EXHIBIT 10.1
PURCHASE AGREEMENT
dated July 16, 1999
by and among
ACCURIDE CORPORATION ("ACCURIDE"),
SERVICIOS AISA, S.A. DE C.V. ("SERVICIOS AISA"),
ACCURIDE DE MEXICO, S.A. DE C.V. (the "COMPANY"),
INDUSTRIA AUTOMOTRIZ, S.A. DE C.V. ("IASA")
and
GRUPO INDUSTRIAL RAMIREZ, S.A. ("GIR")
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "AGREEMENT") is entered into as of July
16, 1999, by and among Accuride Corporation, a Delaware corporation
("ACCURIDE"), Servicios AISA, S.A. de C.V., a Mexican corporation ("SERVICIOS
AISA" and, together with Accuride, the "PURCHASERS"), Accuride de Mexico, S.A.
de C.V., a Mexican corporation (the "COMPANY"), and Grupo Industrial Ramirez,
S.A., a Mexican corporation ("GIR") and Industria Automotriz, S.A. de C.V., a
Mexican corporation ("IASA" and, together with GIR, the "SELLERS").
RECITALS
A. Pursuant to a Joint Venture Agreement dated as of November 5,
1997 among Accuride, IASA, GIR and the Company (the "JV AGREEMENT"), Accuride
and IASA created a joint venture and incorporated the Company as a variable
capital corporation under the laws of the United Mexican States to produce,
market and sell all kinds of steel wheels, rims, side rings, lock rings, adapter
rings, spacer bands, mounting bands and related components, replacements and
products ("WHEELS").
B. The parties entered into a Wheel Requirements Agreement (the
"WHEEL REQUIREMENTS AGREEMENT") and a Bailment Agreement (the "BAILMENT
AGREEMENT") whereby (i) the Company has installed its equipment at IASA's
manufacturing facility in San Nicolas de los Garza, Nuevo Leon, Mexico (the
"IASA FACILITY"), (ii) the Company supplies IASA with raw materials, (iii) IASA
then manufactures Wheels using the Company's equipment and sells the Wheels back
to the Company at cost plus 3.25% of the gross sales revenues (but excluding the
applicable VAT (as defined in the JV Agreement)) that the Company actually
invoices for sales of finished Wheels to its customers.
C. The total authorized capital stock of the Company consists of
the fixed portion represented by 50,000 registered no par value common shares
and the variable portion represented by 75,000,000 registered no par value
common shares.
D. Accuride owns 100,147 shares, or 51%, of the fixed capital
stock of the Company and 39,936,831 shares, or 51%, of the variable capital
stock of the Company.
E. IASA owns 96,219 shares, or 49%, of the fixed capital stock of
the Company and 38,370,680 shares, or 49%, of the variable capital stock of the
Company (such shares being collectively referred to herein as the "IASA
SHARES").
F. In reliance on and subject to the terms, conditions,
representations, warranties, covenants and agreements herein contained,
Purchasers desire to acquire the IASA Shares from the Sellers and the Sellers
desire to sell the IASA Shares to Purchasers.
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AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants herein contained, and other good and valuable consideration,
the receipt and sufficiency of which the parties hereby acknowledge, the parties
hereby agree as follows:
ARTICLE I.
PURCHASE AND SALE
Section 1.01 AGREEMENT TO PURCHASE AND SELL IASA SHARES. Subject to
the terms and conditions of this Agreement, the Sellers agree to sell to the
Purchasers, and the Purchasers agree to purchase from the Sellers, at Closing
(as defined below), the IASA Shares, to be allocated 96,218 shares of the fixed
capital stock and 38,370,680 shares of the variable capital stock to Accuride
and 1 share of the fixed capital stock to Servicios AISA.
Section 1.02 ACQUISITION OF THE IASA SHARES. Subject to the
adjustments provided in the Escrow Agreement (as defined below), in exchange for
the IASA Shares, at the Closing, Purchasers shall pay, or shall cause to be
paid, a total of $7,300,000 which represents the amount of $.18973409 U.S.
Dollars per share to be distributed as indicated in Section 1.01 above, (the
"PURCHASE PRICE"), comprised of the following:
(i) $2,750,000 in immediately available funds to the
account or accounts specified in writing by the Sellers.
(ii) $4,550,000 (the "ESCROW AMOUNT") in immediately
available funds, pursuant to the Escrow Agreement, in substantially the form
attached hereto as Exhibit A (the "ESCROW AGREEMENT"), to an escrow account (the
"ESCROW ACCOUNT") established in accordance with the Escrow Agreement. The
Escrow Amount shall be governed by this Sections 1.02 and 1.03 and the
provisions of the Escrow Agreement. The Escrow Amount shall be allocated as
follows in three separate accounts: (i) $300,000 (the "MAINTENANCE FUNDS"),
(ii) $250,000 (the "RAW MATERIALS FUNDS") and (iii) $4,000,000 (the "TAX LIEN
FUNDS").
Section 1.03 ESCROW AMOUNT.
(a) The Maintenance Funds shall be administered by a committee of
four individuals (the "MAINTENANCE COMMITTEE"), of which two shall be elected by
Accuride (which initially shall be Robert J. Fagerlin and Raul Gonzalez Valdes)
and two shall be elected by the Sellers (which initially shall be Gregorio
Ramirez Jauregui and Pedro Sanchez). All decisions of the Maintenance Committee
shall be made by the majority vote of the Maintenance Committee; provided,
however, that in the event that the Maintenance Committee is unable to concur on
a decision, Robert J. Fagerlin or his successor shall make the final decision on
behalf of the Maintenance Committee in his sole discretion. The Maintenance
Committee shall determine a
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schedule (the "MAINTENANCE SCHEDULE") establishing certain maintenance costs at
the IASA Facility that are not considered to be incurred in the ordinary course
of business (the "EXTRAORDINARY MAINTENANCE COSTS"). The Maintenance Committee
shall deliver a notice to the Escrow Agent (as defined in the Escrow Agreement),
providing instructions to deliver from the Maintenance Funds an amount equal to
such Extraordinary Maintenance Costs to the appropriate party as set forth in
the Maintenance Schedule. The term of the Maintenance Fund shall be for a
period of thirty days after the Closing Date (the "MAINTENANCE FUNDS EXPIRATION
DATE"). If the total sum of all Extraordinary Maintenance Costs set forth in
the Maintenance Schedule is less than the Maintenance Funds, the Maintenance
Committee shall deliver a notice to the Escrow Agent, instructing the Escrow
Agent to deliver to IASA any amount remaining in the Maintenance Funds as of the
Maintenance Funds Expiration Date.
(b) The Raw Materials Funds shall be subject to the following:
(i) Pursuant to the terms of the Wheel Requirements
Agreement, the Company has been selling raw materials (the "Raw Materials") to
IASA for IASA to manufacture Wheels for sale to the Company. IASA and the
Company have agreed to amend the terms of the Wheel Requirements Agreement
whereby the Company will continue providing Raw Materials to IASA, but retaining
title thereto, for IASA to provide the corresponding Wheel manufacturing
services to the Company, pursuant to the Wheel Requirements Agreement, as
amended by Amendment No. 1 to the Wheel Requirements Agreement executed on the
date hereof, a copy of which is attached hereto as Exhibit B. Therefore, IASA
hereby agrees to sell, and as of the Closing Date shall sell, and transfer and
assign to the Company title to the existing inventory of Raw Materials, pursuant
to an invoice in substantially the form attached hereto as Exhibit C.
(ii) The parties agree that as of the Closing Date, there
should be a fixed amount of Raw Materials as determined on the books and records
of the Company (the "ESTIMATED RAW MATERIALS") at the IASA Facility. As soon as
practicable after the Closing (but no later than 10 days thereafter), the
Company and IASA shall perform an audit (the "Audit Date") of the actual Raw
Materials (the "ACTUAL RAW MATERIALS") at the IASA Facility (and reconcile such
amount taking into consideration the Raw Material provided from the Closing Date
to the Audit Date). If the Actual Raw Materials is less than the Estimated Raw
Materials and such difference is not reasonably resolved (i.e., allowance for
steel and steel section scraps) subject to the Purchasers' satisfaction, such
difference shall be distributed to the Company from the Raw Materials Funds, and
any remaining amounts in the Raw Materials Funds shall be distributed to IASA;
within five days of the final determination of the Actual Raw Materials, the
Seller Representative and the Purchaser Representative shall deliver to the
Escrow Agent a notice providing instructions for such distributions.
(c) The Tax Lien Funds shall be governed by Section 4(c) of the
Escrow Agreement.
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Section 1.04 CLOSING. The closing of the transactions contemplated
in this Agreement (the "CLOSING") shall take place at the offices of the Company
no later than three days after the conditions set forth in Article IV have been
satisfied or otherwise waived by the applicable party or such other date or
place as shall be mutually acceptable to the parties (the "CLOSING DATE").
