ASSET PURCHASE AGREEMENT
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AGREEMENT made this 2nd day of June, 1995, by and among Modine
Manufacturing Company, a Wisconsin corporation (hereinafter referred
to as "Modine"), Modi, Inc. a Kentucky corporation (hereinafter
referred to as "Subsidiary"), and The Equion Corporation, a Delaware
corporation (hereinafter referred to as "Seller").
WHEREAS, Seller desires to sell and Modine, through Subsidiary,
a wholly-owned subsidiary of Modine, desires to purchase all of the
business and substantially all of the property, rights and assets of
Signet Systems, Inc., a division of Seller;
WHEREAS, contemporaneously herewith, Seller, Modine and
Subsidiary are entering into a Stock Purchase Agreement (the
"AutoAir Agreement") pursuant to which Modine or Subsidiary has
agreed to purchase eighty percent (80%) of the outstanding stock
of Signet AutoAir Klimaanlagen GmbH, a German corporation
("AutoAir"). The AutoAir Agreement will be in the form attached
hereto as Exhibit I and shall provide for the transfer of the
stock pursuant to German laws and other provisions specific to
the sale of AutoAir.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and conditions set forth in this Agreement,
Modine, Subsidiary and Seller agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms. As used in this Agreement, the
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following terms shall be defined as set forth below.
(a) "Purchased Business" shall, in general, mean all of
the business and assets of The Equion Corporation's Signet
Systems, Inc. division, including, but not limited to,
( i) Property and Plant thereon, known as "The
Harrodsburg Plant" located in Harrodsburg, State of
Kentucky; and
(ii) all of Seller's right, title and
interest in the "Purchase Agreement for an Enterprise"
effective September 1, 1994 between AutoAir, a
partially owned subsidiary of Seller and the sellers of
the business thereunder and the note and obligations
related thereto (the "AutoAir Contract").
The term "Purchased Business" does not include the
AutoAir stock (and business) which is the subject of the
AutoAir Agreement.
(b) "Seller's Real Estate Leases" shall mean those
certain real estate leases (including any applicable options
or extensions), all as specifically set forth in Schedule D
to this Agreement, pertaining to the manufacturing
facilities, warehouse facilities, and office facilities of
which the specific rights, duties and obligations of Seller
as lessee thereunder are to be assigned to Subsidiary.
(c) "Purchase Price" shall mean the purchase price for
the Purchased Business as set forth in and adjusted in
accordance with Section 2.3.
(d) "Purchased Assets" shall mean all of the assets
required for the operation of the Purchased Business
including those assets specifically set forth in the Pro
Forma Balance Sheet or Schedule D to this Agreement relating
to the assets of the manufacturing facilities, warehouse
facilities or office facilities.
(e) "Pro Forma Balance Sheet" shall mean that certain
unaudited pro forma balance sheet entitled "Signet Systems
and Signet AutoAir Combined Balance Sheet" dated as of April 7,
1995 attached hereto as Schedule A.1 and specifically the
projected July 31, 1995 balance sheet in such document.
(f) "Final Balance Sheet" has the meaning set forth in
Section 2.3(c).
(g) "Interim Balance Sheet" shall mean a statement of
assets and liabilities of the Signet Systems, Inc. division
(excluding intercompany accounts and all cash except the
restricted cash account balances of the Ford Motor Company
warranty bank accounts) prepared as of May 31, 1995 by
Seller using the same methods of valuation as used by Seller
in its July 31, 1994 audited financial statements which
statement shall also include a separate statement of
Seller's investment in AutoAir as of May 31, 1995. The
inventory in such statement, based upon the results of a
physical inventory and valuation analysis in accordance with
generally accepted accounting principles as consistently
applied by the Seller shall be audited by KPMG Peat Marwick
subject to control and observation by Modine's auditors.
Accounts receivable shall be valued in accordance with
generally accepted accounting principles as consistently
applied by the Seller and shall be audited by KPMG Peat
Marwick subject to control and observation by Modine's
auditors. All other assets and liabilities will be subject
to review by KPMG Peat Marwick and Modine's auditors.
ARTICLE II
EXCHANGE OF PROPERTY FOR CASH AND A NOTE
Section 2.1 Purchased Business and Purchased Assets. Upon
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and subject to the terms and conditions hereinafter stated,
Subsidiary shall acquire from Seller and Seller shall transfer,
convey and assign to Subsidiary in exchange for cash and certain
notes of Modine and the assumption by Subsidiary of certain
liabilities, as hereinafter specified, all of the business,
properties, rights and assets of the Purchased Business of every
kind and nature, wherever situated, including, without limiting
the generality of the foregoing, its business as a going concern, the
right to use the "Signet" name and any other trademarks, and trade
names, its accounts receivable, bank accounts, advances, deposits,
claims of all kinds, rights under contracts (including, but without
limitation, the AutoAir Contract), fixtures, materials, prepaid
expenses, insurance policies (to the extent such insurance policies
relate solely to the Purchased Business), and all books and records
of the Purchased Business with the exception of originals of
accounting and financial work papers, all as the same shall exist
on the Closing Date; provided, that Seller shall retain its
corporate franchise, its remaining businesses, and its rights under
this Agreement. Such business, properties, rights and assets of the
Purchased Business intended to be transferred to Subsidiary pursuant
hereto shall be conveyed, assigned and transferred by appropriate
instruments, the form and execution of which shall be subject to the
approval of Modine's counsel.
Section 2.2 Seller to Retain its Corporate Books. Seller
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shall retain its corporate shareholder and Board of Directors
minute books. Modine shall retain the books and records
transferred hereunder for a period of at least seven (7) years
and shall make such books and records available to persons
authorized by Seller at all reasonable times.
Section 2.3 Payment. (a) Upon and subject to the terms and
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conditions stated in this Agreement, Modine shall pay to Seller
for the business and assets being purchased pursuant to this
Agreement and the stock of AutoAir being purchased under the
AutoAir Agreement, the aggregate sum of $54,000,000 (the
"Preliminary Purchase Price") as adjusted pursuant to Section
2.3(b). The sum shall be allocated as follows:
PRELIMINARY
PURCHASED COMPONENT PURCHASE PRICE NET ASSET VALUE
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Assets - Signet $50,483,000* $21,513,000*
Stock - AutoAir $ 3,517,000 $ 3,517,000
TOTAL $54,000,000 $25,030,000
*Adjusted upward by the amount of the Worker's Compensation
reserve set forth on the Pro Forma Balance Sheet.
(b) The Preliminary Purchase Price will be adjusted
dollar for dollar to the extent that the net assets shown on
the Final Balance Sheet (which is comparable to the "total
equity" entry on the Pro Forma Balance Sheet) (the "Final
Total Equity") varies from the pro forma "total equity" for
July 31, 1995 set forth on the Pro Forma Balance Sheet as
adjusted in accordance with the following sentence. The pro
forma "total equity" for July 31, 1995 shown on the Pro
Forma Balance sheet is adjusted to $21,513,000 ($23,415,000
less $2,902,00 cash plus $1,000,000 Ford Motor Company
deposit), without taking into account the net asset value of
AutoAir stock, and net advances to AutoAir, of $3,517,000.
The Preliminary Purchase Price as adjusted is hereinafter
referred to as the "Purchase Price."
(c) For purposes of calculating the adjustments to the
Preliminary Purchase Price pursuant to the foregoing
provisions, within sixty (60) calendar days of the Closing
Date, Seller will deliver to Modine a report of KPMG Peat
Marwick as to a statement of assets and liabilities of the
Signet Systems, Inc. division (excluding intercompany
accounts and all cash except the account balances of the
Ford Motor Company warranty accounts) and a statement of
Seller's investment in AutoAir each as of July 31, 1995
(collectively, the "Provisional Closing Balance Sheet")
prepared based upon the audited combining financial
statements of Seller using the physical inventory of Signet
System's assets taken in connection with the Interim Balance
Sheet rolled forward to July 31, 1995. In connection with
the preparation of such report, Modine and Subsidiary shall
cooperate with Seller and KPMG Peat Marwick and provide all
statements, work papers and personnel necessary to complete
such audit. Such statements shall be prepared in accordance
with generally accepted accounting principles as
consistently applied by the Seller. During the thirty (30)
calendar days immediately following Modine's receipt of the
Provisional Closing Balance Sheet, Modine and its
representatives and auditors shall be entitled to review the
Provisional Closing Balance Sheet and Seller's working
papers relating thereto. The Provisional Closing Balance
Sheet shall become final and binding upon the parties on the
thirtieth (30th) calendar day following its delivery, unless
Modine gives written notice to Seller of its disagreement
with the Provisional Closing Balance Sheet and such
calculations ("Notice of Disagreement") prior to such date.
