IDEAL CONSOLIDATED STOCK PURCHASE AGREEMENT
Exhibit
2.1
IDEAL
CONSOLIDATED STOCK PURCHASE AGREEMENT
This
Stock Purchase Agreement (the
“Agreement”) is made and entered into this 19th day of
October,
2007, by and among MISCOR Group, Ltd., an Indiana corporation (the “Purchaser”),
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, referred to herein
collectively as the “Shareholders”).
RECITALS:
A. Shareholders
own a total of 882 shares of no par value common stock (collectively, the
“Shares”) of Ideal Consolidated, Inc., an Indiana corporation (the “Company”),
which Shares represent all of the issued and outstanding shares of stock of
the
Company.
B. The
Company is engaged in the mechanical contracting business, specializing in
commercial, industrial, and institutional piping, plumbing and sheet metal
work,
including engineering, design, fabrication, installation and
maintenance.
C. Purchaser
desires to acquire the Company.
D. Shareholders
desire to sell the Shares to Purchaser, and Purchaser desires to purchase the
Shares from Shareholders, at the price and subject to the terms and conditions
set forth in this Agreement.
Now
therefore, in consideration of the
promises hereinafter made, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the recital provisions
above are incorporated into the body of this Agreement as if fully set forth
therein, and the parties agree as follows:
ARTICLE
I. PURCHASE AND SALE OF SHARES
1.01 Purchase
and Sale of Shares. On and subject to the terms and
conditions set forth herein, Shareholders shall sell, assign, convey, transfer
and deliver to Purchaser, and Purchaser shall purchase from Shareholders, the
Shares, free and clear of any and all liens, claims, pledges, hypothecations, mortgages,
deeds of trust, security interests, leases, charges, options, rights of first
refusal, easements, servitudes encumbrances or other restrictions of any nature
whatsoever (collectively, “Liens”).
1.02 The
Closing. The closing of the transactions contemplated by
this Agreement (the “Closing”) shall take place at the offices of ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇ LLP in South Bend, Indiana, on October 19, 2007 (the “Closing
Date”).
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ARTICLE
II. PAYMENT OF CONSIDERATION
2.01 Purchase
Price. The purchase price for the Shares shall be Nine
Hundred and Fifty Two Thousand Dollars ($952,000.00) (the “Purchase
Price”).
2.02 Payment
of Purchase Price. The Purchase Price shall be allocated among and paid
to the Shareholders in proportion to the number of Shares sold to Purchaser
by
each of the Shareholders, as indicated on Schedule 3.03, and shall be
paid by Purchaser at the Closing by certified checks payable to each of the
Shareholders.
2.03 Post-Closing
Distribution of Net Profit. On or before December 31, 2007, Company
shall pay to the Shareholders the net profits of the Company for the first
nine
(9) months of the 2007 fiscal year, less any distributions made to the
Shareholders in fiscal year 2007 from any distribution of 2007 profits,
including distributions made to shareholders to cover 2007 estimated income
tax
payments if paid from 2007 profits (the “Net Profit Distribution”).
For
example, if it is determined that the Company had a net profit of $600,000
for
the first nine (9) months of the 2007 fiscal year, and
the
Company had distributed $100,000 to
Shareholders from 2007
profits to cover 2007
estimated income tax payments, then the Company
would pay
$500,000
($600,000
- $100,000) to
Shareholders, divided among them according to their percentage ownership of
the
Company prior to Closing.
The
net
profits of the Company for the first nine (9) months of the 2007 fiscal year
shall be determined by the Company’s accounting firm, using the completed contract
method (the method used
by
the Company for computing
federal and state income taxes).
2.04 Bonuses;
Promissory Notes to Shareholders. Any bonuses paid to
employees shall have been paid or accrued as of September 30, 2007 and thereby
have already been factored into the calculation of the net profits of the
Company for the first nine (9) months of the 2007 fiscal year. All
Promissory Notes owing
to Shareholders shall be paid by the Company from cash on hand at or prior
to
Closing.
ARTICLE
III. REPRESENTATIONS AND WARRANTIES OF
SHAREHOLDERS
The
Shareholders hereby jointly and
severally represent and warrant to Purchaser, as of the Closing Date, as
follows:
3.01 Organization
and Qualification. The Company is a corporation duly
licensed, organized and validly existing in the State of Indiana, with all
requisite power and authority to own, lease and operate its facilities and
assets as presently owned, leased and operated and to carry on its business
as
it is now being conducted. The Company does not own, or have any
contract or other commitment to acquire, directly or indirectly, an interest
in
any corporation, partnership or other entity. The Company is duly
licensed, in good standing and qualified to do business as a foreign corporation
in all jurisdictions in which the character of the properties owned or leased
by
it therein or in which the transaction of business makes such
qualification
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necessary. Attached
to Exhibit 6.02 is a complete and correct copy of the Company’s Articles
of Incorporation and Bylaws, which are in full force and effect as of
Closing.
3.02 Authority. Shareholders
have the full right, power and authority to execute, deliver and carry out
the
terms of this Agreement and all documents and agreements necessary to give
effect to the provisions of this Agreement, and to consummate the transactions
contemplated hereby. No other action, consent or approval on the part
of the Company, Shareholders or any other person or entity, is necessary to
authorize the Shareholders’ due and valid execution, delivery and consummation
of this Agreement and all other agreements and documents executed in connection
herewith or contemplated hereby.
3.03 Ownership
of Shares; Capitalization.
(a) The
Shareholders are the sole record and beneficial owners of all of the Shares,
free and clear of any and all Liens. Moreover: (i) Shareholders
are in possession of all certificates evidencing the ownership of the Shares,
all of which are fully paid and non-assessable; (ii) Shareholders have good
title to the Shares, with no restrictions on voting rights and the other
incidents of record and beneficial ownership, and the absolute right to sell
and
transfer the Shares free and clear of any and all Liens; and (iii) there are
no
voting trusts, shareholder agreements or other understandings between any of
the
Shareholders and any other person or entity with respect to the voting of or
any
other matters with respect to the Shares.
(b) The
authorized capital stock of the Company consists solely of 2,000 shares of
no par value common stock and 1,000 shares of preferred
stock with par value of one hundred dollars ($100) per share, 6% noncumulative
as to dividends but fully participating with the common stock. Of
these authorized shares, only 1,000 shares of common stock (the “Shares”
referenced herein) are issued and outstanding. There are no shares of
preferred stock outstanding and no liability to prior holders of preferred
shares. All of the Shares have been duly authorized, are validly
issued, fully paid, and nonassessable, and are owned by the Shareholders as
identified in Schedule 3.03 attached hereto. There are no
outstanding or authorized options, calls, puts, warrants, purchase rights,
subscription rights, conversion rights, exchange rights, or other contracts
or
commitments that could require the Company to issue, sell, or otherwise cause
to
become outstanding any of its capital stock. There are no outstanding
securities or other rights which are convertible or exchangeable into capital
stock of or any other equity interest in the Company. There are no
outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to the Company. Neither
the Company nor any of the Shareholders is subject to any obligation to
repurchase or otherwise acquire or retire or to register any shares of such
capital stock of the Company or any other equity interest in the
Company. No prior offer, issue, redemption, call, purchase, sale,
transfer, negotiation or other transaction of any nature with respect to such
capital stock of the Company has given rise to any claim or action of any nature
whatsoever by any person or entity and, to the knowledge of Company or any
of
the Shareholders, no fact or circumstance exists which could reasonably be
expected to give rise to any such claim or
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action
on
behalf of any person or entity. Other than the Net Profit
Distribution contemplated by this Agreement, there are no dividends that have
accrued or been declared but are unpaid on such capital stock of the
Company.