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF IASA AND GIR
As an inducement to Purchasers to enter into this Agreement, IASA and
GIR, jointly and severally, hereby represent and warrant to Purchasers, which
representations and warranties are, as of the date hereof, true and correct:
Section 2.01 DISCLOSURE SCHEDULE. IASA and GIR have heretofore
delivered to Purchasers a schedule (the "DISCLOSURE SCHEDULE") containing
certain information regarding GIR, IASA and the Company as indicated at various
places in this Agreement. All information set forth in the Disclosure Schedule
is true, correct and complete as of the date of this Agreement, and shall be
true, correct and complete on and as of the Closing Date, and shall be deemed
for all purposes of this Agreement to constitute an integral part of this
Agreement and of the representations and warranties of GIR and IASA contained
herein.
Section 2.02 INCORPORATION AND QUALIFICATION OF THE SELLERS AND
THEIR SUBSIDIARIES.
(a) Each of GIR and IASA is a corporation duly incorporated and
validly existing under the laws of the Untied Mexican States.
(b) Each of GIR and IASA has all necessary corporate power and
authority and has taken all corporate actions necessary or appropriate to enter
into this Agreement and the Escrow Agreement, to carry out its obligations
hereunder and thereunder, to consummate the transactions contemplated hereby and
thereby and to perform its obligations hereunder and thereunder. Each of GIR and
IASA has taken all actions necessary to secure all approvals required in
connection herewith and therewith. The execution and delivery of each of the
Agreement and the Escrow Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action of each of GIR and IASA. Each of IASA and GIR further
represents and warrants, jointly and severally, that none of the following
documents has been amended or revoked, but each remains in full force and
effect: (i) the Power of Attorney granted to Gregorio Ramirez Jauregui by IASA
and formalized by means of public deed 2151 dated September 18, 1998 before Ms.
Maria Atala Martinez, Notary Public 127 in Monterrey, N.L.; and (ii) the Power
of Attorney granted to Gregorio Ramirez Jauregui by GIR and formalized by means
of public deed 2183 dated October 19, 1998 before Ms. Maria Atala Martinez,
Notary Public 127 in Monterrey, N.L. Upon execution and delivery (assuming due
execution and delivery by the other parties hereto), each of
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the Agreement and the Escrow Agreement will be the valid and legally binding
agreement of each of GIR and IASA, enforceable against GIR and IASA in
accordance with its terms and conditions. Without limiting the generality of the
foregoing, GIR further represents and warrants that it does not need to obtain
approval of its stockholders to enter into this Agreement and the Escrow
Agreement, to consummate the transactions contemplated hereby and thereby and to
perform its obligations hereunder and thereunder.
(c) GIR is the legal beneficial owner of at least 90% of the
outstanding voting capital stock of Trailers de Monterrey, S.A. de C.V, a
Mexican corporation ("TRAILERS"), free and clear of any and all Liens (as
defined below). Trailers is a corporation duly organized and validly existing
under the laws of the United Mexican States.
(d) GIR is the legal beneficial owner of at least 90% of the
outstanding voting capital stock of Distribuidora Automotriz Ramirez, S.A. de
C.V, a Mexican corporation ("DIARSA"), free and clear of any and all Liens.
DIARSA is a corporation duly organized and validly existing under the laws of
the Untied Mexican States.
Section 2.03 CONSENTS; NO CONFLICT. Except as set forth in Section
2.03 of the Disclosure Schedule, no consents, approvals, assignments, releases,
termination statements, filings, notifications or other similar authorizations
or filings ("CONSENTS") to the transactions contemplated by this Agreement or
the Escrow Agreement are required from or with any person or entity, whether an
individual, trustee, corporation, partnership, limited partnership, limited
liability company, trust, unincorporated organization, business association,
firm, joint venture or Governmental Authority (as defined below) (collectively,
a "PERSON"). Without limiting the generality of the foregoing, the Consents of
the IASA stockholders and the holders of the Obligaciones con Garantia
Fiduciaria (IASASA) 1992 formalized by means of the acta de emision (Indenture)
contained in public deed 14,956 dated September 2, 1992, granted before Mr.
Gilberto Allen, Notary Public 33 in Monterrey, N.L., (as amended from time to
time "Debentures"), to the transactions contemplated by this Agreement and the
Escrow Agreement are not required to consummate the transactions contemplated by
this Agreement and the Escrow Agreement. Assuming all Consents and other
actions described in Section 2.03 of the Disclosure Schedule have been obtained
and all filings and notifications listed in Section 2.03 of the Disclosure
Schedule have been made, the execution, delivery and performance of this
Agreement and the Escrow Agreement by the Sellers, and the consummation of the
transactions contemplated hereby and thereby, do not and will not:
(a) violate or conflict with the respective ESCRITURA CONSTITUTIVA
or Bylaws (or other similar applicable charter document) of the Sellers;
(b) conflict with or violate any law, statute, ordinance, rule,
regulation, order, writ, judgment, injunction, decree, ruling, stipulation,
determination or award (collectively, a "GOVERNMENTAL ORDER") entered by or with
any federal, state or local governmental authority,
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regulatory or administrative agency, or governmental commission, court, tribunal
or arbitral body (collectively, the "GOVERNMENTAL AUTHORITY") applicable to
either of the Sellers;
(c) conflict with, result in any breach of, or constitute a Default
(as defined below) under any material Contracts (as defined below) relating to
the business or assets of either of the Sellers or to or by which either of the
Sellers is a party or is otherwise bound or affected, or result in the creation
of any claim, security interest, lien, option, subscription, call, or
encumbrance of any kind ("LIEN") on either of the Sellers, or any of their
respective assets;
(d) require either of the Sellers to notify or obtain any License
(as defined below) or Consent from any Person; or
(e) result in any other event that would, or is reasonably likely
to, affect the ability of either Seller to consummate the transactions
contemplated by this Agreement or the Escrow Agreement, except for such
violations, conflicts, Defaults, Licenses, Consents or other events which, in
the aggregate would not materially affect the ability of either Seller to
consummate the transactions contemplated hereby or thereby.
"DEFAULT" shall mean (a) any actual breach or default, (b) the
occurrence of an event that with the passage of time or the giving of notice or
both would constitute a breach or default or (c) the occurrence of an event that
with or without the passage of time or the giving of notice or both would give
rise to a right of termination, renegotiation or acceleration.
"CONTRACTS" shall mean any agreement, contract, note, loan, evidence
of indebtedness, purchase order, letter of credit, indenture, security or pledge
agreement, franchise agreement, undertaking, practice, covenant not to compete,
employment agreement, severance agreement, license, instrument, obligation or
commitment to which a Person is a party or is bound and which relates to the
Person's business or assets, whether oral or written.
"LICENSE" shall mean all licenses, authorizations, permits and
certificates.
Section 2.04 TITLE
IASA is the legal and beneficial owner of, and has the complete and
unrestricted power and the unqualified right to transfer, and is transferring,
the IASA Shares, free and clear of all Liens. With respect to the IASA Shares,
"LIENS" shall include any agreement limiting or restricting Sellers' right to
vote, transfer or otherwise dispose of the IASA Shares. Upon the delivery of
and payment of the amount indicated in Paragraph (a) of Section 1.02 herein, the
Purchasers will acquire good and valid title to the IASA Shares, free and clear
of all Liens.
Section 2.05 LITIGATION. There are no pending or, to the Sellers'
knowledge, threatened or anticipated judicial or administrative claims, actions,
suits, criminal prosecutions, governmental audits or investigations,
administrative proceedings, arbitrations, mediations or
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proceedings ("LITIGATION") which (i) would reasonably be expected, individually
or in the aggregate, to have a material adverse effect on the ability of the
Sellers to consummate the transactions contemplated by this Agreement or the
Escrow Agreement or (ii) question the validity of this Agreement, the Escrow
Agreement or any action taken or to be taken by the Sellers in connection
herewith or therewith.
Section 2.06 NO MATERIAL ADVERSE EFFECT. Since December 31, 1998,
to the Sellers' knowledge, there has not been any Company Material Adverse
Effect nor has there been any material failure by the Company to operate its
business in the ordinary course.
"COMPANY MATERIAL ADVERSE EFFECT" means any event, fact, effect or
change which, individually or in the aggregate, has, or is reasonably likely to
have, a material adverse effect on the condition (financial or other), business,
prospects, results of operations, assets, liabilities or operations of the
Company.
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Section 2.07 NO UNDISCLOSED LIABILITIES. To Sellers' knowledge, the
Company does not have any debts, liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) that would be required to
be reflected on, or disclosed or reserved against in, a balance sheet of the
Company or in the notes thereto, prepared in accordance with generally accepted
United States accounting principles consistently applied, except for (a) debts,
liabilities and obligations that were so reserved on, or disclosed or reflected
in, the balance sheet of the Company as of December 31, 1998 and the notes
thereto and (b) debts, liabilities or obligations arising in the ordinary course
of business since December 31, 1998.
