AGREEMENT FOR THE PURCHASE AND SALE OF ASSETS
THIS AGREEMENT is made as of this 8th day of August, 1996, by and between
Xxxxxxxxx Industries, Inc., an Illinois corporation located at 0000 Xxxxxx
Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxxx 00000 ("Seller"), and Formtek, Inc., a Delaware
corporation with offices located at 000 Xxxxx Xxx Xxxxxx, Xxxxxxxxx, XX 00000
("Purchaser").
RECITALS
A. Seller is the owner of certain assets including real property, machinery,
equipment, and other tangible personal property, inventory, work-in-process,
rights under agreements, accounts or notes receivable, intellectual property,
permits, goodwill and other books, records, information and materials required
or appropriate for the continued operation of that certain business that
manufactures and sells machinery and equipment for roll forming,
cutting-to-length, and wing forming, Gripall material handling, automated metal
fabricating systems and the repair and service parts related thereof (the
"Xxxxxxxxx Business").
B. Seller desires and intends to sell and transfer the assets and certain
liabilities associated with the Xxxxxxxxx Business of Seller to Purchaser at the
price and on the terms and conditions hereinafter set forth.
C. Purchaser desires and intends to purchase the assets and assume certain
liabilities of Seller associated with the Xxxxxxxxx Business at the price and on
the terms and conditions hereinafter set forth.
AGREEMENTS
NOW, THEREFORE, in consideration of the terms hereof, the parties hereto,
intending to be legally bound hereby, agree as follows:
1. Purchase and Sale of Assets
1.1 The Assets. Upon the closing of the transactions contemplated under this
Agreement on August 30, 1996, or such other date as mutually agreed by the
parties (the "Closing Date"), and subject to the terms and conditions contained
in this Agreement, Seller shall sell, transfer, convey, assign and deliver to
Purchaser, and Purchaser shall purchase, acquire and accept from Seller, free
and clear of all liens, encumbrances, restrictions and adverse charges of any
nature whatsoever, except as may be permitted by Section 7.7, all of the assets,
rights, interests, properties and goodwill of every nature whatsoever, tangible
or intangible and wheresoever situated, required or appropriate for the
continued operation of the Xxxxxxxxx Business which is further defined as the
manufacture, application, design, development, engineering, distribution and
sale of various models and types of machinery and equipment for the feeding,
straightening, forming, bending, notching, welding, stacking, and other
activities involved in automated fabricating systems, and the parts and
accessories related thereto set forth by model number in Schedule 1.1 attached
hereto. The assets, rights, interests, properties and goodwill sold,
transferred, conveyed, assigned and delivered by Seller to Purchaser hereunder
(collectively, the "Assets") shall include, but shall not be limited to the
following:
1.1.1 Machinery & Equipment. All of the machinery, equipment, office
equipment, furniture, furnishings, fixtures, jigs, dies, tooling, patterns,
tooling fixtures, trucks, motor vehicles and all other fixed tangible assets of
Seller used in the Xxxxxxxxx Business identified in Schedule 1.1.1 attached
hereto (the "Machinery & Equipment"), together with any rights of Seller to all
warranties, if any, and to the extent assignable, received from the
manufacturers and sellers of such items;
1.1.2 Inventory. All saleable, usable, undamaged, non-obsolete and
non-slow-moving inventory of Seller relating to the Xxxxxxxxx Business including
raw materials, work-in-process, and finished goods (the "Inventory") to be
physically counted by the parties on August 30, 1996, (and thereafter as
necessary until the count is completed), listed, valued and attached to this
Agreement thereafter as Schedule 1.1.2;
1.1.3 Material Agreements. Subject to required consents by third
parties, all right, title and interest of Seller in, to and under those certain
executory contracts (including the right to the return of any and all deposits),
contract rights and agreements including sales purchase orders to provide
equipment, repair parts and services to the customers of Seller, sales
representative agreements, leases of personal property, licenses, service and
maintenance agreements, vendor purchase orders, and other agreements related to
the ownership or operation of the Xxxxxxxxx Business expressly identified and
listed by Purchaser and copies of which agreements are attached as exhibits in
Schedule 1.1.3 attached hereto (the "Material Agreements");
1.1.4 Intellectual Property. All patents, patent applications,
trademarks, trademark applications, service marks, tradenames, copyrights and
copyright applications, and licenses with respect to any of the foregoing, all
inventions, inventor's notes, discoveries, trade secrets, ideas, proprietary
processes and formulae, whether patentable or not, improvements, engineering
drawings, computer-assisted design and manufacturing data, bills of material,
designs and specifications (including design choices), computer software and
laboratory certifications, proprietary and trade rights and data, ideas and
know-how, whether patentable or not, and all shop rights, manufacturing data,
licenses, and other intellectual property and all correspondence related thereto
of Seller that are used or could be used in the Xxxxxxxxx Business (all of which
are hereinafter collectively referred to as the "Intellectual Property");
1.1.5 Receivables. All cash, accounts or notes
receivable, prepaid expenses and contract rights of Seller as of
the Closing Date, including those identified in Schedule 1.1.5
attached hereto (the "Receivables");
1.1.6 Real Property. The improved real estate commonly
known as 0000 Xxxxxx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxxx and legally
described as set forth in Schedule 1.1.6 attached hereto (the
"Real Property");
1.1.7 Permits. All of Seller's right, title and interest in and to any
and all permits, licenses, authorizations, certifications, consents, orders,
registrations and approvals of any federal, state or local governmental entity
or certifying or regulatory agency or authority required of Seller or otherwise
necessary or advisable for the operation of the Xxxxxxxxx Business as set forth
on Schedule 1.1.7 attached hereto (the "Permits") to the extent the same are
transferable or assignable to Purchaser;
1.1.8 Books and Records. All of Seller's right, title and interest in
or to all books of account, records, files and invoices, including but not
limited to technical and scientific literature, all invoice files kept by serial
number, model or customer and correspondence related thereto, all production
data, testing data, equipment maintenance data, employee files, payroll
information system, accounting records, inventory records, purchasing records,
engineering records, sales and sales promotional data, advertising materials,
customer lists and customer data, cost and pricing information, supplier and
vendor lists, installation and maintenance manuals, business plans, supply
reference catalogs and any other records and data used in connection with the
Xxxxxxxxx Business (whether in computer software, data or any other form) (the
"Books and Records") other than the corporate minute book and records of
shareholder and director action by Seller; and
1.1.9 Goodwill. The goodwill associated with the
Xxxxxxxxx Business (the "Goodwill").
1.2 Conveyance of Assets. The sale, transfer, conveyance, assignment and
delivery of the Assets provided for in this Article 1 shall be made by the
following documentation as appropriate (i) a duly executed xxxx of sale,
evidencing the warranty provisions of this Agreement, and substantially in the
form of Exhibit 1.2A attached hereto (the "Xxxx of Sale"), (ii) a duly executed
statutory warranty deed transferring the Real Property substantially in the form
of Exhibit 1.2B attached hereto (the "Deed") and (iii) such other good and
sufficient instruments of conveyance and transfer as shall be reasonably
necessary to vest in Purchaser as of the Closing Date full title to the Assets
being sold, transferred, conveyed, assigned and delivered hereunder.
1.3 Off-Site Assets. All tangible Assets held at any location other than the
facility of Seller are described at the Closing Date will be set forth in
Schedule 1.3 attached to this Agreement at Closing which schedule includes a
description of each of such assets, its type, the name and address of the vendor
or customer holding such assets and, if such asset is held pursuant to an
agreement, a copy or description of such agreement is attached as an exhibit to
the schedule.
2. Excluded Assets. The assets excluded from this Agreement
(the "Excluded Assets") are set forth in Schedule 2.0 attached
hereto ("Excluded Assets").
3. Purchase Price
3.1 Purchase Price. The purchase price payable to Seller under this
Agreement for the Assets by Purchaser shall be Two Million One Hundred Thousand
and 00/100 Dollars ($2,100,000.00) (the "Purchase Price"), subject to the net
worth adjustment set forth in Section 3.2 of this Agreement.
3.2 Net Worth Adjustment of Purchase Price. The Purchase Price shall be
adjusted dollar-for-dollar for any reduction in, or increase in, the net worth
of Seller between (i) the net worth amount of One Million Six Hundred Sixty-six
Thousand Four Hundred Forty-three and 00/100ths Dollars ($1,666,443.00) (the
"Net Worth Target") and (ii) the net worth of Seller as at the Closing Date as
determined in accordance with the principles set forth hereinafter (the "Net
Worth Determination").
3.2.1 Within 20 days after the Closing Date, or such other time period
as agreed by the parties, Purchaser and Seller shall use their best efforts to
value the physical count of the Inventory to be taken immediately after the
Closing Date. Within thirty (30) days after the Closing Date, Purchaser and
Seller shall work together making such personnel and records available as
necessary to complete a balance sheet for Seller as at the Closing Date and to
finalize the Net Worth Determination in good faith at their earliest convenience
based upon the principles and standards set forth in Section 3.2.2, the
representations and warranties set forth in Sections 7.4, 7.5, 7.12 and 7.15 of
the Agreement and the covenants of Seller set forth in Sections 10.4, 10.5.2,
10.6, 10.10 and 22.8 of this Agreement. The final Net Worth Determination and
the calculation of the adjustments to the Purchase Price, subject to such
offsets by Purchaser against amounts payable by Seller to Purchaser under
Article 16 hereof, if any, shall be set forth in a memorandum of understanding
prepared and executed by the authorized representative of each of the parties
and delivered to the Escrow Agent (as defined below) (the "Memorandum of
Understanding") who then shall make the appropriate disbursements. Any
additional amount due and owing to Seller pursuant to the Net Worth
Determination shall be paid in cash by wire transfer or other immediately
available funds to Seller within ten (10) business days of the execution of the
Memorandum of Understanding.
