after the
Closing. Except to the extent notices must be given by Purchaser alone, Parent
shall or shall cause its Affiliates to give all required notices to third
parties (including Governmental Authorities, except to the extent such notice is
not required by Law). Purchaser shall cooperate and use commercially reasonable
efforts to assist Parent and the Companies in giving such notices and obtaining
such Consents.
(b) Notwithstanding anything in this Agreement to the
contrary, to the extent that any Contract to be transferred pursuant to the
terms of this Agreement or any Ancillary Agreement may not be properly
transferred without the Consent of a third-party (including any Governmental
Authority), or if the transfer or attempted transfer would constitute a
violation or breach thereof or a violation of any Law, nothing in this Agreement
will constitute a transfer or an attempted transfer thereof and, except as
provided for in SECTION 4.21(d) below, Purchaser and the New Group shall not be
deemed to assume any Liabilities thereunder until properly transferred.
(c) To the extent that the Consents described in SECTION
4.21(a) or that are otherwise necessary to assign, transfer, sublease or
sublicense any of the Assets to Newco, AHCGC, Canadian Purchaser or to Purchaser
are not obtained prior to Closing, Parent and its Affiliates shall, commencing
on the Closing Date and continuing for the shorter of (x) the duration (without
giving effect to any termination right arising out of the transactions
contemplated by this Agreement) of each such Asset (subject to extensions
thereof as requested by Purchaser to the
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extent expressly provided for under such Contract or Permit), or (y) the period
ending upon Parent's receipt of written notice (or, if later, the effective time
of such termination set forth in such notice) from Purchaser that Purchaser no
longer desires such Asset, use commercially reasonable efforts (which shall not
be deemed to include a guarantee of performance by Parent or Seller) to (A)
provide to Purchaser and its Affiliates the benefits of any such Asset not
assigned, transferred, subleased or sublicensed due to Parent's or its
Affiliates' failure or inability to obtain such Consent, (B) cooperate with
Purchaser and its Affiliates to reach a reasonable and lawful arrangement
designed to provide such benefits to Purchaser and its Affiliates during such
period and (C) enforce at the request of Purchaser, or allow Purchaser and its
Affiliates to enforce (and, solely for such purpose, Parent hereby constitutes
and appoints Purchaser or the subject Affiliate as its true and lawful
attorney-in-fact), any rights of Parent and its Affiliates under any such Asset
against the issuer thereof or the other party or parties thereto (including the
right to elect to terminate such of the foregoing in accordance with the terms
thereof upon the request of Purchaser); PROVIDED, HOWEVER, that the reasonable
costs and expenses (including reasonable professional fees and expenses)
incurred by Parent or its Affiliates at Purchaser's request, and incurred by
Purchaser or its Affiliates, in each case, with respect to any of the actions
contemplated under (C) above, shall be borne equally by Purchaser and Seller.
The failure or inability to obtain any Consent subject to this SECTION 4.21
shall not be a breach of this Agreement so long as Parent and its Affiliates
have carried out their obligations under this SECTION 4.21, PROVIDED, the
foregoing shall not limit the conditions to Closing set forth in ARTICLE VII
hereof.
(d) To the extent that Purchaser or its Affiliates are
provided the benefits of any Asset pursuant to clause (c) of this SECTION 4.21,
Purchaser or such Affiliate shall perform for the benefit of the issuer thereof,
or the other party or parties thereto, the obligations of Parent or its relevant
Affiliate, as the case may be, thereunder or in connection therewith, but only
to the extent (i) that such action by Purchaser would not result in any default
thereunder or in connection therewith and (ii) such performance pertains to the
benefits provided to Purchaser or its Affiliates; PROVIDED, HOWEVER, that if
Purchaser or its Affiliate shall fail to perform to the extent required herein
and such failure continues for ten (10) Business Days following notice thereof
to Purchaser, Parent and its Affiliates shall (A) thereafter cease to be
obligated under this SECTION 4.21 to provide Purchaser or its Affiliates with
any benefits in respect of the Asset which is the subject of such failure to
perform unless and until such situation is remedied or, (B) at the sole option
of Parent (provided such Contract was (x) a Material Contract or (y) (1) a
non-Material Contract as to which Parent had at Closing notified Purchaser was
to be subject to this SECTION 4.21 and (2) within ten (10) Business Days after
Closing, Purchaser had not notified Parent of its desire not to be transferred
such Contract), Purchaser shall promptly pay or reimburse Parent to remedy such
failure to perform during such period of failure of performance for the shorter
of the periods set forth in subpart (x) or (y) of SECTION 4.21(c) above.
SECTION 4.22 COMPANY EXPENSES. Seller and Parent hereby
represent and covenant that all amounts payable by the Companies to financial
advisors, attorneys, accountants and other professionals in connection with the
transactions contemplated by this Agreement, are not and shall not be
Liabilities of the Companies and have been or will be fully paid by Seller or
Parent.
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SECTION 4.23 RELEASE. Seller, agrees, on its own behalf and on
behalf of its Affiliates and successors and assigns, (i) to waive all rights of
indemnification from AHCGC and (ii) to release AHCGC from any and all
indemnification obligations under the Transfer Agreement, dated as of December
10, 1995, between Seller and AHCGC (the "1995 TRANSFER AGREEMENT"), under the
Assumption of Liabilities Agreement, dated as of December 31, 1995, between
Seller and AHCGC and under any other agreement associated with the 1995
Restructuring, effective as of the Closing.
SECTION 4.24 CONFIDENTIALITY.
(a) Each of Parent, Operating Company and Seller shall (and in
each case shall cause their respective Representatives and Affiliates to) keep
confidential prior to and after Closing, and shall not (and in each case shall
cause their respective Representatives not to) disclose to any Person, any
Confidential Information (as defined below) of Purchaser which may be or may
have been provided or disclosed to Parent or its Affiliates or their
Representatives in connection with the due diligence process or in the process
of negotiation of the transactions contemplated by this Agreement. Seller,
Parent and Operating Company shall (and in each case shall cause their
respective Representatives and Affiliates to) keep confidential prior to and
after the Closing, and shall not (and in each case shall cause their respective
Representatives not to) disclose to any Person, any Confidential Information to
the extent it relates to the Business. For purposes of this Agreement,
"CONFIDENTIAL INFORMATION" expressly includes, but is not limited to, any and
all non-public information, whether written or oral, including sales and
marketing information, financial information, customer lists, projections,
plans, proposals, compensation information, manufacturing processes and
technologies, balance sheets, marketing strategies, information regarding
suppliers, customers and sales personnel, income statements, Contracts,
documents, and all other materials which are not publicly available. With
respect to the Confidential Information of Purchaser, the term Confidential
Information does not include information which (i) is or becomes generally
available to the public other than as a result of a disclosure by Parent or any
of its Affiliates or any person acting on behalf of Parent or any of its
Affiliates or (ii) becomes available to Parent or its Affiliates on a
non-confidential basis from a source other than the Companies or their Employees
or former employees, PROVIDED that such source was not bound by a
confidentiality agreement with, or other contractual, legal or fiduciary
obligation of confidentiality to Purchaser or its Affiliates with respect to
such information relating to the Purchaser. With respect to the Confidential
Information which relates to the Business which Parent and its Affiliates
possess, the term Confidential Information does not include information which
(i) is or becomes generally available to the public other than as a result of a
disclosure by Parent or any of its Affiliates or any person acting on behalf of
Parent or any of its Affiliates or (ii) becomes available to Parent or its
Affiliates on a non-confidential basis from a source other than the Companies or
their Representatives or former employees, PROVIDED that such source was not
bound by a confidentiality agreement with, or other contractual, legal or
fiduciary obligation of confidentiality to Purchaser or its Affiliates with
respect to such information relating to the Business.
(b) Purchaser shall (and shall cause its Representatives and
Affiliates to) keep confidential prior to and after Closing, and shall not (and
in each case shall cause its
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Representatives and Affiliates not to) disclose to any Person, any Confidential
Information of Parent or its Affiliates (other than as relates to the Business)
which may be or may have been provided or disclosed to Purchaser or its
Affiliates or Representatives in connection with the due diligence process or in
the process of negotiation of the transaction contemplated by this Agreement.
With respect to the Confidential Information of Parent or its Affiliates (other
than as relates to the Business), the term Confidential Information does not
include information which (i) is or becomes generally available to the public
other than as a result of a disclosure by Purchaser or any of its Affiliates or
any person acting on behalf of Purchaser or any of its Affiliates or (ii)
becomes available to Purchaser or its Affiliates on a non-confidential basis
from a source other than Parent or its Affiliates or Representatives or former
employees, provided that such source was not bound by a confidentiality
agreement with, or other contractual, legal or fiduciary obligation of
confidentiality to Parent or its Affiliates (other than as relates to the
Business) with respect to such information.
(c) The obligations of Purchaser, Parent, Seller, Operating
Company and their respective Affiliates under this SECTION 4.24 shall terminate
on the five (5) year anniversary of the Closing Date.
(d) If a party hereto is requested or becomes legally
compelled to disclose any of the Confidential Information, such party shall
provide, or cause the provision of, prompt written notice of such request or
legal compulsion to the other parties hereto so that such other parties hereto
may seek a protective order or other remedy or waive compliance with this
SECTION 4.24 of the Agreement. The party from whom the Confidential Information
is being requested shall reasonably cooperate in obtaining such protective order
or other remedy upon such other party's request and at such other party's
expense. If, in the absence of a protective order or the receipt of a waiver
hereunder, the party from whom the Confidential Information has been requested
is nonetheless compelled to disclose Confidential Information to or at the
direction of any tribunal or other Governmental Authority or else stand liable
for contempt or suffer other censure, penalty or adverse consequences, such
compelled party may disclose such specifically requested Confidential
Information to or at the direction of such tribunal or other Governmental
Authority only after first notifying the other parties hereto.
SECTION 4.25 RELEASE OF LIENS. Prior to or upon the Closing,
Seller shall use commercially reasonable efforts to deliver to Purchaser
releases, in form and substance reasonably satisfactory to Purchaser, effective
to release all Encumbrances (other than (i) subparts (a), (c) and (d) of the
Permitted Encumbrances definition and (ii) the Encumbrances listed on SECTION
2.22(a) of the Disclosure Schedule) in favor of any Person on or relating to
AHCGC or Newco, the shares of capital stock of Newco or AHCGC or any of the
Assets, including UCC termination statements and releases of any and all
mortgages or other liens on any Assets.
SECTION 4.26 1995 RESTRUCTURING. Prior to or upon the Closing,
Seller and Parent shall, and Parent shall cause its Affiliates to, (a) enter
into all agreements and make all filings, as to which Parent or its Affiliates
are the only signatories thereto, necessary to complete the proper documentation
and the proper transfer and conveyance of all of the rights, title and interest
to the Assets in accordance with all applicable Law that were to be transferred
to AHCGC by Seller pursuant to the 1995 Transfer Agreement and agreements
associated therewith
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(the "UNTRANSFERRED ASSETS") and (b) undertake all commercially reasonable
efforts to obtain all Consents relating to the issuance or proper transfer and
assignment, to the extent they constitute Untransferred Assets, (i) of each
Material AHCGC Permit and (ii) of each Material Contract from Seller to AHCGC.
All such filings, agreements and Consents (the "ASSET DROP-DOWN DOCUMENTS")
shall be in form and substance reasonably satisfactory to Purchaser.
SECTION 4.27 CAPITAL EXPENDITURES IN 2002. Upon preparation
thereof, but no later than November 30, 2001, Parent shall promptly provide a
copy of the Business' capital budget plan for the calendar year 2002 (the "2002
CAPITAL BUDGET PLAN"), in form similar to the 2001 Capital Budget Plan attached
hereto in SECTION 2.23 of the Disclosure Schedule.
SECTION 4.28 RELEASE OF GUARANTORS. Purchaser agrees to use
all commercially reasonable efforts to release and remove as promptly as
practicable after the Closing Date Parent and its Affiliates (other than Newco
or AHCGC) as guarantors under any Contract which is part of the Assets.
SECTION 4.29 PRE-CLOSING DISCLOSURES.
(a) Between the date hereof and five (5) Business Days prior
to the Closing Date, Parent may elect to notify (the "PARENT LIABILITIES
NOTICE") Purchaser of the occurrence of any events, circumstances or conditions
which first arise after the date hereof and prior to the Closing which could
cause any representation or warranty set forth in ARTICLE II hereof to be
breached as of the Closing Date. The Parent Liabilities Notice shall (i)
describe such event, circumstance or condition, (ii) indicate the
representations and warranties that would be reasonably likely to be breached
thereby and Parent's good faith estimate of the amount of the potential
Liabilities associated therewith and (iii) identify, to Seller's Knowledge, all
third-parties which are involved in the potential or actual Liabilities
identified by Parent. Parent agrees to make available to Purchaser all
information (whether then or later available) regarding the actual or potential
Liabilities described in the Parent Liabilities Notice and to use commercially
reasonable efforts to provide access to all personnel of Parent and its
Affiliates and third parties involved in the Liabilities described in the Parent
Liabilities Notice.
(b) Purchaser shall provide Parent notice within two (2)
Business Days prior to the Closing Date stating whether Purchaser agrees to
limit the aggregate indemnifiable Damages with respect to the breaches
identified in the Parent Liabilities Notice to $33,200,000. If Purchaser agrees
to so limit the indemnifiable Damages, the notice referred to in the first
sentence hereof shall be referred to herein as the "LIMITATION OF
INDEMNIFICATION NOTICE", and Parent shall have no right to terminate this
Agreement pursuant SECTION 9.1(i). However, if Purchaser does not so agree to
limit such indemnifiable Damages, Parent shall have the right to exercise its
termination rights set forth in SECTION 9.1(i) hereof.
(c) No disclosure pursuant to this SECTION 4.29 shall be
deemed to modify or amend the representations or warranties made by Seller or
Parent herein for any purpose under this Agreement, including the satisfaction
of the conditions to Closing under ARTICLE VII or Seller's, Parent's or
Purchaser's indemnification obligations under ARTICLE VIII, except as
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otherwise contemplated by SECTION 8.3(g) hereof, or to cure any breach of a
representation or warranty when made or any covenant or agreement.
SECTION 4.30 MATERIAL CONTRACTS PRIOR TO CLOSING. To the
extent the Companies enter into any Material Contract between the date hereof
and the Closing, which would require the Consent of a third-party to avoid an
Adverse Event as to such Material Contract in connection with the transactions
contemplated by this Agreement (a "Pre-Closing Material Contract"), Parent
agrees to promptly notify Purchaser in writing of such Pre-Closing Material
Contract (the "Material Contract Notice"). Each Material Contract Notice shall
have attached a copy of such Pre-Closing Material Contract. Within five (5)
Business Days of receipt of such Material Contract Notice, Purchaser shall
notify Parent in writing whether Purchaser requests that such Pre-Closing
Material Contract be added to the list of Required Consents, thereby requiring
that obtaining such Consent be a condition to Closing (the "Purchaser Required
Consent Notice"). If Purchaser so requests, Parent shall, within five (5)
Business Days of receipt of such Purchaser Required Consent Notice, notify
Purchaser in writing of its agreement to either: (A) add such Contract to the
list of Required Consents or (B) not have such Consent be added to the list of
Required Consents, in which case Parent shall be deemed to have agreed to
indemnify Purchaser pursuant to Section 8.2(a)(x) hereof as to such Contract.
SECTION 4.31 KITCHEN ESSENTIALS TRADEMARK LICENSE. If Target
Corporation or any of its Affiliates agrees to sublicense to Purchaser or any of
its Affiliates with respect to glass products, the "Kitchen Essentials" or
"Essentials" trademarks or any trademarks derivative thereof to the extent
licensed to Target Corporation, and Target Corporation or any of its Affiliates
notifies Parent or its Affiliates regarding such matter and seeks to obtain
Parent's or its Affiliates consent with respect to such sublicense, Parent
hereby agrees that it will consent, and will cause its applicable Affiliates to
consent, to such sublicense between Target Corporation or any of its Affiliates
and Purchaser or any of its Affiliates.
SECTION 4.32 PURCHASE ORDERS. For a period of nine (9) months
after the Closing Date, (a) Mirro Company, an Affiliate of Parent, may from time
to time issue Purchase Orders to AHCGC for the products set forth in Exhibit
4.32 at the prices set forth in Exhibit 4.32, provided that (1) notwithstanding
the other terms set forth in such Purchase Orders, the terms set forth under
"Other Terms" in Exhibit 4.32 shall control, and (2) the minimum quantity of
products to be supplied under each Purchase Order shall be as set forth by Mirro
Company and reasonably agreed to by AHCGC in the applicable Purchase Order, and
(b) Purchaser shall cause AHCGC to honor and perform AHCGC's obligations under
such Purchase Orders in accordance with the terms of this Section 4.32 and
Parent shall cause Mirro Company to honor and perform its obligations under such
Purchase Order in accordance with the term of this Section 4.32. Following the
nine (9) month anniversary of the Closing Date, either Mirro Company or
Purchaser may terminate the agreements contemplated by this Section 4.32 at any
time after thirty (30) days notice to the other party.