3.04 Enforceability. This
Agreement and all other agreements and documents executed in connection herewith
by any of the Shareholders, upon due execution and delivery thereof, shall
constitute the valid and binding obligations of each of the Shareholders and
are
enforceable against each of them in accordance with their respective
terms.
3.05 Absence
of Default; Consents. The execution, delivery and
consummation of this Agreement, and all other agreements and documents executed
in connection herewith or contemplated hereby by the Shareholders will not
constitute a violation of, or be in conflict with, and will not, with or without
the giving of notice or the passage of time, or both, result in:
(i) a breach of, constitute a default under, create (or cause the
acceleration of the maturity of) any debt, indenture, obligation or liability
affecting the Company; (ii) the creation or imposition of any Lien upon the
Company or its assets, or otherwise adversely affect the Company under: (A)
any
term or provision of the Articles of Incorporation or Bylaws of the Company;
(B)
any contract, lease, purchase order, agreement, document, instrument, indenture,
mortgage, pledge, assignment, permit, license, approval or other commitment
to
which the Company and/or the Shareholders are a party or by which the Company
and/or the Shareholders are bound; (C) any judgment, decree, order, regulation
or rule of any court or regulatory authority; (D) any law, statute, rule,
regulation, order, writ, injunction, judgment or decree of any court or
governmental authority or arbitration tribunal to which the Company and/or
any
of the Shareholders are subject; or (iii) a violation of or conflict with any
term or provision of the Articles of Incorporation or Bylaws of the
Company. Neither the Shareholders nor the Company are required to
give any notice to, make any filing with, or obtain any authorization, consent,
or approval of any governmental or regulatory agency or any other third party
in
order for the Shareholders to consummate the transactions contemplated by this
Agreement.
3.06 Financial
Statements. Attached hereto as Schedule 3.06 are true
and correct copies of the Company’s reviewed balance sheets and statements of
income, stockholders’ equity and cash flows for each of the twelve-month periods
ending December 31, 2004, 2005 and 2006, and balance sheets and statements
of
income for mid-year (6/30/07) and the quarter ending September 30, 2007
(collectively, the “Financial Statements”). The Financial Statements
accurately reflect the books and accounts of Company in all material respects
and represent accurately the results of the Company’s operations for the periods
indicated.
3.07 Operations
Since December 31, 2006. Except as set forth in Schedule
3.07, since December 31, 2006, the Company has conducted its business in the
ordinary course of business, and (except as otherwise contemplated by this
Agreement) has not:
(a) suffered
any loss, damage or destruction of or to any material assets of the Company,
whether or not covered by insurance;
(b) paid,
discharged or satisfied any material liability other than in the
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ordinary
course of business;
(c) declared
or made any salary, bonus or compensation increases to any officers, employees,
or agents, other than customary increases in the ordinary course of business
or
instituted any bonus, insurance, pension, profit-sharing or other employee
benefit plan or arrangement made to, for, or with the employees, directors,
independent contractors or agents of the Company;
(d) written
off as uncollectible any account receivable, or reduced any reserves, other
than
in the ordinary course of business;
(e) made
any change in the accounting methods or practices employed by the Company or
change in depreciation or amortization policies;
(f) issued
or sold, or contracted or made any other commitment for the issuance or sale
of,
any shares of capital stock or securities convertible into or exchangeable
for
capital stock of the Company;
(g) entered
into any commitments or transactions not in the ordinary course of business
involving an aggregate value in excess of $10,000 or made aggregate capital
expenditures or commitments in excess of $10,000;
(h) terminated
or amended any material contract or license or other instrument, or suffered
any
loss or termination or threatened loss or termination of any material customer
or contractual or business arrangement;
(i) had
any federal, state or local statutes, rule, regulation, order or case adopted,
promulgated or decided which, to the best knowledge of the Shareholders,
adversely affects the Company;
(j) compromised
any debts, claims or rights or disposed of any properties or other assets other
than in the ordinary course of business;
(k) subjected
any assets, tangible or intangible, to any lien, encumbrance or restriction
of
any nature whatsoever;
(l) incurred
any liability or obligation other than in the ordinary course of business,
all
of which are accounted for and accurately reflected on the Company’s books and
records;
(m) suffered
any material adverse change in its financial condition, assets, liabilities,
business, including but not limited to its relationships with its customers,
suppliers, employees and other business partners, or net worth; or
(n) amended
any organizational documents of the Company.
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3.08 No
Undisclosed Liabilities. The Company has no liabilities or
obligations, whether known, unknown, accrued, absolute, contingent, direct
or
indirect other than those set forth on the most recent balance sheet included
in
the Company’s Financial Statements or incurred in the ordinary course of
business since the date of the most recent Financial Statements, none of which
are material or adverse. The Company has reserved all known or expected losses
on uncompleted jobs, which reserve is set forth in the Company’s Financial
Statements.
3.09 Employment
Discrimination. No person or party (including, without
limitation, any governmental agency) has asserted, or to the best knowledge
of
the Shareholders, has threatened to assert, any claim for any action or
proceeding, against the Company or any officer, director, employee, or agent
of
the Company (and the Company and Shareholders are not aware of any facts which
could serve as the basis for such a claim), arising out of any statute,
ordinance or regulation relating to wages, collective bargaining, discrimination
in employment or employment practices or occupational safety and health
standards (including, without limitation, the Fair Labor Standards Act, Title
VII of the Civil Rights Act of 1964, as amended, the Occupational Safety and
Health Act, the Age Discrimination in Employment Act of 1967, the Americans
With
Disabilities Act or the Family and Medical Leave Act).
3.10 Licenses
and Permits. The Company has all local, state and federal
licenses, permits, registrations, certificates, contracts, consents,
accreditations and approvals necessary for Company to operate and conduct its
business (collectively, the “Licenses and Permits”), and there do not exist any
defaults, waivers, investigations or exemptions relating thereto or which would
be caused by the transactions contemplated by this Agreement. There
exists no grounds for revocation, suspension or limitation of any of the
Licenses and Permits, nor will consummating the transactions contemplated by
this Agreement cause any such grounds for revocation, suspension or limitation
of the Licenses and Permits. No notices have been received by the
Company or Shareholders with respect to any threatened, pending, or possible
revocation, termination, suspension or limitation of any of the Licenses and
Permits. Copies of each of the Licenses and Permits are attached to
and listed on Schedule 3.10 attached hereto.
3.11 Assets. All
of the Company’s material tangible assets are listed on Schedule 3.11
attached hereto (the “Assets”), and these constitute all of the assets necessary
to operate the Company’s business as presently conducted. Except as disclosed in
Schedule 3.11 attached hereto, the Company owns all of the Assets free
and clear of all Liens. All of the Assets are in good condition
and repair for their current use in the ordinary course of business of the
Company and conform in all material respects with all applicable ordinances,
regulations and other laws.