If a timely Notice of Disagreement is received by Seller
with respect to the Provisional Closing Balance Sheet, then
such Provisional Closing Balance Sheet (as revised in
accordance with clause (x) or (y) below) shall become final
and binding upon the parties on the earlier of (x) the date
the parties resolve in writing any differences they have
with respect to any matter specified in a Notice of
Disagreement or (y) the date any matters properly in dispute
are finally resolved in writing by the Accounting Firm (as
defined below). During the ten (10) calendar days
immediately following the delivery of any Notice of
Disagreement, Modine and Seller shall seek in good faith to
resolve in writing any differences which they may have with
respect to any matter specified in such Notice of
Disagreement. During such period, each party shall have
access to the other party's working papers prepared in
connection with the other party's preparation of a Notice of
Disagreement. At the end of such 10-day period, Modine and
Seller shall submit to the Accounting Firm for review and
resolution any and all matters that remain in dispute and
which were properly included in any Notice of Disagreement,
and the Accounting Firm shall reach a final, binding
resolution of all matters which remain in dispute. The
Provisional Closing Balance Sheet, with such adjustments
necessary to reflect the Accounting Firm's resolution of the
matters in dispute, shall become final and binding on Modine
and Seller on the date the Accounting Firm delivers its
final resolution to the parties. Upon the final and binding
determination of the Provisional Closing Balance Sheet as
set forth above, the Provisional Closing Balance Sheet shall
become the "Final Balance Sheet." The Accounting Firm shall
be Ernst & Young, or if such firm is unable or unwilling to
act, such other nationally recognized independent public
accounting firm as shall be agreed upon by the parties
hereto in writing. The cost of any review or arbitration
(including the fees and expenses of the Accounting Firm)
pursuant to this Section 2.3(c) shall be borne 50% by Modine
and 50% by Seller.
(d) Payment of the Purchase Price shall be made as
follows:
( i) On the Closing Date Modine shall pay to
Seller Forty-nine Million Dollars ($49,000,000*) in
cash;
*Adjusted upward by the amount of the Worker's
Compensation reserve set forth on the Pro Forma Balance
Sheet.
( ii) On the Closing Date Modine shall
deliver to Seller two duly executed non-negotiable
promissory notes (Exhibits II and IIA) each for Two
Million Five Hundred Thousand ($2,500,000) (the
"Notes"), which shall bear interest on the unpaid
principal sum outstanding from time to time at the prime
rate as adjusted from time to time utilized by Modine's
prime lender, the M&I Xxxxxxxx & Xxxxxx Bank, Milwaukee,
Wisconsin. Specifically, the principal amount of each
note shall be due and payable as follows:
(A) The first of said notes shall be due
and payable on July 31, 1996; and
(B) The second of said notes shall be due
and payable on July 31, 1997.
Payment of the Modine Indemnified Costs (as defined
in Section 7.1) may be setoff against the obligations
of Modine under one or both of said Notes in accordance
with provisions as set forth in Article 7.
(iii) Within ten (10) calendar days of the
determination of the Final Balance Sheet, if the Final
Total Equity without taking into account the net
investment in AutoAir stock as determined in accordance
with the AutoAir Agreement is greater than $21,513,000,
Modine shall pay the difference to Seller in cash; and
( iv) Within ten (10) calendar days of the
determination of the Final Balance Sheet, if the Final
Total Equity without taking into account the net
investment in AutoAir stock as determined in accordance
with the AutoAir Agreement is less than $21,513,000,
the Seller shall pay the difference to Modine in cash.
Section 2.4 Liabilities Assumed and Liabilities Not Assumed.
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In addition to the payment as provided in Section 2.3 above, Modine
shall also assume and agree to pay, perform and discharge in the
normal course of business and in a timely fashion all of the debts,
obligations and liabilities of the Purchased Business (except for any
bank overdrafts, loans, intracompany or other, which shall not be
assumed) as the same shall exist at the Closing Date except that
Modine shall not assume:
(a) Any liability of the Purchased Business which is
not (i) reflected in the Final Balance Sheet or (ii)
disclosed in writing to, and assumed in writing by, Modine
prior to the Closing Date;
(b) Any liability of Seller incurred in connection with
this Agreement or the transactions contemplated herein
including, but without limitation, liabilities for
compensation and expenses of counsel and independent
accountants; or
(c) Any liability of Seller arising from any transaction
subsequent to the Closing Date and including, without
limiting the generality of the forgoing, any liability for
federal or state income or other taxes in the nature thereof.
In addition, Modine shall assume all of the obligations of
Seller under that certain loan dated as of September 1, 1994 of
Seller to X. Xxxxxxx and the other former owners of AutoAir.
Section 2.5 Assignment of Material Contracts. Seller shall
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obtain, in all cases of material non-assignable contracts and
rights and of all material contracts involving credits for
purchases by the Purchased Business of products, materials and
supplies, the consent of the other party or parties thereto to
the assignment of such contracts and rights to Subsidiary.
Section 2.6 Signet Systems Inc. Name. Seller agrees that
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it shall file promptly after Closing the necessary documents with
the Kentucky Secretary of State's Office transferring the Signet
Systems, Inc. name, and further agrees that it shall not operate
an active business under the firm name and style of "Signet
Systems, Inc." from the Date of Closing.
ARTICLE III
CLOSING
Section 3.1 Place of Closing. The Closing of this
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Agreement and all deliveries hereunder shall take place at the
offices of The Equion Corporation, 000 Xxxx Xxxx Xxxxxx, Xxxxx
000, Xxxxxxxxx, Xxxxxxxx unless the parties hereto mutually agree
upon a different place.
Section 3.2 Time of Closing. The "Closing Date" or "Date
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of Closing" means the time at which Seller makes the conveyance
provided for in Article II hereof against delivery of cash and
the notes as provided in such Article which shall occur on July
31, 1995. The "Document Closing" shall be July 14, 1995 at ten
o'clock a.m. (10:00 a.m.), Eastern time; provided, however, that
it may be at such other place and time as shall be mutually
agreed upon by the parties hereto but no later than July 31,
1995. At the Document Closing, all conditions to closing shall
have been completed or waived and the only remaining conditions
shall be payment of the Purchase Price and delivery of the
conveyance documents.
Section 3.3 Closing Escrow. All of the closing documents
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in connection with the transaction, including the Notes, any
bills of sale, conveyances or title transfer documents, and all
certificates, instruments and agreements in connection with the
consummation of the transaction shall be executed on the Document
Closing effective as of the Closing Date. All such documents and
the purchase price shall be held in escrow pending the Closing
Date. The Escrow Agreement is attached hereto as Exhibit III.
Section 3.4 Failure to Close. If, by July 14, 1995, Modine
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and Subsidiary fail to perform all of their respective
obligations and agreements and comply with all covenants and
conditions contained in this Agreement to be performed or
complied with by them at or prior to the Closing Date (other than
(a) the payment of consideration which may occur after the
Document Closing but on or prior to July 31, 1995, (b) delays
occasioned solely by the action or inaction of the Seller, or (c)
delays resulting from the Department of Justice or Federal Trade
Commission review of the Notification and Report Form for Certain
Mergers and Acquisitions filed by either the Seller or Modine),
Modine shall pay an additional $1,000,000 in cash to Seller for
the purchase price of the Purchased Business.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF XXXXXX
Xxxxxx represents and warrants to Seller as follows:
Section 4.1 Corporate Organization. Modine is a
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corporation duly organized, validly existing and in good standing
under the laws of the State of Wisconsin and has all requisite
corporate power to perform its obligations under said Agreement.