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ARTICLE V
EMPLOYEE MATTERS
SECTION 5.1 COMPANY BENEFIT PLANS. Except as otherwise
provided in this ARTICLE V, as of the Closing Date, Parent, Operating Company
and the Companies shall take such action as is necessary such that the Companies
shall cease being "participating employers" and shall cease any co-sponsorship
and participation in each Company Benefit Plan that is jointly adopted,
sponsored or maintained by Parent, Operating Company and the Companies and in
which any current, terminated or retired Employee participates. Except as
otherwise provided in SECTIONS 5.2, 5.3 and 5.4, after the Closing Date the
Companies shall have no further Liability and Seller shall retain all
Liabilities for claims under such Plans, whether such claims are made on or
after the Closing Date.
SECTION 5.2 DEFINED BENEFIT PLANS.
(a) Parent or the Operating Company, as applicable, shall
spin-off and transfer all pension obligations and liabilities of the Newell
Rubbermaid Pension Plan for Factory and Distribution Hourly Paid Employees
("PARENT'S HOURLY PLAN") and the Newell Rubbermaid Pension Plan for Salaried and
Clerical Employees ("PARENT'S SALARIED Plan" and collectively with Parent's
Hourly Plan the "PARENT'S HOURLY AND SALARIED PLANS") attributable to Employees
(which, for purposes of this Section 5.2, shall include active, terminated and
retired Employees) to new pension plans to be established for hourly and
salaried Employees of the Companies (individually the "NEW HOURLY PLAN" and the
"NEW SALARIED PLAN" and collectively the "NEW HOURLY AND SALARIED PLANS"). Each
such spin-off and transfer shall be accomplished as set forth in this SECTION
5.2 and in accordance with Section 414(l) of the Code.
(b) The New Hourly and Salaried Plans will provide that (i)
Employees' accrued benefits under Parent's Hourly and Salaried Plans will be
transferred to and credited under the New Hourly and Salaried Plans, as
applicable; and (ii) such Employees' periods of service credited under Parent's
Hourly or Salaried Plans will be credited for purposes of determining benefit
accrual, vesting and eligibility under the New Hourly or Salaried Plans, as
applicable. The New Hourly and Salaried Plans shall at Closing provide, with
respect to service with the Companies before Closing, benefits, rights and
features that are identical in all respects to those provided by Parent's Hourly
and Salaried Plans to the Employees as of the Closing Date. The Employees shall
participate in the New Hourly and Salaried Plans, as applicable, as of the
Closing Date.
(c) The date on which the plan liabilities of Parent's Hourly
and Salaried Plans are calculated shall be called the "TRANSFER DATE" and shall
be effected as soon as practicable following the Closing Date. The plan
liabilities of the Parent's Hourly Plan to be transferred to the New Hourly Plan
(the "HOURLY PENSION Liabilities") shall be the actuarial present value of the
accrued plan benefits of Employees who are participants in the Parent's Hourly
Plan as of the Transfer Date calculated pursuant to Section 414(l) of the
Internal Revenue Code using the following actuarial assumptions: (i) for
determining the present value of benefit liabilities, an interest rate equal to
the rate prescribed by the PBGC for terminating pension plans for the month in
which the Transfer Date occurs, as set forth in ERISA Section 4044 and PBGC
Regulation
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Section 4044.52 and Appendix B to Part 4044; (ii) the mortality table, as set
forth in Treasury Regulation Section 4044.53 and Appendix A to Part 4044 (Part
4022 as of March 17, 2000); (iii) the PBGC's expected retirement ages as set
forth in PBGC Regulation Section 4044.55 and Appendix D to Part 4044, Table
II-A, II-B or II-C, as applicable based on (A) an unreduced retirement age equal
to the earliest age at which the entire benefit can commence on an unreduced
basis, and (B) an earliest retirement age equal to the earliest age at which the
entire benefit can be commenced; (iv) the loading assumptions set forth in PBGC
Regulation Section 4044.52(e) and Appendix C to Part 4044; and (v) for purposes
of determining eligibility for retirement subsidies such calculations shall be
based upon service as of the Transfer Date and age as of the applicable expected
retirement age as determined pursuant to clause (iii) above. As soon as
practicable following the Transfer Date, pursuant to SECTION 5.2(g) below,
Parent shall cause assets of Parent's Hourly Plans equal to either (i) the
Hourly Pension Liabilities or (ii) the amount required by Code Section 414(l) if
the funded status of Parent's Hourly Plan as of the Transfer Dates determined
using the foregoing actuarial assumption would prohibit the transfer of assets
equal to the Hourly Plan Liabilities (the "HOURLY PENSION ASSETS") plus interest
at the rate of 6% per annum from the Transfer Date to the date the Hourly
Pension Assets are actually conveyed, to be conveyed in cash to the New Hourly
Plan. Until the Hourly Pension Assets are transferred to the New Hourly Plan,
Parent or the Operating Company, as applicable, will continue to process
distributions required to be made to Employees under Parent's Hourly Plan on and
after the Closing Date in accordance with its terms and procedures.
(d) The plan liabilities of the Parent's Salaried Plan to be
transferred to the New Salaried Plan (the "SALARIED PENSION LIABILITIES") shall
be the actuarial present value of the accrued plan benefits of Employees who are
participants in the Parent's Salaried Plan as of the Transfer Date calculated
pursuant to Section 414(l) of the Internal Revenue Code using the following
actuarial assumptions: (i) for determining the present value of benefit
liabilities, an interest rate equal to the rate prescribed by the PBGC for
terminating pension plans for the month in which the Transfer Date occurs, as
set forth in ERISA Section 4044 and PBGC Regulation Section 4044.52 and Appendix
B to Part 4044; (ii) the mortality table, as set forth in Treasury Regulation
Section 4044.53 and Appendix A to Part 4044 (Part 4022 as of March 17, 2000);
(iii) the PBGC's expected retirement ages as set forth in PBGC Regulation
Section 4044.55 and Appendix D to Part 4044, Table II-A, II-B or II-C, as
applicable based on (A) an unreduced retirement age equal to the earliest age at
which the entire benefit can commence on an unreduced basis, and (B) an earliest
retirement age equal to the earliest age at which the entire benefit can be
commenced; (iv) the loading assumptions set forth in PBGC Regulation Section
4044.52(e) and Appendix C to Part 4044; and (v) for purposes of determining
eligibility for retirement subsidies such calculations shall be based upon
service as of the Transfer Date and age as of the applicable expected retirement
age as determined pursuant to clause (iii) above. As soon as practicable
following the Transfer Date, Parent shall cause assets of Parent's Salaried Plan
equal to either (i) the Salaried Pension Liabilities or (ii) the amount required
by Code Section 414(l) if the funded status of Parent's Salaried Plan as of the
Transfer Date determined using the foregoing actuarial assumption would prohibit
the transfer of assets equal to the Salaried Plan Liabilities (the "SALARIED
PENSION ASSETS") plus interest at the rate of 6% per annum from the Transfer
Date to the date the Salaried Pension Assets are actually conveyed, to be
conveyed in cash to the New Salaried Plan. Until the Salaried Pension Assets are
transferred to the New Salaried Plan, Parent
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or the Operating Company, as applicable, will continue to process distributions
required to be made to Employees under Parent's Salaried Plan or after the
Closing Date, in accordance with its terms and procedures.
(e) If as of the Transfer Date the aggregate amount of Hourly
Pension Assets to be transferred from Parent's Hourly Plan to the New Hourly
Plan as determined under SECTION 5.2(c) hereof do not equal or exceed the amount
of the Hourly Pension Liabilities also to be transferred under SECTION 5.2(c)
hereof, then Seller shall pay Purchaser the difference between the Hourly
Pension Liabilities and the Hourly Pension Assets, plus interest at the rate of
6% per annum from the Transfer Date to the date the Hourly Pension Assets are
actually conveyed in cash to Purchaser. Such payment shall be made no later than
five (5) Business Days after the amount of the Hourly Pension Assets and the
Hourly Pension Liabilities to be transferred are finally determined under
SECTION 5.2(g) hereof.
(f) If as of the Transfer Date the aggregate amount of
Salaried Pension Assets to be transferred from Parent's Salaried Plan to the New
Salaried Plan as determined under SECTION 5.2(d) hereof do not equal or exceed
the amount of the Salaried Pension Liabilities also to be transferred under
SECTION 5.2(d) hereof, then Seller shall pay Purchaser the difference between
the Salaried Pension Liabilities and the Salaried Pension Assets, plus interest
at the rate of 6% per annum from the Transfer Date to the date the Salaried
Pension Assets are actually conveyed in cash to Purchaser. Such payment shall be
made no later than five (5) Business Days after the amount of the Salaried
Pension Assets and the Hourly Pension Liabilities to be transferred are finally
determined under SECTION 5.2(g) hereof.
(g) Parent's actuary shall deliver a report to Parent setting
forth the determination of the values of each the Hourly Pension Liabilities and
the Salaried Pension Liabilities using the assumptions set forth in SECTIONS
5.2(c) and (D), and Parent shall provide a copy to Purchaser. Purchaser shall
have fourteen (14) days to notify Parent in writing of any objections regarding
the determination of the Hourly Pension Liabilities and Salaried Pension
Liabilities. If Purchaser timely notifies Parent of any objections that Parent
and Purchaser cannot resolve within thirty (30) days thereafter, Parent and
Purchaser shall appoint an actuarial firm satisfactory to both parties (the cost
of which shall be paid evenly by both parties) to resolve such objections, which
resolution shall be final and binding on both parties. In the event that
Purchaser shall object to the determination of the Hourly Pension Liabilities
and/or Salaried Pension Liabilities and such objections have not been resolved
by the Transfer Date, then Parent may in its discretion transfer to, and
Purchaser shall accept in, the New Hourly and Salaried Plans assets in the form
of cash from Parent's Hourly and Salaried Plans as specified in SECTION 5.2(c)
and 5.2(D) based on the determination of the Hourly Pension Liabilities and the
Salaried Pension Liabilities made by Parent's actuary. If Purchaser's objections
regarding the determination of the Hourly Pension Liabilities and/or Salaried
Pension Liabilities are later resolved in favor of Purchaser and the amount of
the Hourly Pension Liabilities and/or Salaried Pension Liabilities are
increased, then Parent shall cause assets of Parent's Hourly Plan and/or
Parent's Salaried Plan in the form of cash which reflect such adjustment in the
Hourly Pension Liabilities and/or Salaried Pension Liabilities as of the
Transfer Date, to be transferred in accordance with SECTIONS 5.2(c) and (d) to
the New Hourly Plan and/or New Salaried Plan, plus interest from the Transfer
Date to the date such
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additional assets are actually conveyed in cash at the rate of 6% per annum on
such additional assets.
(h) The benefits to be provided to salaried and non-union
hourly Employees under the New Hourly and Salaried Plans for a period of
12-months after the Closing shall not be less than either (i) those provided to
such Employees under Parent's Hourly and Salaried Plans, as applicable,
immediately prior to the Closing Date or (ii) those provided under Purchaser's
defined benefit pension plans from time to time during such 12-month period to
similarly situated employees of Purchaser; PROVIDED, HOWEVER, that nothing
herein shall prohibit Purchaser from amending its defined benefit pension plan
or the New Hourly and Salaried Plans at any time following the Closing.
SECTION 5.3 DEFINED CONTRIBUTION PLANS. As soon as practicable
following the Closing Date, Parent or Operating Company, as applicable, shall
spin-off and transfer the account balances of each Employee who is employed by a
Company on the Closing Date and who is a participant in the Newell Rubbermaid
401(k) Savings Plan (the "PARENT'S 401(k) PLAN") to a 401(k) Plan established or
maintained by Purchaser (the "NEW 401(k) PLAN") in a trustee to trustee transfer
in accordance with Section 414(l) of the Code. The transfer of the account
balance liability and related assets shall include a trustee-to-trustee transfer
of all participant loan accounts and liabilities under Parent's 401(k) Plan. The
level of contributions to be provided to salaried and non-union Employees under
the New 401(k) Plan shall not be less than those provided to similarly situated
employees of Purchaser. The New 401(k) Plan will provide that Employees' periods
of service credited under Parent's 401(k) Plan will be credited for purposes of
determining participation, vesting and eligibility for any other benefit right
or feature of the New 401(k) Plan which is available based upon service.
SECTION 5.4 RETIREE HEALTH. On and after the Closing Date,
Purchaser shall establish for Employees a retiree health and life insurance plan
and Purchaser shall assume all Liabilities with respect to the Employees under
the Newell Medical Plan for Retirees ("PARENT'S RETIREE PLAN"). Purchaser shall
not assume any Liabilities with respect to any retiree health and life insurance
benefits of any Employees who are not employed by a Company on the Closing Date
and any such benefits shall continue to be provided under Parent's Retiree Plan.
SECTION 5.5 WELFARE PLANS.
(a) Parent shall retain all liability for claims incurred
under the Company Benefit Plans that are welfare benefit plans within the
meaning of Section 3(1) of ERISA and all severance plans or arrangements,
whether or not such plans or arrangements are "welfare benefit plans" within the
meaning of Section 3(1) of ERISA (the "PARENT'S WELFARE PLANS") on and prior to
the Closing Date. For this purpose claims under any medical, dental, vision, or
prescription drug plan, generally will be deemed to be incurred on the date that
the service giving rise to such claim is performed and not when such claim is
made; PROVIDED, HOWEVER, that with respect to claims relating to hospitalization
the claim will be deemed to be incurred on the first day of such hospitalization
and not on the date that such services are performed. Claims for disability
under any long or short term disability plan shall be incurred on the date the
Employee or former Employee is first absent from work because of the condition
giving rise to such disability and not
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when the Employee or former Employee is determined to be eligible for benefits
under the applicable Parent's Welfare Plan. Seller shall provide under Parent's
Welfare Plans any continuation coverage required under Section 4980B of the
Code, Part 6 of Title I of ERISA or applicable state law ("COBRA") to each
"qualified beneficiary" as that term is defined in COBRA whose first "qualifying
event" (as defined in COBRA) occurs on or prior to the Closing Date.
(b) Notwithstanding the foregoing, as soon as practicable
after the Closing Date, Parent or the Operating Company, as applicable, shall
spin-off and transfer all of the accounts of its Section 125 flexible spending
plan attributable to Employees who are employed by a Company on the Closing Date
and their dependents and beneficiaries to a new Section 125 flexible spending
plan established by the Purchaser. Neither the Operating Company nor Seller
shall have any liability with respect to the Purchaser's Section 125 flexible
spending plan after the Closing Date, including liability for any Claims
incurred prior to the Closing Date.
SECTION 5.6 COMPENSATION AND BONUS PLANS. For twelve (12)
months following the Closing Date, Purchaser shall not reduce the base salary or
base hourly wage rate of any Employee below the rate in effect immediately prior
to the Closing Date. As soon as practicable after the Closing Date, Parent shall
pay all bonuses and incentive compensation, if any, earned by the Employees
under the Company Benefit Plans which are bonus and or incentive compensation
plans. For purposes of determining the amount of any such bonus or whether any
performance targets or goals entitling Employees to any such bonuses Parent
shall treat the Closing Date as the last day of the applicable period for
determining bonuses and shall, if applicable, annualize any financial or other
performance results. If an Employee participates in a bonus plan of Parent,
Seller, the Operating Company or a Company as of the Closing Date, then
Purchaser shall make a bonus plan at the same potential bonus levels available
to such Employee for the remainder of the calendar year in which the Closing
Date occurs; PROVIDED, HOWEVER, that Purchaser in its sole discretion may
establish the criteria for receiving any such bonuses.
SECTION 5.7 PURCHASER'S PLANS. Effective as of the Closing
Date, Purchaser shall provide welfare benefits to Employees under welfare
benefit plans maintained by Purchaser (the "PURCHASER'S WELFARE PLANS").
Purchaser's Welfare Plans shall provide Employees with either (a) welfare
benefits substantially similar to those provided under Parent's Welfare Plans
immediately prior to the Closing or (b) welfare benefits that are substantially
similar to those provided to Purchaser's similarly situated employees. Purchaser
will credit the Employees for their service with Parent, its Affiliates, the
Companies (and any predecessors) for purposes of eligibility, benefit accruals,
waiting periods or other qualification or eligibility for any benefit or
privilege, under Purchaser's Welfare Plans in which Employees are allowed to
participate after the Closing, and any applicable vacation or severance policies
or programs, but not to the extent such credit would result in a duplication of
benefits. The Employees will be allowed by Purchaser to participate in
Purchaser's Plans without being subject to any waiting periods or any
restrictions or limitations for pre-existing conditions, except to the extent
any such Employee has not satisfied any corresponding applicable waiting period,
or limitation under the Company Benefit Plans. Purchaser's Welfare Plans shall
credit each Employee (including any spouses and dependents) with the amount, if
any, paid during the calendar year in which the Closing Date occurs under the
Company Benefit Plans towards deductibles, co-pays and out-of-pocket maximums.
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SECTION 5.8 SEVERANCE. If during the nine (9) month period
following the Closing Date, any Employee would be eligible for severance under
Purchaser's severance plan set forth on SECTION 5.8-1 hereof of the Disclosure
Schedule (or would be eligible for such severance but for the fact that such
Employee is a non-union hourly employee) Purchaser shall provide such Employee
severance benefits equal to the severance benefits set forth on SECTION 5.8-2 of
the Disclosure Schedule.