3.12 Insurance. All
of the Assets are insured in such amounts and against such losses, casualties
or
risks as are reasonably customary for similar properties and businesses, and
the
Company has maintained such insurance continuously from the date of its
inception. All policies and binders of insurance for directors and
officers, fire, liability, workers’ compensation, and other customary matters
held by or on behalf of the Company (“Company Insurance Policies”) are described
on Schedule 3.12 attached hereto and have been made available to
Purchaser. The Company Insurance Policies are in full force and
effect. The Company is not in default with
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respect
to any material provision contained in any of the Company Insurance
Policies. The Company has not received any written notice of
cancellation or modification in coverage amounts of, or increase in any premiums
for, any Company Insurance Policies, and the Company is not aware of any facts
that would result in cancellation or modification in coverage amounts of, or
increase in premiums under, any Company Insurance Policies.
3.13 Intellectual
Property. Schedule 3.13 attached hereto sets forth an
accurate and complete list of all trademarks, trade names, trademark
registrations, service names, service marks, patents and applications therefor,
and all other intellectual property rights owned by the Company and/or used
or
useful in the operation of its business, including all software of any nature
owned, licensed and/or used by the Company (collectively, the “Intellectual
Property”). The Company has the valid right to use all Intellectual
Property, and all Intellectual Property will be available for use by the Company
following the consummation of the transactions contemplated
hereby. There is no asserted or, to the Shareholders’ and/or the
Company’s best knowledge, any threatened infringement action, lawsuit, claim or
complaint that asserts that the Company’s operations violate or infringe any of
the software or other intellectual property rights, including the trade names,
trademarks, trademark registrations, service names, service marks or patents,
of
any other person or entity. The Company has taken adequate and
commercially reasonable steps to maintain all trade secrets and protect the
Intellectual Property. None of the Intellectual Property is owned by
or registered in the name of any current or former owner, partner, director,
executive, officer, employee, salesman, agent, customer, representative or
contractor of the Company or any of the Shareholders, nor does any such person
or entity have any interest therein or right thereto, including the right to
royalty payments.
3.14 Contracts.
(a) The
legal enforceability after the Closing of the rights of the Company under any
agreements between the Company and customers or other third parties (the
“Contracts”) will not be affected in any material manner by the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby, including the change in ownership and control of Ideal Consolidated,
Inc.
(b) All
of the Contracts that are material and currently pending are listed on
Schedule 3.14.
(c) All
of the Contracts are in full force and effect, are valid and enforceable in
accordance with their terms. No condition exists or event has
occurred which, with notice or lapse of time or both, would constitute a
default, accelerate the maturity or performance, or permit modification,
cancellation or termination of any of the Contracts or any other contracts,
agreements, or commitments which involve the Company. The terms and
conditions of all such contracts, agreements, or commitments are reasonable
and
customary in the industry and trade in which the Company operates, and there
are
no extraordinary terms contained therein.
(d) There
are no renegotiations of, or attempts to renegotiate, or
outstanding
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rights
to
renegotiate, any material amounts paid or payable to the Company, under current
or completed contracts, agreements, or commitments with any person or entity
having the contractual or statutory right to demand or require such
renegotiation. No such person or entity has made written demand for
such renegotiation.
(e) The
Company is not a party to or bound by (i) any outstanding contracts with
officers, employees, agents, consultants, advisors, salesmen, sales
representatives, distributors or dealers that are not cancelable by the Company
on notice of not longer than 10 days and without liability, penalty or premium;
(ii) any agreement or arrangement providing for the payment of any bonus or
commission based on sales or earnings; or (iii) any agreements that contain
any
severance or termination pay, liabilities or obligations.
(f) The
Company is not a party to any licensing agreement, either as licensor or
licensee.
(g) The
Company is not restricted or purported to be restricted by agreement or
otherwise from carrying on its business anywhere in the United States or
elsewhere.
(h) The
Company is not a guarantor of or for the obligations or liabilities of any
other
persons, firm or corporation, including without limitation, any of the
Shareholders.
3.15 Premises. The
Company owns no real estate. The Company leases the premises at ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, under a Commercial Lease agreement
with landlords ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the “Landlords”), a
complete copy of which lease is attached as Exhibit 3.15 hereto (the
“Lease”). The Company has no agreement, understanding, or obligation
with or to the Landlords other than as set forth in the Lease. The
Company is current in all obligations and not in default with respect to any
obligations under the Lease. Under the Lease, the Company has the
right to continue to occupy the premises at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇ through October 1, 2008 under the terms and conditions of the
Lease.
3.16 Litigation. (i)
There are no claims, lawsuits, actions, arbitrations, administrative or other
proceedings pending against the Company and, to the best knowledge of the
Shareholders, no such matter is threatened and there is no basis for any such
action; (ii) there are no governmental or administrative investigations or
inquiries pending that involve the Company; (iii) there are no judgments against
or consent decrees binding on the Company or its assets; and (iv) all claims,
lawsuits, actions, arbitrations, administrative or other proceedings pending
against the Company have been reported to the appropriate insurance carrier
and,
except as indicated in Schedule 3.16 attached hereto, the Company has not
received a notice of denial of coverage or a reservation of rights.
3.17 Hazardous
Substances. To the best of the Shareholders knowledge and belief, there
is no current, and has been no past, introduction into the environment by the
Company of any pollution, including without limitation any contaminant, irritant
or pollutant or other toxic or
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hazardous
substance, in violation of any federal, state or local law, ordinance or
governmental rule or regulations, as a result of any spill, discharge, leak,
emission, escape, injection, dumping or release of any kind whatsoever of any
substance or exposure of any type, as a result of which the Company has or
may
become liable to any person or entity by any reason of which any of the
Company’s assets may suffer or be subjected to any Lien.
3.18 Labor
Matters. The Company is party to a collective bargaining
agreement with the Plumbers and Pipefitters Local 172, a true and complete
copy
of which is attached hereto as Exhibit 3.18 (the “Union
Contract”). There has not been any strike of any kind called or
threatened to be called against the Company. The Company is not
currently experiencing any grievances, labor troubles or strikes, work
stoppages, slow-downs or other material interference by its employees or other
members of the Plumbers and Pipefitters Local 172.
3.19 Tax
Matters.
(a) For
purposes of this Agreement, (i) “Tax” means any federal, state, local, or
foreign income, gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental (including taxes
under Section 59A of the Code), customs duties, capital stock, franchise,
profits, withholding, social security, unemployment, disability, real property,
personal property, sales, use, transfer, registration, value added, alternative
or add-on minimum, estimated, or other tax of any kind whatsoever, including
any
interest, penalty, or addition thereto, whether disputed or not, and (ii) “Tax
Return” means any return, report, information return, or other document
(including any related or supporting information) filed or required to be filed
with any taxing authority in connection with its determination, assessment,
collection, administration, or imposition of any Tax.
(b) The
Company has duly and timely filed each and every Tax Return and has duly and
timely paid all Taxes and other charges (whether or not shown on any Tax Return)
due or claimed to be due from it by federal, foreign, state, or local taxing
authorities or has set up an adequate reserve in the Financial Statements for
all Taxes payable. True and correct copies of all Tax Returns
relating to federal taxes and state income and sales taxes and other charges
for
the periods ending December 31, 2005, 2006 and 2007 have been heretofore
delivered to Purchaser, together with any exemption certificates or other
material Tax documents and correspondence with any taxing
authority. The Company has not received any written notice of any
deficiencies for any Taxes. There are no Liens for Taxes (other than
liens for current Taxes not yet due and payable) upon any properties or assets
of the Company (whether real, personal, or mixed, tangible or intangible),
and
there are no pending or, to the Shareholders’ knowledge, threatened audits or
examinations relating to, or claims asserted for, Taxes or assessments against
the Company, and the Shareholders have no knowledge of any basis for any such
claims. The Company has not been granted or been requested to grant
any extension of the limitation period applicable to any claim for Taxes or
assessments with respect to Taxes. The Company is not a party to any
Tax allocation or sharing agreement. The Company is not liable for
the Taxes of any “Affiliated Group” under Treasury Regulation
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1.1502-6
(or any similar provision of state, local, or foreign law). The
Company has withheld and paid all Taxes required to have been withheld and
paid
in connection with amounts paid or owing to any employee, independent
contractor, creditor, or stockholder.