Section 2.08 CERTAIN PAYMENTS. Each of the Sellers or each of the
directors, officers or agents of such Seller has not, directly or indirectly,
(a) made any contribution, gift, bribe, rebate, payoff, influence payment,
kickback or other payment to any Person, private or public, regardless of form,
whether in money, property or services (i) to obtain favorable treatment in
securing business, (ii) to pay for favorable treatment for business secured,
(iii) to obtain special concessions or for special concessions already obtained,
for or in respect of the Company or any Affiliate (as defined below) of the
Company or (iv) in violation of any Governmental Order or (b) established or
maintained any fund or asset that has not been recorded in the books and records
of the Company. "AFFILIATE" of a Person means any other Person that directly or
indirectly controls, or is controlled by, or under common control with, the
first Person.
Section 2.09 AGREEMENTS. Section 2.09 of the Disclosure Schedule
sets forth all agreements, contracts, leases, purchase orders, undertakings,
understandings, covenants not to compete, confidentiality agreements, licenses,
obligations or other commitments, whether oral or written, between each of the
Sellers or any of its Affiliates, on one hand, and each of the Purchasers or any
of its Affiliates, on the other hand.
Section 2.10 JOINT VENTURE AGREEMENTS. Each of the Sellers is in
compliance in all material respects under each of the agreements contemplated by
and entered into pursuant to the JV Agreement (together with the JV Agreement,
the "ADM AGREEMENTS").
Section 2.11 SELLERS' PROPRIETARY RIGHTS. Except as contributed or
licensed to the Company pursuant to Section 4.1(a) of the JV Agreement, the
Company does not use any of Sellers' Proprietary Rights (as defined below) in
the conduct of the Company's business as presently conducted and as presently
contemplated to be conducted. The Company has no obligation to compensate any
Person, including without limitation, the Sellers, for the use of any of the
Sellers' Proprietary Rights. "PROPRIETARY RIGHTS" mean all (a) U.S. and foreign
patents, patent applications, patent disclosures and improvements thereto,
including petty patents and utility models and applications therefor, (b) U.S.
and foreign trademarks, service marks, trade dress, logos, trade names and
corporate names and the goodwill associated therewith and registrations and
applications for registration thereof, (c) U.S. and foreign copyrights and
registrations and applications for registration thereof, (d) U.S. and foreign
mask work rights and registrations and applications for registration thereof,
(e) trade secrets and confidential business
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information (including ideas, formulas, compositions, inventions (whether
patentable or unpatentable and whether or not reduced to practice), know-how,
manufacturing and production processes and techniques, research and development
information, drawings, specifications, designs, plans, proposals, technical
data, copyrightable works, financial, marketing and business data, pricing and
cost information, business and marketing plans and customer and supplier lists
and information), (f) other proprietary rights, (g) copies and tangible
embodiments thereof (in whatever form or medium) and (h) licenses granting any
rights with respect to any of the foregoing.
Section 2.12 CLAIMS. Section 2.12 of the Disclosure Schedule sets
forth all actions, suits or other claims of the Sellers against any of the
Purchasers or any of their respective Affiliates.
Section 2.13 [INTENTIONALLY LEFT BLANK].
Section 2.14 BROKERS' FEES. All negotiations relating to this
Agreement and the Escrow Agreement have been carried out without the
intervention of any Person acting on behalf of the Sellers in such manner as to
give rise to any valid claim against the Purchasers for any brokerage or
finder's commission, fee or similar compensation.
Section 2.15 SUFFICIENCY OF THE TAX LIEN FUNDS. The amount
allocated to the Tax Lien Funds is sufficient to pay for any amounts due under
and cancellation of the embargo (attachment) in favor of the Secretariat of
Finance and Public Credit for non-payment of taxes, which was recorded in the
Public Registry of Property and Commerce in Monterrey on October 15, 1998, under
entry 1206, volume 150, Book 13, Section II (the "Embargo").
Section 2.16 MATERIAL MISSTATEMENTS OR OMISSIONS. No
representations or warranties by GIR or IASA in this Agreement, nor any
document, exhibit, statement, certificate or schedule furnished to Purchasers
pursuant hereto, including, without limitation, the Disclosure Schedule,
contains or will contain any untrue statement of a material fact, or omits or
will omit to state any material fact necessary to make the statements or facts
contained therein not misleading.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
As an inducement to GIR and IASA to enter into this Agreement,
Purchasers, jointly and severally, hereby represent and warrant to GIR and IASA,
which representations and warranties are, as of the date hereof, true and
correct:
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Section 3.01 INCORPORATION AND AUTHORITY OF PURCHASERS
(a) Accuride is a corporation duly formed and validly existing
under the laws of the State of Delaware and has all necessary power and
authority to enter into this Agreement and the Escrow Agreement, to carry out
its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby.
(b) Servicios AISA is a corporation duly formed and validly
existing under the laws of the United Mexican States and has all necessary power
and authority to enter into this Agreement and the Escrow Agreement, to carry
out its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby pursuant to public deed 50,510 dated April 15,
1998, granted before Mr. Carlos Montano Pedraza, Notary Public 130 in Monterrey,
Mexico and recorded in the Public Registry of Property and Commerce in
Monterrey, N.L. on April 20, 1998 under entry 2232, volume 207-45, Book 4,
Commerce Section.
(c) Each of the Purchasers has taken all actions necessary to
secure all approvals required in connection herewith and therewith. The
execution and delivery of each of the Agreement and the Escrow Agreement and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action of each of the Purchasers
(including, without limitation, the resolutions of the Board of Directors of
Accuride dated as of May 18, 1999), and upon execution and delivery (assuming
due execution and delivery by the other parties hereto), each of the Agreement
and the Escrow Agreement will be the valid and legally binding agreement of each
of the Purchasers, enforceable against each of the Purchasers in accordance with
its terms and conditions.
Section 3.02 NO CONFLICT; CONSENTS
Except as set forth in Section 3.02 of the Disclosure Schedule, no
Consents to the transactions contemplated by this Agreement or the Escrow
Agreement are required from or with any Person. Assuming all Consents and other
actions described in Section 3.02 of the Disclosure Schedule have been obtained
and all filings and notifications listed in Section 3.02 of the Disclosure
Schedule have been made, the execution, delivery and performance of this
Agreement and the Escrow Agreement by Purchasers and the consummation of the
transactions contemplated hereby and thereby do not and will not:
(a) violate or conflict with the respective charter documents of
each of the Purchasers;
(b) conflict with or violate any Governmental Order applicable to
either of the Purchasers;
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(c) conflict with, result in any breach of, or constitute a Default
under, any material Contract relating to the business or assets of either of the
Purchasers or to or by which either of the Purchasers is a party or is otherwise
bound or affected, or result in the creation of any Lien on either of the
Purchasers or any of their respective assets;
(d) require either of the Purchasers to notify or obtain any
License or Consent from any Person; or
(e) result in any other event that would, or is reasonably likely
to, affect the ability of either of the Purchasers to consummate the
transactions contemplated by the Agreement or the Escrow Agreement, except for
such violations, conflicts, Defaults, Licenses, Consents or other events which,
in the aggregate, would not materially affect its ability to consummate the
transactions contemplated hereby or thereby.
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Section 3.03 AGREEMENTS. Section 3.03 of the Disclosure Schedule
sets forth all agreements, contracts, leases, purchase orders, undertakings,
understandings, covenants not to compete, confidentiality agreements, licenses,
obligations or other commitments, whether oral or written, between each of the
Sellers or any of its Affiliates, on one hand, and each of the Purchasers or any
of its Affiliates, on the other hand.
Section 3.04 CLAIMS. Section 3.04 CLAIMS. Section 3.04 of the
Disclosure Schedule sets forth all actions, suits or other claims of the
Purchasers against any of the Sellers or any of their respective Affiliates.
Section 3.05 CERTAIN PAYMENTS. Each of the Purchasers or each of
the directors, officers or agents of such Purchasers has not, directly or
indirectly, (a) made any contribution, gift, bribe, rebate, payoff, influence
payment, kickback or other payment to any Person, private or public, regardless
of form, whether in money, property or services (i) to obtain favorable
treatment in securing business, (ii) to pay for favorable treatment for business
secured, (iii) to obtain special concessions or for special concessions already
obtained, for or in respect of the Company or any Affiliate of the Company or
(iv) in violation of any Governmental Order or (b) established or maintained any
fund or asset that has not been recorded in the books and records of the
Company.
Section 3.06 JOINT VENTURE AGREEMENTS. Each of the Purchasers is in
compliance in all material respects under each of the AdM Agreements.
Section 3.07 BROKERS' FEES. All negotiations relating to this
Agreement and the Escrow Agreement have been carried out without the
intervention of any Person acting on behalf of the Purchasers in such manner as
to give rise to any valid claim against the Sellers for any brokerage or
finder's commission, fee or similar compensation.