SECTION 5.9 COOPERATION. Seller and Parent shall cooperate
with Purchaser in providing such employee records, data and information
necessary in order for Purchaser to perform its obligations and responsibilities
under the Purchaser's Plans as required by this ARTICLE V.
SECTION 5.10 NO THIRD PARTY BENEFICIARIES. The parties hereto
acknowledge and agree that all provisions contained in this Agreement with
respect to employee benefits or employee compensation are included for the sole
benefit of the respective parties hereto and shall not create any right in any
other Person, including any Employees, former Employees, any participant in any
Company Benefit Plan or any beneficiary thereof. Nothing contained herein shall
interfere with Purchaser's right to amend or terminate the Companies Hourly and
Salaried Plans or any Purchaser Plan after the Closing.
ARTICLE VI
TAX MATTERS
SECTION 6.1 SECTION 338(h)(10) ELECTION.
(a) With respect to the Share Purchase and the deemed sale for
Tax purposes of the shares of AHCGC, subject to SECTIONS 6.1(b)-(d), Parent
(and, to the extent necessary, its Affiliates) will join with Purchaser (and, to
the extent necessary, its Affiliates) to make irrevocable elections under
Section 338(h)(10) of the Code and, if permissible, similar elections under any
applicable state or local Tax laws (collectively, the "ELECTIONS"). Purchaser
and Parent (and their Affiliates) shall report the transaction consistently with
the Elections and agree not to take any action that could cause such Elections
to be invalid, and shall take no position contrary thereto unless required to do
so pursuant to a determination (as defined in Section 1313(a) of the Code or any
similar state or local Tax provision).
(b) Within six months after the Closing Date, Purchaser (and,
to the extent necessary, its Affiliates) shall prepare any and all forms
necessary to effectuate the Elections (including Internal Revenue Service Form
8023 and any similar forms under applicable state and local tax laws
(collectively, the "SECTION 338 FORMS")) and shall provide copies thereof to
Parent. Purchaser and Parent (and, to the extent necessary, their Affiliates)
shall each cause the Section 338 Forms to be duly executed by an authorized
person and Purchaser shall duly and timely file the Section 338 Forms in
accordance with applicable Tax laws and the terms of this Agreement. Parent
(and, to the extent necessary, its Affiliates) (i) shall include a copy of Form
8023 with its income and franchise Tax Returns for any tax period that includes
the Closing Date, (ii) shall, as specifically and reasonably instructed by the
Purchaser, take all actions necessary and appropriate (including filing such
additional forms, Tax Returns, elections,
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schedules and other documents as may be required by applicable Law, and as
timely prepared by Purchaser and delivered to Parent in a timely fashion) to
effect and preserve the Elections in accordance with the provisions of
Regulation Section 1.338(h)(10)-1 (and comparable provisions of each applicable
state and local Tax law) or any successor provisions (collectively, the "SECTION
338 ACTS"), and (iii) if notified by any Taxing Authority that any Section 338
Acts are necessary for an Election to be valid or if otherwise aware of any
Section 338 Acts that are necessary for an Election to be valid, shall in good
faith attempt to complete the Section 338 Acts.
(c) In no event later than five (5) months after the Closing
Date, Purchaser shall prepare an initial allocation of the aggregate deemed
sales price of the assets of Newco and AHCGC resulting from the Elections (as
required pursuant to Section 338(h)(10) of the Code and the Regulations
promulgated thereunder) among such assets in accordance with the parameters set
forth in SECTION 6.1(d) and among the assets in each Class (as provided in
Regulation Section 1.338-6(b) or any successor provision) in accordance with an
appraisal (the "APPRAISAL") prepared by a qualified M.A.I. or other Person with
professional competence in conducting appraisals of this nature (the "SECTION
338 ALLOCATION"), and Purchaser shall submit to Parent copies of the Section 338
Allocation and the Appraisal. The cost of the Appraisal shall be borne by
Purchaser. Purchaser and Parent (and their Affiliates) shall file all Tax
Returns consistently with the Section 338 Allocation, and shall not voluntarily
take any action inconsistent therewith upon examination of any Tax Returns, in
any refund claim, in any litigation, or otherwise with respect to such Tax
Returns unless required to pursuant to a determination (as defined in Section
1313(a) of the Code or any similar state or local Tax provision).
(d) Purchaser and Parent agree that (i) thirty-five percent
(35%) of the aggregate deemed sales price (as described in SECTION 6.1(c)) shall
be allocated to the Newco assets (other than the stock of AHCGC) and sixty-five
percent (65%) shall be allocated to the AHCGC assets and (ii) no less than
forty-five percent (45%) or more than sixty-five percent (65%) of the aggregate
deemed sales price allocated to the assets of each of Newco and AHCGC will be
allocated to accounts receivable, Inventory, property, plant and equipment,
prepaid and other non-intangible assets.
SECTION 6.2 PREPARATION OF TAX RETURNS AND FILINGS.
(a) Subject to SECTION 6.5, for any Taxable Period of the
Companies that ends on or before the Closing Date, Parent shall timely prepare,
consistent with past practices and custom (unless a contrary position is
required by Law) and file with the appropriate Taxing Authority all required
consolidated, combined or unitary Tax Returns that include any of the Companies
and shall pay all Taxes shown due on such Tax Returns.
(b) Subject to SECTION 6.5, for any Taxable Period of the
Companies that ends on or before the Closing Date, Parent shall timely prepare,
consistent with past practices and custom (unless a contrary position is
required by Law) and file with the appropriate Taxing Authority all other Tax
Returns of the Companies and shall pay all Taxes shown due on such Tax Returns.
Parent shall provide Purchaser the opportunity to review and comment upon such
Tax Returns, and if the filing of such Tax Returns may cause a material increase
in the Tax Liability of
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any of Newco or AHCGC for a Post-Closing Tax Period, Parent shall not file any
such Tax Returns without Purchaser's consent (which consent shall not be
unreasonably withheld and shall be deemed to be provided if such Tax Return is
prepared consistently with past practices and custom of the Companies or the
requirements of applicable Law).
(c) Purchaser shall provide Parent the opportunity to review
and comment upon, and Purchaser shall timely prepare and file with the
appropriate Taxing Authority, all Newco and AHCGC Tax Returns relating to a
Straddle Period required to be filed and shall pay all Taxes due with respect to
such Tax Returns; PROVIDED, HOWEVER, that Purchaser will prepare such Tax
Returns consistent with past practices and custom of the Companies (unless a
contrary position is required by Law) to the extent such Tax Returns relate to
the Taxes of Newco or AHCGC for a Pre-Closing Tax Period and Purchaser shall not
file any such Tax Return without Parent's consent (which consent shall not be
unreasonably withheld). Seller or Parent shall pay Purchaser (in accordance with
the procedures set forth in SECTION 8.4) for any amount owed by Seller or Parent
pursuant to SECTION 8.4 with respect to any such Tax Returns.
(d) Purchaser and Parent agree to cause Newco or AHCGC to file
all Tax Returns for the period including the Closing Date on the basis that the
relevant Taxable Period ended as of the close of business on the Closing Date
(which shall be deemed the time of Closing as provided in SECTION 1.5 and which
shall include the tax consequences of the Share Purchase and the Elections) if
the relevant Tax Law allows such a filing and all Newco or AHCGC Tax Returns
that are filed for a Tax Period that begins the day immediately after the
Closing Date (including any group Tax Returns that include Newco or AHCGC
beginning on the day immediately after the Closing Date) shall include all
activities of Newco or AHCGC occurring after the deemed time of Closing provided
in SECTION 1.5 other than the tax consequences of the Share Purchase, the
Elections and the results of any inter-company transactions with Parent or its
Affiliates.
SECTION 6.3 FILING OF AMENDED TAX RETURNS. Parent shall be
responsible for filing any Tax Returns that include Newco or AHCGC for taxable
years ending on or prior to the Closing Date that are required as a result of
examination adjustments made by any Taxing Authority for such taxable years as
finally determined and shall pay any Taxes that are due thereon. Parent shall
not be entitled to file (nor shall Purchaser or its Affiliates be under any
obligation to file) any other amended Tax Return for any of the Companies for a
Pre-Closing Tax Period unless the requirements in the last sentence of SECTION
6.2(b) are satisfied.
SECTION 6.4 TAX REFUNDS. The amount of any refunds or offsets
of Taxes of the Companies for any Taxable Period ending on or before the Closing
Date shall be for the account of Seller, except to the extent that such refund
or offset arises as a result of a Newco or AHCGC carryback of a loss or other
tax benefit arising from a period beginning after the Closing Date (except as
otherwise provided in SECTION 6.5). The amount of any refunds or offsets of
Taxes of Newco or AHCGC for any Taxable Period beginning after the Closing Date
shall be for the account of Purchaser. The amount of benefit of any refunds or
offsets of Taxes of Newco or AHCGC for any Straddle Period shall be equitably
apportioned in a manner consistent with SECTION 8.4(c). Provided that the
non-requesting party, acting in good faith, determines that there is a
reasonable basis for filing a claim for refund with the relevant Taxing
Authority and if the
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filing of such a claim is not inconsistent with any other provision of this
Agreement, each party shall, if the other party so requests and at such other
party's expense, cause Newco or AHCGC to file for and obtain any refunds or
offsets to Taxes to which the requesting party is expressly entitled under this
ARTICLE VI. Each party shall forward, and shall cause its Affiliates to forward
the amount of such refund or offset to Tax, to the party entitled pursuant to
this ARTICLE VI to receive such amount, within ten (10) days after such refund
is received or after such offset is allowed or applied against other Tax
Liability, as the case may be. Notwithstanding the foregoing, the control of the
prosecution of a claim for refund of Taxes paid pursuant to a deficiency
assessed subsequent to the Closing Date as a result of an audit shall be
governed by the provisions of SECTION 8.4(e).
SECTION 6.5 CARRYBACKS. Purchaser shall not, and shall cause
Newco and AHCGC not to, carryback any net operating loss or other Tax attribute
to a Pre-Closing Tax Period if Newco or AHCGC (as the case may be) were included
as part of a combined, consolidated, or unitary Tax Return in such Tax Period to
which such carryback relates; PROVIDED, HOWEVER, that any such carryback will be
permitted if such carryback is required by the relevant Tax Law prior to a
carryforward (and a waiver of the carryback is not permitted), the carryback
involves a material net operating loss or other Tax attribute and Parent
consents to such carryback (which consent shall not be unreasonably withheld).
If Parent or an Affiliate realizes a reduction in Tax for such a period as a
result of such carryback (either in the form of a refund or an offset), Parent
shall pay to Purchaser the amount of such reduction within ten (10) days after
the receipt of the refund or the offset; PROVIDED, HOWEVER, that Parent shall be
entitled to retain any such reduction in Tax to the extent that Purchaser or its
Affiliates obtain as a result of such carryback a greater Tax credit
carryforward that may be utilized in a Post-Closing Tax Period. Parent shall, at
the request of Purchaser, cooperate in connection with the filing of any
necessary Tax Returns and other documents to effect a carryback at Purchaser's
expense, and Parent shall provide a basis for the computation of the amount paid
to Purchaser pursuant to this SECTION 6.5 in reasonable detail.
SECTION 6.6 COOPERATION IN TAX MATTERS. Parent, the Companies
and Purchaser shall reasonably cooperate, and shall cause their respective
Affiliates and Representatives to reasonably cooperate, in preparing and filing
all Tax Returns, including maintaining and making available to each other all
records necessary in connection with Taxes and in resolving all disputes and
audits with respect to all Taxable Periods relating to Taxes. Parent and
Purchaser agree (a) to retain all Books and Records with respect to Tax matters
pertinent to any Company or Canadian Seller relating to any Tax Period beginning
before the Closing Date until ninety (90) days after the expiration of the
applicable statute of limitations and to abide by all record retention
agreements entered into with any Taxing Authority, (b) to allow the other party
and its Representatives, at times and dates mutually acceptable to the parties,
to inspect, review and make copies of such records as such party may deem
necessary or appropriate from time to time, such activities to be conducted
during normal business hours and at such party's expense, and (c) to give the
other party reasonable written notice prior to transferring, destroying or
discarding any such Books and Records and, if the other party so requests,
Parent and Purchaser, as the case may be, shall allow the other party to take
possession of such Books and Records.
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SECTION 6.7 TRANSFER TAXES. All transfer, documentary, sales,
use, stamp, registration and other similar Taxes (including all applicable real
estate transfer or real estate gains Taxes) and related recording and other fees
(collectively, "TRANSFER TAXES") incurred in connection with this Agreement and
the transactions contemplated by this Agreement shall be borne by Parent except
that any such Transfer Taxes resulting from the Share Purchase (including any
Transfer Taxes resulting from the Elections but excluding all other Taxes
resulting from the Elections, such as income and franchise Taxes) shall be borne
equally by Parent and Purchaser, and Parent and Purchaser shall cooperate in
preparing and filing all Tax Returns and other documentation on a timely basis
as may be required to comply with the provisions of such Tax laws.
SECTION 6.8 TREATMENT OF INDEMNIFICATION PAYMENTS. Parent,
Seller and Purchaser agree to treat any amounts payable pursuant to ARTICLE VIII
as an adjustment to the Purchase Price for federal income tax purposes, unless a
final determination causes any such payment not to be treated as an adjustment
to the Purchase Price for federal income tax purposes.
ARTICLE VII
CONDITIONS TO CLOSING
SECTION 7.1 CONDITIONS TO OBLIGATIONS OF SELLER. The
obligation of Seller and Parent to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction (or waiver by Seller and
Parent), at or prior to the Closing, of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Purchaser contained in this Agreement and of Purchaser and
Canadian Purchaser contained in the Canadian Purchase Agreement that are
qualified as to materiality shall be true and correct as of the date hereof and
as of the Closing Date, as if made as of the Closing Date (except for
representations and warranties which by their terms speak as of a specific date
or time, which need only be true and correct as of such date), and the
representations and warranties of Purchaser contained in this Agreement and of
Purchaser and Canadian Purchaser contained in the Canadian Purchase Agreement
that are not so qualified shall be true and correct in all material respects as
of the date hereof and as of the Closing Date, as if made as of the Closing Date
(other than such representations and warranties as are made as of another date,
which shall be true and correct as of such date).
(b) AGREEMENTS AND COVENANTS. Purchaser and Canadian Purchaser
shall have performed and complied in all material respects with all agreements
and covenants required to be performed and complied with by Purchaser under this
Agreement and by Purchaser and Canadian Purchaser under the Canadian Purchase
Agreement at or prior to the Closing.
(c) NO ORDER. No order, statute, rule, regulation, executive
order, injunction, stay, decree, directive, or restraining order shall have been
enacted, entered, promulgated or enforced by any court of competent jurisdiction
or Governmental Authority that would (i) prevent the consummation of any of the
transactions contemplated by this Agreement or (ii) cause any of
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the transactions contemplated by this Agreement to be rescinded following
consummation, nor shall any such injunction, judgement, order, decree, ruling or
charge be in effect.
(d) GOVERNMENTAL APPROVALS. All Consents from, registrations
and filings with and notices to Governmental Authorities necessary to permit the
consummation of the transactions contemplated by this Agreement shall have been
obtained, unless the failure to obtain any such consent, approval or waiver or
make such registration or filing or give such notice could not reasonably be
expected to have a material adverse effect on (i) Parent or (ii) the receipt or
retention by Seller or Parent of the net proceeds of the transactions
contemplated by this Agreement.
(e) ANTITRUST APPROVALS. Any waiting period (and any extension
thereof) under the HSR Act applicable to the purchase of the Shares contemplated
hereby shall have expired or shall have been terminated.
(f) LEGAL OPINION. Parent shall have received from Latham &
Watkins an opinion of counsel addressed to Parent and dated as of the Closing
Date in the form set forth on EXHIBIT 7.1(f).
(g) CLOSING DELIVERIES. Each of the Closing deliveries set
forth in SECTION 1.7 hereof shall have been delivered.
SECTION 7.2 CONDITIONS TO OBLIGATIONS OF PURCHASER. The
obligation of Purchaser to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction (or waiver by Purchaser in
writing), at or prior to the Closing, of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Seller and Parent contained in this Agreement and of Parent and
Canadian Seller contained in the Canadian Purchase Agreement that are qualified
as to materiality or Material Adverse Effect shall be true and correct as of the
date hereof and as of the Closing Date, as if made on the Closing Date (except
for representations and warranties which by their terms speak as of a specific
date or time, which need only be true and correct as of such date), and the
representations and warranties of Seller and Parent contained in this Agreement
and of Parent and Canadian Seller contained in the Canadian Purchase Agreement
that are not so qualified shall be true and correct in all material respects as
of the date hereof and as of the Closing Date, as if made as of the Closing Date
(other than such representations and warranties as are made as of another date
which shall be true and correct as of such date), PROVIDED, to the extent that
the representations and warranties set forth in Section 2.22(b)(i) or (iii) have
been breached in any respect prior to Closing, such breach or breaches shall not
prevent this condition from being satisfied so long as this condition shall have
been satisfied with respect to each representation and warranty concerning each
asset requisite to the New Group's manufacture and distribution of glass
products in the Ordinary Course of Business following the Closing.