Section 4.2 Authorization of Agreement. The execution and
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delivery of this Agreement and the Notes described in Section
2.3(d) and the performance by Modine of its obligations hereunder
and thereunder and the transactions contemplated herein have been
duly authorized.
Section 4.3 Effect of Agreement. The execution,
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delivery and performance of this Agreement and the Notes
described in Section 2.3(d) and the transactions contemplated
hereby will not, with or without the giving of notice and/or the
passage of time, (i) violate any provision of law applicable to
Modine which violation would have a material adverse effect on
the ability of Modine to perform its obligations under this
Agreement and the Notes or (ii) conflict with, or result in the
breach or termination of any provision of, the articles of
incorporation or by-laws of Modine, or (iii) conflict with, or
result in the breach or termination of any provision of, or
constitute a default under, or result in the creation of any
lien, charge or encumbrance upon any of the properties or assets
of Modine pursuant to any indenture, mortgage, deed of trust or
other instrument or agreement to which Modine is a party or by
which it or any of its properties or assets may be bound which
conflict, breach, termination, default, lien, charge or
encumbrance would have a material adverse effect on the ability
of Modine to perform its obligations under this Agreement and the
Notes.
Section 4.4 Brokerage. Modine has not incurred any
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obligation or liability, contingent or otherwise, for brokerage
or finders' fees or agents' commissions in connection with this
Agreement or the transactions contemplated hereby.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SUBSIDIARY
Subsidiary represents and warrants to Seller as follows:
Section 5.1 Corporate Organization. Subsidiary is a
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corporation duly organized, validly existing and in good standing
under the laws of the state of Kentucky and has all requisite
corporate power to perform its obligations under this Agreement.
Section 5.2 Authorization of Agreement. The execution and
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delivery of this Agreement and the performance by Subsidiary of
the transactions contemplated herein have been duly authorized.
Section 5.3 Effect of Agreement. The execution, delivery
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and performance of this Agreement and the transactions
contemplated hereby will not, with or without the giving of
notice and/or the passage of time, (i) violate any provision of
law applicable to Subsidiary which violation would have a
material adverse effect the ability of Subsidiary to perform its
obligations under this Agreement or (ii) conflict with, or result
in the breach or termination of any provision of, the articles of
incorporation or by-laws of Subsidiary, or (iii) conflict with,
or result in the breach or termination of any provision of, or
constitute a default under, or result in the creation of any
lien, charge or encumbrance upon any of the properties or assets
of Subsidiary pursuant to any indenture, mortgage, deed of trust
or other instrument or agreement to which Subsidiary is a party
or by which it or any of its properties or assets may be bound
which conflict, breach, termination, default, lien, charge or
encumbrance would have a material adverse effect on the ability
of Subsidiary to perform its obligations under this Agreement and
the Notes.
Section 5.4 Brokerage. Subsidiary has not incurred any
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obligation or liability, contingent or otherwise, for brokerage
or finders' fees or agents' commissions in connection with this
Agreement or the transactions contemplated hereby.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Modine and Subsidiary as
follows:
Section 6.1 Incorporation, Good Standing, Power, Etc.
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Seller is a corporation duly organized, validly existing and in
good standing under the laws of the state of Delaware and has all
requisite corporate power to own, lease and operate its property
and to carry on its business as now being conducted.
Section 6.2 Authorization of Agreement. The execution and
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delivery of this Agreement and the performance by Seller of the
transactions contemplated herein have been duly authorized.
Section 6.3 Effect of Agreement. Except as set forth on
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Schedule L (which Schedule shall also set forth a method of
compliance), the execution, delivery and performance of this
Agreement and the transactions contemplated hereby will not, with
or without giving notice and/or the passage of time, (i) violate
any provision of law applicable to the Purchased Business which
violation would have a material adverse effect on the business or
financial condition of the Purchased Business or the ability of
Seller to perform its obligations under this Agreement or (ii)
conflict with, or result in the breach or termination of any
provision of, the certificate of incorporation or by-laws of
Seller, or (iii) conflict with, or result in the breach or
termination of any provision of, or constitute a default under,
or result in the creation of any lien, charge or encumbrance upon
any of the properties or assets of the Purchased Business
pursuant to any indenture, mortgage, deed of trust or other
instrument or agreement to which Seller is a party or by which it
or any of the Purchased Business's properties or assets may be
bound which conflict, breach, termination, default, lien, charge
or encumbrance would have a material adverse effect on the
business or financial condition of the Purchased Business or the
ability of Seller to perform its obligations under this
Agreement.
Section 6.4 Financial Statements. Attached hereto as
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Schedule A.1 is the Pro Forma Balance Sheet of the Purchased
Business as projected to July 31, 1995. The Pro Forma, Interim
and Final Balance Sheets have been or will be prepared in
accordance with generally accepted accounting principles
consistently applied when determining the account balances of
assets and trade liabilities and accruals included or to be
included and are or will be correct and complete and fairly
present the financial condition of the Purchased Business as at
April 7, 1995 projected to July 31, 1995; as at May 31, 1995
(Schedule A.2); and as at July 31, 1995 (Schedule A.3),
respectively, except as otherwise indicated in the accompanying
accountant's notes.
Section 6.5 Absence of Undisclosed Liabilities. The Pro
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Forma, Interim and Final Balance Sheets make or will make full
and adequate provision for all obligations and liabilities, fixed
or contingent, of the Purchased Business as of their respective
dates, and at those dates, the Purchased Business did not have
any obligations or liabilities, fixed or contingent, not
reflected in said Balance Sheets or disclosed in Schedules A.1,
A.2, or A.3. or otherwise assumed in writing by Modine or
Subsidiary.
Section 6.6 Absence of Certain Changes or Events. Except
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as set forth on Schedule B hereto, Seller has not with respect to
the Purchased Business, since April 7, 1995 (a) discharged or
satisfied any material lien or material encumbrance or paid any
material obligation or liability, fixed or contingent, to its
shareholders or to any affiliated company; (b) mortgaged, pledged
or subjected to material lien or to any other material
encumbrance any of its assets or properties; (c) sold,
transferred or leased any of the Purchased Assets, other than the
sale of inventory or property in its usual course of business or
other sale, transfer or lease which is not material to the
Purchased Business; (d) canceled or compromised any material debt
or material claims; (e) waived or released any rights of material
value under any leases, agreements, patents, trademarks or trade
names or with respect to know-how; (f) entered into any
employment contract with any officer, employee or agent or paid
any bonus or special compensation to any officer, employee or
agent; (g) made any loans or advances to any officer, employees
or agents other than advances for travel and other expenses; (h)
suffered any material adverse changes in financial condition,
assets, properties or business; or (i) entered into any
transaction not in the ordinary course of business which would
have a material adverse effect on the financial or other
condition of the Purchased Business.
Section 6.7 Tax Matters. With respect to the Purchased
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Business Seller has prepared and filed with the appropriate
federal, state and local governmental agencies all tax returns
required to be filed, and has paid, or made provisions for the
payment of, all taxes which have or may become due pursuant to
said tax returns or pursuant to any assessments received by it.
The amount provided for income taxes in the Final Balance Sheet
will be sufficient for all accrued and unpaid taxes, whether or
not disputed, for the period ended on the date of the Final
Balance Sheet. Seller has filed all appropriate tax returns with
respect to the Purchased Business for all prior years and has
paid all taxes due in accordance with applicable law and is not
aware of any investigation or disputes over the amount of taxes
paid with respect to the Purchased Business. Seller has not
executed or filed with any tax authority any agreement extending
the period for assessment or collection of any income taxes with
respect to the Purchased Business. Seller is not a party to any
pending action or proceedings by any governmental authority for
assessment or collection of taxes with respect to the Purchased
Business, nor has any claim for assessment or collection of taxes
with respect to the Purchased Business been asserted against it.