3.2.2 For purposes of the Net Worth Determination under this Agreement,
the following shall apply:
(A) The actual assets and liabilities of Seller shall be
calculated as at the Closing Date in accordance with generally accepted
accounting principles ("GAAP") consistently applied, except to the extent that
other provisions of this Section 3.2 provide otherwise;
(B) The Real Property, Intellectual Property and Machinery &
Equipment by agreement of the parties shall be valued at One Million Seven
Hundred Twenty-five Thousand Four Hundred Eighty-Two and 00/100ths Dollars
($1,725,482.00);
(C) The Inventory as counted at the Closing Date shall be valued
as set forth in Section 7.15 of this Agreement;
(D) The value of the Receivables shall be valued as
set forth in Section 7.12 of this Agreement; and
(E) The liabilities of Seller shall be those that are expressly
assumed by Purchaser pursuant to Article 5 of this Agreement.
3.3 Payment of Purchase Price. On the Closing Date, Purchaser shall deliver
in cash by wire transfer or other immediately available funds (a) to Seller the
amount of One Million Three Hundred Thousand and 00/100ths Dollars
($1,300,000.00) and (b) to Escrow Agent the amount of Three Hundred Thousand and
00/100ths Dollars ($300,000.00) (the "Short-Term Escrow Amount") and (c) to
Escrow Agent the amount of Five Hundred Thousand and 00/100ths Dollars
($500,000.00) (the "Long-term Escrow Amount").
3.4 Escrow and Disbursement Agreements. The Short-Term Escrow Amount shall
be received, held and disbursed according to the terms and conditions of an
escrow and disbursement agreement substantially in the form of Exhibit 3.4A
attached hereto (the "Short-term Escrow Agreement") among Seller, Purchaser and
Chicago Title Insurance Company (the "Escrow Agent"). The Long-term Escrow
Amount shall be received, held and disbursed according to the terms and
conditions of an escrow and disbursement agreement substantially in the form of
Exhibit 3.4B attached hereto (the "Long-term Escrow Agreement") among Seller,
Purchaser and Escrow Agent.
4. Allocation of Purchase Price. The Purchase Price shall be allocated by the
parties hereto among the Assets as set forth in a memorandum of allocation
delivered on the Closing Date substantially in the form attached hereto as
Exhibit 4.0 (the "Memorandum of Allocation"). Notwithstanding any allocation by
the parties, Purchaser has agreed to purchase and Seller has agreed to sell the
Assets, and the allocation is not intended and shall not be deemed to constitute
an agreement between the parties to transfer less than all of the Assets.
Furthermore, such allocation has been made solely to ascribe fair value to the
Assets and any benefits deriving therefrom shall not inure to any other third
party.
5. Assumption of Liabilities
Upon the Closing Date, Purchaser shall assume or discharge the following
liabilities of Seller:
5.1 Assumed Liabilities. Those trade accounts payables,
customer deposits, that certain secured bank debt and other
obligations of Seller as specifically set forth by Purchaser in
Schedule 5.1 attached hereto as they exist as of the Closing
Date; and
5.2 Assumption of Material Agreements. The obligations and liabilities of
Seller with respect to the assignment to Purchaser of the Material Agreements
described in Section 1.1.3 and listed on Schedule 1.1.3.
5.3 Limits on Assumption. Except for the assumptions or discharges of
liabilities described in Sections 5.1 and 5.2, Purchaser shall not assume (a)
other liabilities, obligations and commitments of Seller, whether fixed or
contingent, legal or equitable, mature or inchoate, written or oral, express or
implied, known or unknown, including, but not limited to those related to taxes,
employment practices, employee benefits and pensions, implied warranties,
products or professional liability, and environmental, health and safety
obligations all as related to, arising from or in connection with the Xxxxxxxxx
Business for products manufactured and services performed on or before the
Closing Date and (b) those liabilities, obligations and commitments of Seller
that arise after the Closing Date, and the indemnification provisions contained
in Article 16 of this Agreement shall apply to any liability of Seller which is
not assumed by Purchaser and which is asserted or claimed by any person against
Purchaser.
5.4 Assignment of Contracts and Rights. Notwithstanding anything in this
Agreement to the contrary, this Agreement shall not constitute an agreement to
assign any particular Material Agreement or any claim, contract, license, lease,
commitment, sales order, purchase order or any claim or right or any benefit
arising thereunder or resulting therefrom if the agreement to assign or attempt
to assign, without the consent of a third party, would constitute a breach
thereof or in any way adversely affect the rights of Purchaser or Seller
thereunder. Until such consent is obtained, or if an attempted assignment
thereof would be ineffective or would affect the rights of Seller thereunder so
that the Purchaser would not in fact receive all such rights, Purchaser and
Seller will cooperate with each other in any arrangement designed to provide for
Purchaser the benefits of, and to permit Purchaser to assume, insofar as
expressly set forth herein, the stated liabilities under the particular Material
Agreement(s) including enforcement at the request and expense and for the
benefit of Purchaser of any and all rights of Seller against a third party
thereto arising out of the breach or cancellation thereof by such third party or
otherwise. Any transfer or assignment to Purchaser by Seller of any property or
property rights or any contract or agreement which shall require the consent or
approval of any third party shall be made subject to such consent or approval
being obtained.
6. Covenant Against Competition
6.1 Covenant Not to Compete. Seller covenants and agrees that neither it nor
its affiliates shall at any time within the three (3) year period immediately
following the Closing Date (a) compete, directly or indirectly, with Purchaser
or (b) have any ownership interest in any firm, corporation, partnership,
proprietorship or other business that engages with third parties in the
activities now engaged in and in the territory served by the Xxxxxxxxx Business,
so long as Purchaser or any affiliate or successor thereof, remains engaged in
the Xxxxxxxxx Business; provided, however, that Seller may own, directly or
indirectly, solely as an investment, securities, or any entity which are
publicly traded if Seller does not, directly or indirectly, own five percent
(5%) or more of any class of securities of any such competitive entity.
6.2 Remedies. Without waiving the Purchaser's rights to monetary damages,
all parties to this Agreement acknowledge that the breach of the obligations
contained in this Article 6 would result in substantial but indeterminable harm
to Purchaser, that the restraints imposed are reasonable, that there is no
adequate remedy at law for a breach of such obligations, and that therefore
injunctive relief, specific performance or other equitable remedies are
appropriate to enforce the obligations undertaken in this Article 6. In the
event that a court finds that the term, territory, or scope of this Article 6 is
too broad to be enforceable, Seller and Purchaser further agree that a
reformation of the terms of this Article 6 is appropriate and should be
undertaken by the court in order to protect the value of the Assets being
conveyed pursuant to this Agreement as a going concern, and to provide for the
enforceability of the obligations contained in this Article 6 to the fullest
extent allowed by law and equity.
7. Representations and Warranties of Seller
Seller represents and warrants to Purchaser as of the Closing Date as
follows:
7.1 Corporate Existence. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Illinois, and
Seller knows of no violation of the requirement for good standing in any other
jurisdiction in which it is required to be qualified to carry on the Xxxxxxxxx
Business. Seller has full corporate power and authority to carry on the
Xxxxxxxxx Business as now being conducted.
7.2 Due Authorization and Enforceability. Seller has full corporate power
and authority to execute and deliver this Agreement and the Xxxx of Sale, the
Deed, the Short-term Escrow Agreement, the Long-term Escrow Agreement, the
Memorandum of Allocation, the Noncompetition Agreement, and the other documents,
instruments and agreements to which it is a party that are to be delivered upon
the Closing Date (collectively, the "Related Agreements"), and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Related Agreements by Seller and the consummation of the
transactions contemplated hereby and thereby has been duly authorized by all
necessary corporate actions, including votes of the directors of Seller and of
the shareholders of Seller, and no other corporate action or proceeding on the
part of Seller is necessary to authorize the execution and delivery of this
Agreement or the Related Agreements or the consummation by Seller of the
transactions contemplated hereby or thereby. This Agreement and the Related
Agreements have been duly executed and delivered by Seller, and are legal, valid
and binding obligations of Seller enforceable against Seller in accordance with
their terms.
7.3 No Conflicts. Neither the execution and delivery of this Agreement or
the Related Agreements nor the consummation of the transactions contemplated
hereby or thereby will (i) conflict with or violate any provision of the
Articles of Incorporation, Bylaws or other Charter documents of Seller, (ii)
conflict with or violate any law, rule, regulation, ordinance, order, writ,
injunction, judgment or decree applicable to the Xxxxxxxxx Business or by which
any of the Assets are bound or affected or (iii) conflict with or result in any
breach of or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination or cancellation of, or accelerate the performance required by or
maturity of, or result in the creation of any security interest, lien, charge or
encumbrance on any of the Assets pursuant to any of the terms, conditions or
provisions of, any note, bond, mortgage, indenture, permit, license, franchise,
lease, contract or other instrument or obligation to which Seller is a party or
by which any of the Assets are bound or affected; except those Liens permitted
by Section 7.7 of this Agreement and in the case of (ii) or (iii) above, for
such conflicts, violations, breaches, defaults, terminations, cancellations and
accelerations which in the aggregate will not have a material adverse effect on
the Xxxxxxxxx Business.
7.4 Financial Statements. Attached hereto as Schedule 7.4 are the balance
sheets of Seller of the fiscal year ended December 31, 1995, and as of the
interim period ended June 30, 1996, and the related statements of income and
changes in financial position, for the respective fiscal year and interim period
then ended and the Financial Condition Summary dated July 10, 1996 (all of the
foregoing referred to above in this Section 7.4 are herein collectively referred
to as the "Seller Financial Statements"). The Seller Financial Statements fairly
present the assets, liabilities and financial position of Seller as of the
respective dates set forth therein and the results of operations and changes in
financial position of Seller for the respective periods set forth therein; the
Seller Financial Statements have been prepared in each case in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved.
7.5 No Material Changes. Since December 31, 1995, to the date hereof, and at
the Closing Date, (i) there have been no changes in the Assets or the
liabilities (actual or contingent) of Seller or in the nature and prospects of
the Xxxxxxxxx Business or its condition (financial or otherwise) which have in
the aggregate been material and adverse to the Xxxxxxxxx Business, and, (ii)
Seller has operated the Xxxxxxxxx Business in the ordinary course and consistent
with past practice.