(b) AGREEMENTS AND COVENANTS. Seller and Parent and their
respective Affiliates shall have performed and complied in all material respects
with all agreements and
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covenants required to be performed and complied with by Seller, Parent or their
respective Affiliates under this Agreement and the Canadian Purchase Agreement
at or prior to the Closing; PROVIDED, to the extent Seller, Parent or their
respective Affiliates have breached any of their respective obligations under
SECTION 4.16 with respect to the transfer of the Outside Assets or the Seller
Assets, such breach or breaches shall not prevent this condition from being
satisfied, provided this condition has been satisfied with respect to each asset
requisite to the New Group's manufacture and distribution of glass products in
the Ordinary Course of Business following the Closing.
(c) THIRD-PARTY CONSENTS; PERMITS. All Consents (i) from, with
and to Governmental Authorities necessary to permit the consummation of the
transactions contemplated by this Agreement and (ii) necessary to avoid an
Adverse Event as to a Contract or Permit listed on SCHEDULE 7.2(c)(ii) (each, a
"REQUIRED CONSENT" and collectively, the "REQUIRED CONSENTS"), in each case as a
result of the transactions contemplated by this Agreement shall have been
obtained, without, in any case, any material increase in any payments thereunder
or any other material adverse change or condition to the granting of such
Consent (except for one-time payments made by Parent or Seller), and all such
Consents as to Permits shall be final and conclusive, from which there is no
further appeal right, or any such appeal right has expired.
(d) NO ORDER. No Action shall be pending or threatened before
any Governmental Authority or before any arbitral body wherein an unfavorable
injunction, judgment, order, decree, ruling, directive or charge would (i)
prevent consummation of any of the transactions contemplated by this Agreement,
(ii) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation, (iii) affect adversely the right of Purchaser
to own the Shares or control any member of the New Group or (iv) affect
adversely the right of Purchaser or any of its Affiliates (including the New
Group) to own their assets or to operate their businesses, nor shall any such
injunction, judgment, order, decree, ruling or charge be in effect.
(e) FINANCING. Purchaser shall have obtained and received all
funding under the Commitment (other than unneeded availability under the
Revolving Credit Facility).
(f) ASSET TRANSFER TRANSACTIONS. All of the Asset Transfer
Transactions shall have been duly consummated pursuant to the terms of this
Agreement and the Asset Transfer Documents.
(g) CANADIAN ASSET ACQUISITION. The Canadian Asset Acquisition
shall have been duly consummated pursuant to the terms of the Canadian Purchase
Agreement.
(h) LEGAL OPINION. Purchaser shall have received from Schiff
Hardin & Waite an opinion of counsel addressed to Purchaser dated as of the
Closing Date in the form set forth on EXHIBIT 7.2(h).
(i) AUDITORS CONSENT. If Purchaser has provided Arthur
Andersen with a reasonable opportunity to review, as provided in SECTION 4.19,
the Form 8-K filing Purchaser is required to file with the SEC in connection
with the closing of the transactions contemplated by
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this Agreement, Purchaser shall have received Arthur Andersen's consent to
include its audit report on the Audited Financial Statements and, if then
complete, the 2001 Audited Financial Statements in such Form 8-K.
(j) ANTITRUST APPROVALS. Any waiting period (and any extension
thereof) under the HSR Act applicable to the purchase of the Shares contemplated
hereby shall have expired or shall have been terminated.
(k) CLOSING DELIVERIES. Each of the Closing deliveries set
forth in SECTION 1.7 hereof shall have been delivered.
(l) NO MATERIAL ADVERSE EFFECT. Since the date of this
Agreement, a Material Adverse Change shall not have occurred.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 SURVIVAL. The representations, warranties,
covenants and obligations of Seller, Parent, Canadian Seller, Purchaser and
Canadian Purchaser contained in this Agreement and the Canadian Purchase
Agreement shall survive the Closing, PROVIDED that the representations and
warranties of Seller, Parent, Canadian Seller, Purchaser and Canadian Purchaser
shall survive for a period of eighteen (18) months after the Closing; PROVIDED,
FURTHER that (a) the representations and warranties of Parent and Seller
contained in SECTIONS 2.1 (ORGANIZATION), 2.2 (AUTHORITY; ENFORCEABILITY), 2.5
(CAPITAL STOCK OF COMPANIES), 2.6 (SUBSIDIARIES), AND 2.22(a)(iii) AND (b)(iii)
(TITLE TO ASSETS), and the representations and warranties of Parent and Canadian
Seller contained in SECTIONS 6(a) AND (b) of the Canadian Purchase Agreement and
the representations and warranties of Purchaser contained in SECTION 3.1
(ORGANIZATION) and 3.2 (AUTHORITY; ENFORCEABILITY) and the representations and
warranties of Purchaser and Canadian Purchaser contained in SECTIONS 7(a) AND
(b) of the Canadian Purchase Agreement, shall survive indefinitely, (b) the
representations and warranties of Parent and Seller contained in 2.17
(ENVIRONMENTAL MATTERS) shall survive for a period of five (5) years after the
Closing, (c) the representations and warranties of Parent and Seller contained
in SECTIONS 2.14 (EMPLOYEE BENEFITS) and 2.19 (TAXES) shall survive until ninety
(90) days following the expiration of the applicable statute or similar period
of limitations and (d) the representations and warranties of Parent and Seller
contained in SECTION 2.16 (INTELLECTUAL PROPERTY) shall survive indefinitely
with respect to ownership of Intellectual Property and any actual or alleged
infringement of intellectual property rights resulting from the use of the
Intellectual Property in the Business that occurred prior to Closing; it being
understood that in the event notice of any Claim for indemnification under
SECTION 8.2(a)(i) or (ii), SECTION 8.2(b)(i) or (ii) or SECTION 8.4 shall have
been given within the applicable survival period, the representations and
warranties that are the subject of such indemnification Claim shall survive with
respect to such Claim until such time as such Claim is finally resolved.
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SECTION 8.2 INDEMNIFICATION OTHER THAN FOR TAX MATTERS.
(a) INDEMNIFICATION BY SELLER AND PARENT. From and after the
Closing, Seller and Parent shall, jointly and severally, indemnify, save and
hold harmless Purchaser and its Affiliates (including the New Group after the
Closing) and each of the foregoing's respective officers, directors, employees,
agents and ERISA Affiliates (collectively, the "PURCHASER INDEMNIFIED PARTIES")
from and against any and all Damages arising out of, resulting from or incident
to:
(i) the breach of any representation or warranty (other
than those relating to Taxes) made by Seller or Parent or its Affiliates in this
Agreement or the Canadian Purchase Agreement without regard to any qualification
contained in any representation or warranty as to materiality or a Material
Adverse Effect;
(ii) the breach of any representation or warranty (other
than those relating to Taxes) made by Seller or Parent or its Affiliates in this
Agreement or the Canadian Purchase Agreement without regard to any qualification
contained in any representation or warranty as to materiality or a Material
Adverse Effect as if such representation or warranty were made on and as of the
Closing Date (except in the case of any representation or warranty that by its
terms is made as of a date specified therein);
(iii) the breach of any covenant or agreement (other than
those relating to Taxes) by Seller or Parent or its Affiliates contained in this
Agreement or the Canadian Purchase Agreement;
(iv) the Seller-Retained Liabilities;
(v) the Excluded Seller Liabilities;
(vi) the matters described on EXHIBIT 8.2(a)(vi) hereof;
(vii) any violation of Environmental Law relating to any
action, omission or occurrence prior to Closing or circumstance or condition
existing prior to Closing, subject to the limitations set forth in SECTION
8.3(e);
(viii) any release, discharge or migration of Hazardous
Substances from and beyond any of the Facilities or Former Properties at any
time arising from any release or discharge at or from a Facility at any time on
or before the Closing Date, subject to the limitations set forth in SECTION
8.3(d) and excluding releases, migrations or discharges which are the subject of
SECTION 8.2(a)(vi);
(ix) any claims made with respect to Employees or former
employees of the Companies or their predecessors for workers' compensation or
similar claims whether or not insured or self-insured or mandated by applicable
Law ("COMPENSATION CLAIMS") filed with an appropriate agency by an Employee,
former Employee or by a spouse or dependent of an Employee or former Employee
("CLAIMING EMPLOYEE") if the injury or alleged injury occurred, or
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was alleged to have occurred, in its entirety prior to the Closing Date,
irrespective of when such injury is manifested; or in the event of any such
Compensation Claim filed on or after the Closing Date by or on behalf of a
Claiming Employee and the injury occurred or is alleged to have occurred both
prior to and subsequent to the Closing Date, the liability for such Compensation
Claim, if any, as between the Purchaser Indemnified Parties and Parent and
Seller shall be apportioned between them based upon the length of exposure of
the Claiming Employee to the product, material, practice, condition or other
circumstances claimed to have caused the alleged injury, with the proportionate
share of such liability equaling a fraction, the denominator of which shall be
the Claiming Employee's total length of exposure to such product, material
practice, condition or other circumstances claimed to have caused the alleged
injury, and the numerator of which shall be, in the case of the Purchaser
Indemnified Party, such Claiming Employee's total length of exposure after the
Closing Date;
(x) subject to the limitations set forth in SECTION
8.3(f), the failure to obtain a Consent necessary to avoid any Adverse Event
with respect to a Pre-Closing Material Contract as a result of the consummation
of the transactions contemplated by this Agreement, if, in accordance with
SECTION 4.30 hereof, Purchaser has requested that Parent add such Pre-Closing
Material Contract to the list of Required Consents and Parent notifies Purchaser
that it will instead agree to indemnify Purchaser pursuant to this clause (x);
(xi) except to the extent subject to SECTION 8.2(a)(ix),
any claims, demands (oral or written), causes of actions or Actions against the
Companies, the Companies' officers, directors, employees or agents or any of the
Assets, asserted prior to or after the Closing Date, relating to or arising out
of any claim, cause of action or Action relating to (a) any personal injury,
bodily injury, sickness or disease that occurs prior to the Closing Date,
including any arising from or relating to any exposure to or contact with any
asbestos or other allegedly injurious materials or substances, or (b) any damage
to tangible property that occurs prior to the Closing Date, or (c) any claim,
cause of action or Action of any Employee or former employee of the Companies or
their predecessors relating to any employment matter (other than grievances
under a collective bargaining agreement) relating to occurrences prior to the
Closing Date, including the matters set forth as items 1-5 and 11 of subsection
(i) of SECTION 2.13 of the Disclosure Schedule. For the avoidance of doubt, the
parties hereto acknowledge that items 7, 8 and 10 of subsection (i) of SECTION
2.13 of the Disclosure Schedule are covered by this clause (xi);
(xii) any claim for indemnification against any of the
Companies by reason of the fact that Seller, Parent or any of their directors,
officers, employees or agents, was a director, officer, employee, or agent of
the Companies or was serving at the request of any such entity as a partner,
trustee, director, officer, employee, or agent of the Companies (whether such
claim is for judgments, damages, penalties, fines, costs, amounts paid in
settlement, losses, expenses, or otherwise and whether such claim is pursuant to
any statute, charter document, bylaw, agreement, or otherwise), including with
respect to any action, suit, proceeding, complaint, claim, or demand brought by
Purchaser against Seller or Parent (whether such action, suit, proceeding,
complaint, claim, or demand is pursuant to this Agreement, applicable law, or
otherwise);
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(xiii) the 1995 Restructuring, including any (A) violation
of any Law, Governmental Order or Permit applicable to Seller or AHCGC or any of
their respective assets or properties in connection with the 1995 Restructuring
or (B) breach of, default under, failure to obtain any Consent under, or
termination, amendment or acceleration of, or creation of any Encumbrance on any
of the assets or properties of Seller or AHCGC pursuant to any Contract or
Permit in effect at the time of the 1995 Restructuring to which Seller or AHCGC
(or any predecessor thereto) is or was a party or by which any of their assets
or properties are or were bound or affected, in each case resulting from the
1995 Restructuring;
(xiv) the failure to obtain a Consent necessary to avoid
an Adverse Event with respect to the Railroad Agreement;
(xv) the matters described in EXHIBIT 8.2(a)(xv) hereof;
or
(xvi) the failure to obtain a Consent necessary to avoid
an Adverse Event with respect to the Warehouse Agreement, including all
reasonable costs and expenses associated with the New Group having to move
Inventory and associated equipment and materials to another warehousing facility
as a result of the failure to obtain such Consent.
The foregoing indemnification obligations are independent
of each other, except as otherwise expressly provided therein.
(b) INDEMNIFICATION BY PURCHASER. From and after the Closing,
Purchaser shall indemnify, save and hold harmless Parent, Seller and their
Affiliates and each of the foregoing's respective directors, officers,
employees, agents and ERISA Affiliates (the "SELLER INDEMNIFIED PARTIES") from
and against and all Damages arising out of, resulting from or incident to:
(i) the breach of any representation or warranty made by
Purchaser or its Affiliates in this Agreement or the Canadian Purchase Agreement
without regard to any qualification contained in any representation or warranty
as to materiality;
(ii) the breach of any representation or warranty made by
Purchaser or its Affiliates in this Agreement or the Canadian Purchase Agreement
without regard to any qualification contained in any representation or warranty
as to materiality as if such representation or warranty were made on and as of
the Closing Date (except in the case of any representation or warranty that by
its terms is made as of a date specified therein);
(iii) the breach of any covenant or agreement (other than
those relating to Taxes) by Purchaser or its Affiliates contained in this
Agreement or the Canadian Purchase Agreement;
(iv) the presence of Hazardous Substances at, on or under
any of the Facilities, unless such Damages are subject to indemnification under
SECTIONS 8.2(a)(vi), (vii) or (viii) hereof;
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(v) any obligation of Parent or any of its Affiliates
(other than Newco or AHCGC) as guarantors under any Contract (A) which is
included in the transferred Assets or (B) which is transferred to Purchaser in
connection with the transfer of the capital stock of AHCGC;
(vi) any obligations of Parent or any of its Affiliates
for product liability claims arising out of post-Closing occurrences concerning
machine-made soda lime or borosilicate bakeware or machine-made soda lime
glassware (excluding, for the avoidance of doubt, handmade or lead crystal
products) manufactured prior to Closing at a Facility or Former Property owned
or previously owned by Seller or any of its Subsidiaries or predecessors; or
(vii) any Assumed Seller Liabilities and Canadian
Liabilities, unless such Liability is subject to indemnification under SECTION
8.2(a) hereof or under SECTION 8(b) of the Canadian Purchase Agreement.
(c) INDEMNIFICATION PROCESS. The Person making a claim for
indemnification under this ARTICLE VIII shall be, for the purposes of this
Agreement, referred to as the "INDEMNIFIED PARTY" (provided that for the purpose
of clause (iii) below such term shall refer to the party hereto to whom such
Person is related for purposes of obtaining the benefits of this Article VIII)
and the party or parties against whom such claims are asserted under this
Article VIII shall be, for the purposes of this Agreement, referred to as the
"INDEMNIFYING PARTY." All claims by any Indemnified Party under this ARTICLE
VIII, other than Tax Claims which are subject to the provisions of SECTION 8.4
hereof, shall be asserted and resolved as follows:
(i) NOTICE OF CLAIMS. In the event that (i) any claim or
Action is asserted or instituted against any Indemnified Party by any Person
other than the parties to this Agreement or their Affiliates which could give
rise to Damages for which an Indemnifying Party could be liable to an
Indemnified Party for Damages under this Agreement (such claim, demand or
Proceeding, a "THIRD PARTY CLAIM") or (ii) any Indemnified Party under this
Agreement shall have a claim to be indemnified for Damages by any Indemnifying
Party under this Agreement which does not involve a Third Party Claim (such
claim, a "DIRECT CLAIM" and, together with Third Party Claims, "CLAIMS"), the
Indemnified Party shall with reasonable promptness send to the Indemnifying
Party a written notice specifying the nature of such Claim, the amount of
Damages sought in such Claim, if known, and the provisions of this Agreement in
respect of which such right of indemnification is claimed or arises (a "CLAIM
NOTICE"), PROVIDED that a delay or defect in notifying the Indemnifying Party
shall not relieve the Indemnifying Party of its obligations under this Agreement
except to the extent that (and only to the extent that) the Indemnifying Party
demonstrates such failure shall have caused the Damages for which the
Indemnifying Party is obligated to be greater than such Damages would have been
had the Indemnified Party given the Indemnifying Party timely notice.
(ii) THIRD PARTY CLAIMS. In the event of a Third Party
Claim (except for any Third Party Claims that are indemnifiable under either
SECTION 8.2(a)(vi) or SECTION 8.2(a)(viii), the process for which is set forth
in SECTION 8.2(d)(ii)), the Indemnifying Party shall be entitled to assume and
control the defense of such Third Party Claim and to appoint counsel of the
Indemnifying Party's choice at the expense of the Indemnifying Party to
represent
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the Indemnified Party and any others the Indemnifying Party may reasonably
designate in connection with such Third Party Claim (in which case the
Indemnifying Party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by any Indemnified Party except as set forth
below); PROVIDED that such counsel is reasonably acceptable to the Indemnified
Party, which approval shall not be unreasonably withheld or delayed.