Section 6.8 Title to Properties, Absence of Liens and
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Encumbrances. Except as specifically disclosed in Schedule C
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hereto, Seller has good and marketable title to all of the
Purchased Assets (including the properties and assets reflected
in the Pro Forma Balance Sheet), free and clear of all claims,
liens, charges, encumbrances, restrictions on transfer and
defects of any nature whatsoever except where such claims, liens,
charges, encumbrances, restrictions or transfer and defects would
not have a material adverse effect, either individually or in the
aggregate, on the Purchased Business.
Section 6.9 List of Documents; No Default. Annexed hereto
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as Schedule D is a true and complete list, including a brief
description, of the following:
(a) All personal property (including machinery and equipment)
owned by Seller with respect to the Purchased Business;
(b) All policies of insurance (with a notation of the
premiums paid thereon) owned by Seller with respect to the
Purchased Business or in which Seller is named as a
beneficiary;
(c) Each contract, agreement, license, lease,
commitment, and understanding to which the Purchased
Business is bound which either (i) (1) involve payment by
the Purchased Business of more than $50,000 and (2) extend
(without right of termination by the Purchased Business)
more than one (1) year from the date hereof, including
contracts or commitments in the ordinary course of business,
or (ii) personal service contracts not terminable by the
Purchased Business on 30 days' notice, other than those
listed and described pursuant to other sub-paragraphs of
this Section 6.9;
(d) All collective bargaining agreements (if any),
contracts with labor unions, employment and consulting
agreements, executive compensation agreements, employee
pension plans, or retirement plans, employee profit sharing
plans, employees' stock purchase and stock option plans,
hospitalization insurance, retiree health plans, and other
plans and agreements providing for employee benefits to
which the Purchased Business is a party;
(e) The names of all retired employees, if any, of the
Purchased Business who are receiving or are entitled to
receive any payments not covered by a pension plan of Seller
or any union pension plan related to a collective bargaining
agreement to which Seller is a party, their ages and their
current annual unfunded pension benefits;
(f) The name of each bank in which the Purchased
Business has an account or safety deposit box and the names
of all persons authorized to draw thereon or have access
thereto;
(g) The name of each stock brokerage firm, if any, in
which the Purchased Business has an account, the names of
all persons authorized to purchase and sell securities
through such account, and a description of the securities
held therein; and
(h) The names, and the related amounts of any person to
which the Purchased Business is presently indebted who is a
shareholder, officer, or director of Seller, or their
respective spouses or children.
True and complete copies of the documents referred to in Schedule
D have been delivered to Modine; except as set forth in Schedule
D hereto, all of the rights, contracts, agreements, licenses,
leases, commitments and understandings set forth therein are
valid and enforceable in accordance with their respective terms
for the period stated therein except where such validity or
enforceability will not have a material adverse effect on the
Purchased Business; and neither Seller nor any other party
thereto or bound thereby is in default of the performance of its
respective obligations thereunder except where a default does not
have a material adverse effect on the Purchased Business, except
as otherwise set forth in Schedule D hereto.
Section 6.10 Litigation. Except as set forth and fully
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described in Schedule E hereto, there are no claims, actions,
suits, proceedings or investigations pending, nor, to the
knowledge of Seller threatened against or relating to the
Purchased Business or its assets or properties, or in any way
involving this Agreement or the transactions contemplated hereby,
nor is there any basis known to Seller for any such claim, action,
suit, proceeding or investigation. There is no order, decree or
judgment of any kind in existence enjoining or restraining Seller,
or any of its officers or employees, from taking any action of any
kind with respect to the Purchased Business, nor is Seller in
default with respect to any order, judgment, writ, injunction or
decree of any governmental agency or instrumentality with respect
to the Purchased Business. Seller has not waived any statute of
limitations with respect to any of its liabilities with respect
to the Purchased Business, including any liability for any taxes,
(whether income, excise or other).
Section 6.11 Books and Records. The books and records of
-----------------
the Purchased Business are in all material respects complete and
correct, have been maintained in accordance with generally
accepted accounting principles consistently applied and good
business practice and accurately reflect the results of
operations of the Purchased Business as set forth in the
financial statements referred to in Section 6.4 hereof. Modine
may examine such books and records at such times as it may
reasonably request.
Section 6.12 Other Information. Neither this Agreement nor
-----------------
the Schedules hereto contain any information which is false or
misleading or contains any material misstatement of fact or omits
to state any material fact required to be stated to make the
statement therein not false or misleading.
Section 6.13 Brokerage. Except as set forth in Schedule F
---------
hereto, Seller has not incurred any obligation or liability,
contingent or otherwise, for brokerage or finders' fees or
agents' commissions in connection with this Agreement or the
transactions contemplated hereby.
Section 6.14 Future Conduct of Business. Except as set
--------------------------
forth in Schedule G, Seller does not know of any present
condition which would materially adversely affect the Purchased
Business from being carried on in essentially the same manner as
it is now being conducted, provided, however that,
notwithstanding any of the foregoing representations and
warranties or any other representation or warranty contained in
this Agreement, Seller does not make any representation or
warranty as to (i) any forecasts or projections of future
performance of the Purchased Business; (ii) the impact of any
seasonal or climate changes on the Purchased Business; (iii) the
effect of changes in general economic conditions on the Purchased
Business; (iv) the effect of any changes in the automotive or
related industries on the Purchased Business; or (v) the future
profitability of the Purchased Business under new ownership.
Section 6.15 Patents, Trademarks, Copyrights and Trade
-----------------------------------------
Names. Schedule H is a true and correct list of patents,
-----
trademarks, copyrights and trade names (and any applications
therefor), registered to Seller in regard to the Purchased
Business and the validity of such patents, trademarks, copyrights
and trade names, and the title thereto, has not been questioned
in any litigation to which Seller is a party or, to the knowledge
of Seller in any threatened litigation.
To the knowledge of Seller, no use of any patent, trademark,
copyright and trade name owned by Seller in regard to the
Purchased Business has heretofore been or is now being made,
except by Seller or by an entity duly licensed by Seller to use
the same under an agreement disclosed in Schedule D. Seller owns
all patents, trademarks, trade names and copyrights necessary to
the conduct of the Purchased Business as now being conducted or
presently proposed to be conducted without known conflict with
rights of others.
Section 6.16 Compliance with Applicable Laws. The conduct
-------------------------------
by Seller of the Purchased Business does not violate or infringe
any federal, state, or local law, statute, ordinance or
regulation (other than any environmental law or regulation which
is the subject of Section 6.17), but including any right,
concession, patent, trademark, trade name, copyright, know-how or
other proprietary right of others, the enforcement of which would
materially adversely affect the Purchased Business or the value
of its properties or assets; to its knowledge, Seller is in a
position to comply with all applicable existing federal, state,
and local laws heretofore enacted which may become effective
hereafter with respect to the Purchased Business, without
affecting the business of or the value of the Purchased Business.
Section 6.17 Environmental Matters. Except as disclosed on
---------------------
Schedule I hereto, for which full and complete reserves have been
or will be established, Seller has obtained and operated the
Purchased Business in compliance with all federal, state, and
local environmental laws and permits, the failure to comply with
which would result in a material adverse effect on the Purchased
Business. Except as disclosed on Schedule I hereto, for which
full and complete reserves have been or will be established,
there are no environmental claims, actions, suits, proceedings or
investigations pending, nor to the knowledge of Seller,
threatened against or relating to Seller or the business defined
by the term Purchased Assets, nor is there any basis known to
Seller for any such environmental claim, action, suit, proceeding
or investigation. Except as disclosed on Schedule I hereto, for
which full and complete reserves have been or will be
established, there is no order, decree, or judgment pertaining to
any environmental matters in existence enjoining or restricting
the use or operation of the Purchased Business, nor is Seller in
default for noncompliance with respect to any order, judgment,
writ, injunction, or decree of any governmental agency or
instrumentality pertaining to environmental matters. Seller is
not presently aware of any circumstances which may give rise to
future environmental liabilities with respect to the Purchased
Business. Seller has not waived in writing any statutes of
limitation with respect to any environmental liabilities
regarding Purchased Business.