Section 3.08 MATERIAL MISSTATEMENTS OR OMISSIONS. No
representations or warranties by the Purchasers in this Agreement, nor any
document, exhibit, statement, certificate or schedule furnished to the Sellers
pursuant hereto, including, without limitation, the Disclosure Schedule,
contains or will contain any untrue statement of a material fact, or omits or
will omit to state any material fact necessary to make the statements or facts
contained therein not misleading.
ARTICLE IV.
CONDITIONS
Section 4.01 CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASERS. The
obligations of the Purchasers to consummate the transactions provided for hereby
are subject, in the reasonable discretion of the Purchasers, to the
satisfaction, on or prior to the Closing Date, of each of the following
conditions, any of which may be waived by the Purchasers:
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Accuride Servicios AISA IASA GIR Company
12
(a) the representations and warranties in Article II shall be true
and correct in all material respects when made and at and as of the Closing Date
as if such representations and warranties were made at such time (except that
those representations and warranties which are made as of a specific date shall
be true and correct only as of such date);
(b) GIR and IASA shall have performed and satisfied in all material
respects all agreements and covenants required hereby to be performed or
satisfied by them prior to or at the Closing Date;
(c) no Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any Governmental Order which is in effect as of
the Closing and which results in (i) a restraint, prohibition or other
interference with the ownership or operation by the Purchasers or any of their
Affiliates of all or any material portion of the business of the Company, (ii)
the imposition or confirmation of any material limitations on the ability of the
Purchasers effectively to exercise full rights of ownership of the IASA Shares,
including, without limitation, the right to vote the IASA Shares on any matters
properly presented to the stockholders, (iii) a requirement that the Purchasers
or any of their Affiliates divest any securities of the Company or any material
part of the Company's business, (iv) of making the transactions contemplated by
this Agreement illegal or otherwise prohibiting consummation of the such
transactions or (v) is reasonably likely to result in a Company Material Adverse
Effect (each of (i) through (v), a "SUBSTANTIAL DETRIMENT");
(d) all material Licenses or Consents from any Person, and all
filings, registrations and notifications necessary to permit GIR and IASA to
consummate the transactions contemplated by this Agreement shall have been
obtained or made. All such Licenses and Consents which have been obtained shall
be on terms that are not reasonably likely, directly or indirectly, to result in
a Substantial Detriment;
(e) no Person who or which is not a party to this Agreement shall
have commenced or threatened to commence any Litigation seeking to restrain or
prohibit, or to obtain damages in connection with, the transactions contemplated
by this Agreement;
(f) from the date of this Agreement, there shall not have occurred
any event, change or condition that, individually or in the aggregate, has had
or could reasonably be expected to have a Company Material Adverse Effect;
(g) the Company shall have received a written consent as well as
any other necessary documents from Citibank Mexico, S.A. to the consummation of
the transactions contemplated by this Agreement and the Escrow Agreement; and
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Accuride Servicios AISA IASA GIR Company
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(h) GIR and IASA shall have delivered the documents required to be
delivered by them pursuant to Section 5.02 in form and content reasonably
satisfactory to Purchasers.
Section 4.02 CONDITIONS PRECEDENT TO OBLIGATIONS OF GIR AND IASA. The
obligations of GIR and IASA to consummate the transactions provided for hereby
are subject, in the reasonable discretion of GIR and IASA, to the satisfaction,
on or prior to the Closing Date, of each of the following conditions, any of
which may be waived by GIR or IASA:
(a) the representations and warranties in Article III shall be true
and correct in all material respects when made and at and as of the Closing Date
as if such representations and warranties were made at such time (except that
those representations and warranties which are made as of a specific date shall
be true and correct only as of such date);
(b) Purchasers shall have performed and satisfied in all material
respects all agreements and covenants required hereby to be performed or
satisfied by it prior to or at the Closing Date;
(c) the Company shall have received a written consent as well as
any other necessary documents from Citibank Mexico, S.A. to the consummation of
the transactions contemplated by this Agreement and the Escrow Agreement;
(d) IASA shall have received a release of its liability with
respect to the Completion Guaranty Agreement and the Credit Agreement with
Citibank de Mexico, S.A.;
(e) no Governmental Order, action or proceeding shall have been
instituted or threatened which makes the transactions contemplated by this
Agreement illegal or otherwise prohibited;
(f) no Person who or which is not a party to this Agreement shall
have commenced or threatened to commence any Litigation seeking to restrain or
prohibit, or to obtain damages in connection with the transactions contemplated
by this Agreement; and
(g) Purchasers shall have delivered the documents required to be
delivered by it pursuant to Section 5.01 in form and content reasonably
satisfactory to GIR and IASA.
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Accuride Servicios AISA IASA GIR Company
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ARTICLE V.
DELIVERIES AT CLOSING
Section 5.01 DELIVERIES BY PURCHASERS AT CLOSING. Purchasers shall
deliver the following items at the Closing:
(a) $2,750,000 in immediately available funds to the account or
accounts specified in writing by the Sellers;
(b) $4,550,000 in immediately available funds to the Escrow
Account;
(c) a certificate, dated the Closing Date and signed by the
authorized officers of each of the Purchasers as to the fulfillment of the
conditions set forth in Section 4.02 (a) and (b);
(d) Escrow Agreement;
(e) the Long-term Purchase Agreement (as defined below); and
(f) such other documents and items as GIR and IASA may reasonably
request.
Section 5.02 DELIVERIES BY GIR AND IASA AT CLOSING. IASA and GIR (as
indicated) shall deliver or cause to be delivered the following items to
Purchasers at the Closing:
(a) Escrow Agreement executed by IASA;
(b) a certificate, dated the Closing Date and signed by the
authorized officers of each of GIR and IASA as to the fulfillment of the
conditions set forth in Section 4.01(a) and (b);
(c) a legal opinion from Daniel Sierra, counsel of IASA and GIR, in
substantially the form of Exhibit D hereto;
(d) certificates representing the IASA Shares, endorsed for
transfer to the Purchasers, free and clear of any and all Liens;
(e) copies of the Powers of Attorney described in Section 2.02(b);
(f) the Long-term Purchase Agreement executed by DIARSA and
Trailers; and
(g) such other documents and items as Purchasers may reasonably
request.
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Section 5.03 FURTHER DELIVERIES. At any time on or after the date
of this Agreement, each party will execute and deliver any further assignments,
conveyances and other assurances, documents and instruments of transfer
reasonably requested by another party to consummate the transactions
contemplated hereby.
ARTICLE VI.
ADDITIONAL AGREEMENTS
Section 6.01 FURTHER ASSURANCES. Upon the terms and subject to the
conditions contained herein, the parties agree, after the execution of this
Agreement, (i) to use all 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, (ii) to execute any documents, assignments, assurances, instruments
or conveyances of any kind which may be reasonably necessary or advisable to
carry out any of the transactions contemplated hereunder, and (iii) to cooperate
with each other in connection with the foregoing. Without limiting the
foregoing, the parties agree to use their respective reasonable efforts (i) to
obtain all necessary Consents from any Person; PROVIDED, HOWEVER that Purchasers
and the Sellers shall not be required to make any payments, commence litigation
or agree to modifications of the terms thereof in order to obtain any such
Consents, (ii) to give all notices to and make all registrations and filings
with any Person and (iii) to fulfill all conditions to this Agreement.
Section 6.02 NO SHOP. From the date hereof through the Closing or
the earlier termination of this Agreement, each of the Sellers shall not, and
shall cause its Affiliates and their respective employees, agents or advisors
(including without limitation investment bankers, attorneys and accountants),
not to, directly or indirectly, solicit, initiate or continue 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 corporation, partnership, person
or other entity or group, other than the Purchasers concerning any sale of all
or a portion of the IASA Shares (a "PROPOSED ACQUISITION TRANSACTION"). From
the date hereof through the Closing or the earlier termination of this
Agreement, the Sellers shall not, directly or indirectly, through any officer,
director, partner, member, shareholder, consultant, advisor, accountant,
employee, agent or other representative ("REPRESENTATIVE") otherwise, solicit,
initiate or encourage the submission of any proposal or offer from any person
relating to any Proposed Acquisition Transaction or participate in any
negotiations regarding, or furnish to any other person any information with
respect to the Company or otherwise cooperate in any way with, or assist or
participate in, facilitate or encourage, any effort or attempt by any other
person to seek or effect a Proposed Acquisition Transaction.
Section 6.03 NO SOLICITATION.