Notwithstanding an Indemnifying Party's election to appoint one separate counsel
(plus one local counsel, if necessary) to represent an Indemnified Party in
connection with a Third Party Claim, an Indemnified Party shall have the right
to employ one separate counsel (plus one local counsel, if necessary), and the
Indemnifying Party shall bear the reasonable fees, costs and expenses of such
one separate counsel (plus one local counsel, if necessary) if (A) there exists
a conflict of interest (including the availability of one or more legal defenses
to the Indemnified Party which are not available to the Indemnifying Party) that
would make it inappropriate in the reasonable judgment of the Indemnified Party
(upon and in conformity with advice of counsel) for the same counsel to
represent both the Indemnified Party and the Indemnifying Party, PROVIDED that
the Indemnified Party and such counsel shall contest such Third Party Claim in
good faith or (B) if the Claim seeks injunctive relief which, if granted could
materially and adversely affect the Indemnified Party or its Affiliates. The
Indemnified Party shall cooperate with the Indemnifying Party and its counsel in
such defense and make available to the Indemnifying Party all witnesses,
records, materials, and information in the Indemnified Party's possession or
under the Indemnified Party's control relating thereto as may be reasonably
requested by the Indemnifying Party, and in contesting any claim, demand or
Proceeding which the Indemnifying Party defends, or, if appropriate and related
to the claim, demand or Proceeding in question, in making any counterclaim
against the person asserting the Third Party Claim, or any cross-complaint
against any Person. In the event the Indemnifying Party fails to assume the
defense of such Third Party Claim within thirty (30) days after receipt of
notice thereof in accordance with the terms hereof, (A) the Indemnified Party
against which such Third Party Claim has been asserted shall have the right to
undertake the defense, compromise or settlement of such Third Party Claim on
behalf of, at the expense of and for the account and risk of the Indemnifying
Party, and (B) the Indemnifying Party agrees to cooperate with the Indemnified
Party in such defense and make available to the Indemnified Party, all
witnesses, records, materials and information in the Indemnifying Party's
possession or under the Indemnifying Party's control relating thereto as may be
reasonably requested by the Indemnified Party.
(iii) SETTLEMENT OF THIRD PARTY CLAIMS. In connection with
the settlement or compromise of any Third Party Claim (except for any Third
Party Claims that are indemnifiable under either SECTION 8.2(a)(vi) or SECTION
8.2(a)(viii), the process for which is set forth in SECTION 8.2(d)(ii)), the
Indemnifying Party shall not, without the written consent of the Indemnified
Party (which consent shall not be unreasonably withheld or delayed), (A) settle
or compromise any Third Party Claims or consent to the entry of any judgment
which does not include as an unconditional term thereof the delivery by the
claimant or plaintiff to the Indemnified Party of a written release from all
liability in respect of such Third Party Claim of all Indemnified Parties
affected by such Third Party Claim or (B) settle or compromise any Third Party
Claim if the settlement or compromise imposes equitable remedies or material
obligations on the Indemnified Party other than financial obligations for which
such Indemnified Party will be indemnified hereunder or (C) settle or compromise
any Third Party Claim if the Indemnified Party
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will be required to make any payment with respect to such compromise or
settlement due to the application of the limitations of SECTION 8.3. No Third
Party Claim which is being defended in good faith by the Indemnifying Party or
which is being defended by the Indemnified Party in accordance with the terms of
this Agreement shall be settled or compromised by the Indemnified Party without
the written consent of the Indemnifying Party (which consent shall not be
unreasonably withheld or delayed); PROVIDED, HOWEVER, if a Third Party Claim is
being defended by an Indemnified Party pursuant to the last sentence of clause
(ii) above (unless the Indemnifying Party and Indemnified Party mutually agree
that the Indemnified Party shall defend such Third Party Claim), the limitations
on the Indemnified Party's right to settle or compromise set forth in this
clause (iii) shall not apply to such Indemnified Party, unless the Indemnifying
Party has been advancing (in a timely manner) payment of such Indemnified
Party's costs and expenses associated with such defense upon demand therefor by
the Indemnified Party (subject to the undertaking of the Indemnified Party to
reimburse such advances in the event such costs of defense are not ultimately to
be indemnifiable under this ARTICLE VIII).
(iv) REDUCTION OF DAMAGES. To the extent any Damages of an
Indemnified Party are reduced by receipt of payment under insurance policies,
which payments are not subject to retroactive adjustment or other reimbursement
to the insurer in respect of such payment, such payments (net of the expenses of
the recovery thereof) (such net payment, a "REIMBURSEMENT") shall be credited
against any such Damages; PROVIDED, HOWEVER, the pendency of such payments shall
not delay or reduce the obligation of the Indemnifying Party to make payment to
the Indemnified Party in respect of such Damages. The Indemnified Party shall
use commercially reasonably efforts (but in no event shall the Indemnified Party
be required to sue the insurer or its agent, unless the Indemnifying Party
agrees to pay all reasonable costs and expenses in connection therewith,
including reasonable attorneys' fees) to pursue payment under or from any
insurer in respect of such Damages. If any Reimbursement is obtained subsequent
to payment by an Indemnifying Party in respect of any Damages, such
Reimbursement shall be promptly paid over to the Indemnifying Party. In the case
any event shall have occurred which would otherwise entitle either party to
assert a claim for indemnification hereunder, no Damages shall be deemed to have
been sustained by such party to the extent of any actual Tax savings realized by
such party with respect thereto (the "TAX BENEFIT"), but such Damages shall be
increased by such an amount necessary in order for the Indemnified Party to
receive a net payment, after paying any Taxes resulting from its receipt of any
indemnification payment for such Damages, equal to the amount of Damages
otherwise determined in accordance with this SECTION 8.2(c)(iv). The Tax losses,
deductions, credits or other items of the Indemnified Party resulting from
Damages shall be deemed to be realized proportionately with any other Tax
losses, deductions, credits or other items available to the Indemnified Party.
To the extent there is a determination (as defined in Section 1313(a) of the
Code or any comparable provision of state, local or foreign law) disallowing the
Tax Benefit, the Indemnifying Party shall refund to the Indemnified Party the
amount of any related reduction of Damages previously allowed pursuant to this
SECTION 8.2(c)(iv).
(v) ACCESS. From and after the delivery of a Claim Notice
under this Agreement, at the reasonable request of the Indemnifying Party, each
Indemnified Party shall grant the Indemnifying Party and its Representatives all
reasonable access to the books, records
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and properties of such Indemnified Party to the extent reasonably related to the
matters to which the Claim Notice relates. All such access shall be granted
during normal business hours and shall be granted under conditions which will
not unreasonably interfere with the business and operations of such Indemnified
Party. The Indemnifying Party will not, and shall require that its
Representatives do not, use (except in connection with such Claim Notice) or
disclose to any third Person other than the Indemnifying Party's Representatives
(except as may be required by applicable Law) any information obtained pursuant
to THIS SECTION 8.2(c)(v) which is designated as confidential by an Indemnified
Party.
(d) CERTAIN ENVIRONMENTAL MATTERS. In connection with any
claim for indemnification under either SECTION 8.2(a)(vi) or SECTION
8.2(a)(viii) (certain releases, discharges or migration of Hazardous
Substances), the following shall apply, notwithstanding any contrary term of
SECTIONS 8.2(c)(ii) or (iii):
(i) REMEDIATION. Purchaser shall control (A) the
decommissioning, removal and disposal of the assets subject to SECTION
8.2(a)(vi) and the remediation of any Hazardous Substances released therefrom
indemnifiable under SECTION 8.2(a)(vi), and (B) the remediation of any release,
discharge or migration of Hazardous Substances indemnifiable under SECTION
8.2(a)(viii), including the selection and direction of any contractor,
consultants or other Persons necessary for the performance thereof and the
communication with any Governmental Authority or other Person incident thereto.
Notwithstanding the foregoing, however, Parent and Seller shall have the right
to approve the lead contractor or consultant for any such remediation project,
provided such approval shall not be unreasonably withheld or delayed. Purchaser
shall provide Parent and Seller with copies of any final proposed work plans,
bids or cost projections and allow Parent and Seller a reasonable amount of time
to review and comment on such documents prior to the commencement of the work
proposed therein. Purchaser shall provide Parent and Seller with copies of any
invoices or other documentation of Damages incurred in connection with any such
work and Parent and Seller shall deliver to Purchaser payment of amounts due in
respect of such Damages under SECTIONS 8.2(a)(vi) or (viii), subject to the
applicable limitations in SECTION 8.3, within forty-five (45) days of its
receipt of any such invoices or other documentation (subject to the undertaking
of the Indemnified Party to reimburse such advances in the event such costs are
not ultimately to be indemnifiable under this ARTICLE VIII). In the event that a
new remediation project indemnifiable under SECTION 8.2(a)(viii) is to commence
after the aggregate amount of Damages incurred by Purchaser and indemnifiable
under such clause (but for the limitations of SECTION 8.3(d)) have already
exceeded $5,000,000, then Parent and Seller shall have the right to approve the
performance of such new remediation project, including the selection of any
contractor or consultant, the preparation and submission of any proposed work
plan and the communication with any Governmental Authority or other Person
incident thereto, and such approvals shall not be unreasonably withheld or
delayed.
(ii) THIRD PARTY CLAIMS. In the event of a Third Party
Claim under either SECTION 8.2(a)(vi) or SECTION 8.2(a)(viii), Purchaser shall
assume and control the defense of such Third Party Claim, and the assertion of
any counterclaims or cross-claims relating thereto, including the appointment of
counsel, the costs of which defense shall be indemnifiable Damages, subject to
the applicable limitations of SECTION 8.3. Seller and Parent shall cooperate
with
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Purchaser and its counsel in such defense and make available to them all
witnesses, records, materials and information in Seller's or Parent's possession
or under their control relating thereto as may be reasonably requested by
Purchaser or its counsel, and in contesting any such claim, demand or proceeding
in question, in making any counterclaim against the person asserting the Third
Party Claim, or any cross-complaint against any Person. Purchaser shall not,
without the written consent of Seller or Parent (which consent shall not be
unreasonably withheld or delayed), settle or compromise any such Third Party
Claim if Seller or Parent will be required to make any payment with respect to
such settlement or compromise due to the application of SECTION 8.3. Purchaser
shall provide Parent and Seller with copies of any invoices or other
documentation of Damages incurred in connection with any such Third Party Claim
and Parent and Seller shall deliver to Purchaser payment of amounts due in
respect of such Damages under SECTIONS 8.2(a)(vi) or (viii), subject to the
applicable limitations in SECTION 8.3, within forty-five (45) days of its
receipt of any such invoices or other documentation (subject to the undertaking
of the Indemnified Party to promptly reimburse such advances in the event such
costs are not ultimately to be indemnifiable under this ARTICLE VIII).
(e) DEFINITION OF DAMAGES. "DAMAGES" shall mean any and all
costs, losses, (including diminution in value) Taxes, liabilities, obligations,
damages, lawsuits, deficiencies, claims, demands, and expenses (whether or not
arising out of Third Party Claims), including interest, penalties, costs of
mitigation, losses in connection with any Environmental Laws (including any
clean-up or remedial action), damages to the environment and, reasonable
attorneys' fees. The term "DAMAGES" shall not include lost profits and other
losses (other than direct damages) resulting from any shutdown or curtailment of
operations of the Companies (other than lost profits and other losses payable
between or among the parties hereto which arise out of a Third Party Claim for
such Damages). The term "DAMAGES" as used in this ARTICLE VIII is not limited to
matters asserted by third parties against Seller, Parent or Purchaser, but
includes Damages incurred or sustained by Seller Indemnified Parties or
Purchaser Indemnified Parties in the absence of Third Party Claims.
Notwithstanding anything to the contrary in this Agreement, Damages shall
expressly exclude punitive damages, exemplary damages, multiple damages and
other penalty damages, unless arising out of a Third Party Claim. Payments by
Purchaser Indemnified Parties of amounts for which Purchaser Indemnified Parties
indemnified hereunder, and payments by Seller Indemnified Parties of amounts for
which Seller Indemnified Parties are indemnified, shall not be a condition
precedent to recovery.
(f) The respective indemnification obligations of the parties
with respect to Tax matters (including any breach of the representations and
warranties contained in SECTION 2.19) shall be governed by SECTION 8.4 and this
SECTION 8.2 shall not be applicable to any such matters.
SECTION 8.3 LIMITS ON INDEMNIFICATION.
(a) No amount shall be payable by any Indemnifying Party
pursuant to SECTION 8.2(a)(i) and (ii) or SECTION 8.2(b)(i) and (ii) unless the
aggregate amount of Damages indemnifiable under SECTION 8.2(a)(i) and (ii) or
SECTION 8.2(b)(i) and (ii), respectively, exceeds $4,000,000 (at which point the
Indemnified Party shall be entitled to all indemnification amounts in excess of
such threshold amount); PROVIDED, HOWEVER, that the above limitation shall not
apply
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to any indemnification obligations of Seller and Parent to Purchaser Indemnified
Parties arising from Seller's and Parent's representations and warranties set
forth in SECTION 2.19 (Taxes) or SECTION 2.22(a)(iii) or (b)(iii) (Title to
Assets) or SECTION 2.15(a)(i) (Title to Owned Property) or indemnification
obligations of any party under any other provision of ARTICLE VIII (nor shall
any Damages paid in respect of such other indemnification obligations be applied
toward such $4,000,000 threshold).
(b) Notwithstanding anything to the contrary contained in this
Agreement, the maximum amount of indemnifiable Damages which may be recovered by
any Purchaser Indemnified Parties from Seller and Parent and by any Seller
Indemnified Parties from Purchaser arising out of, resulting from or incident to
the matters enumerated in SECTION 8.2(a)(i) or (a)(ii) or SECTION 8.2(b)(i) or
(b)(ii) shall be an amount equal to thirty percent (30%) of the Purchase Price;
PROVIDED, HOWEVER, that this limitation shall not apply to any indemnification
obligations of Seller and Parent to any Purchaser Indemnified Parties arising
from representations and warranties set forth in SECTION 2.14 (Employee
Benefits), SECTION 2.17 (Environmental Matters) or SECTION 2.19 (Taxes).
(c) The indemnification obligations pursuant to SECTION
8.2(a)(vi) shall be limited to fifty percent (50%) of the Damages subject to
indemnification thereunder, PROVIDED this limitation shall not apply to Damages
which are also subject to indemnification under SECTION 8.2(a)(i), (ii) or (vii)
hereof.
(d) The indemnification obligations pursuant to SECTION
8.2(a)(viii) shall survive for a period of five (5) years after the Closing.
With respect to Damages subject to indemnification under SECTION 8.2(a)(viii),
(a) Parent and Seller shall not be obligated to indemnify any Purchaser
Indemnified Party for the first $3,000,000 of Damages for which Parent and
Seller would otherwise be required to indemnify Purchaser Indemnified Parties
thereunder, and (B) if such Damages exceed $3,000,000 in the aggregate, Parent
and Seller shall indemnify Purchaser Indemnified Parties for (1) fifty percent
(50%) of the Damages that exceed $3,000,000 and are less than $5,000,000 and (2)
all Damages in excess of $5,000,000.
(e) With respect to the indemnification obligations pursuant
to SECTION 8.2(a)(vii), indemnifiable Damages thereunder shall be limited only
to fines or monetary penalties imposed or demanded by any Governmental
Authority, provided this limitation shall not affect any right of
indemnification under any other clause of SECTION 8.2(a). In the event that any
Governmental Authority agrees to a reduction of the amount of any fine or
penalty in consideration for the performance of any supplemental environmental
project, the indemnifiable Damages shall be the full amount of the fine or
penalty prior to any reduction due to the supplement environmental project, but
shall not include any of the costs to perform such supplemental environmental
project.
(f) No Damages shall be indemnifiable under SECTION 8.2(a)(x)
if such Damages relate to loss by the New Group of products or services (but not
breach of Contract claims) under a Pre-Closing Material Contract as to which
Purchaser or the New Group could obtain (after using commercially reasonable
efforts) substantially equivalent products or services
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on substantially equivalent terms and conditions (as to the Business) from a no
less qualified third-party vendor.
(g) If Purchaser has provided the Limitation of
Indemnification Notice, Parent's and Seller's indemnification obligations in
respect of Damages pursuant to SECTION 8.2(a)(ii) shall be limited to
$33,200,000 in the aggregate with respect to Damages arising out of the events,
circumstances or conditions set forth in any Parent Liabilities Notice provided
to Purchaser in accordance with SECTION 4.29 hereof.
(h) To the extent an Indemnifying Party discharges any claim
for indemnification hereunder, it shall be subrogated to all related rights of
the Indemnified Party against third parties (other than any Purchaser
Indemnified Party or Seller Indemnified Party).
(i) None of the limitations set forth in SECTION 8.3(a), (b),
(c), (d), (e), (f) or (g) of this Agreement or the limitations on survival set
forth in SECTION 8.1 of this Agreement shall apply to Damages which arise out of
fraud by any party hereto or any Affiliate of such party.
SECTION 8.4 TAX INDEMNIFICATION.