Section 6.18 Machinery and Equipment. All machinery and
-----------------------
equipment owned by Seller and defined by the term Purchased Business
is in substantially the same condition and repair as it was when
inspected by the representatives of Modine on April 5, 1995,
ordinary wear and tear and ordinary capital improvements excepted.
Section 6.19 Labor Disputes. With respect to the Purchased
--------------
Business, to Seller's knowledge Seller is in compliance with all
federal and state laws respecting employment and employment
practices, terms and conditions of employment, wages and hours,
and is not engaged in any unfair labor practice; there is no
pending unfair labor practice complaints against Seller with
respect to the Purchased Business; there is no labor strike or
other material labor disturbance pending or to Seller's knowledge
threatened against or affecting the Purchased Business; no union
representation question exists respecting the employees of the
Purchased Business; no grievance which might have a material
adverse affect on the Purchased Business or the conduct of its
business; and no arbitration proceeding arising out of collective
bargaining agreements are pending and no claim therefor exists.
Section 6.20 Inventory, Accounts Receivable
------------------------------
(a) All inventory of the Purchased Business to be
reflected on the Interim and Final Balance Sheets will
consist solely of items of merchantable quality, saleable at
regular price in the ordinary course of business (with a due
allowance for excess and obsolete inventory based upon a
valuation analysis in accordance with generally accepted
accounting principles consistently applied by Seller) and
will be carried on the books of the Purchased Business at
the lower of cost or market.
(b) The accounts receivable of the Purchased Business to
be reflected on the Interim and Final Balance Sheets will be
bona fide accounts receivable, fully collectible at their
face amounts less the specified reserve for bad debt
reflected in said Balance Sheets.
Section 6.21 Purchase Obligations. Each unfilled purchase
--------------------
order and each other commitment for purchases made by the
Purchased Business was made in the usual and ordinary course of
business as the result of genuine arms-length bargaining and,
except as to purchase commitments listed on Schedule D hereto,
there are no such purchase orders or commitments that call for
deliveries thereunder beyond a period of one (1) year from the
date hereof and require payment by the Purchased Business after
the Closing Date in excess of $50,000.
Section 6.22 Employee Benefit Plans; ERISA. With respect
-----------------------------
to the Purchased Business there are no employee pension and
welfare benefit plans, as defined in Sections 3(1) and 3(2) of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA") maintained by the Seller, other than those described in
Schedule D ("Benefit Plans").
With respect to each Benefit Plan and except as provided on
Schedule D: (i) If intended to qualify under Section 401(a) or
403(a) of the Code such plan so qualifies in all material
respects and its trust is exempt from taxation under Section
501(a) of the Code; (ii) such plan has been administered and
enforced in accordance with its terms and applicable law in all
material respects; (iii) no material breaches of fiduciary duty
have occurred; (iv) no material disputes are pending or to
Seller's knowledge, threatened; (v) no non-exempt prohibited
transaction has occurred for which the Seller would incur a
material liability; (vi) no reportable event has occurred for
which the thirty-day notice requirement has not been waived and
for which the Seller would incur a material liability; (vii) all
required contributions and premiums due have been made on a
timely basis (including, where applicable, the extension of time
established under Section 412 of the Code and regulations
thereunder); and (viii) all legally required contributions and
premiums necessary to fund for all current and future benefits of
current employees, retirees and beneficiaries, have been paid
(including any retiree or beneficiary welfare benefits). All
contributions made or required to be made under any Benefit Plan
treated as funded for federal income tax purposes meet the
requirements for deductibility under the Code, and all
contributions which have not been made have been properly
recorded on the books of Seller.
Except as set forth in Schedule D, no Benefit Plan is a
multiemployer plan (as defined in Section 4001(a)(3) of ERISA) or
a multiple employer plan (within the meaning of Section 413(c) of
the Code).
With respect to each Benefit Plan which is subject to Title
IV of ERISA, neither Seller nor any Benefit Plan has incurred or
is expected to incur, directly or indirectly, any actual or
contingent liability arising from plan termination or withdrawal
to the Pension Benefit Guaranty Corporation or otherwise.
With respect to each Benefit Plan, and to the extent
applicable, Seller has delivered to Modine accurate and complete
copies of: all plan texts and agreements, all summary plan
descriptions and summaries of material modifications; the most
recent annual reports and all other reports filed with the
Department of Labor pursuant to ERISA; the most recent annual and
periodic accountings of plan assets; the most recent
determination letters received from the Internal Revenue Service;
and the most recent actuarial valuations.
Section 6.23 Customers. Except as set forth in Schedule J,
---------
since January 1, 1995, no customer of Seller has advised Seller
in writing of its intention to cancel a blanket purchase order
for products of the Purchased Business; provided, that Modine
acknowledges that the Purchased Business receives changes in the
purchase orders from customers on a monthly basis which may vary
up or down from orders made in the previous month and with
respect to which Seller makes no representations or warranties.
Section 6.24 Computer Programs, Databases and Software.
-----------------------------------------
Seller owns or has the right to use pursuant to lease or license
computer programs, databases and software which, in the
aggregate, are sufficient and adequate to operate the Purchased
Business. Seller is in compliance with all material terms of
such leases or licenses.
Section 6.25. Product Warranty. Schedule K is a complete
----------------
list of the Purchased Business's warranty programs (the "Warranty
Programs") and the documents related to the Warranty Programs.
The warranty reserves for the Warranty Programs (the "Warranty
Reserves"), as set forth in the books and records of the
Purchased Business and reflected in the Pro Forma Balance Sheet
(and to be reflected in the Interim and Final Balance Sheet), are
and will be adequate based on historical warranty costs and
expenses of the Purchased Business. The Warranty Reserves have
been maintained in accordance with generally accepted accounting
principles consistently applied and good business practice. The
Purchased Business is in material compliance with its warranty
obligations as set forth in the documents listed on Schedule K.
ARTICLE VII
INDEMNIFICATION
Section 7.1 Indemnification by Seller. Seller agrees to
-------------------------
indemnify Modine and Subsidiary against and in respect of:
(a) any loss, liability or damage to Modine or
Subsidiary arising from any breach of any representation,
warranty, covenant or agreement contained herein;
(b) all obligations and liabilities of the Purchased
Business whether accrued, fixed, contingent or otherwise,
arising on or before the Final Balance Sheet date to the
extent not reflected in the Final Balance Sheet or otherwise
disclosed in the Schedules;
(c) all obligations and liabilities of, or claims
against, the Purchased Business between the Pro Forma
Balance Sheet date and the Closing Date, to the extent not
otherwise reflected in the adjustment to the Preliminary
Purchase Price pursuant to Section 2.3, except for those
arising in the ordinary course of business and except for
those disclosed pursuant to this Agreement and approved by
Modine in writing; and
(d) all reasonable costs and expenses (including
reasonable attorneys' fees) incurred in connection with any
action, suit, proceeding, demand or judgment incident to any
of the matters indemnified against in this Section 7.1.
All such losses, liabilities, damages, costs and expenses
are referred to herein as "Modine Indemnified Costs."
Section 7.2 Indemnification by Modine and Subsidiary. Each
----------------------------------------
of Modine and Subsidiary agrees to indemnify Seller against and
in respect of:
(a) any loss, liability or damage to Seller arising from
any breach of any representation, warranty, covenant or
agreement contained herein;
(b) all reasonable costs and expenses (including
reasonable attorneys fees) incurred in connection with any
action, suit, proceeding, demand or judgment incident to any
of the matters indemnified against in this Section 7.2.
All such losses, liabilities, damages, costs and expenses
are referred to herein as "Seller Indemnified Costs."