(c) Schedule
3.19 attached hereto lists each jurisdiction in which the Company files Tax
Returns for each period or portion thereof ending on or before the Closing
Date. There is no claim outstanding against the Company by any taxing
authority in a jurisdiction where the Company does not file Tax Returns that
it
is or may be subject to taxation by that jurisdiction.
(d) The
Company is not a party to any agreement, contract, arrangement or plan that
has
resulted or would result, separately or in the aggregate, in the payment of
any
“excess parachute payment” within the meaning of Code § 280G (or any
corresponding provision of state, local, or foreign Tax law). The
Company has not been a United States real property holding corporation within
the meaning of Code § 897(c)(2) during the applicable period specified in Code §
897(c)(1)(A)(ii).
(e) The
unpaid Taxes of Company (i) did not, as of the date of its most recent Financial
Statements, exceed the reserve for Tax liability (rather than any reserve for
deferred Taxes established to reflect timing differences between book and Tax
income) set forth on the face of the balance sheet contained in such Financial
Statements (rather than in any notes thereto) and (ii) will not exceed that
reserve as adjusted for operations and transactions through the Closing Date
in
accordance with the past custom and practice of Company in filing its Tax
Returns.
(f) The
Company will not be required to include any item of income in, or exclude any
item of deduction from, taxable income for any taxable period (or portion
thereof) ending after the Closing Date as a result of any:
(i) change
in method of accounting for a taxable period on or prior to the Closing
Date;
(ii) “closing
agreement” as described in Code § 7121 (or any corresponding or similar
provision of state, local or foreign income Tax law) executed on or prior to
the
Closing Date;
(iii) installment
sale or open transaction disposition made on or prior to the Closing Date;
or
(iv) prepaid
amount received on or prior to the Closing Date.
3.20 Employees. Except
the Union Contract referenced above in Section 3.18, the Company has no
employment agreements with its employees and all such employees are employed
on
an “at will” basis. All wages, benefits and other amounts due and
owing to, or on behalf of, all of Company’s employees have been paid by Seller
in accordance with all applicable
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agreements,
laws and regulations.
3.21 Employee
Benefit Plans.
(a) Except
as set forth in Schedule 3.21, the Company does not maintain or
contribute to (or have the obligation to contribute to) any Employee Benefit
Plans (as defined below) (“Company’s Employee Benefit Plans”). True
and correct copies and descriptions of all of Company’s Employee Benefit Plans
are attached to Schedule 3.21. With respect to Company’s
Employee Benefit Plans, the Company has made all payments required to be made
by
it on or prior to the Closing Date.
(b) Each
of the Company’s Employee Benefit Plans and any related trust agreements,
annuity contracts, insurance contracts or other instruments are in compliance
in
all material respects both as to form and operation with the requirements of
applicable state and federal law, including but not limited to ERISA and the
Code, and have been administered in accordance with their terms. Each
of the Company’s Employee Benefit Plans intended to qualify under Section 401(a)
of the Code is so qualified, and neither the Company nor the Shareholders know
of any event or condition that has occurred that would reasonably be expected
to
have an adverse effect on the qualified status of such plan.
(c) The
Company does not sponsor or contribute to, and no employees of the Company
participate in, a “pension plan” (within the meaning of Section 3(2) of ERISA)
that is subject to Section 302 of ERISA or Section 412 of the Code.
(d) Except
as set forth in Schedule 3.21, the Company is not now nor has ever been a
contributing employer with respect to any “multiemployer plan” within the
meaning of Sections 3(37) and 4001(a)(3) of ERISA.
(e) All
reports and applications relating thereto required by any government agency
have
been timely filed and all contributions required to be made to each Employee
Benefit Plan under the terms of such plan, ERISA, the Code or other applicable
law have been timely made.
(f) The
Company has not engaged in, and no fiduciary of any such employee benefit plan
has engaged in, any “prohibited transaction” in violation of Section 406 of
ERISA or within the meaning of Section 4975 of the Code for which no exemption
exists under ERISA or the Code. No investigation, audit, action,
claim or litigation has been commenced or, to the knowledge of Company or any
of
the Shareholders, threatened (other than routine claims for benefits) with
respect to any of the Company’s Employee Benefit Plans, nor is the Company or
any of the Shareholders aware of any facts which reasonably could be expected
to
form the basis of such investigation, audit, action, claim or
proceeding.
(g) Except
as disclosed on Schedule 3.21, the Company does not maintain
or
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contribute
to any employee benefit plan which provides, and has no liability or obligation
to provide, life insurance, medical or other employee welfare benefits to any
employee (or such employee’s beneficiary) upon such employee’s retirement or
termination of employment, except as may be required by federal, state or local
laws, rules or regulations, and the Company has never represented, promised
or
contracted to any employee that such employee would be provided with life
insurance, medical or other employee welfare benefits upon such employee’s
retirement or termination of employment, except to the extent required by
federal, state or local laws, rules or regulations.
(h) Each
of the Company’s Employee Benefit Plans which is a “group health plan” as
defined in Section 5000(b)(1) of the Code has been operated in material
compliance with the requirements of Section 4980B of the Code and Sections
601
through 608 of ERISA (COBRA), and each such plan, to the extent applicable,
is
in material compliance with the privacy, security and other provisions of the
Health Insurance Portability and Accountability Act of 1996
(HIPAA).
(i) The
consummation of the transactions contemplated by this Agreement will not (A)
entitle any individual to severance pay or (B) accelerate the time of payment,
vesting or increase the amount of compensation due to any such
individual.
(j) There
is no circumstance, event or condition which reasonably could be expected to
cause the Company to incur any liability in respect of an employee benefit
plan
maintained by any entity which is (or at any relevant time was) a member of
a
“controlled group of corporations” (within the meaning of Section 414(c) of the
Code) with the Company or under “common control” (within the meaning of Section
414(c) of the Code) with the Company.
(k) “Employee
Benefit Plan” means (i) any employee benefit plan, as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974 as amended (“ERISA”), and
(ii) any other plan, trust agreement or arrangement for any bonus, severance,
hospitalization, vacation, incentive or deferred compensation, pension or
profit-sharing, retirement, payroll savings, stock option, equity compensation,
group insurance, death benefit, fringe benefit, welfare or any other employee
benefit plan or fringe benefit arrangement of any nature whatsoever, including
those benefiting retirees or former employees.
3.22 Compliance
with Laws. The Company is not and has not been in violation
of, and the Company’s Businesses have been and are being conducted in accordance
with, all federal, state, municipal, foreign and other laws, regulations, orders
and other legal requirements applicable thereto (collectively, “Rules”), and
neither the Company nor any of the Shareholders has knowledge or reason to
know
of, nor received notice of, any violation or alleged violation by the Company
of
any Rule.