(a) Following the Closing, Parent and Seller shall, jointly
and severally, indemnify the Purchaser Indemnified Parties (including the
Companies) and hold them harmless from (i) all Liability for Taxes of Newco and
AHCGC (including any obligation to contribute to the payment of a Tax determined
on a consolidated, combined or unitary basis with respect to a group of
corporations that includes or included Newco or AHCGC, and any Taxes resulting
from the Elections except as provided in SECTION 6.7) for any Pre-Closing Tax
Periods (determined in accordance with the methodology provided in SECTION
6.2(d)), (ii) all Liability (as a result of Regulation Section 1.1502-6(a) or
otherwise) for Taxes of Parent, Seller, Canadian Seller (including all Liability
for Property Taxes arising out of the ownership of the Canadian Assets for any
Pre-Closing Tax Period (determined on a per diem basis consistent with the
methodology of SECTION 8.4(c)(i)) or any other entity which is or has been an
Affiliate of Newco or AHCGC (other than Newco and AHCGC), (iii) any and all
Damages arising out of, resulting from or incident to any breach by Parent,
Seller, or any of their Affiliates (other than, after the Closing, Newco and
AHCGC) of any covenant contained in SECTION 4.1(xxiii) or (xxiv) or ARTICLE VI,
(iv) any and all Damages arising out of, resulting from or incident to the
breach of any representation or warranty made by Parent or Seller in SECTION
2.19 without regard to any qualification contained therein as to materiality or
a Material Adverse Effect, except to the extent that any such Damages are
otherwise indemnified pursuant to the foregoing clauses (i) - (iii), and (v) any
and all Damages arising out of, resulting from or incident to the breach of any
representation or warranty made by Parent or Seller in SECTION 2.19 without
regard to any qualification contained therein as to materiality or Material
Adverse Effect as if such representation or warranty were made on or as of the
Closing Date (except in the case of any representation or warranty that by its
terms is made as of a date specified therein), except to the extent that any
such Damages are otherwise indemnified pursuant to the foregoing clauses (i) -
(iv). For purposes of this SECTION 8.4(a), Taxes shall include the amount of
Taxes which would have been paid but for the application of any credit or net
operating loss or capital loss deduction attributable to Post-Closing Tax
Periods.
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(b) Following the Closing, Purchaser shall indemnify the
Seller Indemnified Parties and hold them harmless from (i) all Liability for
Taxes of Newco and AHCGC (including any obligation to contribute to the payment
of a Tax determined on a consolidated, combined or unitary basis with respect to
a group of corporations that includes or included one or more of Newco or AHCGC)
for any Post-Closing Tax Period (determined in accordance with the methodology
provided in SECTION 6.2(d)), (ii) any and all Damages arising out of, resulting
from or incident to the breach by Purchaser of any covenant contained in ARTICLE
VI of this Agreement and (iii) all Liability for Property Taxes arising out of
the ownership of the Canadian Assets for any Post-Closing Tax Period (determined
on a per diem basis consistent with the methodology of SECTION 8.4(c)(i)).
(c) In the case of any Straddle Period:
(i) real, personal and intangible property Taxes
("PROPERTY TAXES") of Seller or its Affiliates for a Pre-Closing Tax Period
shall be equal to the amount of such Property Taxes for the entire Straddle
Period multiplied by a fraction, the numerator of which is the number of days
during the Straddle Period that are in the Pre-Closing Tax Period (including
that portion of the Straddle Period in which any of the Assets were owned by
Seller) and the denominator of which is the total number of days in the Straddle
Period; and
(ii) the Taxes of Newco or AHCGC (other than Property
Taxes) for any Pre-Closing Tax Period shall be computed as if such Taxable
Period ended as of the close of business on the Closing Date (which shall be the
deemed the time of Closing as provided in SECTION 1.5 and which shall include
the tax consequences of the Share Purchase and the Elections).
(d) With respect to Parent and Seller's indemnity obligations
in respect of Taxes for a Straddle Period, Seller shall pay to Purchaser an
amount equal to any such Taxes allocable to a Pre-Closing Tax Period in
accordance with SECTION 8.4(c) less the sum of (i) the amount of such allocable
Taxes paid by Parent or any of its Affiliates (other than Newco or AHCGC) at any
time and (ii) the amount of such Taxes paid by Newco and AHCGC on or prior to
the Closing Date (collectively, (i) and (ii), the "STRADDLE PERIOD TAX OFFSET")
within ten (10) days after written demand thereof is made by Purchaser (but in
no event earlier than five (5) days before the date on which the Taxes for the
Straddle Period are required to be paid to the relevant Taxing Authority). If
the amount of the Straddle Period Tax Offset exceeds the amount of such Taxes
allocable to the Pre-Closing Tax Period within such Straddle Period, Purchaser
shall pay to Parent the amount of such excess within ten (10) days after the Tax
Return with respect to the final liability for such Taxes is required to be
filed with the relevant Taxing Authority. In the case of a Tax that is contested
in accordance with the provisions of SECTION 8.4(e), payment of the Tax to the
appropriate Taxing Authority shall not be considered to be due earlier than the
date a final determination to such effect is made by the appropriate Taxing
Authority or court.
(e) (i) If a claim shall be made by any Taxing Authority,
which, if successful, might result in an indemnity payment to a party (the
"FIRST PARTY"), one of its Affiliates or any of its Representatives pursuant to
this SECTION 8.4, the First Party shall promptly and in any event no more than
thirty (30) days following the First Party's receipt of such claim, give written
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notice to the other party (the "SECOND PARTY") of such claim (a "TAX CLAIM");
PROVIDED, HOWEVER, the failure of the First Party to give such notice shall only
relieve the Second Party from its indemnification obligations hereunder to the
extent it is actually prejudiced by such failure.
(ii) With respect to any Tax Claim relating to a Taxable
Period ending on or prior to the Closing Date, Parent shall, upon written
notification to Purchaser, control all proceedings and may make all decisions
taken in connection with such Tax Claim (including selection of counsel) at its
own expense; PROVIDED, HOWEVER, that with respect to Tax Claims the resolution
of which will be binding on Newco or AHCGC in a Tax Period ending after the
Closing Date, then Purchaser may also participate in such proceeding at its own
expense and Parent may not settle such Tax Claim without the written consent of
Purchaser (which consent shall not be unreasonably withheld). Parent and
Purchaser shall jointly control all proceedings taken in connection with any Tax
Claim relating to Taxes of Newco or AHCGC for a Straddle Period. Purchaser shall
control at its own expense all proceedings with respect to any Tax Claim
relating to a Taxable Period beginning after the Closing Date. A party shall
promptly notify the other party if it decides not to control the defense or
settlement of any Tax Claim which it is entitled to control pursuant to this
Agreement, and the other party shall thereupon be permitted to defend and settle
such proceeding.
(iii) Parent and Purchaser and each of their respective
Affiliates shall reasonably cooperate with each other in contesting any Tax
Claim. Such cooperation shall include the retention and, upon the request of the
party or parties controlling proceedings relating to such Tax Claim, the
provision to such party or parties of records and information which are
reasonably relevant to such Tax Claim, and making employees available on a
mutually convenient basis to provide additional information or explanation of
any material provided hereunder or to testify at proceedings relating to such
Tax Claim.
SECTION 8.5 EXCLUSIVITY OF INDEMNIFICATION REMEDY. Except for
any equitable relief, including injunctive relief or specific performance, to
which any party hereto may be entitled, from and after the Closing the
indemnification provided in this ARTICLE VIII shall be the sole and exclusive
remedy of any party hereto with respect to this Agreement and the Ancillary
Agreements, except for rights of set-off as to obligations arising under this
Agreement (excluding any obligations arising under the Transition Services
Agreement), which the parties hereto hereby establish and acknowledge.
ARTICLE IX .
TERMINATION AND WAIVER
SECTION 9.1 TERMINATION. This Agreement may be terminated at
any time prior to the Closing:
(a) by either Parent or Purchaser if the Closing shall not
have occurred on or prior to October 31, 2001; PROVIDED, HOWEVER, that such
period shall be extended to the one-year anniversary of the date of this
Agreement in the event all conditions to effect the Share Purchase and the other
transaction contemplated by this Agreement other than those set forth in
SECTIONS 7.1(c) (No Order), 7.1(e) (Antitrust Approvals), 7.2(d) (No Order) and
7.2(j) (Antitrust
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Approvals) have been or are capable of being satisfied at the time of such
extension; PROVIDED, FURTHER, that the right to terminate this Agreement under
this SECTION 9.1(a) shall not be available to any party whose failure to fulfill
any obligation under this Agreement shall have been the cause of, or shall have
resulted in, the failure of the Closing to occur on or prior to such date;
(b) by either Parent or Purchaser in the event that any
Governmental Authority shall have issued a final, non-appealable order, decree,
ruling or injunction (other than a temporary restraining order) restraining,
enjoining or otherwise prohibiting the transactions contemplated by this
Agreement; PROVIDED, HOWEVER, that the right to terminate this Agreement under
this SECTION 9.1(b) shall not be available to any party who shall not have
complied with its obligations under SECTIONS 4.3 and 4.4 to avoid the issuance
of such order, decree, ruling or injunction;
(c) by Purchaser in the event (i) the EBITDA derived from the
Initial Financial Statements for the periods ended December 31, 2000 and March
31, 2001 taken as one fifteen (15) month period is $3 million or more greater
than the EBITDA derived from the Subsequent Financial Statements for the periods
ended December 31, 2000 and March 31, 2001 taken as one fifteen (15) month
period or (ii) the EBITDA derived from the Initial Financial Statements for the
three month period ended March 31, 2001 is $2 million or more greater than the
EBITDA derived from the Interim Financial Statements; PROVIDED, HOWEVER,
Purchaser shall not have the right to exercise such right of termination until
twenty (20) days after giving the written notice (the "STATEMENT NOTICE") to
Seller and Parent (the "EVALUATION PERIOD") setting forth the differences in
EBITDA between such financial statements. During the Evaluation Period,
Purchaser agrees and agrees to cause it financial and legal advisors to,
negotiate in good faith with Seller and Parent as to such matters and, if
appropriate, to make such adjustments to the terms and conditions of this
Agreement and the Ancillary Agreements as would result in Purchaser agreeing to
proceed with the transactions contemplated hereby. If the Statement Notice shall
not be given by Purchaser within thirty (30) days after receipt of the
Subsequent Financial Statements in conformance with the requirements of SECTION
4.18 this termination right shall cease;
(d) by the mutual written consent of Parent and Purchaser;
(e) by Seller upon written notice in the event of a material
breach of any representation or warranty of Purchaser contained in this
Agreement (other than a breach of the representations in SECTION 3.3(b) relating
to a Governmental Order entered after the date hereof under the Antitrust Laws
in connection with the transactions contemplated hereby) or any covenant or
agreement to be performed or complied with by Purchaser pursuant to the terms of
this Agreement, which breach (i) has continued without cure for a period of
thirty (30) days following notice thereof by Seller to Purchaser and (ii) would
result in a condition to Closing set forth in SECTION 7.1 of this Agreement not
being satisfied (which condition has not been waived by Seller in writing);
(f) by Purchaser upon written notice in the event of a
material breach of any representation or warranty of Seller or Parent contained
in this Agreement (other than a breach of the representations in SECTION 2.3(b)
relating to a Governmental Order entered after the date hereof under the
Antitrust Laws in connection with the transactions contemplated hereby) or any
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covenant or agreement to be performed or complied with by Seller, Parent or the
Companies pursuant to the terms of this Agreement, which breach (i) has
continued without cure for a period of thirty (30) days following notice thereof
by Purchaser to Seller and Parent and (ii) would result in a condition to
Closing set forth in SECTION 7.2 of this Agreement not being satisfied (which
condition has not been waived by Purchaser in writing);
(g) by either Purchaser or Parent, if either (i) the Parent
and Purchaser shall have agreed to not further resist or contest actions or
proceedings under or relating to the HSR Act or other Antitrust Laws challenging
the Share Purchase or other transactions contemplated by this Agreement, or (ii)
Purchaser shall have determined not to proceed to continue to contest or resist
in compliance with SECTION 4.4 and, prior to termination by Purchaser pursuant
to this clause (ii), five (5) Business Days have passed since Purchaser advised
Parent of such decision pursuant to SECTION 4.4(d);
(h) by either Purchaser (provided Purchaser shall have
complied with its obligations under SECTION 4.20(a)) or Parent (provided Parent
shall have complied with its obligations under SECTION 4.20(b)), upon written
notice to the other, in the event the Commitment lapses or is terminated by the
lenders thereunder and the Commitment is not renewed, reinstated or replaced
within forty-five (45) days of the date the Commitment lapsed or was terminated
(the "COMMITMENT CURE PERIOD"); PROVIDED, HOWEVER, Parent's and Purchaser's
right of termination under this subparagraph (h) shall terminate if prior to, or
during the Commitment Cure Period, Purchaser irrevocably waives the condition
set forth in SECTION 7.2(e) (FINANCING) hereof; or
(i) by Parent, if it has provided a Parent Liabilities Notice
to Purchaser in accordance with SECTION 4.29 and Purchaser has not provided
Parent with a Limitation of Indemnification Notice at least two (2) Business
Days prior to Closing.
SECTION 9.2 EFFECT OF TERMINATION. In the event of termination
of this Agreement as provided in SECTION 9.1, this Agreement shall forthwith
become void and of no further force or effect and there shall be no liability on
the part of any party hereto, except (i) that nothing herein shall relieve any
party hereto from liability for any willful breach of this Agreement occurring
prior to any such termination and (ii) the terms of each of this SECTION 9.2 and
SECTION 11.1, SECTION 11.4, SECTION 11.6, SECTION 11.7, SECTION 11.10 and
SECTION 11.11 shall survive such termination.
ARTICLE X
DEFINITIONS
SECTION 10.1 CERTAIN DEFINED TERMS. As used in this Agreement,
the following terms shall have the following meanings:
"ACTION" shall mean any claim, action, suit, arbitration,
hearing or proceeding by or before any Governmental Authority or arbitral body.
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"ADVERSE EVENT" means a violation of or breach or default (or
event which would become a default with either the giving of notice or lapse of
time, or both) under, or the arising of any rights of termination, material
modification or acceleration of, any Contract or Permit.
"AFFILIATE" shall mean, with respect to any specified Person,
any other Person that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with,
such specified Person.
"AGREEMENT" shall mean this Stock Purchase Agreement among
Parent, Seller, Operating Company, Newco and Purchaser (including the Disclosure
Schedule, Schedules and Exhibits hereto), as amended, modified or supplemented
from time to time.
"AHCGC" shall mean Anchor Hocking Consumer Glass Corporation,
a Delaware corporation.
"AHCGC ASSETS" shall mean all of AHCGC's right, title and
interest in and to all properties, assets and rights of any kind, nature and
description, whether tangible or intangible, real or personal, owned by AHCGC or
in which AHCGC has any interest, excluding any Excluded Seller Assets.
"ANCILLARY AGREEMENTS" shall mean the Transition Services
Agreement, the Asset Transfer Documents, the Asset Drop-Down Documents and the
Canadian Purchase Agreement.
"ASSET TRANSFER DATE" shall mean the date on which the
transfer and conveyance of the Seller Assets to Newco is consummated in
accordance with the terms and subject to the conditions of this Agreement and
the Asset Transfer Documents.
"ASSET TRANSFERS" shall mean, collectively, the transactions
contemplated by the Asset Transfer Transactions, the Asset Drop-Down Transfers
and the Canadian Asset Acquisition.
"ASSETS" shall mean the (i) Seller Assets, (ii) AHCGC Assets,
(iii) Outside Assets and (iv) Canadian Assets.
"BOOKS AND RECORDS" shall mean all books, documents, records,
lists, ledgers, files, reports, plans, data, drawings and operating records of
any kind (including records, files and data stored on computer disks or tapes or
any other storage medium, including any offline or archived data), or portions
thereof, pertaining to the Companies or the Business, including all corporate
and tax Books and Records of the Companies.
"BUSINESS" shall mean (a) all of the Assets and (b) the
business of the Companies as presently conducted, which relates to the design,
development, manufacture, distribution, servicing, sale or marketing of consumer
or specialty glass products and the associated Canadian business.
"BUSINESS DAY" shall mean any day that is not a Saturday, a
Sunday or other day on which banks are required or authorized by law to be
closed in The City of Chicago.
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"CANADIAN ASSETS" shall have the meaning set forth in the
Canadian Purchase Agreement.
"CANADIAN LIABILITIES" shall have the meaning set forth in the
Canadian Purchase Agreement.
"CANADIAN PURCHASE AGREEMENT" shall mean the Canadian Asset
Purchase Agreement between Canadian Purchaser, Purchaser, Parent and Canadian
Seller dated as of the date hereof, whereby Canadian Seller shall sell and
Canadian Purchaser shall acquire all of the Canadian Assets and assume all of
the Canadian Liabilities.
"CANADIAN PURCHASER" shall mean Libbey Canada Inc., an Ontario
corporation.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder.
"CONFIDENTIALITY AGREEMENT" shall mean the confidentiality
agreement dated February 28, 2001 between Purchaser and Seller.
"CONSENT" shall mean waiver, consent, approval, grant,
concession or exemption of any Person, including any Governmental Authority.