Section 7.3 Notice of Claim. If, during the term of
---------------
indemnification for any matter set forth in Section 7.4, any
party shall become aware of any state of facts which threatens to
give rise to any matter subject to indemnification pursuant to
Sections 7.1 or 7.2 hereof, such party shall send a written
notice to the other briefly setting forth such facts. Such party
shall have the right (without prejudice to the other party's
rights under this Agreement) at its sole cost and expense, to
defend against any claim giving rise to any such liability,
expense or loss, including if necessary, a defense in the name of
such party who shall cooperate with the indemnifying party in the
preparation of such defense, but shall be entitled to be
reimbursed by the indemnifying party for the out-of-pocket costs
and expenses or any liability incurred by them in connection
therewith. In the event the indemnifying party undertakes such a
defense, the indemnifying party shall be entitled to be
represented by counsel of its own choosing. A "Defense" in the
sense of the foregoing shall be deemed to include the affirmative
action for the collection of the accounts receivable referred to
in Section 6.20(b) hereof (taking into account the specified bad
debt reserve as provided herein.)
Section 7.4 Limitations on Indemnification.
------------------------------
(a) Modine's and Subsidiary's rights of indemnification
hereunder shall remain in effect until July 31, 1997, except
with respect to certain soil contamination and the
remediation thereof at the Seller's Harrodsburg, Kentucky
manufacturing plant. In regard to such contamination and
remediation, Modine shall undertake in good faith to
successfully implement the soil vapor extraction system
presently designed and contemplated for remediation. The
remediation shall be deemed to be completed when a reputable
environmental consultant selected by Modine has issued its
certification to Modine to that effect, which certification
shall be in a form reasonably satisfactory to Modine and
shall include written clearance from the appropriate
Kentucky environmental regulatory authority. In the event
such soil vapor extraction system is unsuccessful and such
certification cannot be attained, then in that event Seller
shall remain liable for such remediation as is necessary and
appropriate to achieve such certification and written
clearance. No Modine Indemnified Costs shall be payable
hereunder until all such Modine Indemnified Costs in the
aggregate exceed $50,000. In no event shall Seller be
liable for Modine Indemnified Costs in excess of
$15,000,000. Payment of the Modine Indemnified Costs may be
setoff against the obligations of Modine under the Notes in
accordance with the provisions as set forth in Section 7.6.
The threshold levels and maximum amounts of indemnification
set forth herein shall also take into account any
indemnification obligations arising under the AutoAir
Agreement.
(b) The parties hereto agree that, in relation to any
breach, default, or nonperformance of any representation,
warranty, covenant, or agreement made or entered into by a
party hereto pursuant to this Agreement or any certificate,
instrument, or document delivered pursuant hereto other than
as a result of fraud, the only relief and remedy available
to the other party hereto in respect to said breach,
default, or nonperformance shall be damages, but only to the
extent properly claimable and as limited pursuant to this
Article VII. Except where it can be shown that a party
acted in a fraudulent manner, the parties hereto also agree
that no action for termination or rescission, or claiming
repudiation, of this Agreement may be brought or maintained
by either party against the other following the Document
Closing.
Section 7.5 Product Warranty Indemnification Period.
---------------------------------------
Provided that following the closing, no material changes are made
to the warranty programs and, on an ongoing basis, Modine and
Subsidiary (i) proactively audit and administer the warranty
programs, including but not limited to auditing customer
procedures, training, activities relating to the warranty
programs, setup, account for and adjust the warranty reserves and
account for warranty costs in a manner consistent with the books
and records and practices and procedures of the Purchased
Business as of the Closing Date; (ii) follow and comply in all
material respects with warranty obligations set forth in the
documents listed on Schedule D; and (iii) use their best efforts
to adjust prices of the Purchased Business's products and take
into account actual warranty claims and costs, then Seller shall
indemnify Modine and Subsidiary for the aggregate amount by which
actual warranty costs incurred by the Purchased Business until
July 31, 1997 exceed an amount which is One hundred Thousand
Dollars ($100,000) more than the warranty reserves as shown on
the final balance sheet, provided that in no event shall Seller's
obligation to indemnify Modine and Subsidiary under this Section
7.5 exceed an aggregate of One Million Dollars ($1,000,000). Any
liability under this Section 7.5 shall be applied against the
$50,000 threshold level for indemnification generally as provided
in Section 7.4.
Section 7.6 Set-off Procedure. In the event Modine
-----------------
reasonably believes that any Modine Indemnified Costs (as defined
in Section 7.1) have arisen during the term that one or more of
the Notes are outstanding, other than those that relate to the
soil contamination and remediation thereof at Seller's
Harrodsburg, Kentucky manufacturing plant, as to which this
Section 7.6 shall not apply, Modine may pay into an interest-
bearing escrow account with a financial institution reasonably
satisfactory to it (the "Escrow Agent"), an amount equal to such
estimated Modine Indemnified Costs (the "Estimated Holdback").
Notwithstanding the maturity date of one or both of the Notes,
such Estimated Holdback shall be held in escrow by the Escrow
Agent pending resolution by binding mediation to be conducted in
accordance with the mediation provisions of Exhibit VIII annexed
hereto, of Modine's claim to indemnification pursuant to Article
VII. Any additional amounts of principal and interest coming due
on one or both of the Notes shall remain payable when due. Upon
resolution of the mediation or upon written direction of the
parties, that portion of the Estimated Holdback equal to the
actual Modine Indemnified Costs, with interest accrued thereon,
shall be returned to Modine, and the balance, with accrued
interest, shall be delivered to Equion.
ARTICLE VIII
CONDUCT OF BUSINESS - ACCESS TO INFORMATION
Section 8.1 No Material Change in Status. Seller hereby
----------------------------
agrees that from the date of April 7, 1995, pending the Closing,
and except as otherwise provided in this Agreement, consented to
by Modine in writing or disclosed in any Schedule hereto:
(a) The Purchased Business has been and shall be
conducted in the ordinary course of operation;
(b) Except as approved by Modine in writing or as set
forth in any applicable collective bargaining agreement or
other existing plans, agreements, or rights as set forth in
the Schedules to this Agreement, no increase or prepayment
shall be made in the compensation payable to or to become
payable to any officer, employee or agent, and no bonuses,
stock option, profit sharing bonuses, retirement or other
similar payment or arrangement shall be paid or made by
Seller regarding the Purchased Business;
(c) No funds shall be borrowed or loaned by Seller
regarding the Purchased Business other than in the ordinary
course of business or pursuant to Seller's line of credit
with the Bank of Boston - Connecticut; and
(d) Seller will use its best efforts to preserve the
Purchased Business's organization intact.
Section 8.2 Access to Information. From the date of
---------------------
execution by Seller of this Agreement to and including the
Closing, Seller shall, subject to notice, permit Modine and its
authorized representatives, accountants and attorneys full and
reasonable access to all records and other data relating to the
Purchased Business, as well as access to the properties and
assets of the Purchased Business and to all records and data
relating thereto. In that connection, Seller shall furnish, or
cause to be furnished, to Modine and its representatives such
financial and operating data and such other information with
respect to the Purchased Business, its properties and assets as
Modine or such representatives shall from time to time reasonably
request. With the consent and supervision of Seller, Modine and
its representatives shall be entitled to contact or communicate
with any suppliers or customers of the Purchased Business or
other persons having business dealings with the Purchased
Business provided such contact or communication is done in a
reasonably prudent manner so as not to intentionally disrupt or
disturb Seller's business relations with such suppliers,
customers or persons. All information and documents furnished to
Modine shall be kept confidential and, in the event the
transaction contemplated herein is not consummated, all such
information and documents shall be returned to Seller. All
information shall be subject to the Confidentiality Agreement
between Modine and Seller dated as of April 27, 1995.
Section 8.3 Bulk Sales Compliance. Modine and Subsidiary
---------------------
hereby waive compliance by Seller with any bulk sales acts of any
state, and other laws having a similar effect, which may apply to
the transactions contemplated by this Agreement.
Section 8.4 Employees. Seller shall terminate all
---------
employees of the Purchased Business effective immediately prior
to the Closing. Simultaneously therewith, Buyer shall make
offers of employment, subject to the Closing, to those same
employees at the same levels of compensation and benefits as
previously paid to such employees by Seller.