3.23 Corporate
Minute Books. The minute books of the Company have
been
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maintained
in the Company’s usual, regular and ordinary manner and contain, in all material
respects, complete minutes of annual and special meetings of the Board of
Directors and the shareholders and any consents in lieu thereof, and the
signatures therein are the true signatures of the persons purporting to have
signed them. The stock ledgers of the Company are complete and
accurate.
3.24 Bank
Accounts. Schedule 3.24 lists: (i) all accounts, safe
deposit boxes and current receivable collection boxes maintained by the Company
at any bank or other financial institution and the names of the persons
currently authorized to effect transactions in such accounts or with access
to
such boxes; and (ii) the names of all persons, firms, associations, corporations
or business organizations holding general or special powers of attorney from
the
Company and a description of the terms thereof.
3.25 Broker’s
or Finder’s Fee. Neither the Company nor the Shareholders
have employed, or are liable for the payment of any fee to, any finder, broker,
consultant or similar person in connection with the transactions contemplated
by
this Agreement.
3.26 Customers. The
Company has not received any notice nor has knowledge that any of its customers
intends to terminate or materially reduce its commercial relationship with
the
Company, and no customer has terminated or materially reduced its commercial
relationship with the Company in the last twelve (12) months.
3.27 Product
and Service Warranty. Company has no liability (whether
known or unknown and whether absolute or contingent) for the replacement or
rework of products or services sold or delivered by the Company or other damages
in connection therewith, and no product or service sold or delivered by Company
is subject to any guaranty, express warranty or other indemnity other than
Seller’s standard warranty, which is set forth in full on Schedule
3.27(a) or as agreed to under one of the specific contracts listed on
Schedule 2.27(b). True and complete copies of each of the
contracts listed on Schedule 2.27(b) have been provided to Purchaser
prior to Closing.
3.28 Inventory. The
inventory of the Company as of September 30, 2007 is as set forth on Schedule
3.28 hereto. There has been no material change in the inventory
since that date other than changes consistent with past practices of the Company
in the ordinary course of business. All inventory of the Company is
of a quality salable in the ordinary course of business consistent with the
past
practices, subject to normal allowances for outdated or damaged items, which
allowances are not material.
3.29 Accounts
Payable and Receivable. A summary statement of the accounts
payable and receivable of the Company as of September 30, 2007 is as set forth
on Schedule 3.29 hereto. There has been no material change in
the balance of accounts payable and accounts receivable since that date other
than changes consistent with past practices of the Company in the ordinary
course of business. All accounts receivable are collectible in the
ordinary course of business.
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3.30 Cost
to Complete Estimates. The Company’s books and records
include estimates of the cost to complete (“ECC”) each project currently
underway. Each ECC has been compiled utilizing standard industry
estimating techniques. Each ECC is a truthful and accurate estimate of the
cost
to complete the project to which it relates.
3.31 Related
Party Transactions. No
Shareholder, nor any entity in which any of the Shareholders, directly or
indirectly, owns any beneficial interest (a “Related Party”), has any direct or
indirect interest in: (i) any contract, arrangement or understanding
with, or relating to the business or operations of, the Company; (ii) any loan,
arrangement, understanding, agreement or contract for or relating to
indebtedness of the Company; (iii) any property (real, personal or mixed),
tangible or intangible, used in the business or operations of the Company;
or
(iv) any business or entity that competes with the Company. The
Company does not owe and is not obligated to pay any of the Shareholders or
any
Related Party any amount, and none of the Shareholders nor any Related Party
has
any claim of any kind against the Company or any affiliate, employee, officer
or
director of the Company.
3.33 No
Omissions or Misstatements. None of the statements or
information included in this Agreement or in the Schedules hereto, or other
documents furnished or to be furnished by any of the Shareholders or the
Company, or any of their representatives, contains any untrue statement of
a
material fact or is misleading in any material respect or omits to state any
material fact necessary in order to make any of the statements herein or therein
not misleading in light of the circumstances in which they were
made. Shareholders have fully disclosed to the Purchaser all material
facts affecting the Company.
ARTICLE
IV. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser
hereby represents and
warrants to the Shareholders as follows:
4.01 Organization
and Qualification. Purchaser is a corporation duly organized and
validly existing under the laws of the State of Indiana. Purchaser
has full power and authority, and all licenses, permits, and authorizations
necessary, to consummate the transaction contemplated by this
Agreement.
4.02 Authority. Purchaser
has the full right, power and authority to execute, deliver and carry out the
terms of this Agreement and all documents and agreements necessary to give
effect to the provisions of this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and consummation of this
Agreement, and all other agreements and documents executed in connection
herewith by Purchaser have been duly authorized by all necessary corporate
action on the part of Purchaser. No other action, consent or approval
on the part of Purchaser or any other person or entity, is necessary to
authorize the due and valid execution, delivery and consummation of this
Agreement and all other agreements and documents executed in connection hereto
by Purchaser.
4.03 Enforceability. This
Agreement and all other agreements and documents executed in connection herewith
by Purchaser shall constitute the valid and binding obligations
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of
Purchaser and are enforceable in accordance with their respective
terms.
4.04 Absence
of Default. The execution, delivery and consummation of this
Agreement, and all other agreements and documents executed in connection
herewith by Purchaser, will not constitute a violation of, or be in conflict
with, and will not, with or without the giving of notice or the passage of
time,
or both, result in: (i) a breach of, constitute a default under,
create (or cause the acceleration of the maturity of) any debt, indenture,
obligation or liability affecting Purchaser or its business; (ii) the creation
or imposition of any security interest, lien, charge or other encumbrance upon
Purchaser, or otherwise adversely affect Purchaser or its business under: (A)
any term or provision of its Articles of Incorporation or Bylaws; (B)
any contract, lease, purchase order, agreement, document, instrument, indenture,
mortgage, pledge, assignment, permit, license, approval or other commitment
to
which Purchaser is a party or by which Purchaser is bound; (C) any judgment,
decree, order, regulation or rule of any court or regulatory authority; (D)
any
law, statute, rule, regulation, order, writ, injunction, judgment or decree
of
any court or governmental authority or arbitration tribunal to which Purchaser
is subject; or (iii) a violation of or conflict with any term or provision
of
the Articles of Incorporation or Bylaws of the Purchaser
4.05 Litigation
and Investigations. There is no action, suit, proceeding,
claim, arbitration or investigation pending, or as to which Purchaser has
knowledge or received any notice of assertion against Purchaser, which in any
manner challenges or seeks to prevent, enjoin, alter or materially delay any
of
the transactions contemplated by this Agreement.
4.06 Broker’s
or Finder’s Fee. Purchaser has not employed, nor is
Purchaser liable for the payment of any fee to any finder, broker, consultant
or
similar person in connection with the transactions contemplated by this
Agreement.
4.07 No
Omissions or Misstatements. None of the statements or
information included in this Agreement or the Schedules hereto, or other
documents furnished or to be furnished by Purchaser to the Shareholders, or
any
of their representatives, contain any untrue statement of a material fact or
is
misleading in any material respect or omits to state any material
fact necessary in order to make any of the statements herein or therein not
misleading in light of the circumstances in which they were made.
ARTICLE
V. RELATED AGREEMENTS AND CONDITIONS TO CLOSE
5.01
Related Agreements.