"CONTRACTS" shall mean any agreements, contracts, leases,
powers of attorney, notes, loans, evidence of indebtedness, letters of credit,
settlement agreements, franchise agreements, undertakings, covenants not to
compete, licenses, instruments, obligations, commitments, purchase and sales
orders and other executory commitments to which any Person is a party, whether
oral or written.
"CONTROL" (including the terms "CONTROLLED BY" and "UNDER
COMMON CONTROL WITH"), with respect to the relationship between or among two or
more Persons, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the affairs or management of a Person, whether
through the ownership of voting securities, by contract or otherwise, including
the ownership, directly or indirectly, of securities having the power to elect a
majority of the board of directors or similar body governing the affairs of such
Person.
"DIVISION" shall mean the Business, including the accounts of
Seller, AHCGC (including the Canadian sales office and distribution operation)
and, after the Asset Transfers, the New Group, and Parent corporate accounts
directly related to Seller and AHCGC after elimination of intercompany accounts
and transactions, excluding the accounts of Operating Company, Newell Puerto
Rico, Ltd. and Plastics, Inc., which are businesses unrelated to the Business.
"EBITDA" shall mean earnings before interest, taxes,
depreciation and amortization and shall be computed as the sum of (i) net
income, income taxes and interest as reflected on the relevant income statement
and (ii) depreciation and amortization as reflected on the relevant statement of
cash flow for the applicable period.
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"EMPLOYEE" shall mean any employee of any of the Companies.
"EMPLOYMENT AGREEMENT" shall mean any agreement between Parent
or any of its Affiliates (including the Companies), on the one hand, and an
Employee, on the other hand.
"ENCUMBRANCE" shall mean any security interest, pledge,
mortgage, lien, charge, easement, restrictive covenant, development agreement,
zoning by-law or restriction, right-of-way (from or onto the real property
and/or improvements thereon), building set-back requirements, encroachment,
building or use restriction, other encumbrance or title defect of any kind,
option to purchase, right of first refusal, right of first offer, adverse claim,
or other right of occupation.
"ENVIRONMENTAL CLAIMS" means all notices of violation, liens,
claims, demands, suits, or causes of action for any damage, including personal
injury (including bodily injury) or property damage (including any depreciation
or diminution of property values) arising directly or indirectly out of
Environmental Conditions or Environmental Laws. By way of example only (and not
by way of limitation), Environmental Claims include (i) violations of or
obligations under any Contract related to Environmental Laws or Environmental
Conditions between the Companies and any other Person, (ii) actual or threatened
damages to natural resources, (iii) claims for nuisance or its statutory
equivalent, (iv) claims for the recovery of response costs under Environmental
Laws or otherwise, or administrative or judicial orders directing the
performance of investigations, responses or remedial actions under any
Environmental Laws or otherwise, (v) requirements to implement "corrective
action" pursuant to any order or permit issued pursuant to the Resource
Conservation and Recovery Act, as amended, or similar provisions of applicable
state law, (vi) claims related to Environmental Laws or Environmental Conditions
for restitution, contribution, or indemnity, (vii) fines, penalties or liens of
any kind against property related to Environmental Laws or Environmental
Conditions, (viii) claims related to Environmental Laws or Environmental
Conditions for injunctive relief or other orders or notices of violation from
federal, state or local agencies or courts, and (ix) with regard to any present
or former employees, claims relating to exposure to or injury from Environmental
Conditions.
"ENVIRONMENTAL CONDITIONS" means the state of the environment,
including natural resources (e.g., flora and fauna), soil, surface water, ground
water, any present or potential drinking water supply, subsurface strata or
ambient air, relating to or arising out of the use, handling, storage,
treatment, recycling, generation, transportation, release, spilling, leaking,
pumping, pouring, emptying, discharging, injecting, escaping, leaching,
disposal, dumping or threatened release of Hazardous Substances by the Companies
or any of their respective predecessors or successors in interest, or by its
respective agents, representatives, employees or independent contractors when
acting in such capacity on behalf of any of the Companies. With respect to
Environmental Claims by third parties, Environmental Conditions also include the
exposure of persons to Hazardous Substances at the work place or the exposure of
persons or property to Hazardous Substances migrating from or otherwise
emanating from or located on the Facilities or the Former Facilities.
"ENVIRONMENTAL LAWS" means all applicable Laws, all rules or
regulations promulgated thereunder, and all orders, consent orders, judgments,
notices, permits or demand letters issued, promulgated or entered pursuant
thereto, relating to pollution or protection of the
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environment (including ambient air, surface water, ground water, land surface,
or subsurface strata), including (i) Laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals,
industrial materials, wastes or other substances into the environment and (ii)
Laws relating to the identification, generation, manufacture, processing,
distribution, use, treatment, storage, disposal, recovery, transport or other
handling of pollutants, contaminants, chemicals, industrial materials, wastes or
other substances. Environmental Laws shall include the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, the
Toxic Substances Control Act, as amended, the Hazardous Materials Transportation
Act, as amended, the Resource Conservation and Recovery Act, as amended, the
Clean Water Act, as amended, the Safe Drinking Water Act, as amended, the Clean
Air Act, as amended, the Occupational Safety and Health Act, as amended, and all
analogous laws promulgated or issued by any Governmental Authority.
"ENVIRONMENTAL REPORTS" means any and all written analyses,
summaries or explanations, in the possession or control of Seller or the
Companies, prepared for the purpose of analyzing or assessing (a) any
Environmental Conditions in, on or about the Facilities or the Former Properties
or (b) compliance by the Companies with Environmental Laws.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, and the rules and regulations promulgated thereunder.
"ESTIMATED CLOSING DATE BALANCE SHEET" shall mean the
estimated unaudited, consolidated balance sheet of the New Group as of the
Closing Date prepared in accordance with GAAP consistent with accounting
principles and practices applied in preparation of the 2000 Unaudited Financial
Statements (excluding the physical inventory contemplated thereby).
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
"FACILITIES" shall means all plants, offices, manufacturing
facilities, stores, warehouses, administration buildings and all real property
and related facilities (i) owned or leased by the Companies and used by the
Companies as of the date hereof in the conduct of the Business or (ii) which are
part of the Outside Assets or the Canadian Assets.
"FORMER PROPERTIES" shall mean all plants, offices,
manufacturing facilities, stores, warehouses, administration buildings and all
real property and related facilities owned, leased or operated by the Companies
or any of their respective predecessors prior to the date hereof, but excluding
the Facilities; PROVIDED, HOWEVER, when this term is used in SECTION 2.17
hereof, it shall only relate to all plants, offices, manufacturing facilities,
stores, warehouses, administration buildings and all real property and related
facilities owned, leased or operated by AHCGC prior to the date hereof, but
excluding the Facilities; PROVIDED FURTHER, when this term is used in SECTION
4.16 hereof, it shall only relate to all plants, offices, manufacturing
facilities, stores, warehouses, administration buildings and all real property
and related facilities owned, leased or operated by Seller or any of its
predecessors, but excluding the Facilities.
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"GAAP" shall mean United States generally accepted accounting
principles and practices as in effect from time to time.
"GOVERNMENTAL AUTHORITY" shall mean any Canadian, United
States federal, state, provincial, municipal, or local or any foreign
government, any governmental or quasi-governmental regulatory or administrative
authority, agency or commission or any court, tribunal or judicial body.
"GOVERNMENTAL ORDER" shall mean any action, order, writ,
injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority.
"HAZARDOUS SUBSTANCES" means all pollutants, contaminants,
chemicals, wastes, and any carcinogenic, ignitable, corrosive, reactive, toxic
or otherwise hazardous substances or materials (whether solids, liquids or
gases) subject to regulation, control or remediation under Environmental Laws or
otherwise. By way of example only, the term Hazardous Substances includes
petroleum, flammable, explosive and radioactive materials, PCBs, pesticides,
herbicides, asbestos or asbestos-containing materials, sludge, slag, acids,
metals, solvents and waste waters.
"HSR ACT" shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder.
"INTELLECTUAL PROPERTY" shall mean all patents, registered and
unregistered copyrights, registered and unregistered trademarks and service
marks, tradenames, all applications or registrations for any of the foregoing,
and trade names, brandmarks, brand names, trade dress, logos, Internet domain
names, trade secrets, know-how, show-how, third-party licenses, data, data paths
or databases, software applications, HTML pages, file structures, artwork,
drawings, illustrations, photographs, videos, slogans and related information
and documentation and any similar type of proprietary intellectual property or
technology right.
"INVENTORY" shall mean (a) all of the Companies' inventories
within the Facilities or wherever otherwise located held for resale to the
Companies' customers or reflected as inventory on the Final Closing Date Balance
Sheet and (b) all of the raw materials, work in process, spare parts, finished
products, wrapping, supply and packaging items and similar items of the
Companies in the Facilities or wherever otherwise located.
"KEY FACILITIES" shall mean (i) the facility and associated
real and personal property commonly know as 400 Ninth Street in Monaca,
Pennsylvania, (ii) the facility and associated real and personal property
commonly known as 1115 West Fifth Avenue/519 Pierce Avenue in Lancaster, Ohio
and (iii) the facility and associated real and personal property commonly known
as 2893 West Fair Avenue in Lancaster, Ohio.
"KNOWLEDGE" shall mean (i) with respect to Purchaser, the
actual knowledge of the executive officers of Purchaser and (ii) with respect to
Seller, the actual knowledge of persons listed on EXHIBIT 10.1-K, as to those
matters subject to the representation indicated for such persons on EXHIBIT
10.1-K (it being agreed that the phrase "general knowledge" on such exhibit
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means such persons knowledge shall be relevant to all representations and
warranties qualified by "knowledge").
"LAW" shall mean any statute, law, ordinance, regulation,
decision or rule of any Governmental Authority, whether foreign, federal, state,
provincial, municipal, local or otherwise.
"LIABILITIES" shall mean, any and all direct or indirect
liability, indebtedness, obligation, commitment, expense, loss, claim, damages,
deficiency, guaranty or endorsement of or by any Person of any type, whether
accrued, absolute, contingent, matured, unmatured, liquidated, unliquidated,
known or unknown or otherwise, including Tax liabilities, liabilities in respect
of products and liabilities arising under any Environmental Law.
"MATERIAL ADVERSE CHANGE" shall mean any change, circumstance
or event that, individually or in the aggregate with all other changes,
circumstance or events, has had or is reasonably likely to have a Material
Adverse Effect.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect
(a) on the business, properties, financial condition, assets, liabilities or
results of operations of (i) the Companies, taken as a whole, or (ii) the
Business, taken as a whole, or (b) on the ability of Parent or the Companies to
consummate the transactions contemplated by this Agreement in a timely manner,
other than any material adverse effect (x) resulting from conditions or
circumstances generally affecting the glass tableware and specialty glassware
industries but only to the extent the Companies or the Business are affected in
a manner similar to such other industry participants or (y) resulting from loss
of business existing as of the date of this Agreement with existing customers
which loss is as a direct result of the identity of Purchaser as the acquiror of
the Business.
"MATERIAL AHCGC PERMIT" means any Permit as to which the loss
or absence of such Permit or an Adverse Event would be reasonably likely (i) to
materially and adversely affect or limit the ownership, use or operation as
presently conducted of (I) any AHCGC Facility or material portion thereof or
(II) any Asset which is material to the operation of the business of AHCGC or
(III) or any material aspect of the Business or (ii) to have a material adverse
effect on AHCGC or (iii) to result in a fine in excess of $10,000 or (iv) to
result in any criminal liability.
"MATERIAL PERMIT" means any Permit as to which the loss or
absence of such Permit or an Adverse Event would be reasonably likely (i) to
materially and adversely affect or limit the ownership, use or operation as
presently conducted of (I) any Key Facility or material portion thereof, (II)
any Asset which is material to the operation of the Business or (III) any
material aspect of the Business or (ii) to have a Material Adverse Effect or
(iii) to result in a fine in excess of $10,000 or (iv) to result in any criminal
liability.
"NEW GROUP" shall mean Newco, AHCGC and the Canadian Assets
and Canadian Liabilities.
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"1995 RESTRUCTURING" shall mean the transfer of certain assets
and liabilities of Seller to AHCGC pursuant to the 1995 Transfer Agreement and
the other agreements associated therewith.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of
business consistent with past custom and practice.
"PERMITS" shall mean all permits, authorizations, approvals,
registrations, licenses or certificates granted by or obtained from any
Governmental Authority.
"PERMITTED ENCUMBRANCES" shall mean: (a) Encumbrances for
Taxes, assessments or governmental charges or levies on property not yet due and
delinquent or the validity of which are being contested in good faith by
appropriate proceedings or (b) Encumbrances consisting of mechanics', carriers',
workmens', repairmens' and other like Encumbrances arising or incurred in the
Ordinary Course of Business, (c) any interest of lessors reflected on UCC
financing statements filed in connection with equipment leases entered into in
the Ordinary Course of Business, or (d) Encumbrances consisting of zoning or
planning restrictions, easements, permits and other restrictions or limitations
of record on the use of real property or title thereto which do not individually
or in the aggregate materially detract from the occupancy, marketability or
value of the subject Asset, or materially impair the use of such subject Asset
by the Companies in the operation of the Business as presently conducted. No
Encumbrances in the nature of a judgment lien, mortgage, deed of trust or UCC
Financing Statement (other than those relating to Encumbrances described in
subpart (c) above) shall be a Permitted Encumbrance.
"PERSON" shall mean any individual, partnership, firm,
corporation, association, trust, unincorporated organization, joint venture,
limited liability company or other entity.
"POST-CLOSING TAX PERIOD" shall mean any Tax Period beginning
after the Closing Date and that portion of any Straddle Period beginning after
the Closing Date.
"PRE-CLOSING TAX PERIOD" shall mean any Tax Period ending on
or before the Closing Date and that portion of any Straddle Period ending on the
Closing Date.
"PRESENTLY CONDUCTED" shall mean the Business as then
conducted or the Business as conducted during, but without reference to any
specific point in time, the twelve (12) month period prior to Closing.
"RAILROAD AGREEMENT" shall mean the Service Agreement between
Indiana and Ohio Central Railroad, Inc. and Anchor Hocking Corporation,
effective April 1994 (including all amendments, extensions, renewals and
replacements thereof).
"REGULATION" shall mean the Treasury Regulations (including
temporary regulations) promulgated by the United States Department of Treasury
with respect to the Code or other federal Tax statutes.
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"REGULATION S-X" shall mean Regulation S-X of the Securities
and Exchange Commission, as amended from to time.
"REPRESENTATIVES" shall mean any officer, director, member,
shareholder, principal, attorney, agent, employee, banker, accountant,
consultant or other representative.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"SELLER BANK ACCOUNT" shall mean one or more bank accounts to
be designated by Seller in a written notice to Purchaser at least two (2)
Business Days before the Closing.
"SELLER-RETAINED LIABILITIES" shall mean any Liabilities
arising from or relating to (i) any Former Properties, (ii) any assets,
products, employees or operations of (A) any business other than the
manufacturing, sale or distribution of consumer and specialty glass products at
the Facilities or (B) any facilities, businesses or entities previously
divested, sold or otherwise discontinued by the Companies or their predecessors,
(iii) any waste materials, including but not limited to any waste water,
Hazardous Substances or any product that was off-specification, damaged or
otherwise unsold, that were generated or stored at and transported from any of
the Facilities or Former Properties to any offsite location at any time on or
before the Closing Date (but excluding, for the avoidance of doubt, any release,
discharge or migration of Hazardous Substances subject to SECTION 8.2(a)(viii)),
(iv) Parent's Welfare Plans, Parent's Hourly and Salaried Plans, Parent's 401(k)
Plan or Parent's Retiree Plan or (v) any of the Contracts set forth in SECTION
4.16(b) of the Disclosure Schedule; PROVIDED that notwithstanding clause (ii) of
this definition, Seller-Retained Liabilities shall not include Liabilities for
product liability claims arising out of post-Closing occurrences concerning
machine-made soda lime or borosilicate bakeware or machine-made soda lime
glassware (excluding, for the avoidance of doubt, handmade or lead crystal
products) manufactured at a Former Property owned or previously owned by Seller
or any of its Subsidiaries or predecessors.
"STRADDLE PERIOD" shall mean any Taxable Period that includes
(but does not end on) the Closing Date.
"SUBSIDIARIES" and "SUBSIDIARY" shall mean any and all
corporations, partnerships, limited liability companies and other entities with
respect to which Seller, AHCGC or Newco, directly or indirectly, own securities
having the power to elect a majority of the board of directors or similar body
governing the affairs of such entity.
"TARGET NET WORKING CAPITAL" shall mean the amount specified
under the column "Target Amounts" in the table in Section D of SCHEDULE 1.3(b)
hereof corresponding to the "Closing Period" on said schedule in which the
Closing Date occurs.
"TAX OR TAXES" shall mean, with respect to any Person, all
taxes, assessments, charges, duties, fees, levies, imports or other governmental
charges, including any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, stamp, occupation, customs duties, goods
and services, capital stock, capital, business, franchise, profits, withholding,
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social security (including any social security charge or premium), unemployment,
real property, personal property, sales, use, transfer, registration, value
added, alternative or add-on minimum or estimated tax imposed by a Taxing
Authority, including any interest, penalty, or addition thereto, whether
disputed or not, for which such Person may be liable (including any such tax
related to any other Person or entity for which such Person is liable, by
contract, as transferee or successor, by law (including as a result of the
application of Regulation Section 1.1502-6) or otherwise).