7.6 All Necessary Assets. The Assets (including the Machinery & Equipment,
Inventory, Material Agreements, Intellectual Property, Receivables, Real
Property, Permits, Books and Records and Goodwill) being sold, transferred,
conveyed, assigned and delivered by Seller under this Agreement constitute all
of the assets used by Seller in the conduct of the Xxxxxxxxx Business.
7.7 Title to Assets. Seller warrants that Seller has good and marketable
title to the Assets transferred hereunder and, upon consummation of the
transactions contemplated by this Agreement, including execution and delivery of
the Xxxx of Sale, the Deed or other instruments of transfer, Purchaser will
acquire title to the Assets, free and clear of all mortgages, pledges, liens,
security interests, assignments, conditional sales agreements, encumbrances,
claims or charges of any kind ("Liens"), except for (i) Liens created by
Purchaser and, (ii) Liens set forth on Schedule 7.7 which Purchaser shall assume
at the Closing Date. At the Closing Date, none of the Assets will be subject to
any commitment or other arrangement for its sale or use by third parties except
under Material Agreements disclosed in Schedule 1.1.3.
7.8 Condition of Assets. The Machinery & Equipment included in the Assets
set forth in Schedule 1.1.1 are in good operating condition and repair, ordinary
wear and tear excepted, and are reasonably satisfactory for the purposes for
which the Assets are being used, and are capable of being used to carry on the
Xxxxxxxxx Business.
7.9 Compliance with Laws. The operation of the Xxxxxxxxx Business and the
use of the Assets comply in all material respects with all applicable laws,
ordinances, rules, decrees, orders and regulations, including federal and state
and local environmental laws and rules and laws related to employment, benefits,
and pensions (collectively the "Laws"), except for such failures to comply which
in the aggregate will not have a material adverse effect on the Assets or
Xxxxxxxxx Business. Seller has obtained all necessary permits, licenses,
certificates, exemptions, orders and approvals and has filed all required
notices with federal, state and local governmental bodies that are required by
applicable law for the use of the Assets and in order to conduct the Xxxxxxxxx
Business as presently conducted, all of which are valid and effective on the
date of this Agreement and will be valid at the Closing Date, and all payments,
fees and costs thereof have been paid in full to the date of this Agreement and
will be paid in full at the Closing Date. Seller has not received notice of any
violations of any Laws or regulations or any covenants or contracts with respect
to the Xxxxxxxxx Business or any of the Assets, and to Seller's knowledge, no
such notice of violations is pending or has been threatened.
7.10 Absence of Litigation. There are no judgments or other judicial or
administrative orders outstanding against Seller, nor is there any action, suit
or proceeding at law or in equity or by or before any governmental or
administrative instrumentality or other agency now pending or, to the knowledge
of Seller, threatened against or affecting Seller, the Assets or any of Seller's
property or rights which, if adversely determined, might materially impair the
right or ability of Seller to carry on the Xxxxxxxxx Business as it is now
conducted or as proposed to be conducted by Purchaser or would materially
adversely affect the financial condition of Seller. A true, correct and complete
list of all suits or proceedings at law, in equity or by or before any
governmental or administrative instrumentality or other agency and other
litigation (whether material or not) pending or threatened against Seller, or
settled within the last five (5) years is attached hereto as Schedule 7.10.
Seller is not in default in any material respect under any applicable statute,
rule, order, certificate or regulation of any governmental authority having
jurisdiction over it. Seller has conducted the Xxxxxxxxx Business in such a
manner so that there have been no breaches of express warranty on the part of
Seller.
7.11 Material Agreements. Schedule 1.1.3 is an accurate and complete list of
all of Seller's Material Agreements of any kind as to which the rights and/or
obligations of which are being assumed or discharged by Purchaser. There are no
other Material Agreements being assumed by Purchaser. Each of the Material
Agreements is valid and effective in accordance with its terms. True and correct
copies of the Material Agreements have been supplied to Purchaser by Seller,
appropriately identified in order that such Material Agreements can be
identified and attached in Schedule 1.1.3. At the Closing Date, all consents to
the assumptions of the obligations of Seller by Purchaser under the Material
Agreements will have been obtained by Seller. All other executory contract
rights or obligations of Seller related to the Xxxxxxxxx Business, not listed on
Schedule 1.1.3 and therefore not being assumed by Purchaser, are listed in
Schedule 7.11. No party to any of the Material Agreements (including Seller) is
in material default thereunder and no event has occurred which with the passage
of time or the giving of notice or both would constitute a material default
under any of the Material Agreements.
7.12 Receivables. The Receivables being conveyed hereunder and listed in
Schedule 1.1.5, will, at the Closing Date, be owned by Seller, free and clear of
all claims, encumbrances, credits, backcharges, counterclaims, setoffs and
deductions, and are not subject to additional requirements of performance by
Seller, and such Receivables have not been billed or collected for a greater
percentage of the work done or materials supplied than has actually been
performed or supplied by Seller. At the Closing Date Seller and Purchaser shall
establish a reasonable reserve for bad debts against the Receivables for
purposes of the Net Worth Determination. Seller guarantees to Purchaser that the
Receivables shall be collected by Purchaser.
7.13 Intellectual Property. Seller owns or possesses and will have conveyed
to Purchaser at the Closing Date all Intellectual Property used in the Xxxxxxxxx
Business, and the Intellectual Property does not, to the best knowledge of
Seller, infringe any patent or other rights owned by others, nor has Seller
received any notice of conflict thereof with the asserted rights of others.
7.14 Related Party Agreements. No affiliate, officer or director of Seller
or any related person has, directly or indirectly, entered into any transaction
with Seller relating to the Xxxxxxxxx Business. For purposes of this Agreement,
the term "related person" shall mean and include any person related to any
affiliate, officer or director of Seller by blood or by marriage, or any
corporation, partnership, proprietorship, trust or other entity in which any
officer or director of Seller (or any spouse, ancestor or descendant of the
same) has more than a five percent (5%) legal or beneficial interest.
7.15 Inventory. The Inventory of Seller included in the Assets (whether raw
materials, purchased components, manufactured parts, work-in-process, finished
goods or other) does not contain any damaged, defective, slow-moving (defined as
more than a two years' supply of items used in new Xxxxxxxxx machine products
and as more than a five years' supply of items sold as repair parts, under
normal conditions of sale) or obsolete items which are not currently usable or
saleable in the ordinary course of the Xxxxxxxxx Business.
(a) Raw materials and purchased components shall be
valued individually at the lower of acquisition costs or market
value in accordance with GAAP consistently applied. Acquisition
costs shall be determined on an item-by-item, FIFO basis. Work-in-process
consisting of manufactured parts, sub-assemblies and equipment in the process of
being assembled and finished goods shall be valued at the sum of the value of
the raw material and purchased components, the direct labor and the factory
burden applicable to said items as further set forth herein: (i) raw materials
and purchased components shall be valued at the lower of acquisition costs or
market value in accordance with GAAP consistently applied, (ii) direct labor
shall be valued at $13.93 per hour of direct labor determined by Seller's labor
collection system, and (iii) factory burden shall be valued at $19.04 per hour
of direct labor adjusted to eliminate any costs inconsistent with GAAP in the
calculation of burden.
(b) The value at which the Inventory is shown on the Seller
Financial Statements has been determined in accordance with the standard
valuation policy of Seller, consistently applied and in accordance with GAAP.
(c) All items of Inventory on hand at the Schiller Park, Illinois
facility of Seller that are included in the physical counts at the Closing Date,
but not yet set forth or reflected in Seller's accounts payable reported in the
Seller Financial Statements, shall be disclosed to Purchaser on Schedule 7.15
attached hereto.
7.16 Taxes. With respect to the Xxxxxxxxx Business and the Assets being
conveyed under this Agreement, Seller has filed all federal, state, county and
local tax returns, including information returns, which it is required by law to
file and has paid all income, payroll, withholding, gross receipts, excise,
business and occupation, sales, use or other taxes, assessments and other
governmental charges due in respect of such returns, except to the extent that
any such taxes are being contested in good faith and as to which adequate
reserves have been set aside and Seller has accrued all taxes not yet due. Since
December 31, 1995, Seller has not incurred any taxes other than taxes incurred
in the ordinary course of business, and all such taxes are fully reserved
against on the books of Seller. Seller is not delinquent in the payment of any
amount of taxes, and there are no Liens for any taxes upon the Assets of Seller,
except Liens for current taxes not yet due that are fully reserved for on the
Seller Financial Statements and will be paid at the Closing Date. All taxes that
Seller was or is required by law to withhold or collect, have been and are being
withheld or collected by it and have been or are being held by it for such
payment. All tax returns required to be filed by or on behalf of Seller have
been prepared and filed in accordance with all applicable laws or requirements
and accurately reflect the taxable income (or other measure of tax) of the party
filing the tax returns. All such tax returns, estimates, reports and
declarations are complete and accurate and disclose all taxes required to be
paid for the periods covered thereby. True and complete copies of federal and
state income or franchise tax returns of Seller for the fiscal year ended
December 31, 1995 have been delivered to Purchaser. No audit, action, suit,
investigation, claim, assessment or examination with respect to taxes is now
pending or currently in progress with respect to Seller and, to the best of
Seller's knowledge, there is no basis therefor. Seller has not received from the
Internal Revenue Service or from any other tax authority of any state, foreign,
county, local, or other jurisdiction a notice of underpayment of taxes, a
proposed assessment of taxes, a proposed adjustment to any tax return filed or
other deficiency that has not been paid.
7.17 No Misrepresentation or Material Non-disclosures. Neither this
Agreement nor the Related Agreements, nor any other document, certificate or
statement furnished to Purchaser in connection herewith contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein or therein not misleading. There
is no fact known to Seller which materially adversely affects or in the future
may (so far as can now be foreseen) materially adversely affect the Xxxxxxxxx
Business or the Assets which has not been set forth in this Agreement.