(a) ▇▇▇▇▇▇▇
▇▇▇▇ shall enter into an ancillary non-competition/non-solicitation agreement
with Ideal Consolidated, Inc., for a term of three (3) years from the date
of
Closing, which agreement is attached hereto as Exhibit
5.01(a).
(b) ▇▇▇▇▇▇▇
▇▇▇▇ shall enter into an ancillary consulting agreement with Ideal Consolidated,
Inc., which agreement is attached hereto as Exhibit 5.01(b).
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5.02
Conditions to Obligations of
Shareholders. All obligations of Shareholders under
this Agreement are subject to the fulfillment, at or prior to the Closing,
of
the following conditions, any one or more of which may be waived in writing
by
Shareholders:
(a) All
representations and warranties made by Purchaser in this Agreement shall be
true
and correct on and as of the Closing Date. Purchaser shall have
delivered to Shareholders a certificate, signed and dated as of the Closing
Date, to the foregoing effect.
(b) Purchaser
shall have delivered all documents and agreements described in Article VII
and
otherwise performed in all respects all obligations required under this
Agreement and any other agreements referenced herein to be performed by it
on or
prior to the Closing Date. Purchaser shall have delivered to
Shareholders a certificate, signed and dated as of the Closing Date, to the
foregoing effect.
(c) No
order of any court or administrative agency shall be in effect which restrains
or prohibits the transactions contemplated hereby, and there shall not have
been
threatened, nor shall there be pending, any action or proceeding by or before
any court or governmental agency or other regulatory or administrative agency
or
commission, challenging any of the transactions contemplated by this
Agreement.
(d) Shareholders
shall have received such other certificates, instruments and documents,
reasonably satisfactory in form and substance to Shareholders, in confirmation
of the representations and warranties of Purchaser or in furtherance of the
transactions contemplated by this Agreement as Shareholders or their counsel
may
reasonably request.
5.03
Conditions to Obligations of
Purchaser. All obligations of Purchaser under this Agreement
are subject to the fulfillment, at or prior to the Closing, of the following
conditions, any one or more of which may be waived in writing by
Purchaser:
(a) All
representations and warranties made by Shareholders in this Agreement and in
any
agreement referenced herein shall be true and correct on and as of the Closing
Date. The Shareholders shall have delivered to Purchaser a
certificate, signed and dated as of the Closing Date, to the foregoing
effect.
(b) Each
of the Shareholders shall have delivered all documents and agreements to which
he is a party or signatory described in Article VI and each of the Shareholders
shall have otherwise performed in all respects all obligations required under
this Agreement and in any agreement referenced herein to be performed by him
on
or prior to the Closing Date. The Shareholders shall have delivered
to Purchaser a certificate, signed and dated as of the Closing Date, to the
foregoing effect.
(c) No
order of any court or administrative agency shall be in effect which restrains
or prohibits the transactions contemplated hereby, and there shall not have
been
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threatened,
nor shall there be pending, any action or proceeding by or before any court
or
governmental agency or other regulatory or administrative agency or commission,
challenging any of the transactions contemplated by this Agreement.
(d) All
consents, waivers, authorizations and approvals required in connection with
the
execution, delivery and performance of this Agreement, as contemplated hereby,
shall have been duly obtained and/or assumed.
(e) Purchaser
shall have completed its due diligence investigation and shall not have
discovered any conditions or set of facts which, individually or in the
aggregate, are not to Purchaser’s satisfaction, in its sole
discretion.
(f) Purchaser
shall have received certificates representing the Shares, free and clear of
all
Liens and duly endorsed for the transfer of such Shares to Purchaser, together
with such other certificates, instruments and documents, reasonably satisfactory
in form and substance to Purchaser, in confirmation of the representations
and
warranties of each Shareholder or in furtherance of the transactions
contemplated by this Agreement as Purchaser or its counsel may reasonably
request.
(g) All
consents, authorizations, orders and approvals of (or filings or registrations
with) any governmental commission, board or other regulatory body or any other
third party (including lenders and lessors) required in connection with the
execution, delivery and performance of this Agreement shall have been obtained
or made.
(h) On
or prior to the Closing Date, there shall have been no loss, damage or
destruction to the Assets which materially impairs the use or the value of
the
Assets or the Company. The Company shall not have suffered any
material adverse change in its financial condition, results of operations,
assets, liabilities, or business.
(i) Purchaser
shall have received (i) final state and local tax lien and Uniform Commercial
Code financing statement searches disclosing all Liens on the assets of the
Company; and (ii) written releases from the holders of any such Liens with
respect thereto.
ARTICLE
VI. DELIVERIES BY SHAREHOLDERS AT CLOSING
At
Closing, the Shareholders shall
deliver to Purchaser the following documents in form and substance reasonably
satisfactory to Purchaser:
6.01
Documents Relating to
Title. Shareholders shall execute, acknowledge, deliver and
cause to be executed, acknowledged and delivered to Purchaser:
(a) In
lieu of stock certificates for the Shares, which certificates cannot be located
at this time, each Shareholder will execute and deliver an Affidavit and
Indemnity Agreement along with a Stock Power to transfer the
shares;
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(b) The
ancillary non-competition/non-solicitation and consulting agreements, which
shall be attached hereto as Exhibit 5.01(a) and Exhibit
5.01(b).
(c) The
resignation of each member of the Board of Directors and each officer of the
Company effective as of the Closing; and
(d) The
Shareholders and the Company shall have delivered to Purchaser an opinion of
legal counsel (the “Opinion Letter”), dated the Closing Date, in the form of
Exhibit 6.01(d).
6.02
Corporate Existence and Certified Corporate
Resolution. Shareholders shall deliver to Purchaser a
certificate of existence for the Company from the Indiana Secretary of State,
together with certificated copy of the corporate resolutions of the Company
authorizing the transactions contemplated herein.
6.03
Third-Party Consents and
Releases. Shareholders shall deliver to Purchaser all
consents, estoppels, approvals, releases, filings and authorizations of
third-parties that are necessary or advisable for the legal and proper
execution, delivery and consummation of this Agreement, and the transactions
contemplated hereunder, including but not limited to releases from the holders
of Liens with respect to the Assets.
6.04
Additionally Requested Documents; Post-Closing
Assistance. At the reasonable request of Purchaser at
Closing and at any time or from time to time thereafter, Shareholders shall
cooperate with Purchaser to put Purchaser in actual possession and operating
control of the Company, execute and deliver such further instruments of sale,
conveyance, transfer and assignment, as Purchaser may reasonably request in
order to effectively convey, transfer and assign the same to Purchaser, and
to
take such other actions as Purchaser may reasonably request to release Purchaser
and the Company from all obligation and liability with regard to any obligation
or liability retained or assumed by Shareholders and to otherwise effectuate
the
intent of this Agreement and the transactions contemplated hereby.
ARTICLE
VII. DELIVERIES BY PURCHASER AT CLOSING
At
Closing, Purchaser shall deliver or
cause to be delivered to Shareholders the following in a form and substance
reasonably satisfactory to Shareholders:
7.01 Corporate
Existence and Certified Board Resolutions. Purchaser shall
deliver to Shareholders a certificate of existence of the Purchaser from the
Indiana Secretary of State, together with a certified copy of the resolutions
of
the Board of Directors of Purchaser authorizing the execution, delivery and
consummation of this Agreement and all other documents executed in connection
herewith.