"TAX AUTHORITY" and "TAXING AUTHORITY" shall mean with respect
to any Tax, the government entity or "quasi governmental entity," or political
subdivision thereof that imposes such Tax, and the agency (if any) charged with
the collection of such Taxes for such entity or subdivision.
"TAX PERIOD AND TAXABLE PERIOD" shall mean any period
prescribed by any Taxing Authority for which a Tax Return is required to be
filed or a Tax is required to be paid.
"TAX RETURN" shall mean any return (including information
return), report, notice, form, declaration, claim for refund, estimate,
election, information statement or other document relating to any Tax, including
any schedule or attachment thereto, and including any amendment thereof filed or
to be filed with any Tax Authority.
"TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT" or "TRANSACTIONS
CONTEMPLATED BY THE AGREEMENT" shall include the Asset Transfers and the other
matters contemplated by Ancillary Agreements.
"TRANSITION SERVICES AGREEMENT" shall mean that Transition
Services Agreement entered into by and among Parent and Purchaser substantially
in the form attached hereto as EXHIBIT 10.1-T.
"WAREHOUSE AGREEMENT" shall mean the Lease Agreement between
Beaver Valley Industrial Park and Anchor Hocking Glass Corporation, effective
April 11, 1996 (including all amendments, extensions, renewals and replacements
thereof).
SECTION 10.2 OTHER DEFINED TERMS. The following terms shall
have the meanings defined for such terms in the Sections set forth below:
TERM SECTION
---- -------
Accounting Expert 1.4
Accounting Principles 1.4
Acquired Person 4.14
AH Products 4.14
Antitrust Laws 4.4
Appraisal 6.1
Arthur Andersen 4.19
Asset Drop-Down Documents 4.26
Asset Drop-Down Transfers Recitals
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Asset Transfer Documents 4.16
Asset Transfer Transactions Recitals
Assumed Seller Liabilities 4.16
Audited Financial Statements 2.7
Balance Sheet 2.7
Balance Sheet Date 2.7
Business Internet Content 4.9
Canadian Asset Acquisition Recitals
Canadian Seller Recitals
Claim Notice 8.2
Claiming Employee 8.2
Claims 8.2
Closing 1.5
Closing Date 1.5
Closing Date Balance Sheet 1.4
Closing Net Working Capital 1.4
Closing Payment 1.2
COBRA 5.5
Commitment 3.6
Commitment Cure Period 9.1
Companies Preamble
Companies' Software 2.16
Company Benefit Plans 2.14
Company Pension Plan 2.14
Company Properties 2.15
Compensation Claims 8.2
Competing Business 4.14
Coordinator 4.2
Damages 8.2
Desktop Software 2.16
Direct Claim 8.2
Disclosure Schedule 2.3
Elections 6.1
ERISA Affiliate 2.14
Estimated Closing Net Working Capital 1.3
Estimated Working Capital Adjustment Amount 1.3
Excluded Seller Assets 4.16
Excluded Seller Liabilities 4.16
Exempt Facilities Exhibit 4.14(d)(i)
Evaluation Period 9.1
Final Closing Date Balance Sheet 1.4
Final Closing Net Working Capital 1.4
Final Stub Period Financial Statements 2.7
Financing 3.6
First Party 8.4
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Hourly Pension Assets 5.2
Hourly Pension Liabilities 5.2
Indemnified Party 8.2
Indemnifying Party 8.2
Initial Financial Statements 2.7
Interim Financial Statements 2.7
Leased Properties 2.15
Licensed Software 2.16
Limitation of Indemnification Notice 4.29
Material Contracts 2.10
Multiemployer Plan 2.14
Net Working Capital 1.3
New Hourly and Salaried Plans 5.2
New Hourly Plan 5.2
New Salaried Plan 5.2
New 401(k) Plan 5.3
Newco Preamble
1995 Transfer Agreement 4.23
Non-Compete Period 4.14
Objection Period 1.4
Off The Shelf Software 2.16
Operating Company Preamble
Outside Assets 2.18
Owned Properties 2.15
Owned Software 2.16
Packaging 4.8
Parent Preamble
Parent's Hourly and Salaried Plans 5.2
Parent's Hourly Plan 5.2
Parent's IP 4.8
Parent Liabilities Notice 4.29
Parent's Retiree Plan 5.4
Parent's Salaried Plan 5.2
Parent's Welfare Plans 5.5
Parent's 401(k) Plan 5.3
PBGC 2.14
Participate 4.14
Property Taxes 8.4
Proposed Acquisition 4.15
Purchase Price 1.2
Purchaser Preamble
Purchaser Indemnified Parties 8.2
Purchaser's Welfare Plans 5.7
Quarterly Period Financial Statements 4.18
Reimbursement 8.2
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Required Consent 7.2
Salaried Pension Assets 5.2
Salaried Pension Liabilities 5.2
Second Party 8.4
SEC 4.19
SEC Filings 4.19
Section 338 Acts 6.1
Section 338 Allocation 6.1
Section 338 Forms 6.1
Seller Preamble
Seller Assets 4.16
Seller Indemnified Parties 8.2
Shared Assets 2.18
Shares Recitals
Share Purchase Recitals
Specified Seller Assets 4.16
Statement Notice 9.1
Statement of Objections 1.4
Straddle Period Tax Offset 8.4
Subsequent Financial Statements 2.7
Survey 4.7
Tax Benefit 8.2
Tax Claim 8.4
Third Party Claim 8.2
Transfer Date 5.2
Transfer Taxes 6.7
Untransferred Assets 4.26
Using Person 4.14
2000 Unaudited Financial Statements 2.7
2001 Audited Financial Statements 4.18
2001 Capital Budget Plan 2.23
2002 Capital Budget Plan 4.27
Western Hemisphere 4.14
SECTION 10.3 OTHER INTERPRETIVE PROVISIONS. The words
"hereof", "herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section, Schedule and Exhibit references are to
this Agreement unless otherwise specified. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation",
such that the matters or terms that follow are by way of example and not by way
of limitation. The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
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ARTICLE XI
GENERAL PROVISIONS
SECTION 11.1 EXPENSES. Except as otherwise specified in this
Agreement, all out-of-pocket costs and expenses, including fees and
disbursements of counsel, financial advisors and accountants, incurred in
connection with this Agreement, the Ancillary Agreements and the transactions
contemplated by this Agreement and thereby shall be paid by Seller, Parent or
Purchaser, as the case may be, incurring such costs and expenses, whether or not
the Closing shall have occurred, it being understood that Seller and/or Parent
will pay all such costs and expenses incurred by the Companies prior to the
Closing Date.
SECTION 11.2 NOTICES. Any notices or other communications
required or permitted under, or otherwise in connection with this Agreement
shall be in writing and shall only be effective if deemed to have been duly
given when delivered in person or upon confirmation of receipt when transmitted
by facsimile transmission (but only if followed by transmittal by national
overnight courier or hand delivery on the next Business Day) or on receipt after
dispatch by registered or certified mail, postage prepaid, addressed, or on the
next Business Day if transmitted by national overnight courier, in each case as
follows:
(a) if to Seller or Parent:
Newell Rubbermaid Inc.
6833 Stalter Drive, Suite 101
Rockford, IL 61108
Telecopy: (815) 381-8160
Attention: Dale L. Matschullat
Vice President - General Counsel
with copies to:
Newell Rubbermaid Inc.
6833 Stalter Drive, Suite 101
Rockford, IL 61108
Telecopy: (815) 381-8134
Attention: Andrea L. Horne; and
Vice President - Corporate Development
Schiff Hardin & Waite
6600 Sears Tower
Chicago, IL 60606
Telecopy: (312) 258-5700
Attention: Frederick L. Hartmann, Jr.
(b) if to Purchaser:
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Libbey Inc.
300 Madison Avenue
P.O. Box 10060
Toledo, OH 43604-1561
Telecopy: (419) 325-2585
Attention: Mark E. Songer, Director of
Corporate Development
with copies to:
Libbey Inc.
300 Madison Avenue
PO Box 10060
Toledo, OH 43604-1561
Telecopy: (419) 325-2585
Arthur H. Smith, Vice President and General Counsel
Latham & Watkins
233 S. Wacker Drive
Sears Tower, Suite 5800
Chicago, Illinois 60606
Telecopy:(312) 993-9767
Attention: Mark D. Gerstein
or such other address as the person to whom notice is to be given has furnished
in writing to the other parties. A notice of change in address shall not be
deemed to have been given until received by the addressee.
SECTION 11.3 PUBLIC ANNOUNCEMENTS. No party to this Agreement
shall make, or cause to be made, any press release or public announcement in
respect of this Agreement or the transactions contemplated by this Agreement
without the prior written consent of the other parties, and the parties shall
cooperate as to the timing and contents of any such press release or public
announcement; PROVIDED, HOWEVER, that a party may, without the prior consent of
the other parties, make such press release or public announcement as may be
required by Law or any listing agreement with a securities exchange if it has
used all commercially reasonable efforts to consult with the other parties and
to obtain such parties' consent but has been unable to do so in a timely manner.
SECTION 11.4 HEADINGS; TABLE OF CONTENTS. The descriptive
headings contained in this Agreement and table of contents of this Agreement are
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 11.5 SEVERABILITY. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any Law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated by this Agreement is not affected in
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any manner materially adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner in order that the transactions contemplated by this Agreement
are consummated as originally contemplated to the greatest extent possible.
SECTION 11.6 ENTIRE AGREEMENT. This Agreement (including all
schedules, exhibits, documents, and materials hereunder referred to) and the
Ancillary Agreements constitute the entire agreement of the parties hereto with
respect to the subject matter hereof and supersede all prior agreements and
undertakings, both written and oral, among the parties hereto with respect to
the subject matter hereof.
SECTION 11.7 ASSIGNMENT. This Agreement may not be assigned by
operation of law or otherwise by Seller, Operating Company, Parent, Newco or
AHCGC without the prior written consent of Purchaser (which consent may be
granted or withheld in the sole discretion of Purchaser). This Agreement may not
be assigned by operation of law or otherwise by Purchaser without the prior
written consent of Seller (which consent may be granted or withheld in the sole
discretion of the other parties hereto), EXCEPT, Purchaser may, without prior
consent of any other party hereto, transfer or assign by operation of law or
otherwise this Agreement to any Affiliate or subsidiary of Purchaser, provided
that in the event Purchaser assigns all or a portion of its rights and
obligations under this Agreement, Purchaser hereby unconditionally and
irrevocably guarantees to the other parties hereto the prompt and full discharge
by such subsidiary or Affiliate of all of Purchaser's obligations under this
Agreement in accordance with the terms hereof. Purchaser also hereby agrees
that, if such subsidiary or Affiliate fails to perform and discharge promptly
all such obligations and liabilities in accordance with such terms, Purchaser
will, forthwith, perform and discharge the same. The unconditional obligation of
Purchaser hereunder will not be affected, impaired or released by any
termination or expiration hereof or by any extension, waiver, amendment or other
circumstance whatsoever that would release a guarantor. Any attempted assignment
in violation of this SECTION 11.7 shall be null and void.
SECTION 11.8 NO THIRD PARTY BENEFICIARIES. Except as provided
in ARTICLE VIII as to indemnified parties, this Agreement shall be binding upon
and inure solely to the benefit of the parties hereto and their permitted
assigns and nothing herein, express or implied, is intended to or shall confer
upon any other Person any legal or equitable right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.
SECTION 11.9 AMENDMENT. This Agreement may not be amended
except by an instrument in writing signed by the parties hereto.
SECTION 11.10 WAIVER. Any party to this Agreement may (a)
extend the time for the performance of any of the obligations or other acts of
any other party, (b) waive any inaccuracies in the representations and
warranties of another party contained herein or in any document delivered by
another party pursuant hereto or (c) waive compliance with any of the agreements
or conditions of another party contained herein. Any such extension or waiver
shall be valid only if set forth in an instrument in writing signed by the party
to be bound thereby. Any waiver of any term or condition shall not be construed
as a waiver of any subsequent breach or a
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subsequent waiver of the same term or condition, or a waiver of any other term
or condition, of this Agreement. The failure of any party to assert any of its
rights hereunder shall not constitute a waiver of any of such rights.
SECTION 11.11 GOVERNING LAW; JURISDICTION. This Agreement
shall be governed by, and construed in accordance with, the laws of the State of
Illinois. All actions, proceedings, claims, counterclaims or cross-complaints in
any action or other proceeding brought by any party hereto against any other
party or parties hereto with respect to any matter arising out of, or in any way
connected with or related to, this Agreement or any portion thereof, whether
based upon contractual, statutory, tortious or other theories of liability
arising out of or relating to this Agreement, shall be heard and determined in
any federal court sitting in Chicago, Illinois, unless there is no federal court
jurisdiction, in which case the action or proceeding shall be heard and
determined in any state court sitting in Chicago, Illinois, and the parties
hereto hereby irrevocably submit to the jurisdiction of such courts in any such
action or proceeding, IRREVOCABLY AGREE THAT ANY SUCH COURT IS A PROPER VENUE
FOR ANY SUCH ACTION, and irrevocably waive the defense of an inconvenient forum.
Each party irrevocably consents to the service of any and all process in any
such action or proceeding by the mailing of copies of such process to such party
at its address specified in SECTION 11.2. Nothing in this SECTION 11.11 shall
affect the right of any party hereto to serve legal process in any other manner
permitted by law. The consents to jurisdiction set forth in this Section shall
not constitute general consents to service of process in the State of Illinois
and shall have no effect for any purpose except as provided in this SECTION
11.11 and shall not be deemed to confer rights on any person other than the
parties hereto.
SECTION 11.12 WAIVER OF JURY TRIAL. The parties hereto hereby
irrevocably waive their respective rights to trial by jury of any cause of
action, claim, counterclaim or cross-complaint in any action or other proceeding
brought by any party hereto against any other party or parties hereto with
respect to any matter arising out of, or in any way connected with or related
to, this Agreement or any portion thereof, whether based upon contractual,
statutory, tortious or other theories of liability. Each party represents that
it has consulted with counsel regarding the meaning and effect of the foregoing
waiver of its right to a jury trial.
SECTION 11.13 DISCLOSURE SCHEDULE. Nothing in the Disclosure
Schedule shall be deemed adequate to disclose an exception to a representation
or warranty (referenced by subsection) made herein unless such exception is
identified in the applicable Section of the Disclosure Schedule. Any
information, item or other disclosure set forth in any section, of the
Disclosure Schedule shall be deemed to have been set forth in all other
applicable portions thereof pertaining to ARTICLE II, if the relevance of such
disclosure to such other portion is reasonably apparent from the facts specified
in such disclosure. Except as provided in SECTION 8.3(g) hereof, the right to
indemnification, payment of Damages or other remedy based on any of the
representations, warranties, covenants and agreements herein will not be
affected by any investigation conducted with respect to, or any Knowledge
acquired (or capable of being acquired) at any time, whether before or after the
execution and delivery of this Agreement or the Closing Date, with respect to
the accuracy or inaccuracy of or compliance with, any such representation,
warranty, covenant, or obligation, and the waiver of any condition based on the
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accuracy of any representation or warranty, or on the performance of or
compliance with any covenant or agreement, will not affect the right to
indemnification, payment of Damages, or other remedy based on such
representations, warranties, covenants and agreements.
SECTION 11.14 SPECIFIC PERFORMANCE. Each of the parties
acknowledges and agrees that the other party would be damaged irreparably in the
event any of the provisions of this Agreement are not performed in accordance
with their specific terms or otherwise are breached. Accordingly, each of the
parties agrees that the other party shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically this Agreement and the terms and provisions hereof in any
action instituted in any court having jurisdiction over the parties and the
matter (subject to the provisions set forth in SECTION 11.11 above), in addition
to any other remedy to which they may be entitled, at law or in equity.
SECTION 11.15 COUNTERPARTS. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
SECTION 11.16 CURRENCY. Except for values expressly provided
otherwise, all currency amounts set forth herein are United States Dollars.
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IN WITNESS WHEREOF, Seller, Parent, Operating Company, Seller
and Purchaser have caused this Agreement to be executed as of the date first
written above by their respective officers thereunto duly authorized.
ANCHOR HOCKING CORPORATION
By: /s/ Dale L. Matschullat
----------------------------------
Name: Dale L. Matschullat
Title: VP General Counsel
NEWELL RUBBERMAID INC.
By: /s/ Dale L. Matschullat
----------------------------------
Name: Dale L. Matschullat
Title: VP General Counsel
NEWELL OPERATING COMPANY
By: /s/ Dale L. Matschullat
----------------------------------
Name: Dale L. Matschullat
Title: VP General Counsel
MENAGERIE CORPORATION
By: /s/ Dale L. Matschullat
----------------------------------
Name: Dale L. Matschullat
Title: VP General Counsel
LIBBEY INC.
By: /s/ Arthur H. Smith
----------------------------------
Name: Arthur H. Smith
Title: VP General Counsel
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