7.18 No Defective Products. The products of the Xxxxxxxxx Business
previously manufactured and sold by Seller have, where necessary, been qualified
under and comply in all respects with the specifications and requirements of
applicable rating and compliance agencies and safety standards and contain, to
the best of Seller's knowledge, no defects that will result in damage or injury
to person or property or in epidemic failure of the products.
7.19 Employment Activity. To the best of Seller's knowledge, Seller is in
compliance with all applicable laws respecting employment, employment practices,
employment benefits, non-discrimination in employment and employment practices,
and conditions of employment and payment of wages, and is not engaged in any
unfair labor practice. There is no employment discrimination or unfair labor
practice charge or complaint against Seller pending before the National Labor
Relations Board, the Equal Employment Opportunity Commission or any other
federal, state or local governmental agency arising out of Seller's activities,
and Seller has no knowledge of any facts or information which would give rise
thereto; there is no labor strike or labor disturbance pending or threatened
against Seller nor is any grievance currently being asserted; and Seller has not
experienced a work stoppage or other material labor difficulties.
7.20 Employee Benefit Plans
(a) Set forth in Schedule 7.20(A) is a true and complete list of
each "employee pension benefit plan" (as such term is defined in Section 3(2) of
the Employee Retirement Income Security Act of 1974, as amended and the
regulations promulgated thereunder ("ERISA")) maintained by Seller or an ERISA
Affiliate (as defined in Section 7.20(e) below), or with respect to which Seller
or an ERISA Affiliate is or will be required to make any payment, or which
provides or will provide benefits to present or prior employees of Seller or an
ERISA Affiliate due to such employment (the "Pension Plans"). Set forth in
Schedule 7.20(A) is a true and complete list of each "employee welfare benefit
plan" (as such term is defined in Section 3(1) of ERISA) maintained by Seller,
or with respect to which Seller is or will be required to make any payment, or
which provides or will provide benefits to present or prior employees of Seller
due to such employment (the "Welfare Plans") (the Pension Plans and Welfare
Plans together being the "ERISA Benefit Plans"). Neither Seller nor any ERISA
Affiliate (i) maintains or has maintained, or (ii) is or was required to make
any payment with respect to, any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA) ever subject to Section 302 of ERISA. No
ERISA Benefit Plan or prior Pension Plan is or was a "multiemployer plan" (as
such term is defined in Section 3(37) of ERISA).
(b) Other than those plans and programs listed in Schedule 7.20(A),
Schedule 7.20(B) is a true and complete list of each of the following to which
Seller is a party or with respect to which it is or will be required to make any
payments (the "Non-ERISA Commitments"):
(i) each retirement, savings, profit sharing, deferred
compensation, severance, stock ownership, stock purchase, stock option,
performance, bonus, incentive, vacation or holiday pay, hospitalization or other
medical, disability, life or other insurance, or other welfare, benefit or
fringe benefit plan, policy, trust, understanding or arrangement of any kind,
whether written or oral; and
(ii) each employee collective bargaining agreement and each
agreement, understanding or arrangement of any kind, whether written or oral,
with or for the benefit of any present or prior officer, director, employee or
consultant (including, without limitation, each employment, compensation,
deferred compensation, severance or consulting agreement or arrangement and any
agreement or arrangement associated with a change in ownership of Seller).
Seller has delivered to Purchaser correct and complete copies of (i) all written
Non-ERISA Commitments and (ii) all insurance and annuity policies and contracts
and other documents relevant to any Non-ERISA Commitment. Schedule 7.20(B) also
contains a complete and accurate description of all oral Non-ERISA Commitments.
(c) Seller has delivered to Purchaser with respect to each ERISA
Benefit Plan correct and complete copies, where applicable, of (i) all plan
documents and amendments thereto, trust agreements and amendments thereto and
insurance and annuity contracts and policies, (ii) the current summary plan
description, (iii) the Annual Reports (IRS Form 5500 series) and accompanying
schedules, as filed, for the most recently completed three plan years for which
such reports have been filed, (iv) the financial statements for the most
recently completed three plan years for which such statements have been
prepared, (v) the most recent determination letter issued by the Internal
Revenue Service and the application submitted with respect to such letter and
(vi) all correspondence with the Internal Revenue Service, Department of Labor
and Pension Benefit Guaranty Corporation concerning any controversy.
(d) Each Pension Plan which is intended to qualify under Section
401(a) of the Code is so qualified under the Code as amended to the date hereof
and no circumstance exists which might cause such plan to cease being so
qualified. With respect to each ERISA Benefit Plan, (i) there is no pending or,
to the best knowledge of Seller, threatened claim, (ii) all contributions and
premiums due have been made on a timely basis and are deductible by Seller,
(iii) no "prohibited transaction" described in Section 406 of ERISA or Section
4975 of the Code has occurred, and (iv) Seller has no potential liability under
ERISA or the Code. Each of the ERISA Benefit Plans (i) has been administered in
accordance with its terms and (ii) complies in form, and has been administered
in accordance, with the requirements of ERISA and, where applicable, the Code.
No liability has been asserted (whether or not such liability is being
litigated) against Seller or any affiliate of Seller in connection with any
"employee pension benefit plan" (as defined in Section 3(2) of ERISA), including
but not limited to, any withdrawal liability (as described in Section 4201 of
ERISA) with respect to any multiemployer plan (as defined in Section 3(37) of
ERISA). There are no reserves, assets, surplus or prepaid premiums with respect
to any Welfare Plan. Seller and each ERISA Affiliate has complied with the
health care requirements of Part 6 of Title I of ERISA. Seller has no obligation
to provide health or death benefits to its prior employees or any other person
other than while an employee of Seller, except as specifically required by Part
6 of Title I of ERISA. The consummation of the transactions contemplated by this
Agreement will not (i) entitle any individual to severance pay, or (ii)
accelerate the time of payment, vesting or increase the amount of compensation
due to any such individual. Seller has not taken any action or failed to take
any action which will subject Seller or has subjected Seller to liability under
the Worker Adjustment and Retraining Notification Act of 1988.
(e) For purposes of the Agreement, "ERISA Affiliate" means (i) any
corporation which at any time on or before the Closing Date is or was a member
of the same controlled group of corporations (within the meaning of Section
414(b) of the Code) as Seller; (ii) any partnership, trade or business (whether
or not incorporated) which at any time on or before the Closing Date is or was
under common control (within meaning of Section 414(c) of the Code) with Seller;
and (iii) any entity which at any time on or before the Closing Date is or was a
member of the same affiliated service group (within the meaning of Section
414(m) of the Code) as either Seller, any corporation described in clause (i) or
any partnership, trade or business described in clause (ii).
7.21 No Indebtedness. Seller does not have any outstanding indebtedness to
any person or entity, except for such indebtedness as is set forth on Schedule
7.21 attached hereto, and except for indebtedness being expressly assumed by
Purchaser under Article 5 of this Agreement, the lenders of any such
indebtedness have consented to the transfer of the Assets to Purchaser hereunder
free and clear of all Liens. For purposes of the Agreement, "Indebtedness" shall
mean all items which in accordance with GAAP would be included in determining
total liabilities secured by any Lien on property owned or acquired, whether or
not such a liability shall have been assumed, liabilities in respect of all
leases, whether capitalized or operating, and guarantees, indemnities,
endorsements (other than for collection in the ordinary course of business) and
other contingent obligations, whether secured or not in respect to the
obligations of other persons or entities.
7.22 Representations Regarding Transfer of Real Property.
(a) There are no persons other than Seller in possession or occupancy
of the Real Property or any part thereof, nor are there any persons who have
possessory rights in respect to the Property or any part thereof.
(b) Seller is not a foreign corporation, foreign partnership, foreign
trust or foreign estate (as those terms are defined in the Internal Revenue Code
and Income Tax Regulations).
(c) There are no claims, causes of action or other litigation or
proceedings by or against Seller pending or, to the best of Seller's knowledge,
threatened in writing to Seller in respect to the ownership or operation of the
Real Property or any part thereof (including disputes with governmental
authorities, utilities, contractors, adjoining land owners) which would
adversely affect the Real Property after the Closing.
(d) To the best of Seller's knowledge, Seller has not received any
notice of any fire, health, safety, building, pollution, environmental, zoning
or other violations of law in respect to the Real Property, which have not been
fully and completely corrected.
(e) To the best of Seller's knowledge, there is no existing, pending,
contemplated, or threatened in writing to Seller, (i) condemnation of any part
of the Real Property, or (ii) widening, change of grade or limitation or use of
streets abutting the Real Property except for anything which is public
information.
(f) There are not any contracts, agreements, leases, licenses, written
or oral, to which Seller is a party or otherwise bound, other than as may be
expressly set forth herein, which Purchaser, upon becoming owner of the Real
Property, will be required to assume or pay or to which Purchaser may, as a
consequence of entering into or closing this Agreement, may become bound except
under Schedule 1.1.3 of this Agreement.
(g) There are no judgments affecting the Real Property that are unpaid
or unsatisfied of record; the Real Property is not in the hands of a receiver;
no application for any such receivership is pending; no petition in bankruptcy
has been filed by or against Seller, and there are no actions, proceedings, or
investigations pending or, to the best of Seller's knowledge, threatened in
writing to Seller against or affecting Seller or the Real Property, and no basis
known to Seller for the same, which, if decided adversely, would affect the
Seller's ability to carry out the transaction contemplated by this Agreement.
(h) Seller has not received written notice of violation of applicable
Environmental Laws (as defined below) with respect to the Real Property from any
governmental agency having authority which have not been cured or remediated in
compliance with applicable Environmental Laws.
(i) Upon repayment of the secured loans made to Seller by American
National Bank, Seller has the right to good and marketable fee simple title to
the Real Property subject to no liens, encumbrances, mortgages, assignments,
pledges, easements, equities, options, claims and rights of others of any nature
whatsoever, except for the following:
(i) Taxes and assessments not due and payable as
at the Closing Date;
(ii) Zoning regulations and building code requirements, ordinances,
and restrictions of record, adopted by the government or municipal authority
having proper jurisdiction thereof, and any amendments thereto, now in force and
effect, which relate to the Real Property; and
(iii) The public utility easements, private and public roads and
highways, and covenants and restrictions of record.