Section 8.5 Completion of Schedules. The parties
-----------------------
acknowledge that the Schedules annexed hereto and to the AutoAir
Agreement are substantially complete and correct in all material
respects and that additional information with respect thereto
will be provided no later than two (2) weeks from the date
hereof. Seller represents and warrants that such additional
information will not, singly or in the aggregate, render any of
the representations and warranties made by Seller as of the date
hereof incomplete, inaccurate or incorrect in any material respect.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF MODINE
All obligations of Modine, including the obligation to make
any payments pursuant to Section 2.3 are subject to the
fulfillment on or before the Document Closing of each of the
following conditions, each of which may be waived (but only by an
express written waiver) at the sole discretion of Modine:
Section 9.1 Accuracy of Representations and Warranties.
------------------------------------------
The representations and warranties of Seller herein contained
shall be true and correct in all material respects.
Section 9.2 Performance of Agreements. Seller shall have
-------------------------
performed all obligations and agreements and complied with all
covenants and conditions contained in this Agreement to be performed
or complied with by it at or prior to the Document Closing.
Section 9.3 Seller's Certificate. Seller shall have
--------------------
furnished Modine with a certificate dated the Document Closing
date to the effect that the conditions specified in Sections 9.1
and 9.2 above have been fulfilled (Exhibit IV).
Section 9.4 Actions, Proceedings, Etc. All actions,
--------------------------
proceedings, instruments and documents required to carry out the
transactions contemplated by this Agreement or incidental
thereto, to be performed or provided by Seller and all related
legal matters shall have been reasonably satisfactory to counsel
for Modine.
Section 9.5 Material Non-Assignable Contracts. Seller
---------------------------------
shall have presented evidence satisfactory to Modine that consent
has been obtained from any third party who may be a party to a
material non-assignable contract with Seller pertaining to the
Purchased Business.
Section 9.6 Complete Exhibits and Schedules. Seller shall
-------------------------------
have supplied to Modine materially complete, accurate, and
correct information required by the Exhibits and Schedules of
this Agreement.
Section 9.7 Modine's Board of Directors Approval. Modine
------------------------------------
shall have obtained approval of this Agreement by its Board of
Directors.
Section 9.8 Opinion of Counsel for Seller. Modine shall
-----------------------------
have received an opinion of counsel, dated the Document Closing
date, in form and substance satisfactory to Modine (Exhibit V).
Section 9.9 No Impediments to Transaction.
-----------------------------
(a) Modine and Seller and any other person (as defined
in the Xxxx-Xxxxx-Xxxxxx Act and the rules and regulations
thereunder) required in connection with the acquisition or
the other transactions contemplated by this Agreement to
file a Notification and Report Form for Certain Mergers and
Acquisitions with the Department of Justice and Federal
Trade Commission pursuant to Title II of the Xxxx-Xxxxx-
Xxxxxx Act shall have made such filing and the applicable
waiting period with respect to each such filing (including
any extension thereof by reason of a request for additional
information) shall have expired or been terminated.
(b) Neither Modine nor Seller shall be subject to any
order, decree or injunction of a court of competent
jurisdiction within the United States which (i) prevents or
materially delays the consummation of the transactions
contemplated by this Agreement or (ii) would impose any
material limitation on the ability of Modine effectively to
exercise full rights of ownership of the assets or business
of Seller.
(c) No investigation and no suit, action or proceeding
before any court or any governmental or regulatory authority
shall be pending or threatened by any individual, private or
public entity, state or federal governmental or regulatory
authority against Modine, any of its affiliates, associates,
officers or directors seeking to restrain, prevent or change
in any material respect the transactions contemplated by
this Agreement or seeking damages in connection with such
transactions which are material to Modine.
Section 9.10 Satisfaction With Review of the Purchased
-----------------------------------------
Business; No Material Adverse Change. Modine shall be satisfied
------------------------------------
with its review of the Purchased Business (which satisfaction
shall not be unreasonably withheld; market circumstances
materially different from those presently existing at the time of
execution of this Agreement shall be deemed not to be a
sufficient basis upon which Modine can withhold its satisfaction)
as a result of the investigation and review conducted by Modine
and/or its representatives with respect to the Purchased Business
prior to the Document Closing including without limitation
audits, appraisals and other examinations as to the Purchased
Business's assets, financial condition, prospects, sales and
income projections and operations. Notwithstanding any other
provision of this Agreement, any such investigation, review,
audit, appraisal and other examination shall not modify, diminish
or in any manner affect Seller's representations, warranties and
covenants contained in this Agreement or in the exhibits, or
schedules hereto nor shall any such investigation, review, audit,
appraisal or other examination constitute any waiver or
relinquishment on the part of Modine of its right to rely upon such
representations, warranties, covenants, exhibits, or schedules.
Except as disclosed in the Schedules, since April 7, 1995
there shall not have occurred any material adverse change in the
condition (financial or otherwise) of the Purchased Business.
Section 9.11 AutoAir Agreement. Seller and Modine or
-----------------
Subsidiary shall have entered into an agreement for the sale of
eighty percent (80%) of the stock of AutoAir to Modine and/or
Subsidiary pursuant to the Stock Purchase Agreement attached
hereto as Exhibit I.
Section 9.12 Lien Releases. All lien releases required
-------------
to be obtained from any person or entity, in order to deliver the
Purchased Business and Purchased Assets free and clear of all
liens (other than (a) mechanic's, materialmen's, and similar
liens, (b) liens for taxes not yet due and payable, (c) purchase
money liens and liens securing rental payments under capital
lease arrangements, (d) other liens arising in the ordinary
course of business and not incurred in connection with the
borrowing of money, and (e) liens with respect to the obligations
expressly assumed by Modine or Subsidiary in accordance with
Schedule D, all of which, singly or cumulatively, shall not have
a material adverse effect on the Purchased Business and/or
Purchased Assets), shall be obtained and delivered by Seller at
or prior to the Document Closing Date.
ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER.
All obligations of Seller are subject to the fulfillment on
or before the Document Closing of each of the following
conditions, each of which may be waived (but only by an express
written waiver) at the sole discretion of Seller.
Section 10.1 Accuracy of Representations and Warranties.
------------------------------------------
The representations and warranties of Modine and Subsidiary
herein contained shall be true and correct in all material respects.
Section 10.2 Performance of Agreements. Modine and
-------------------------
Subsidiary shall have performed all obligations and agreements
and complied with all covenants and conditions contained in this
Agreement to be performed or complied with by them at or prior to
the Closing Date.
Section 10.3 Modine's and Subsidiary's Certificate.
-------------------------------------
Modine and Subsidiary shall have furnished Seller with a
certificate dated the Document Closing date to the effect that
the conditions specified in Sections 10.1 and 10.2 above have
been fulfilled (Exhibit VI).
Section 10.4 Opinion of Counsel for Modine and Subsidiary.
--------------------------------------------
Seller shall have received an opinion of W. E. Xxxxxxx, Senior
Vice President, General Counsel and Secretary of Modine, dated
the Document Closing date, in form and substance satisfactory to
Seller (Exhibit VII).
Section 10.5 No Impediments to Transaction.
-----------------------------
(a) Modine and Seller and any other person (as defined
in the Xxxx-Xxxxx-Xxxxxx Act and the rules and regulations
thereunder) required in connection with the acquisition or
the other transactions contemplated by this Agreement to
file a Notification and Report Form for Certain Mergers and
Acquisitions with the Department of Justice and Federal
Trade Commission pursuant to Title II of the Xxxx-Xxxxx-
Xxxxxx Act shall have made such filing and the applicable
waiting period with respect to each such filing (including
any extension thereof by reason of a request for additional
information) shall have expired or been terminated.
(b) Neither Modine nor Seller shall be subject to any
order, decree or injunction of a court of competent
jurisdiction within the United States which (i) prevents or
materially delays the consummation of the transactions
contemplated by this Agreement or (ii) would impose any
material limitation on the ability of Modine effectively to
exercise full rights of ownership of the assets or business
of Seller.
(c) No investigation and no suit, action or proceeding
before any court or any governmental or regulatory authority
shall be pending or threatened by any individual, private or
pubic entity, state or federal governmental or regulatory
authority against Seller, any of its affiliates, associates,
officers or directors seeking to restrain, prevent or change
in any material respect the transactions contemplated by
this Agreement or seeking damages in connection with such
transactions which are material to Seller.