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Accuride Servicios AISA IASA GIR Company
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(a) Attached hereto as Exhibit E is a list of employees that are
considered initial employees of the Company, Servicios AISA, or Rims y Ruedas
AdM, S.A. de C.V. ("RIMS AdM") (the "INITIAL EMPLOYEES"), which list may include
employees who are currently employees of the Sellers or Ruedas AISA, S.A. de
C.V. or other Affiliates of the Sellers. For a period of five years following
the Closing Date, each of the Sellers shall not, and shall cause its Affiliates
not to, directly or indirectly, hire or retain, or offer to hire or retain any
of the Initial Employees or any employees subsequently hired by the Company,
Servicios AISA Rims AdM or their future Affiliates, regardless of whether such
employee is paid a wage, commission, fee or otherwise, except for those
employees who have been terminated by, or who have resigned from, the Company,
Servicios AISA, Rims AdM or their future Affiliates prior to commencement of
employment discussions with the Sellers or their Affiliates. Notwithstanding the
foregoing, the Sellers may not, and the Sellers shall cause their Affiliates not
to, hire those employees who have resigned from the Company, Servicios AISA,
Rims AdM or their future Affiliates until the expiration of three months from
such employee's effective date of resignation, which provision shall not apply
if such provision violates Mexican laws. In case the Sellers or their Affiliates
fail to comply with this provision, Sellers, jointly and severally, shall pay to
Purchasers, per employee hired, an amount equal to two times the annual
remuneration that such employee was receiving upon termination of his or her
relationship with the Company, Servicios AISA, Rims AdM or their future
Affiliates.
(b) For a period of five years following the Closing Date, each of
the Purchasers and the Company shall not, and shall cause its Affiliates not to,
directly or indirectly, hire or retain, or offer to hire or retain any employee
of GIR, IASA or their Affiliates, regardless of whether paid a wage, commission,
fee or otherwise, except for the Initial Employees and employees who have been
terminated by, or who have resigned from, GIR, IASA or their Affiliates prior to
commencement of employment discussions with the Purchasers or their Affiliates.
Notwithstanding the foregoing, the Purchasers may not, and the Purchasers shall
cause their Affiliates not to, hire those employees who have resigned from GIR,
IASA or their Affiliates until the expiration of three months from such
employee's effective date of resignation, which provision shall not apply if
such provision violates Mexican laws. In case the Purchasers or their Affiliates
fail to comply with this provision, Purchasers shall pay to Sellers, per
employee hired, an amount equal to two times the annual remuneration that such
employee was receiving upon termination of his or her relationship with GIR,
IASA or their Affiliates.
Section 6.04 NOTIFICATION OF CERTAIN MATTERS. From the date hereof
through the Closing, each of the parties hereto shall give prompt notice to the
other party of (a) the occurrence, or failure to occur, of any event which
occurrence or failure would be likely to cause any representation or warranty
contained in this Agreement or in any exhibit or schedule hereto to be untrue or
inaccurate in any material respect and (b) any failure of such party or its
respective Affiliates or Representatives, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it under
this Agreement or any exhibit or schedule hereto; PROVIDED, HOWEVER, that such
disclosure shall not be deemed to cure any breach of a
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Accuride Servicios AISA IASA GIR Company
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representation, warranty, covenant or agreement or to satisfy any condition. GIR
and IASA shall promptly notify Purchasers of any Default, the threat or
commencement of any Litigation, or any development that occurs before the
Closing that could in any way materially affect the Company or its business.
Section 6.05 CONTINUATION OF RIGHTS AND OBLIGATIONS. Except as
otherwise specifically set forth in this Agreement, the rights and obligations
of the parties hereto under each of the AdM Agreements, including, without
limitation, the indemnification provisions set forth in the JV Agreement, shall
continue in full force and effect in accordance with the terms, conditions and
limitations set forth therein. The parties hereto agree that the representations
and warranties set forth in this Agreement shall not amend, limit or otherwise
modify in any manner any of the respective parties' rights and obligations under
any of the AdM Agreements. It being further understood by the parties that the
foregoing shall not preclude a claim under this Agreement by any party hereto
based upon the breach of any such representation or warranty.
Section 6.06 [INTENTIONALLY LEFT BLANK]
Section 6.07 CONTINUATION OF SERVICES. Except as modified in this
Agreement, the Sellers hereby agree to continue to provide all services provided
under the Technical Services Agreement (as defined below), the Wheel
Requirements Agreement and the Bailment Agreement in accordance with such
agreements until the proper termination of such agreements, in accordance
therewith or as provided in this Agreement.
Section 6.08 CONFIDENTIAL INFORMATION
(a) PROTECTION OF CONFIDENTIAL AND PROPRIETARY INFORMATION. The
parties acknowledge and agree that the prospects for the present and future
success of the Company depend upon the protection by the Company and the
Purchasers of the confidential and proprietary business information, trade
secrets, technology and know-how ("CONFIDENTIAL INFORMATION") of the Company,
irrespective of the manner in which the Company may obtain it (e.g., whether
developed independently by the Company, obtained from Accuride, IASA or GIR or
otherwise); and each of the parties acknowledges and agrees that irreparable
harm to the Company will result if any Confidential Information of the Company
is disclosed to any Person that is neither a party to this Agreement nor a duly
authorized Representative of any Person that is a party hereto, or if any of the
parties uses Confidential Information anywhere for any purpose or in any context
other than in connection with and for the purpose of advancing the legitimate
interests of the Company.
(b) CERTAIN COVENANTS REGARDING THE TREATMENT OF CONFIDENTIAL
INFORMATION GENERALLY. For the reasons stated in Section 6.08(a), the Sellers
hereby covenant and agree that they and each and every one of their
Representatives and Affiliates, including any future
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Accuride Servicios AISA IASA GIR Company
18
Affiliates and any Affiliates that cease to be such, during the period
commencing as of the Closing Date and continuing for ten years, shall:
(i) not disclose any Confidential Information of the
Company or of any other party to the JV Agreement or this Agreement to any
Person who is not a party to the JV Agreement or this Agreement or a duly
authorized Representative of any party hereto; and
(ii) maintain and protect, and cause each and every
Representative and other Person under its control to maintain and protect, the
confidentiality, secrecy, integrity and quality of the Confidential Information
at issue.
The Sellers shall be liable for any failure of strict compliance with
this Section 6.08 either by the Sellers or by any of their Representatives;
notwithstanding the foregoing, however, the Sellers shall not be held liable for
any unauthorized disclosure of or failure to protect Confidential Information
under this Section 6.08 in cases where: (1) at the time of disclosure, such
Confidential Information was available to the general public in a manner not
involving any breach of the JV Agreement or this Agreement or of any other
Agreement between the parties, thus rendering such information no longer
confidential; or (2) the information was made available to the disclosing party
by a Person not bound by any covenant of confidentiality with any of the parties
hereto with respect thereto; or (3) disclosure was compelled by applicable law
or the order of any court of competent jurisdiction.
(c) CERTAIN ACTIVITIES DEEMED UNAUTHORIZED USE OF CONFIDENTIAL
INFORMATION TO THE DETRIMENT OF THE COMPANY AND THE PURCHASERS. Each of the IASA
and GIR covenants and agrees that, during the period beginning the Closing Date
and ending ten years thereafter, if it or any of its respective Affiliates
engages within the territory of the United Mexican States, directly or
indirectly, in any activity or operation involving or relating in any manner
whatsoever to compete with the Company's business as conducted as of the date of
this Agreement will, compete with the business of the Company as currently being
conducted or otherwise, whether by ownership interest (the "PROHIBITED OWNERSHIP
INTEREST") or otherwise, then such activity or operation shall be deemed
automatically to constitute: (1) an unauthorized use of Confidential Information
of the Company, and therefore a breach of this Agreement; and (2) an injury to
the Company in which the amount of damages cannot be assessed and which injury
may be compensated only upon assessment and payment of the damages described in
Section 6.08(d). For purposes of this Agreement, business of the Company shall
include the tire and wheel assembling and sequencing for sales to original
equipment manufacturers. Notwithstanding the foregoing, the parties hereto agree
that (i) DIARSA may operate in accordance with the terms of Section 5.6 of the
JV Agreement; provided, however, that DIARSA may sell Wheels to vehicle
manufacturers or Wheel distributors in an amount not to exceed $250,000 per year
(the "CAP"); provided, further, however, that the Cap shall be increased
annually by 10%, (ii) Prohibited Ownership Interest shall not apply to or as a
result of fundamental corporate transactions,
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Accuride Servicios AISA IASA GIR Company
19
including mergers, spin-offs and sales of substantially all of the capital stock
or assets of the Sellers or its Affiliates (provided, that any such successor or
acquirer agrees in writing to be bound by the terms of this Section 6.08(c)),
except that the Sellers and their Affiliates shall not acquire any businesses
which have more than 25% of their revenues derived from businesses which compete
with the Company in the business currently conducted by the Company, and with
respect to businesses which derive less than 25% of their revenue from
businesses which compete with the Company in the business currently conducted by
the Company, the Sellers or their Affiliates will dispose of any competing
businesses acquired within 12 months of such acquisition and (iii) tire and
wheel assembling and sequencing in connection with sales of trailers, trucks,
tractors, buses and chassis by GIR or its Affiliates shall not be prohibited
under this Section 6.08(c).