(j) No work has been performed on the Real Property which could give
rise to a mechanics or construction lien which has not been paid.
(k) Seller has no knowledge of either having committed or failed to
commit any acts which would cause a title exception to be noted by a competent
title insurance company and which would render the title of Seller in the Real
Property unmarketable.
(l) Seller has no knowledge of any structural defects in any of the
improvements situated on the Real Property, nor any defects in the plumbing and
electrical systems, or the heating and air conditioning systems which might
reasonably be expected to impair the sales value or the Purchaser's intended use
of the Real Property as an office and manufacturing facility.
(m) there are no fence disputes, boundary disputes, water disputes or
drainage disputes affecting the Real Property, and the Real Property is not
located in a hazardous flood zone or, to the best of Seller's knowledge, in a
"wetland" or "transition area" as defined in the Environmental Laws.
7.23 Environmental Matters. Seller has all permits, licenses, and other
authorizations which are required as of the date of this Agreement and which
will be required as of the Closing Date for the operation of the Xxxxxxxxx
Business under federal, state, local and foreign laws relating to pollution and
protection of the environment, including, without limitation, the Resource
Conservation and Recovery Act, 42 U.S.C. 6901, et seq., as amended ("RCRA"), the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
9601, et seq., as
amended ("CERCLA"), the Clean Air Act, 42 U.S.C. 7401, et seq., as amended
("CAA"), the Clean Water Act, 33 U.S.C. 1251, et seq. ("CWA"), the Toxic
Substance Control Act, 15 U.S.C. 2601, et seq. ("TSCA"), and any other
applicable federal, state or local laws, statutes, ordinances and regulations
relating to the physical or environmental condition of property and to the
maintenance, record-keeping and disposition of any underground tanks and
relating to emissions, discharges, releases or threatened releases, of
pollutants, contaminants, petroleum oils, chemicals or industrial, hazardous or
toxic materials or waste into the environment (including, without limitation,
ambient water, surface water, groundwater, land surface or subsurface strata) or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants, petroleum
oils, chemicals or industrial, hazardous toxic materials or waste or any
regulation, order, decree or judgment issued, entered, promulgated or approved
thereunder (the "Environmental Laws"). With respect to the conduct of its
business, its operations, its properties, and its use of owned and leased
properties, Seller is in compliance in all material respects with all terms and
conditions of the required permits, licenses and authorizations necessary under
the Environmental Laws, and is also in compliance in all material respects with
all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in the
Environmental Laws as in effect on the date hereof. There is no pending civil or
criminal litigation, notice of violation or administrative proceeding arising
out of the business or activities of Seller or any affiliates, including without
limitation any pending litigation, notice or proceeding relating in any way to
the Environmental Laws (including notices, demands, letters or claims under
RCRA, CERCLA, CAA, CWA, TSCA and similar foreign, state and local laws). There
is no threatened civil or criminal litigation, notice of violation or
administrative action arising out of the business activities of Seller,
including without limitation, any threatened litigation, notice or proceeding
relating in any way to the Environmental Laws. Seller is not aware of any past
or present events, conditions, circumstances, practices, incidents or actions
which may give rise to any legal liability, or otherwise form the basis of any
claim, action, suit, proceeding, hearing or investigation against or involving
Seller arising out of any violation or alleged violation of the Environmental
Laws or any circumstances which could reasonably be expected to interfere with
or prevent continued compliance with the Environmental Laws in effect on the
date hereof or the Closing Date. To the best of Seller's knowledge, no hazardous
substances, pollutants, petroleum oils or fraction, contaminants or hazardous
waste including, but not limited to, asbestos, "PCB's" and urea formaldehyde are
contained in or have been, from any source whatsoever, generated, released,
spilled, stored or deposited over, beneath or on the Schiller Park, Illinois
facility of Seller, or on adjoining properties, by Seller, or, to the best of
Seller's knowledge, any other person.
7.24 Approvals and Consents. No consent, authorization or approval of, or
waiver or exemption by, or filing with any other person or entity is required in
connection with the execution, delivery or performance of this Agreement by
Seller or the consummation by Seller of the transactions contemplated hereby.
7.25 Insurance. Attached hereto as Schedule 7.25 is a complete and correct
list of all policies of insurance of which Seller is the owner, insured or
beneficiary, or covering the Xxxxxxxxx Business or any of the Assets for any
policy period after January 1, 1993. Such Schedule indicates for each policy the
carrier, policy number or numbers, names of all insured parties thereunder
(including the named insured and additional insured parties, if any), risks
insured, the amounts of coverage, deductibles and retentions, if any and any
pending claims thereunder. All premiums under such policies for periods through
the date hereof have been paid and through the Closing Date will be paid. No
notice of cancellation or non-renewal with respect to or disallowance of any
claim under, or increase of the premium for any such insurance policy has been
received by Seller.
7.26 Other Intangibles. The vendor and customer lists of Seller related to
the Xxxxxxxxx Business attached hereto as Schedule 7.26 are true and complete as
of the Closing Date; and the engineering drawings, bills of material,
manufacturing data and other intangibles conveyed to Purchaser as described in
Section 1.1.7 of this Agreement are all of such items used in the Xxxxxxxxx
Business that are in the possession of Seller. There exists no actual or, to the
knowledge of Seller, threatened termination, cancellation or material limitation
of, or material modification in, the business relationship of Seller with any
customer or supplier.
7.27 Warranties. Set forth on Schedule 7.27 attached hereto are the express
warranty terms and disclaimers for all forms of warranties given (or extended
warranties sold) by Seller during the ten-year period prior to the Closing Date
with respect to the Xxxxxxxxx Business for product sold or services related
thereto provided by Seller. Seller, in operating the Xxxxxxxxx Business, has not
sold any parts or equipment or performed any services related thereto which fail
to comply with any express or implied warranties or guarantees of Seller
applicable to such parts or equipment or services related thereto.
8. Representations and Warranties of Purchaser
Purchaser represents and warrants to Seller as of the Closing Date as
follows:
8.1 Corporate Existence. Purchaser is a corporation organized and
existing in good standing under the laws of the State of Delaware. Purchaser
has full power and authority to own its assets and to carry on its business as
and where such business is now conducted.
8.2 Due Authorization and Enforceability. Purchaser has full power and
authority to execute and deliver this Agreement and the Related Agreements to
which it is a party, and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and the Related Agreements
to which it is a party, by Purchaser of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action and no other
action or proceeding on the part of Purchaser is necessary to authorize the
execution and delivery by Purchaser of this Agreement or Related Agreements to
which it is a party or the consummation by Purchaser of the transactions
contemplated hereby or thereby. This Agreement and the Related Agreements to
which Purchaser is a party have been duly executed and delivered by Purchaser
and this Agreement and the Related Agreements to which Purchaser is a party are
legal, valid and binding obligations of Purchaser, enforceable against Purchaser
in accordance with their terms.
8.3 No Conflicts. Neither the execution and delivery of this Agreement or
the Related Agreements to which Purchaser is a party, nor the consummation of
the transactions contemplated hereby or thereby will (i) conflict with or
violate any provision of the Articles of Incorporation, Bylaws or other Charter
documents of Purchaser, (ii) conflict with or violate any law, rule, regulation,
ordinance, order, writ, injunction, judgment or decree applicable to Purchaser
or by which any of its properties or assets are bound or affected or (iii)
conflict with or result in any breach of or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights or termination or cancellation of, or result in the
creation of any lien, charge or encumbrance on any of their assets or properties
pursuant to any of the terms, conditions, or provisions of, any note, bond,
mortgage, indenture, permit, license, franchise agreement, lease, contract, or
other instrument or obligation to which Purchaser is a party or by which any of
Purchaser's properties or assets are bound or affected; except, in the case of
(ii) and (iii) above, for such conflicts, violations, breaches, defaults,
terminations, cancellations and accelerations which in the aggregate will not
have a material adverse effect on the ability of Purchaser to consummate the
transactions contemplated by this Agreement and the Related Agreements to which
it is a party.
9. Survival of Representations and Warranties. The representations and
warranties made in this Agreement or pursuant hereto shall survive the execution
and delivery of this Agreement and the conclusion and closing of the
transactions contemplated hereby.
10. Covenants
10.1 Retention of Records. Purchaser hereby covenants that for a period of
five (5) years following the Closing Date, Purchaser will retain, at Purchaser's
sole expense, the Books and Records of Seller relating to the operation of the
Xxxxxxxxx Business prior to the Closing Date. During such period, Purchaser will
afford to Seller, its counsel and accountants, during normal business hours,
reasonable access to such books, records and other data, to the extent that such
access may reasonably be required to facilitate the preparation by Seller of
such tax returns as they may be required to file with respect to Seller and the
investigation, litigation and final disposition of any claims which may be made
against Seller. Following the expiration of such five (5) year period, Purchaser
may dispose of any such books, records and other data; provided, however, that
before disposing of any such materials it will first notify Seller and permit
Seller at its sole expense, to remove such materials.
10.2 Further Actions. Upon the terms and subject to the conditions hereof,
each of the parties hereto agrees to use its best efforts or take or cause to be
taken all action and to do or cause to be done all things necessary, proper and
advisable to consummate the transactions contemplated by this Agreement, the
Related Agreements and other documents necessary to close this transaction, and
shall use its best efforts to obtain all necessary waivers, consents and
approvals and to effect all necessary registrations and filings. In addition,
Seller covenants and agrees that it will take all actions and execute and
deliver all documents, instruments, and agreements necessary to assist Purchaser
in the removal of all Liens, assuming Purchaser has satisfied its obligations
pursuant to its assumption of Seller's liabilities as set forth in Article 5 of
this Agreement.