7.02 Third-Party
Consents. Purchaser shall deliver to Shareholders all
consents,
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approvals,
releases, filings and authorizations of third-parties that are necessary or
advisable for the legal and proper execution, delivery and consummation of
this
Agreement and the transactions contemplated hereunder.
7.03 Related
Agreements. Purchaser shall execute and deliver to
Shareholders all related agreements identified in Section 5.01.
ARTICLE
VIII. SURVIVAL OF PROVISIONS AND
INDEMNIFICATION
8.01
Survival. The representations and
warranties contained in this Agreement shall survive Closing.
8.02
Indemnification by
Shareholders. Subject to the other provisions of this
Article, Shareholders shall, jointly, promptly indemnify, defend, and hold
harmless Purchaser and its shareholders, directors, officers, employees, agents,
successors and assigns against any and all claims, liabilities, losses, costs,
and expenses (including reasonable costs of investigation, court costs and
attorneys and other legal fees actually incurred) and other damages
(collectively, “Losses”) resulting from any breach by a Shareholder or the
Shareholders of any of the covenants, obligations, representations or warranties
contained in this Agreement or any certificate or document of Shareholders
delivered pursuant to this Agreement.
8.03
Indemnification by
Purchaser. Subject to the other provisions of this Article,
Purchaser shall promptly indemnify, defend, and hold harmless Shareholders,
directors, their agents, successors and assigns against any and all
losses, costs, and expenses (including reasonable cost of investigation, court
costs and attorneys and other legal fees actually incurred) and other damages
(collectively, “Losses”) resulting from any breach by Purchaser of any of the
covenants, obligations, representations or warranties contained in this
Agreement or any certificate or document of Purchaser delivered pursuant to
this
Agreement.
8.04
Rules Regarding Indemnification. The
obligations and liabilities of each party which may be subject to
indemnification liability hereunder (the “Indemnifying Party”) to the other
party (the “Indemnified Party”) shall be subject to the following terms and
conditions:
(a) Claims
by Non-Parties. Within twenty (20) days (or such earlier time as
might be required to avoid prejudicing the Indemnifying Party’s position) after
receipt of notice of commencement of any action evidenced by service of process
or other legal pleading, or with reasonable promptness after the assertion
of
any claim by a third party, the Indemnified Party shall give the Indemnifying
Party written notice thereof together with a copy of such claim, process or
other legal pleading, and the Indemnifying Party shall have the right to
undertake the defense thereof by representatives of its own choosing and at
its
own expense, subject however to the rights of any insurance company insuring
against liabilities related to the subject party claim to appoint
counsel. Notwithstanding the foregoing, the Indemnified Party may
participate in the defense with counsel of its own choice and at its own expense
(provided that the Indemnifying Party will bear the expense of counsel for
the
Indemnified Party if the Indemnified Party could
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have
an
inconsistent or conflicting interest from that of the Indemnifying Party or
one
or more legal defenses that are different from or additional to those available
to the Indemnifying Party). Further:
(i) If
the Indemnifying Party, by the thirtieth (30th) day after receipt of notice
of
any such claim (or, if earlier, by the tenth [10th] day preceding the day on
which an answer or other pleading must be served in order to prevent judgment
by
default in favor of the person asserting such claim), does not elect to defend
against such claim, the Indemnified Party, upon further notice to the
Indemnifying Party, will have the right to undertake the defense, compromise
or
settlement of such claim on behalf of or for the account and risk of the
Indemnifying Party and at the Indemnifying Party’s expense, subject to the right
of the Indemnifying Party to assume the defense of such claim at any time prior
to settlement, compromise or final determination thereof.
(ii) Notwithstanding
anything to the contrary contained in this Section 8.04(a), the Indemnifying
Party shall not settle any claim without the consent of the Indemnified Party
unless such settlement involves only the payment of money and the claimant
provides to the Indemnified Party a release from all liability in respect of
such claim. If the settlement of the claim involves more than the
payment of money, the Indemnifying Party shall not settle the claim without
the
prior consent of the Indemnified Party, which consent shall not be unreasonably
withheld.
(iii) The
Indemnified Party and the Indemnifying Party will each cooperate with all
reasonable requests of the other for the purpose of defending against any
claims.
(iv) The
Indemnifying Party shall make all payments pursuant to the indemnification
provisions contained in this Section 8.04(a) within ten (10) business days
after
final determination of the amount thereof.
(b) Claims
by a Party. In the event any Indemnified Party should have a
claim for indemnification against any Indemnifying Party that does not involve
a
third party claim, the Indemnified Party shall deliver notice of such claim
with
reasonable promptness to the Indemnifying Party. The failure by any
Indemnified Party so to notify the Indemnifying Party shall not relieve the
Indemnifying Party from any liability that it may have to such Indemnified
Party
with respect to any claim made pursuant to this Section 8.04(b). If
the Indemnifying Party does not notify the Indemnified Party within thirty
(30)
days following its receipt of such notice that the Indemnifying Party disputes
its liability to the Indemnified Party under this Article IX, or the amount
thereof, the claim specified by the Indemnified Party in such notice shall
be
conclusively deemed a liability of the Indemnifying Party under this Article
IX,
and the Indemnifying Party shall pay the amount of such loss to the Indemnified
Party on demand or, in the case of any notice in which the amount of the claim
(or any portion of the claim) is estimated, on
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such
later date when the amount of such claim (or such portion of such claim) becomes
finally determined. If the Indemnifying Party has timely disputed its
liability with respect to such claim, the Indemnifying Party and the Indemnified
Party shall negotiate in good faith to resolve such dispute or pursue such
remedies as may be available hereunder, at law or in equity.
8.05
Right to Set-Off. Purchaser shall
have the right to recoup and set off any losses and damages incurred or
resulting from any failure of any of the Shareholders to reimburse Purchaser
for
(i) any amounts due under this Agreement, or (ii) any claims of Purchaser
under this Article VIII, against any and all amounts due or to become due to
any
Shareholder from Purchaser under this Agreement and any agreements related
hereto, including without limitation, payments due under any of the related
agreements identified in Section 5.01 hereof. The parties acknowledge
and agree that the rights of recoupment and set off set forth in this Section
8.05 are a condition to Purchaser agreeing to enter into and perform this
Agreement and that the rights of Shareholders under this Agreement and any
documents entered into in connection with this Agreement are subject to such
rights.
ARTICLE
IX. MISCELLANEOUS
9.01 Preparation
of Tax Returns. The Shareholders shall be responsible for
preparing and filing, within the times and in the manner prescribed by law
(subject, however, to filing under any extension), all Tax Returns of the
Company for any tax period ending on or before the Closing Date that are
required to be filed after the Closing Date, and pay all Taxes shown
thereon. The Shareholders covenant that any Tax Returns of the
Company for any tax period ending on or before the Closing Date that are filed
after the Closing Date will be complete, correct and filed consistently with
the
Company’s prior Tax Returns. All Tax Returns that are required to be
filed pursuant to this Section shall not be filed without the prior approval
of
Purchaser, which approval shall not be unreasonably withheld.
9.02 Assignment. No
Shareholder may assign any rights or delegate any obligations under this
Agreement without the prior written consent of Purchaser, and any prohibited
assignment or delegation will be null and void.
9.03 Other
Expenses. Except as otherwise provided in this Agreement,
each Shareholder shall pay his or her own expenses, together with any
and all expenses of the Company, incurred in connection with the negotiation,
execution, and implementation of the transactions contemplated under this
Agreement, and Purchaser shall pay all of its expenses incurred in connection
with the negotiation, execution, and implementation of the transactions
contemplated under this Agreement.