(d) Damages for Breach of Covenant to Refrain from Activities
Constituting Unauthorized Use of Confidential Information to the Detriment of
the Company and the Purchasers. Any breach of the covenants in Section 6.08(c)
shall empower the Company to claim and obtain damages from the Sellers in the
amount of ten million dollars (U.S. $10,000,000).
Section 6.09 EQUIPMENT MAINTENANCE. Notwithstanding anything to the
contrary in the Wheel Requirements Agreement and the Bailment Agreement, (i) the
Company shall instruct IASA, and IASA shall comply with the Company's reasonable
instructions as indicated, regarding all maintenance work to all Wheel
manufacturing equipment to keep them in good working order in accordance with
the terms of the Wheel Requirements Agreement and the Bailment Agreement until
such time as the Company has completed its relocation of such equipment to New
Facility (as defined below), and (ii) the maintenance costs relating to the
materials shall not be included as Conversion Costs (as defined in the Wheel
Requirements Agreement) for purposes of the Wheel Requirements Agreement. "NEW
FACILITY" means the new manufacturing facility the Company is completing in
Cienega de Flores, Mexico as provided in the Transfer Schedule to be determined
in good faith by the parties hereto (the "TRANSFER SCHEDULE"), which the parties
shall use their respective reasonable efforts to effect. IASA shall provide full
access to any personnel, employees and contractors of the Company during normal
working days and hours at IASA Facility, in order to verify proper maintenance
of all Wheel manufacturing equipment. If the relocation to the New Facility is
not completed by December 31, 1999 as contemplated in the Transfer Schedule, the
parties shall revise the Transfer Schedule in good faith and use their
respective reasonable efforts to effect such revised Transfer Schedule.
Section 6.10 INFORMATION TECHNOLOGY SERVICES. IASA and the Company
hereby agree to extend the duration of the Technical Services Agreement
(contrato de prestacion de servicios tecnicos) (the "TECHNICAL SERVICES
AGREEMENT") dated as of November 5, 1997 between IASA and the Company, to
provide information technology services, including computer hardware support and
software support, until the earlier of March 31, 2000 or the date that the
Company provides written notice to IASA terminating the Technical Services
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Accuride Servicios AISA IASA GIR Company
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Agreement. After the Closing, the Company shall pay IASA for services rendered
the applicable hourly rate set forth in the Technical Services Agreement. The
Technical Services Agreement shall continue in full force and effect in
accordance with the terms and conditions agreed to therein, except as modified
herein.
Section 6.11 LONG-TERM PURCHASE AGREEMENTS. GIR and IASA will cause
each of Trailers and DIARSA to enter into a Long-term Purchase Agreement (the
"LONG-TERM PURCHASE AGREEMENT") in substantially the form attached hereto as
Exhibit E.
Section 6.12 LEASE AGREEMENTS.
(a) IASA, the Company and Servicios AISA hereby extend the term of
the lease agreements (contratos de arrendamiento) executed on November 5, 1997
(the "LEASES"), for the use of 837 square meters of office space located at
Avenida Universidad 1011 Norte, San Nicolas de los Garza, Nuevo Leon (the
"MONTERREY OFFICE") through December 31, 1999, unless sooner terminated by
written notice from the Company or Servicios AISA to IASA; PROVIDED, HOWEVER,
that the Company or Servicios AISA may at its option extend the term of the
Leases for an additional period not to exceed 45 days; PROVIDED, FURTHER,
HOWEVER, that the Company or Servicios AISA may reduce the area under the Leases
based on the actual needs of the Company or Servicios AISA by providing written
notice of such reduction to IASA; PROVIDED, FURTHER; HOWEVER, that upon such
reduction, there shall be a corresponding reduction in the rent payable under
the Leases. The Leases shall continue in full force and effect subject to the
terms and conditions agreed to therein, except as modified herein.
(b) The rights and obligations of the parties hereto under the
lease agreement (contrato de arrendamiento) executed on November 5, 1997 for the
use of 120 square meters of office space located at Homero 1425, Suite 402,
Colonia Polanco in Mexico City, Federal District shall continue in full force
and effect until termination of such lease, which shall occur 30 days after the
Closing Date; PROVIDED, that the Company shall have the option to extend this
period for an additional 30 days by providing written notice to IASA.
Section 6.13 LABOR MATTERS. The parties hereto agree to the matters
set forth in the Addendum Regarding Labor Matters attached hereto as Addendum 1.
Section 6.14 TAXES. The Sellers shall be responsible for all income
taxes relating to the sale, transfer and assignment of the IASA Shares.
Section 6.15 EMPLOYEE PARKING. Sellers agree that the employees of
the Company shall have the right to continue to use IASA's parking lot as
currently being used by them for a period of 90 days following the Closing;
PROVIDED, that the Company shall have the option to extend this period for an
additional 30 days, and further provided that any Company
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Accuride Servicios AISA IASA GIR Company
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employees who continue to work at the Monterrey Office shall have the right to
continue to use IASA's parking lot as currently being used by them until the
proper termination of the Leases.
Section 6.16 TERMINATION OF WHEEL REQUIREMENTS AGREEMENT. The
parties agree that the Wheel Requirements Agreement will terminate at such time,
as the Company has completed its relocation to the New Facility as provided in
the Transfer Schedule, which the parties shall use their respective reasonable
efforts to effect.
Section 6.17 ALLOCATION OF WRITTEN OFF EQUIPMENT AND REMOVAL OF
EQUIPMENT.
(a) The parties agree that the assets which have been previously
retired and written off by the Company shall be allocated between the Company
and IASA as provided in EXHIBIT F.
(b) Prior to the time the Company has completed its relocation to
the New Facility as provided in the Transfer Schedule, which the parties shall
use their respective reasonable efforts to effect, the Company, at its sole
expense, shall have removed or caused the removal of its remaining Wheel-related
equipment and inventory currently located at the IASA Facility. Absent a
written agreement to the contrary between the Company and IASA, IASA may remove
any equipment or inventory remaining after such relocation, and the Company will
reimburse IASA for reasonable expenses associated with the removal and storage
of such equipment and inventory.
Section 6.18 MANAGEMENT OF THE IASA FACILITY; MONTHLY MEETINGS.
Notwithstanding the provisions of the Wheel Requirements Agreement, after the
Closing and until the Company has completed its relocation to the New Facility
as provided in the Transfer Schedule, the Company shall have the temporary right
to supervise the management of the Wheel-production operations of the IASA
Facility. After the Closing, the parties hereto shall attend monthly meetings to
discuss matters related to the Wheel-production operation of the IASA Facility
and the completion of the relocation to the New Facility. Except as otherwise
set forth in Addendum 1, all labor obligations and liabilities regarding all
personnel of the Wheel-production operations at the IASA Facility shall remain
IASA's sole responsibility, regardless of the provisions in this Section 6.18.
Section 6.19 CANCELLATION OF THE EMBARGO. If for any reason the Tax
Lien Funds are insufficient for cancellation of the Embargo, the Sellers,
jointly and severally, agree to reimburse the Purchasers for any amount in
excess of the Tax Lien Funds necessary to cancel the Embargo, as well as any
costs and expenses, including, without limitation, attorneys' fees, incurred by
the Purchasers in connection with such cancellation. Anything in this Agreement
to the contrary notwithstanding, the Purchasers shall be entitled to withhold
and set off against any amount due to the Sellers under any agreement between
either of the Sellers, on the one hand,
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and either of the Purchasers, on the other hand, any amount as to which the
Sellers are obligated to pay pursuant to this Section 6.19.
ARTICLE VII.
INDEMNIFICATION
Section 7.01 INDEMNIFICATION.
(a) Sellers, jointly and severally, shall indemnify, defend and
save and hold harmless the Purchasers, the Company and their respective
officers, directors, employees and other agents (collectively, the "PURCHASERS
INDEMNIFIED PARTIES"), jointly and severally, from and against any and all
losses, liabilities, adverse claims, causes of action, damages, demands,
contingencies, settlement, fines, assessments, penalties, charges, costs,
obligations and expenses of every kind and description whatsoever (including,
without limitation, attorneys' fees and litigation, arbitration and other
dispute resolution costs), whether known or unknown, foreseen or unforeseen, or
foreseeable or unforeseeable (a "LOSS"), arising directly or indirectly from,
attributable to, as a result of or otherwise in connection with (a) any breach
by the Sellers of any of their covenants or obligations contained in this
Agreement or in any of the other documents delivered hereunder to be performed
by the Sellers, (b) any breach by the Sellers of, or any inaccuracy in, any
representation or warranty made by the Sellers in this Agreement or any other
documents delivered hereunder by the Sellers, or (c) the Sellers' past, current
or future operations at the IASA Plant (as defined in the JV Agreement) in
connection with the Wheel business, including, without limitation, all Losses
relating to or arising in any manner out of any matter involving contamination
or pollution of any land, site, surface water, ground water, air or soil, or of
equipment or machinery, or of buildings and other structures of any kind,
located at the IASA Plant or in the vicinity thereof. The indemnity obligations
under this Section 7.01(a) shall be construed and applied in the broadest manner
permitted under applicable law and shall survive any termination of this
Agreement for so long as it remains possible that any Purchasers Indemnified
Party indemnified under this Section 7.01(a) may incur any Loss or Losses of the
kind described or referred to herein.