10.3 Press Releases. Purchaser and Seller will consult with each other
before issuing any press release or otherwise making any public statements with
respect to this Agreement or the transactions contemplated hereby and shall not
issue any such press release or make any such public statement prior to such
consultation, except as may be required by law or any listing agreement with a
national securities exchange. It is contemplated that the parties will issue
press releases to announce the execution of this Agreement and the expected
Closing. Notwithstanding the foregoing, Seller shall, simultaneously with the
Closing, notify its employees and creditors of the sale of assets contemplated
by this Agreement, specifically noting that Purchaser is not assuming
liabilities beyond those described in this Agreement.
10.4 Receipt of Funds. After the Closing Date, each of Purchaser and Seller
shall segregate any monies or other amounts paid to either of them in respect of
receivables or assets that belong to the other party, and each party shall
promptly pay over and remit to the other party any such monies and amounts
weekly after receipt thereof. Each of Purchaser and Seller shall take all
reasonable actions, including the giving of timely notices to assure that the
covenants set forth in this Section 10.4 are faithfully and timely fulfilled.
10.5 Employees
10.5.1 Potential Employees. Effective as of the Closing Date, Purchaser
or an affiliate of Purchaser may offer employment to any of Seller's personnel
now working full-time at the Schiller Park, Illinois facility of Seller (a
"Potential Employee"). Any Potential Employee who accepts an offer of employment
and who commences employment with Purchaser upon the terms of such offer on or
after the Closing Date is an "Accepting Employee". Seller shall be responsible
and liable for any required notification and payments under the Worker
Adjustment and Retraining Notification Act of 1988.
10.5.2 Benefits. Purchaser will not assume or have any liability,
responsibility or obligation under any of the Pension Plans, Welfare Plans or
Non-ERISA Commitments of Seller. Seller will be responsible and liable for and
discharge at or prior to Closing all obligations to, for or on behalf of all
Potential Employees under any Pension Plans, Welfare Plans and Non-ERISA
Commitments, including, without limitation, if applicable, the cost of accrued
and unpaid wages, unpaid bonuses, stock options, severance pay, accrued personal
days, unpaid holidays, and sick leave, the cost of retirement benefits and
pensions, the cost of payroll taxes, including FICA, Federal Unemployment
Insurance, State Unemployment Insurance and Federal and State withholding, and
the cost of health insurance, dental insurance, disability insurance, life
insurance and the like for events prior to and including the Closing Date.
Seller also will be responsible and liable for the costs of administration and
compliance with the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA") for any qualifying event or as required under applicable state law or
similar group health contribution coverage benefits under federal and state law
(collectively such costs and those set forth in the sentence prior hereto shall
be defined as "Separation Benefits").
10.5.3 Eligibility of Accepting Employees. For purposes of eligibility
for employment plans, programs and for vacation during employment with
Purchaser, Purchaser's policies or those of its affiliates as set forth from
time to time hereafter shall be applied in accordance with their terms and
conditions to all Accepting Employees. The service of Accepting Employees with
Seller prior to the Closing Date shall be recognized for purposes of eligibility
for participation in Purchaser's 401(k) plan, vacation accrued in accordance
with and subject to the terms and conditions of Purchaser's or its affiliates'
applicable vacation policies as stated from time to time and other applicable
employment benefits plans and programs.
10.5.4 Claims of Accepting Employees. Seller hereby agrees to indemnify
and hold harmless Purchaser, its agents, officers or directors, employees, and
affiliates against any liabilities, costs or expenses (including reasonable
attorneys' fees) resulting from claims made by any Potential Employees, any
prior employees of Seller and/or any applicants for employment with Seller for
Separation Benefits. Subject to the accuracy of the representations of Seller
contained herein, Purchaser hereby agrees to indemnify Seller, its agents,
officers, directors, employees and subsidiaries against any liabilities, costs
or expenses including reasonable attorney's fees) resulting from claims made by
any Accepting Employees relating to acts and omissions of Purchaser with respect
to the employment of such Accepting Employees by Purchaser after the Closing
Date.
10.6 Discharge of Liabilities. Seller will pay and discharge in due course
after the Closing Date, and hold Purchaser harmless from, all liabilities,
obligations and taxes of Seller relating to and arising from the ownership and
operation of the Assets and the Xxxxxxxxx Business prior to and including the
Closing Date, (whether unrecorded accounts payable, accrued liabilities,
customer deposits or other obligations), that are not expressly assumed by
Purchaser pursuant to the terms of Article 5 of this Agreement, it being
understood that Purchaser is assuming no liabilities or obligations of Seller
other than those expressly set forth in Article 5 of this Agreement. If Seller
fails to pay and discharge any such liabilities and, in the case of bona fide
disputes regarding such liabilities, fails to disclose to Purchaser the
existence of and all facts relating to such bona fide disputes, Purchaser may,
without having any duty, pay or discharge such liabilities of Seller and apply
for reimbursement from the Escrow Agent, offset such amounts paid from any
obligation of Seller to Purchaser or use the indemnification provisions of
Article 16 of this Agreement.
10.7 Products Liability Claims. Seller hereby covenants to defend and
undertake any and all obligations and liabilities under any claims for products
liability, failure to warn, breach of warranty, sales misrepresentation or other
related claims arising from loss and injury to person and/or property occurring
prior to and including the Closing Date due to the alleged acts and omissions of
Seller. Seller will maintain in force policies of insurance in sufficient limits
to meet the above obligation. The Long-term Esrow Amount shall be available to
meet the obligations of Seller hereunder.
10.8 Name Change. Immediately after the Closing Date, Seller shall change
its name sufficiently so as not to use "Xxxxxxxxx" or any variant thereof.
10.9 IRPTA Disclosure Document. Purchaser and Seller acknowledge that the
purpose of the Illinois Responsible Property Transfer Act ("IRPTA") is to ensure
that the parties to the transaction contemplated hereby are made aware of the
existing environmental liabilities associated with the ownership of the
Property, as well as the past use and environmental status of the Property.
Purchaser and Seller hereby waive the thirty (30) day IRPTA Disclosure Document
delivery period and agree that the Disclosure Document required by IRPTA (the
"IRPTA Document") will be prepared by Seller and will be provided to Purchaser
by Seller on or before the Closing Date.
10.10 Real Property Apportionment. The general real estate taxes and
assessments, water and sewer charges, utility bills, prepaid charges, payments
and accrued expenses relating to the Real Property, and any leases, licenses,
occupancy certificates, and any and all other items relating thereto not
specifically mentioned which are customarily apportioned in real estate
transactions of this kind (the "Proratable Items") shall be apportioned as of
the Closing Date. The net amount of any such apportionment shall be added to or
deducted from, as the case may be, the amount due Seller on the Closing Date
with respect to the Real Property. If on the Closing Date, real property taxes
for the then current fiscal period are not known, the apportionment of such real
property taxes shall be made on the basis of 100% of the real property taxes for
the immediately preceding fiscal tax period for which such taxes are known.
Seller and Purchaser hereby agree to adjust the apportionment of such real
property taxes when the actual bills therefor are issued. If the real property
taxes which are to be apportioned shall thereafter be reduced by abatement, the
amount of such abatement, less the reasonable cost of obtaining the same, shall
be apportioned between the parties, provided that neither party shall be
obligated to institute or prosecute proceedings for an abatement.
Notwithstanding anything to the contrary contained herein, Seller and Purchaser
acknowledge that Seller shall be responsible for the Proratable Items relating
to periods on or before the Closing Date regardless of when such Proratable
Items shall become due and payable, and Purchaser shall be responsible for all
such Proratable Items relating to periods after the Closing Date.
10.11 Material Changes in Operations. Seller shall refrain, except as
otherwise allowed in this Agreement or approved in advance by Purchaser, from
(i) making any purchases, sales or transfers of any Assets other than in the
ordinary course of business; (ii) entering into any contracts or commitments
other than in the ordinary course of business; (iii) mortgaging, pledging,
subjecting to lien or otherwise encumbering any Asset; (iv) granting a pay
raise, price increase or decrease or making any change in the compensation or
benefits payable to employees, agents or sales representatives of Seller or
making any bonus payment or arrangement , or (v) violating any federal, state or
local laws with respect to the operation of the Xxxxxxxxx Business or the use of
the Assets. Seller shall use its best efforts to pay all liabilities and taxes
in a timely manner, to preserve the Xxxxxxxxx Business intact, to keep the
services of the present officers and key employees and to preserve the goodwill
of all suppliers, customers, sales representatives and others having material
business relations with Seller. Except with Purchaser's prior written consent,
which will not be unreasonably withheld, Seller shall not allow the coverage of
any of the liability or property insurance of the Xxxxxxxxx Business to be
diminished in any material respect. Seller will exercise all due diligence in
safeguarding and maintaining secure all of the Books and Records of Seller.
Seller shall not on behalf of itself or its shareholders enter into, engage in
or initiate any negotiations or discussions regarding (i) a merger,
consolidation, reorganization, restructuring or similar transaction of or
regarding Seller or (ii) the sale, directly or indirectly, of any of Seller's
capital stock or rights related thereto or the Assets. Seller shall refrain from
declaring, setting aside, paying or making any dividend or other distribution or
payment whether in cash, stock or property with respect to any capital stock of
Seller or other rights in respect of or related thereto.
10.12 Access to Information. Seller shall furnish to Purchaser and its
representatives full access at all reasonable times to the employees, Assets,
agents, affiliates and Books and Records of Seller and shall promptly furnish
all information with respect to the Xxxxxxxxx Business as Purchaser reasonably
requests from time to time.
10.13 Real Property and Asset Matters
10.13.1 Environmental Covenants. Seller agrees to allow Purchaser and
its representatives and agents upon prior notice to conduct a Phase I
Environmental Audit (the "Audit") of all aspects of the operation of the
Xxxxxxxxx Business and the condition of the Real Property, including, without
limitation, historical and present operations, waste disposal practices at the
Real Property, permit status and compliance, prospective viability of continued
operation of the Xxxxxxxxx Business in compliance with the Environmental Laws,
and groundwater, air emission and soil evaluation. Seller will cooperate in all
aspects of the Audit and allow complete access by Purchaser and its
representatives and agents to the Real Property and all information requested.