Section 10.6 AutoAir Agreement. Seller and Modine or
-----------------
Subsidiary shall have entered into an agreement for the sale of
eighty percent (80%) of the stock of AutoAir to Modine and/or
Subsidiary pursuant to the Stock Purchase Agreement attached
hereto as Exhibit I.
ARTICLE XI
DELIVERY OF DOCUMENTS
Section 11.1 Necessary Documents. The acquisition of
-------------------
assets in exchange for cash and the Notes in accordance herewith
will be effective as of 12:01 a.m. on the date following the Closing
date. On the Closing Date, subject to the terms and conditions
contained in this Agreement, the actual delivery of the following
shall occur:
(a) Seller shall deliver to Subsidiary bills of sale,
endorsements, assignments, debts, checks and other
instruments of transfer and conveyance in such form as
Modine shall reasonably request, as shall be effective to
vest in Subsidiary good title to the assets and properties
to be conveyed, transferred and delivered hereunder;
(b) Modine and Seller shall deliver to each other
certificates dated the Document Closing date, executed in
their respective corporate names by their appropriate
corporate officers, in accordance with Section 10.3 and
Section 9.3, respectively;
(c) Seller shall deliver to Modine a letter dated as of the
Closing Date from its President and its chief financial officer,
to the effect that on the basis of the latest financial information
available to them, from consultations with other responsible
officers of their corporation, and other pertinent inquiries and
except as otherwise qualified by Schedule G to this Agreement,
they have no reason to believe that during the period from April 7,
1995 to the Closing Date, there were any changes in the Purchased
Business's financial condition, other than adjustments made
pursuant to Section 2.4, or other than changes in the normal
course of business during such period, all of which in the
aggregate are not materially adverse; and
(d) Modine shall deliver to Seller the payment then due
in accordance with Section 2.3.
Notwithstanding the foregoing, all documents shall be
delivered on the Document Closing as provided in Article III.
ARTICLE XII
OTHER MATTERS
Section 12.1 Assignment of Seller's Real Estate Leases. At
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the Document Closing, Seller, as the current lessee, shall
execute such assignments as are necessary to transfer the
leasehold interests (if any) in the manufacturing facilities,
warehouse facilities and office facilities to Subsidiary.
Section 12.2 Expenses. All legal and other costs and
--------
expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party
incurring such expenses; provided, however, that the Xxxx-Xxxxx-
Xxxxxx filing fee and sales taxes on the transfer of the
Purchased Business shall be shared equally by Seller and Modine;
and provided, further, that any brokerage fee incurred by the
Seller shall be borne by the Seller.
Section 12.3 Survival of Representations. All of the
---------------------------
representations, warranties, covenants and agreements of the
parties hereto herein contained or contained in any document
furnished or to be furnished hereunder shall survive the Closing.
Section 12.4 Notices. All notices and other communications
-------
given or made pursuant hereto shall be in writing and shall be
deemed to have been given or made if in writing and delivered
personally or sent by registered or certified mail (postage
prepaid, return receipt requested) or delivered by reputable
overnight carrier to the parties at the following addresses:
(a) if to Modine, to:
Modine Manufacturing Company
0000 XxXxxxx Xxxxxx
Xxxxxx, Xxxxxxxxx 00000
Attention: President
(b) if to Seller, to:
The Equion Corporation
000 Xxxx Xxxx Xxxxxx - Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: President
with a copy to:
The Equion Corporation
000 Xxxxxx Xxxx Xxxx, Xxxxx 00
Xxx Xxxxx, X0X 0X0
Xxxxxxx, Xxxxxx
Attention: President
(c) if to Subsidiary, to:
Modi, Inc.
c/o Modine Manufacturing Company
0000 XxXxxxx Xxxxxx
Xxxxxx, Xxxxxxxxx 00000
Attention: President
or at such other addresses as either of the parties hereto shall
have specified in writing to the other.
Section 12.5 Further Assurances. Seller shall, at any
------------------
time, and from time to time after the Closing Date, upon request
of Modine, do, execute, acknowledge and deliver, or will cause to
be done, executed, acknowledged and delivered, all such further
acts, assignments, transfers, conveyances, powers of attorney and
assurances as may be reasonably required for the better
assigning, transferring, granting, conveying, assuring and
confirming to Subsidiary, or to its successors and assigns, or
for aiding and assisting in collecting and reducing to
possession, any or all of the assets or properties to be assigned
to Subsidiary as provided herein, and any or all obligations of
Seller hereunder.
Section 12.6 Right to Endorse Checks, etc. Seller agrees
----------------------------
that after the Closing Date Subsidiary shall have the right and
authority to endorse without recourse the name of Seller on any
check or any other evidences of indebtedness or negotiable
instruments received by Subsidiary on account of any accounts
receivable or other items transferred to Subsidiary hereunder.
Section 12.7 Specific Performance. Seller acknowledges
--------------------
that the properties and assets to be sold, transferred and
conveyed to Subsidiary pursuant to the terms hereof are unique.
In the event of the breach of this Agreement by either party, the
other party will have no adequate remedy at law and the parties
agree that each shall have the right to enforce its rights
hereunder, not only by an action or actions for damages, but also
by an action or actions for the specific performance of this
Agreement.
Section 12.8 Non-assignability; Amendment; Waiver. This
------------------------------------
Agreement shall not be assignable by any of the parties hereto
and cannot be altered or otherwise amended except pursuant to an
instrument in writing signed by the parties hereto. Each party
hereto may, in writing, extend the time for the performance of
any obligations of the other, waive any inaccuracies and
representations by the other contained in this Agreement or in
any document delivered pursuant thereto or waive compliance by
the other with any of the covenants, conditions or performance of
any obligations under this Agreement.
Section 12.9 Binding Effect; Benefits. This Agreement shall
------------------------
inure to the benefit of and be binding upon the parties hereto,
their successors and assigns; nothing in this Agreement expressed
or implied is intended to confer on any other person, other than
the parties hereto, any rights, remedies, agreements, undertakings,
obligations or liabilities under or by reason of this Agreement.
Section 12.10 Sections and Other Headings. The sections and
---------------------------
other headings contained in this Agreement are for reference purposes
only and shall not affect the meaning or interpretation of this Agreement.
Section 12.11 Counterparts. This Agreement may be executed in any
------------
number of counterparts, each of which shall be deemed to be an original
and all of which together shall be deemed to be one and the same instrument.
Section 12.12 Entire Agreement. This Agreement (including
----------------
the Attachments, Exhibits, Schedules and other documents and
instruments referred to herein) constitutes the entire agreement
between the parties and supersedes all other prior agreements and
understandings, both oral and written, between the parties, with
respect to the subject matter hereof.
Section 12.13 "Knowledge"; "Known". Any reference herein
--------------------
to "knowledge" or "known" shall mean the actual knowledge of
senior management of Equion or Signet or knowledge which they
should have had or facts or information actually known by them or
which they should have known.
Section 12.14 Governing Law. This Agreement shall be
-------------
governed, construed and enforced in accordance with the laws of
the state of Kentucky.
IN WITNESS WHEREOF, this Agreement has been duly executed
and delivered by the parties hereto on the date first hereinabove
written.
MODINE MANUFACTURING COMPANY
ATTEST:
s/W. E. Xxxxxxx BY: s/X. X. Xxxxxx
------------------------- ------------------------------
W. E. Xxxxxxx X. X. Xxxxxx
Senior Vice President, President and Chief Executive
General Counsel and Officer
Secretary
MODI, INC.
ATTEST:
s/X. X. Xxxxx BY: s/A. D. Xxxx
------------------------- -----------------------------
X. X. Xxxxx A. D. Xxxx
Secretary Vice President
THE EQUION CORPORATION
ATTEST:
s/X. X. Xxxxxxx BY: s/Xxx Xxxxxxx
------------------------- -----------------------------
Xxxxxxx X. Xxxxxxx Xxx Xxxxxxx
President and Chief Chairman of the Board and
Operating Officer Chief Executive Officer