(b) Purchasers, jointly and severally, shall indemnify, defend and
save and hold harmless the Sellers and their respective officers, directors,
employees and other agents (collectively, the "SELLERS INDEMNIFIED PARTIES"),
jointly and severally, from and against any and all Losses arising directly or
indirectly from, attributable to, as a result of or otherwise in connection with
(a) any breach by the Purchasers of any of its covenants or obligations
contained in this Agreement or in any of the other documents delivered hereunder
to be performed by the Purchasers or (b) any breach by the Purchasers of, or any
inaccuracy in, any representation or warranty made by the Purchasers in this
Agreement or any other documents delivered hereunder by the Purchasers. The
indemnity obligations under this Section 7.01(b) shall be construed and applied
in the broadest manner permitted under applicable law and shall survive any
termination of this Agreement for so long as it remains possible that any
Sellers Indemnified Party
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Accuride Servicios AISA IASA GIR Company
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indemnified under this Section 7.01(b) may incur any Loss or Losses of the kind
described or referred to herein.
Section 7.02 INDEMNIFICATION PROCEDURES.
For purposes of this Section 7.02, the party seeking indemnification
shall be known as the "INDEMNIFIED PARTY" and the party from whom
indemnification is sought shall be known as the "INDEMNIFYING PARTY." As soon as
reasonably practicable after receipt by an Indemnified Party of notice of any
Loss in respect of which an Indemnifying Party may be liable under this Article
VII, the Indemnified Party shall give notice thereof to the Indemnifying Party,
setting forth in reasonable detail the facts and circumstances pertaining
thereto, but the failure to give such notice shall not relieve the Indemnifying
Party of its obligations under this Article VII unless and to the extent that
the Indemnifying Party is prejudiced by such failure. In the event that the Loss
arises out of or results from a claim by any third party, the Indemnified Party
shall permit the Indemnifying Party, at its option and expense, to assume the
defense of, and subject to the consent of the Indemnified Party, which shall not
be unreasonably withheld, in each case settle or otherwise dispose of such claim
by counsel reasonably satisfactory to the Indemnified Party, provided that the
Indemnified Party may participate in such defense by counsel of its own choice,
but the fees, expenses and other charges of such counsel will be solely for the
account of the Indemnified Party, unless: (a) the employment of counsel by the
Indemnified Party has been authorized in writing by the Indemnifying Party, (b)
there is a conflict or potential conflict (based on advice of counsel to the
Indemnified Party reasonably acceptable to the Indemnifying Party) between the
Indemnified Party and the Indemnifying Party, or (c) the Indemnifying Party has
not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, and
provided, further, that the Indemnified Party shall be entitled to control such
defense jointly with the Indemnifying Party in the case of any litigation
referred to in clause (b) of the immediately preceding proviso to this sentence.
Notwithstanding anything to the contrary in this Section 7.02, without the prior
written consent of each Indemnified Party (or of each Indemnifying Party if the
Indemnified Party is defending such third party claim), which consent shall not
be unreasonably withheld, the Indemnifying Party (or Indemnified Party, as the
case may be) shall not consent to the entry of any judgment or enter into any
settlement that does not include an unconditional release of each Indemnified
Party (or Indemnifying Party) from all liabilities in respect of such Losses.
The Indemnifying Party shall pay for any Loss promptly in cash once its
responsibility has been established.
Section 7.03 SPECIFIC PERFORMANCE.
Each of the parties acknowledges and agrees that the other parties
would be irreparably damaged in the event the provisions of this Agreement are
not performed in accordance with its specific terms or otherwise are breached.
Therefore, notwithstanding anything to the contrary in this Agreement, each of
the parties agrees that the other parties shall be entitled to enforce
specifically the performance by such first party under this Agreement. The
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24
remedies described in this Section 7.03 shall be in addition to, and not in lieu
of, any other remedies that the parties hereto may elect to pursue.
ARTICLE VIII.
GENERAL PROVISIONS
Section 8.01 TERMINATION
(a) This Agreement and the transactions contemplated hereby may be
terminated or abandoned at any time prior to the Closing Date:
(i) by the mutual written agreement of the parties hereto;
(ii) by the written notice from the Purchasers to the
Sellers if the conditions set forth in Section 4.01 have not been satisfied on
or prior to July 31, 1999;
(iii) by the written notice from the Sellers to the
Purchasers if the conditions set forth in Section 4.02 have not been satisfied
on or prior to July 31, 1999; or
(iv) by any party if a final nonappealable judgment has been
entered against such party or any of its Affiliates restraining, prohibiting, or
declaring illegal the consummation of this Agreement or the transactions
contemplated hereby or which imposes or awards damages which would have a
material adverse effect on the economic benefits contemplated hereby.
Notwithstanding the above, a party shall not be allowed to exercise
any right of termination pursuant to this Section 8.01(a) if the event giving
rise to the termination right shall be due to the failure of such party to
perform or observe in any material respect any of the covenants or agreements to
be performed or observed by such party.
(b) In the event this Agreement is terminated in accordance with
Section 8.01(a), no party shall have any further liability hereunder, except for
willful breach of this Agreement.
Section 8.02 EXPENSES. Except as otherwise specified in this
Agreement, each party hereto shall pay its own legal, accounting, out-of-pocket
and other expenses incident to this Agreement and to any action taken by such
party in preparation for carrying this Agreement into effect.
Section 8.03 NOTICES. All notices and other communications given or
made pursuant hereto shall be in writing, with all postage and other delivery
charges prepaid, and shall be deemed to have been duly given or made (i) as of
the date delivered, if delivered personally, (ii) as of the day after being
deposited with a recognized overnight courier, or (iii) when
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25
transmitted if transmitted by facsimile with electronic confirmation; provided
that all such notices and other communications must be addressed to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice).
(a) if to IASA or GIR:
Industria Automotriz, S.A. de C.V.
Avenida Universidad 1011 Norte, Planta Baja
San Nicolas de los Garza, Nuevo Leon
C.P. 66450 Mexico
Attention: Chairman
Fax: 52-8-376-9098
With a copy to:
Grupo Industrial Ramirez, S.A.
Avenida Universidad 1004 Norte
San Nicolas de los Garza, Nuevo Leon
C.P. 66450 Mexico
Attention: Chairman
Fax: 52-8-376-5949
(b) if to Purchasers or the Company:
Accuride Corporation
2315 Adams Lane
P.O. Box 40
Henderson, Kentucky 42420
Attention: David K. Armstrong
Fax: (502) 827-7601
With a copy to:
Latham & Watkins
135 Commonwealth Drive
Menlo Park, California 94025
Attention: Peter F. Kerman, Esq.
Fax: 650-463-2600
and
Santamarina y Steta, S.C.
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Accuride Servicios AISA IASA GIR Company
26
Torre Comercial America
Batallon de San Patricio 111-1102
Garza Garcia, N.L. 66269
Attention: Jorge Barrero Stahl
Fax: 528.368.0111
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27
Section 8.04 PUBLIC ANNOUNCEMENTS. No party to this Agreement shall
make any public announcements in respect of this Agreement or otherwise
communicate with any news media without prior notification to the other party,
and the parties shall cooperate as to the timing and contents of any such
announcement, subject to the requirements of Mexican laws with respect to a
public company's disclosure requirements.
Section 8.05 HEADINGS. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 8.06 SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the greatest extent
possible.
Section 8.07 ENTIRE AGREEMENT. This Agreement (including the
Exhibits hereto), the Disclosure Schedule and the Escrow Agreement constitute
the entire agreement among the parties and supersede all prior agreements and
undertakings with respect to the subject matter hereof.
Section 8.08 ASSIGNMENT. Neither this Agreement nor any of the
rights or obligations hereunder may be assigned by a party without the prior
written consent of the other parties hereto, except that the parties may assign
their rights hereunder (either before or after the Closing Date), to an
Affiliate of such party with the prior written consent of the other party, which
consent shall not be unreasonably withheld. Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
Section 8.09 DISPUTE RESOLUTION.
(a) PRE-ARBITRATION EFFORTS TO RESOLVE DISPUTES. Each of the
parties hereto agrees to attempt in good faith to resolve any dispute,
controversy or claim that may arise in any manner whatsoever with respect to
this Agreement, the Escrow Agreement and the transactions contemplated hereby
and thereby (collectively, the "DISPUTE") and each party hereby designates its
chief executive officer as the individual who has primary authority and
responsibility therefor. Each such designated officer of a party involved in any
Dispute shall attempt in good faith to resolve such Dispute within 30 days after
becoming aware of the Dispute.