Seller shall allow Purchaser and its representatives and agents to take such
samples of soil, wastewater effluent, subsurface water, air emissions and solids
as Purchaser deems necessary to complete the Audit. Purchaser agrees to leave
the Real Property in the same condition as prior to the Audit and not to
materially disturb the operations of Seller in the conduct of the Audit.
10.13.2 Maintenance of Real Property. Seller shall maintain the Real
Property in the same manner that Seller has been maintaining the Real Property.
Seller shall use its best efforts to maintain all permits and consents necessary
to the operation of the Xxxxxxxxx Business and to maintain the Real Property. If
the Real Property is in a municipality that has ordinances requiring a
Certificate of Occupancy or other inspection certificate before the Real
Property
may be used by Purchaser, Seller shall make any and all required repairs and
alterations, at its expense, to maintain or obtain a current certificate by the
Closing Date.
10.13.3 Destruction of Assets. In the event of damage or destruction of
any of the Assets prior to the Closing Date, then, at Purchaser's election, the
damaged or destroyed Assets shall be excluded from this Agreement with a
corresponding reduction in Purchase Price, or Purchaser shall be entitled to
receive the insurance proceeds payable in respect of such Assets in lieu of or
together with such Assets, in which event the Purchase Price shall remain the
same. In the event the Assets are damaged or destroyed by reason of fire or
other casualty to such an extent that the operations of the Xxxxxxxxx Business
are substantially impaired, then Purchaser may, by written notice to Seller,
terminate this Agreement. The Closing may be delayed to determine whether the
Assets have been substantially impaired. Seller shall notify Purchaser
immediately in the event of any damage or destruction to the Assets.
11. Closing
11.1 Closing. The closing of the transaction contemplated by this Agreement
(the "Closing") shall be held on the 30th day of August, 1996 or such other date
as mutually agreed by the parties, at the offices of Barasa & Xxxxxx, 000 Xxxx
Xxxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxxx at 10 a.m., local time, or at such other
time and place as the parties may agree.
11.2 Closing Events. At the Closing upon the Closing Date:
11.2.1 Purchaser, Seller and Escrow Agent shall execute the
Short-term Escrow Agreement and the Long-term Escrow Agreement.
11.2.2 Seller shall execute and deliver to Purchaser the Xxxx of
Sale and any other documents of transfer regarding personal property.
11.2.3 Seller shall provide to Purchaser any and all required
written consents to Purchaser's assumption of the Material Agreements.
11.2.4 Purchaser shall execute and deliver to Seller the Certificate
of Assumption, in the form attached hereto as Exhibit 11.2.4 for those
liabilities of Seller assumed by Purchaser pursuant to Article 5 of this
Agreement.
11.2.5 Purchaser shall have received a written legal opinion from
counsel to Seller and Seller shall have received a written legal opinion from
counsel to Purchaser substantially in the respective forms attached hereto as
Exhibit 11.2.5.
11.2.6 Purchaser shall have received from Seller a certificate
signed by the Chairman and President of Seller that the representations and
warranties of Seller are true as of the Closing Date, and that all covenants to
be performed by Seller by the Closing Date have been performed.
11.2.7 The parties shall complete and execute the Memorandum of
Allocation.
11.2.8 Seller shall obtain from its secured and judgment creditors
and lenders and deliver to Purchaser such lien releases, terminations and other
documents necessary to assure Purchaser to its satisfaction that the Assets are
being transferred by Seller to Purchaser under this Agreement free and clear of
all liens and encumbrances.
11.2.9 Xx. Xxxxxx X. Xxxxxxxxxx shall have executed a Limited-Term
Employment Agreement and Messrs. Xxxxx X. Xxxxxxxxxx and Xxxxxx Xxxxxxx shall
have executed Employment Agreements in form and substance acceptable to
Purchaser.
11.2.10 Seller shall deliver to Purchaser a fully
executed IRPTA Document.
11.2.11 Seller shall deliver to Purchaser a release from the
Illinois Department of Revenue of claims against Seller under Section 902(d) of
the Illinois Income Tax Act and Section 5(j) of the Illinois Retailers
Occupation Tax Act.
11.2.12 Seller shall execute and deliver to Purchaser the Deed and
all other documents, certificates, statements, declarations and affidavits
necessary or generally delivered for the transfer of real estate like the Real
Property, including without limitation, the Title Commitment and Title Policy.
11.2.13 Purchaser shall pay the Purchase Price as set forth in
Section 3.3 of this Agreement.
12. Conditions to Purchaser's Obligation to Complete Closing
The obligation of Purchaser to purchase and pay for the Assets at Closing
shall be subject to the satisfaction, prior to or concurrently with the Closing
Date, of each of the following express conditions precedent, unless waived by
Purchaser:
12.1 Consents and Releases. Seller shall have obtained and delivered to
Purchaser (based upon Purchaser's assumption thereof) any and all required
consents to the assignment of the Material Agreements, the lien and judgment
releases and terminations of security interests described in Section 11.2.8 of
this Agreement so that the Assets may be transferred by Seller to Purchaser free
and clear of all liens and encumbrances, and a release from Xxxxxxxx Venture
Group, Inc. regarding its fee.
12.2 Governmental Approvals. Purchaser and Seller shall have obtained all
requisite government approvals, if any, for their participation in the
transactions contemplated under this Agreement.
12.3 Accuracy of Representations. The representations and warranties of
Seller shall be true and correct in all material respects at the Closing Date,
and Seller shall have complied with all covenants set forth in this Agreement.
12.4 Closing Documents Delivered. Seller shall have executed and delivered
the documents, certificates, instruments and agreements and done the acts
required of Seller in connection with the Closing as described in Section 11 of
this Agreement.
12.5 No Prohibition. No order, statute, rule, regulation, executive order,
injunction, stay, decree or restraining order shall have been enacted, entered,
promulgated or enforced by any court or competent jurisdiction or governmental
or regulatory authority or instrumentality that prohibits the consummation of
the transactions contemplated hereby.
12.6 Bankruptcy. Seller shall not be the subject of a petition for
reorganization or liquidation under the Federal bankruptcy laws, or under state
insolvency laws, nor shall an assignment for the benefit of creditors or any
similar protective proceeding or act or event of bankruptcy have occurred.
12.7 Real Property Fulfillments. Purchaser shall have received prior to the
Closing Date a title report indicating that, upon the payment of the secured
loans made by American National Bank to Seller, Seller will obtain good and
marketable title to the Real Property and any title defects noted in such title
report shall have been cured in full by Seller. The survey of the Real Property
previously provided by Seller to Purchaser shall have been certified as of the
Closing Date to be accurate by the surveyor. Purchaser is reasonably satisfied
with the results of the Phase I Environmental Audit. No uninsured casualty shall
have occurred with respect to the Real Property. No damage or destruction of the
Assets to the extent that the operation of the Xxxxxxxxx Business has been
substantially impaired shall have occurred.
12.8 Non-Fulfillment Date. In the event that one or more of the foregoing
conditions in this Article 12 is not fulfilled by the date of September 30
,1996, Purchaser may, upon notice to Seller on or prior to Closing, elect either
(i) to waive the condition and proceed to Closing; or (ii) terminate this
Agreement without any further liability on the part of either of the parties
except that the foregoing shall not relieve either of the parties from liability
for damages actually incurred as a result of breach of this Agreement.
13. Conditions to Seller's obligation to Complete the Closing
The obligation of Seller to sell and convey the Assets at the Closing shall
be subject to the satisfaction, prior to or concurrently with the Closing Date,
of each of the following express conditions precedent:
13.1 Government Approvals. Purchaser and Seller have obtained all requisite
government approvals, if any, for their participation in transactions
contemplated under this Agreement.
13.2 Accuracy of Representations. The representations and warranties of
Purchaser shall be true and correct in all material respects at the Closing
Date, and for Purchaser shall have complied with all of its covenants set forth
in this Agreement.
13.3 Closing Documents Delivered. Purchaser shall have executed and
delivered the documents, certificates, instruments and agreements and done the
acts required of Purchaser in connection with the Closing, as described in
Section 11 of this Agreement.
13.4 No Prohibition. No order, statute, rule, regulation, executive order,
injunction, stay, decree or restraining order, shall have been enacted, entered,
promulgated or enforced by any court or competent jurisdiction or governmental
or regulatory authority or instrumentality that prohibits the consummation of
the transactions contemplated hereby.
14. [Intentionally left blank.]
15. Amendment and Waiver
15.1 Amendment. This Agreement may be amended only by a writing executed
by the authorized representatives of Purchaser and Seller.
15.2 Waiver. Any party hereto may (a) agree to extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto or (c) waive compliance with
any of the agreements or conditions contained herein. Any agreement on the part
of the party hereto to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed by the authorized representative of
such party.
16. Indemnification
16.1 Purchaser Indemnification. Purchaser hereby agrees to indemnify and
hold Seller harmless, from and against any and all loss, liability (whether
known or unknown, actual or contingent, legal or equitable, mature or inchoate,
as guarantor or principal obligor, howsoever arising), claim, damage and
expense, including, but not limited to, reasonable attorneys' fees and amounts
reasonably expended in settlement of litigation, pending or threatened, arising
out of or relating to: (i) any liabilities or obligations of the Xxxxxxxxx
Business which were expressly assumed by Purchaser under this Agreement; (ii)
any material misrepresentation or material breach of any of Purchaser's
representations and warranties set forth in this Agreement; or (iii) any
material breach of any of Purchaser's covenants or obligations under this
Agreement.
16.2 Seller Indemnification. Seller hereby agrees to indemnify and hold
Purchaser harmless from and against any and all loss, liability (whether known
or unknown, actual or contingent, legal or equitable, mature or inchoate,
howsoever arising), damage and expense, including but not limited to reasonable
attorneys' fees and amounts reasonably expended in settlement of litigation,
pending or threatened, arising out of or relating to: (i) any liabilities and
obligations of Seller not expressly assumed by Purchaser under the Agreement;
(ii) any material misrepresentation or material breach of any of Seller's
representations and warranties set forth in this Agreement; or (iii) any
material breach of any of Seller's covenants or obligations under this
Agreement.