9.04 Notices. All
notices, requests, demands, waivers and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given: (a) if delivered personally, on the date
received, (b) if delivered by overnight courier, on the day after mailing,
or
(c) if mailed, four (4) days after mailing by first class certified mail, return
receipt requested and with postage prepaid. Any such notice shall
be
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sent
as
follows:
|
To
Shareholders:
|
|||
|
▇▇▇▇▇▇▇
▇. ▇▇▇▇
|
|||
|
▇▇▇▇▇
▇▇▇▇▇ ▇▇.
|
|||
|
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
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|||
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▇▇▇▇
▇. ▇▇▇▇▇▇▇
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|||
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▇▇▇▇▇
▇▇▇▇▇ ▇▇.
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|||
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▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
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|||
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▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
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|||
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▇▇▇▇▇
▇▇▇▇▇ ▇▇.
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|||
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▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
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|||
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with
a copy to:
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|||
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Diamond
& Diamond
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|||
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▇▇▇
▇. ▇▇▇▇▇ ▇▇▇▇▇▇
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|||
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▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
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|||
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Attn:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
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|||
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To
Purchaser:
|
|||||
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▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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|||||
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▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
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|||||
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Attn:
|
▇▇▇▇
▇. ▇▇▇▇▇▇▇, President and CEO
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||||
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and
|
▇▇▇▇▇
▇. ▇▇▇▇▇, General Counsel
|
||||
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with
a copy to:
|
|||||
|
▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇▇ LLP
|
|||||
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600
1st Source Bank Center
|
|||||
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▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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|||||
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▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
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|||||
|
Attn: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇, Esq.
|
|||||
9.05 Controlling
Law and Jurisdiction. This Agreement shall be construed,
interpreted and enforced in accordance with the laws of the State of Indiana,
without giving effect to principles of conflicts of laws. The parties expressly
agree that the Indiana state courts located in St. ▇▇▇▇▇▇ County, Indiana (or
if
there is exclusive federal jurisdiction, the United States District Court for
the Northern District of Indiana) shall have exclusive jurisdiction and venue
over any dispute arising out of this Agreement. To the extent not
otherwise subject to
Page
22 of
26
the
jurisdiction of such courts, the Purchaser and each Shareholder hereby agrees
to
waive any objection to jurisdiction and to subject itself to the jurisdiction
of
such courts.
9.06 Headings. Any
paragraph headings in this Agreement are for convenience of reference only
and
shall not be considered or referred to in resolving questions of
interpretation.
9.07 Benefit. This
Agreement shall be binding upon and shall inure to the exclusive benefit of
the
parties hereto and their respective heirs, legal representatives, successors
and
assigns. This Agreement is not intended to, nor shall it, create any
rights in any other party.
9.08 Partial
Invalidity. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if such invalid
or unenforceable provisions were omitted.
9.09 Waiver. Neither
the failure nor any delay on the part of any party hereto in exercising any
rights, power or remedy hereunder shall operate as a waiver thereof, or of
any
other right, power or remedy; nor shall any single or partial exercise of any
right, power or remedy preclude any further or other exercise thereof, or the
exercise of any other right, power or remedy. No waiver of any of the provisions
of this Agreement shall be void unless it is in writing and signed by the party
against which it is sought to be enforced.
9.10 Counterparts
and Facsimiles. This Agreement may be executed
simultaneously in two or more counterparts each of which shall be deemed an
original and all of which together shall constitute but one and the same
instrument. The signature page to this Agreement and all other
documents required to be executed at Closing may be delivered by facsimile
and
the signatures thereon shall be deemed effective upon receipt by the intended
receiving party.
9.11 Legal
Fees and Costs. Subject to the provisions of Article VIII,
in the event any party hereto incurs legal expenses to enforce or interpret
any
provision of this Agreement, the prevailing party will be entitled to recover
such legal expenses, including, without limitation, attorneys fees, costs and
disbursements, in addition to any other relief to which such party shall be
entitled.
9.12 Interpretation
of Representations. Each representation and warranty made in
this Agreement or pursuant hereto is independent of all other representations
and warranties made by the same parties, whether or not covering or related
to
similar matters, and must be independently and separately
satisfied.
9.13 Reliance
by Purchaser. Notwithstanding the right of Purchaser to
investigate the business, assets and financial condition of the Company,
Purchaser has the unqualified right to rely upon, and has relied upon, each
of
the representations and warranties made by the Shareholders in this Agreement
or
made in writing pursuant hereto.
9.14 Entire
Agreement. This Agreement, including the Schedules and
Exhibits hereto, which are hereby incorporated herein by reference, constitutes
the entire agreement
Page
23 of
26
between
the parties hereto with regard to the matters contained herein and it is
understood and agreed that all previous undertakings, negotiations, term sheets
and agreements between the parties are merged herein. This Agreement may not
be
modified orally, but only by an agreement in writing signed by Purchaser and
Shareholders.
[Remainder
of page intentionally left blank.]
Page
24 of
26
IN
WITNESS WHEREOF,
the parties hereto have executed this Agreement on the date or dates indicated
below, effective as of the date first above written.
|
“Shareholders”
|
“Purchaser”
|
|||
|
▇▇▇▇▇▇▇
▇. ▇▇▇▇
|
||||
| /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ |
By:
|
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | ||
|
▇▇▇▇▇▇▇
▇. ▇▇▇▇
|
▇▇▇▇
▇. ▇▇▇▇▇▇▇, President and CEO
|
|||
|
Date:
|
October 19, 2007 |
Date:
|
October 19, 2007 | |
|
▇▇▇▇
▇. ▇▇▇▇▇▇▇
|
||||
| /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | ||||
|
▇▇▇▇
▇. ▇▇▇▇▇▇▇
|
||||
|
Date:
|
October 19, 2007 | |||
|
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
|
||||
| /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | ||||
|
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
|
||||
|
Date:
|
October 19, 2007 | |||
Page
25 of
26
|
Schedules
|
|
|
Schedule
3.03
|
- Capitalization
of Company
|
|
Schedule
3.06
|
- Financial
Statements
|
|
Schedule
3.10
|
- Licenses
and Permits
|
|
Schedule
3.11
|
- Assets
|
|
Schedule
3.12
|
- Insurance
Matters
|
|
Schedule
3.13
|
- Intellectual
Property
|
|
Schedule
3.14
|
- Contracts
|
|
Schedule
3.19
|
- Tax
Matters
|
|
Schedule
3.21
|
- Employee
Benefit Plans
|
|
Schedule
3.24
|
- Bank
Accounts
|
|
Schedule
3.27
|
- Product
Warranty
|
|
Schedule
3.28
|
- Inventory
|
|
Schedule
3.29
|
- Accounts
Payable and Receivable
|
|
Exhibits
|
|
|
Exhibit
3.15
|
Commercial
Lease
|
|
Exhibit
3.18
|
Union
Contract
|
|
Exhibit
5.01(a)
|
Non-Competition
Agreement - ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
|
|
Exhibit
5.01(d)
|
Consulting
Agreement - ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
|
|
Exhibit
6.01(d)
|
Form
of Opinion Letter
|
|
Exhibit
6.02
|
Shareholders’
Closing Certificate
|
|
Exhibit
7.01
|
Purchaser’s
Closing Certificate
|
Page
26 of
26