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(b) REQUIREMENTS OF BINDING ARBITRATION; SCOPE. Each and every
Dispute shall be solely and finally settled by binding, non-appealable
arbitration at Dallas, Texas, U.S.A. not later than six months following the
initial notice of arbitration (which notice shall be given in writing to the
party against whom the claim is being made, and to the arbitration
administrator, by the party initiating the arbitration) in accordance with the
International Arbitration Rules of the American Arbitration Association ("AAA"),
as modified by the provisions of this Section 8.09.
(c) SELECTION OF ARBITRATORS. Each and every arbitration hereunder
shall be conducted by a panel of three arbitrators. The Purchasers shall select
one arbitrator, and the Sellers shall select one arbitrator, not later than 10
days after the initial notice of arbitration. The AAA shall have power to select
either or both such arbitrators if they have not been selected by the parties as
required within the time specified. Not later than 20 days after the selection
and appointment of the two arbitrators, the two appointees shall choose a third
arbitrator to serve as the chairperson of the arbitration panel. If the two
party-appointees cannot agree regarding the selection of the third arbitrator
within such 20 day period, then the AAA shall have the power to select the third
arbitrator. Each arbitrator appointed to hear any Dispute shall have no
relationship or connection with any party to this Agreement or with any of their
respective Affiliates or with legal counsel to any such party or Affiliate. In
the event of the death or disability of an arbitrator, a new arbitrator shall be
selected in the same manner as, and by the same party that selected, the
previous arbitrator.
(d) GOVERNING LAW AND ARBITRATION RULES. The provisions of this
Section 8.09, the International Arbitration Rules of the AAA, and the contract
and other substantive laws of the United Mexican States, as modified by the
terms of this Section 8.09, shall govern the arbitration of any and all
Disputes, and in the event of any conflict between the laws of Mexico and the
Federal Arbitration Act, 9 U.S.C. ss.ss.1 et. seq. (1990) (tHE "ARBITRATION
Act"), in connection with any arbitration of any Dispute hereunder, it is the
express intent of the parties that the substantive laws of Mexico, as modified
by this Section 8.09, shall govern to the maximum extent permitted by law.
(e) BINDING ARBITRATION. The award rendered in connection with any
arbitration conducted in accordance with this Section 8.09 shall be final and
binding upon the parties, and any judgment upon such award may be entered and
enforced by any court of competent jurisdiction in any country without any
further proceedings on the merits of the case. The parties agree that the award
of the arbitral tribunal shall be the sole and exclusive remedy between them
with respect to the Dispute. The parties hereby waive all jurisdictional
defenses in connection with any arbitration instituted under this Section 8.09
and the enforcement of any award or judgment rendered pursuant thereto.
(f) EXPLANATION OF AWARD. Promptly following the rendering of an
order or award in the arbitration of any Dispute, the arbitrators shall issue to
the interested parties
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hereunder a written explanation in the English language, with a certified
translation thereof in the Spanish language, of the reasons for such order or
award and a full statement of the facts found and the rules of law applied in
reaching the decision.
(g) ENFORCEMENT OF AWARD. With respect to any award issued by the
arbitrators pursuant to this Agreement, the parties expressly agree: (1) to the
prosecution of an action by one or more parties against any other party or
parties in any court of the United States of America, or in any court of the
State of Nuevo Leon or of the United Mexican States located in Monterrey, Nuevo
Leon, to confirm and enforce such arbitration award; (2) that any such
arbitration award shall constitute conclusive proof of the validity of the
determinations of the arbitrators underlying such award; and (3) that any court
of the United States of America, or any court of the State of Nuevo Leon or of
the United Mexican States, may enter judgment upon and enforce such award,
whether pursuant to the Inter-American Convention on International Commercial
Arbitration (9 U.S.C. Sections 301-307), the Arbitration Act, the other laws of
the United States of America or of the United Mexican States or of the State of
Nuevo Leon, respectively, or otherwise, without any further proceedings on the
merits of the case.
(h) LANGUAGE OF ARBITRATION. All proceedings in any arbitration
conducted hereunder shall be conducted in the English language, and all
documents, exhibits and other evidence submitted in Spanish by any party shall
be accompanied by a certified English translation thereof; PROVIDED, HOWEVER,
that upon request by any party to the arbitration all such proceedings, hearings
and evidence shall be translated simultaneously into the Spanish language for
the convenience of such party.
(i) DISCOVERY; PRESENTATION OF CASE. Not later than 60 days
following the delivery of the notice of arbitration, each side shall produce and
deliver to the arbitrators and to the other parties copies of all documents and
witness testimony upon which it plans to rely, as well as a list identifying
such documents and witnesses, which list shall contain all information necessary
for a full understanding of the legitimate issues raised in the arbitration,
including, without limitation, the following: (1) a written statement of the
factual basis of the claim or defense and the legal theories upon which each
claim or defense is based; (2) the names and addresses of all individuals,
including witnesses whom the disclosing party expects to call to present
testimony or other evidence during the arbitration proceeding and other
individuals whom the party believes may have knowledge or information relevant
to the arbitration, description of the nature of the knowledge or information
that each such individual is believed to possess, and a summary of each such
witness' expected testimony; (3) the names and addresses of all individuals who
have given statements, along with copies of those statements; (4) a written
computation of the measure of damages alleged by the disclosing party and the
documents or summary of the testimony upon which such computation or measure is
based; and (5) the existence, location, custodian and general description of any
relevant documents or other tangible evidence that the disclosing party plans to
use at the arbitration hearing. Each side shall be permitted five hours of
witness depositions, to be allocated as that side sees fit. No
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Accuride Servicios AISA IASA GIR Company
30
interrogatories or requests for admission shall be permitted. The arbitration
hearing shall take place no later than 90 days following the initial notice of
arbitration. Each side shall have no more than 10 hours to make its arguments
and present its evidence to the arbitration panel. The parties also may submit
pre- and post-hearing memoranda, each not to exceed 20 double-spaced pages.
(j) CONFIDENTIALITY. All papers, documents and other evidence,
whether written or oral, filed with or presented to the arbitrators, shall be
deemed by the parties and the arbitrators to be confidential information. No
party, witness or arbitrator shall disclose in whole or in part to any other
Person any confidential information submitted in connection with arbitration
proceedings hereunder, except to the extent: (1) required by applicable law or
regulation; (2) reasonably necessary to assist counsel in or preparation for
arbitration of the dispute; or (3) that such "confidential" information was
previously known or subsequently became known to the disclosing party without
restrictions on disclosure, that it was developed independently by such
disclosing party, or that it became publicly known through no fault of the
disclosing party.
(k) ARBITRATION EXPENSES. The non-prevailing party in the
arbitration shall bear the fees and expenses of the arbitrators, the reasonable
costs of the arbitration, the expense of any award rendered therein and of its
enforcement, and the reasonable attorneys' fees and expenses of the prevailing
party; and the non-prevailing party shall reimburse the prevailing party for all
such fees, costs and expenses incurred by the prevailing party prior to the date
of the award. All expenses, fees, costs and charges, and any award, shall be
expressed in U.S. dollars.
(l) INTEGRATED ARBITRATION CLAUSE. To the extent, if any, that this
Section 8.09 may be deemed a separate contract, independent from this Agreement,
Sections 8.03 and 8.10 (concerning notices and governing law, respectively)
shall be deemed incorporated into this Section 8.09 by this reference.
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Accuride Servicios AISA IASA GIR Company
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Section 8.10 GOVERNING LAW. This Agreement shall be construed in
accordance with, and governed by the substantive laws of, the United Mexican
States and the state of Nuevo Leon, without reference to principles governing
choice or conflicts of laws. All Exhibits hereto shall be governed by and
construed in accordance with the laws of jurisdiction specified therein.
Section 8.11 NO THIRD-PARTY BENEFICIARIES. This Agreement is for
the sole benefit of the parties hereto and nothing herein expressed or implied
shall give, or be construed to give, to any Person, other than the parties
hereto and such assigns, any legal or equitable rights hereunder.
Section 8.12 AMENDMENT. This Agreement may not be amended or
modified except by an instrument in writing signed by the Company, the
Purchasers and IASA and GIR.
Section 8.13 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 8.14 SURVIVAL. The representations and warranties in this
Agreement and in any of the document executed and delivered in connection with
the transactions contemplated herein shall survive the Closing and remain in
full force and effect for the longer of the following periods: (a) as long as
it is possible that any party to this Agreement could suffer any Loss or Losses
of the kind referred to in Section 7.01(a) or (b) five years after the Closing
Date.
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Accuride Servicios AISA IASA GIR Company
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IN WITNESS WHEREOF, the parties hereto have caused this Purchase
Agreement to be executed as of the date first written above.
ACCURIDE CORPORATION
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
ACCURIDE DE MEXICO, S.A. DE C.V.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
SERVICIOS AISA, S.A. DE C.V.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
INDUSTRIA AUTOMOTRIZ, S.A. DE C.V.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
GRUPO INDUSTRIAL RAMIREZ, S.A.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------