16.3 Procedure of Indemnification
16.3.1 Neither Purchaser nor Seller are required to take any action or
make any claim to any third person as a precondition of seeking indemnification
from the other(s) hereunder. The party seeking indemnification (the "Claimant")
shall promptly give notice to the indemnifying party or parties of any matter or
item which forms a basis for indemnification hereunder (a "Claim"). The Claimant
shall afford the indemnifying party or parties, or their authorized
representatives, the opportunity to defend, discharge or compromise such Claim
and examine the books and records of the Claimant insofar as they relate to such
Claim and to copy or make extracts therefrom, and will (at the expense of the
indemnifying party) provide full cooperation of itself and its employees and
agents with respect to such Claim. At an indemnifying party's request and
expense, the Claimant will assign any claims or rights which the Claimant may
have against any third party in an action against the third parties, and, at the
indemnifying party's expense, the Claimant will cooperate fully with the
indemnifying party in pursuing any such claim or right.
16.3.2 The indemnifying party or parties may, within twenty (20) days
after the Claimant has given notice of the Claim, give notice to the Claimant
that the indemnifying party or parties intend to litigate or otherwise attempt
to resolve the claim identified in the Claimant's notice. Upon such notice from
the indemnifying party or parties to the Claimant: (i) the indemnifying party or
parties, or any of them, shall have the right, at their sole cost and expense
and without liability, cost or expense, to Claimant, to prosecute any such
proceeding, defend any such Claim or otherwise attempt to resolve the Claim
(including, but not limited to, settling such claim by paying all amounts in
settlement), and (ii) Claimant shall have the right to participate at its
expense in the defense of any such Claim. The indemnifying party or parties
shall keep the Claimant appraised of all material developments in connection
with any such Claim.
16.3.3. So long as any indemnifying party shall continue determination
that monies are payable by Claimant to a third person, the indemnifying party or
parties will not be obligated to pay to Claimant the monies so claimed.
16.3.4 Notwithstanding the foregoing Section 16.3.3; if as a result of
any Claim, a judgment is entered against Claimant in a court of competent
jurisdiction, or a lien attaches to any property or asset of Claimant, or any
injunction, order or decree is obtained in any court of competent jurisdiction
which materially and adversely affects or threatens to materially affect the
assets, property, business or operations of Claimant, Claimant will be entitled
to discharge, compromise or settle such Claim in good faith without the consent
of the indemnifying party or parties.
16.3.5 All amounts incurred or paid by the Claimant for which it is
entitled to indemnification by the indemnifying party or parties pursuant to the
terms and conditions of this Agreement shall be promptly reimbursed to it by the
indemnifying party or parties if not reimbursed within thirty (30) days of
written request therefor, Claimant shall have the right to offset from any other
amounts it owes or may owe to the indemnifying party or parties. It is
contemplated by the parties to this Agreement that prompt payment by Seller of
the agreed Claims of Purchaser shall be accomplished, insofar as possible, by
application and use of the Short-term Escrow Amount and the Long-term Escrow
Amount. In the event Claimant collects or retains an amount in excess of the
amount of claim or lien, including reasonable costs and expenses including
attorneys' fees, Claimant shall return such funds to the indemnifying party.
Claimant shall cooperate in accordance with its best business judgment, in
attempting to cause third parties who are liable to it or to the indemnifying
party, to cause such third parties to reimburse the indemnifying party for
payment made by it to Claimant; and Claimant shall subrogate the indemnifying
party to Claimant's rights against third parties, with respect to claims paid by
the indemnifying party to Claimant.
16.4 Exclusive Remedy. So long as the indemnifying party is in compliance
with this Article 16, the remedies provided in this Article 16 shall be
exclusive, except for (a) remedies set forth elsewhere in this Agreement (such
as application or use of the Short-term Escrow Amount and Long-term Escrow
Amount), and (b) specific performance or injunctive relief which shall be
available regardless of the provisions of this Article 16 so long as claims for
specific performance or injunctive relief are made within thirty-six (36) months
of the Closing Date.
16.5 Limitation on Indemnities. Notwithstanding anything set forth in this
Agreement, the aggregate total amount of indemnifications required of Seller
under this Article 16 shall not exceed the amount of the Purchase Price. This
limitation on indemnity shall not apply to claims of fraud. The time limitation
set forth in Section 16.4 of this Agreement, shall not apply to claims of fraud
or actions to enforce Article 6, Sections 7.2, 7.7, 7.16, 8.2 and Article 19 of
this Agreement.
16.6 Guarantee of Purchaser Obligations. Mestek, Inc. shall guarantee the
obligations of Purchaser under this Agreement by the execution and delivery of
a guarantee substantially in the form attached hereto as Exhibit 16.6
(the "Mestek Guarantee").
17. Notices. Any notices or other communications required or permitted hereunder
or otherwise in connection herewith shall be in writing and shall be deemed to
have been duly given when delivered in person or transmitted by facsimile
transmission or on receipt after dispatch by express, registered or certified
mail, postage prepaid, addressed as follows:
If to Seller:
Xxxxxxxxx Industries, Inc.
x/x Xxxxxxxx Xxxxxx, Xxx.
Barasa & Xxxxxx
000 X. Xxxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
If to Purchaser:
Formtek, Inc.
000 Xxxxx Xxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: R. Xxxxx Xxxxx,
Senior Vice President
or such other address as the person to whom notice is to be given has furnished
in writing to the other parties.
18. Further Assurance -- After Closing
18.1 Assurance of Seller. At any time and from time to time after the
Closing Date, at Purchaser's request and without further consideration, Seller
shall cooperate in good faith and promptly execute and deliver all such further
instruments or documents and perform such other and further acts as Purchaser
may reasonably request is in order to fully conclude the transactions
contemplated hereby.
18.2 Delivery of Notices. After the Closing Date, each party shall promptly
deliver to the other party any notices, correspondence and other documents
relating to the Assets being conveyed hereunder and the Xxxxxxxxx Business,
which are, from time to time, received by that party.
19. Confidentiality
19.1 Proprietary information. Purchaser acknowledges its receipt of
substantial information from Seller concerning the Xxxxxxxxx Business. All such
information is hereinafter called the "Proprietary Information".
19.2 Nondisclosure. Seller acknowledges that it is now in possession of the
same Proprietary Information concerning the Xxxxxxxxx as described above in
Section 19.1. Seller agrees to keep all of the Proprietary Information
confidential after the Closing Date, except such Proprietary Information that
becomes public information without the fault of Seller.
20. Entire Agreement -- Binding Effect. This Agreement (together with the
Exhibits and Schedules hereto, the Related Agreements and the other agreements
executed at the Closing) sets forth the entire integrated understanding and
agreement of the parties with respect to the subject matter hereof and
supersedes all prior agreements whether written or verbal. This Agreement may
not be modified, amended or terminated except in a writing signed by all of the
parties hereto.
21. Assignment. No party to this Agreement shall have the right to assign any of
its rights and obligations hereunder without the prior written consent of the
other parties hereto. To the extent that such consent is given, this Agreement
and all provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
22. Miscellaneous
22.1 Expenses. Except as otherwise agreed herein, each party hereto shall
bear its own expenses incurred in connection with this Agreement and the
consummation of the transactions contemplated hereby.
22.2 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original instrument, but
all such counterparts together shall constitute one and the same instrument.
22.3 Governing Law. This Agreement is being made in and shall be governed by
and construed and enforced in accordance with the laws of the State of Illinois
and the United States of America, except for the conflicts laws of those
jurisdictions.
22.4 No Third Party Rights. This Agreement, the Related Agreements and the
other agreements entered into at the Closing are solely for the benefit of the
parties hereto. No third person shall acquire any rights or claims by reason of
or under this Agreement, the Related Agreements or the other agreements entered
into at the Closing.
22.5 Severability. Should any terms, provision or clause hereof, or of any
other agreement or document which is required by this Agreement, be held to be
invalid, such invalidity shall not affect or render invalid any other provisions
or clauses hereof or thereof the consideration or mutuality of which can be
given effect without such invalid provision, and all of which shall remain in
full force and effect. If any provision of this Agreement is so broad as to be
unenforceable, such provision shall be interpreted to be only so broad as is
enforceable under applicable law.
22.6 Headings. The headings to the sections of this Agreement are inserted
for convenience and reference only and are not intended to define or limit the
substance of any section.
22.7 Singular and Plural. Singular terms in this Agreement may be deemed to
include plural, and plural terms to include the singular.
22.8 Brokerage Fees. Neither Seller nor Purchaser, nor any of their
officers, directors or employees, has incurred any liability for any brokerage
fees, commissions, finders' fees or similar fees or expenses for which either
Seller or Purchaser may be liable, except Seller has engaged Xxxxxxxx Venture
Group, Inc. and its principal Xxxxxxx X. Xxxxxxxx as its agent and broker and
hereby is liable and undertakes the responsibility for the payment of all fees
and costs thereof, absolving and indemnifying Purchaser of any obligations
therefor or related thereto.
22.9 Exhibits and Schedules. The exhibits and schedules referenced in this
Agreement and attached hereto shall be deemed to be a part of this Agreement and
are incorporated herein by this reference.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal, with the intent that this be a sealed instrument, on the date first above
written.
SELLER: XXXXXXXXX INDUSTRIES, INC.
CORPORATE SEAL
ATTEST:
By: /s/ Xxxxxx Xxxxxxx By:/S/XXXXXX X. XXXXXXXXXX
Xxxxxx X. Xxxxxxxxxx, Chairman
and Chief Executive Officer
PURCHASER: FORMTEK, INC.
CORPORATE SEAL
ATTEST:
By: /s/ X.X. Xxxxx By:/S/XXXXXXX X. XXXX
Xxxxxxx X. Xxxx, Vice
President-Finance
