EXHIBIT NO. 10.46
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT ("Agreement") dated as of September 1, 1999 among G B
LABELS, INC., a Delaware corporation with its principal office and place of
business in Burlington, North Carolina (the "Seller") and JIT MANUFACTURING,
INC., a North Carolina corporation, with its principal office and place of
business in Greensboro, North Carolina (the "Buyer").
WITNESSETH:
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WHEREAS, Seller is engaged in the business of manufacturing pressure
sensitive flexo-printed labels (the "Business"); and
WHEREAS, Seller desires to sell and Buyer desires to purchase the
assets utilized in the operation of the Business, including but not limited to,
certain machinery, equipment, inventory, and other tangible and intangible
assets of Seller, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants hereinafter set forth, the parties hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
1.1 Acquired Assets. Subject to the terms and conditions of this
Agreement, at Closing (as defined herein) and effective at 12:01 a.m. on August
30, 1999 ("Effective Date"), Seller hereby agrees to sell, assign, convey and
deliver to Buyer, or cause to be sold, assigned, transferred, conveyed and
delivered to Buyer, and Buyer agrees to purchase and accept from Seller all of
Seller's right, title and interest in any of the following assets as are owned
by Seller on the Effective Date, whether or not carried or reflected on the
books and records of Seller (collectively the "Acquired Assets"):
(a) All of the manufacturing and operating assets associated with
or benefiting the Business including, without limitation, all
trucks, automobiles, trailers, rolling stock, machinery,
equipment, printing cylinders, cutting dies, computers,
tooling, accessories, dies, patterns, working and design
drawings, materials handling and support equipment, supplies,
tools, replacement and spare parts together with all related
operation or repair manuals and applicable warranties of each
manufacturer of such items;
(b) All inventory including, without limitation, finished goods
("Finished Goods"), work-in-process ("Work-in-Process"), raw
materials ("Raw Materials"), replacement
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and spare parts, new and used tool inventory, packaging
materials and operating supplies (collectively the
"Inventory");
(c) All accounts receivable of Seller (collectively "Accounts
Receivable");
(d) All records related to Seller's customers, suppliers and
products, as well as other information owned by Seller which
will enable Buyer to continue the operations of the Business
as they are currently being conducted;
(e) All permits, licenses and approvals and authorizations by
governmental authorities held by Seller at the Effective Date
which are transferable by Seller;
(f) Subject to any approval requirements, supplier, customer and
other contracts designated by Seller and related to the
operation of Seller's Business;
(g) All Seller's rights in, to and under all domestic and foreign
patents, patent applications, patent licenses, software
licenses, know-how licenses, trade names, the name "G B
Labels, Inc.", trademarks, copyrights, unpatented inventions,
service marks, trademark and service xxxx registrations and
applications, all trade secrets, know-how (including, without
limitation, proprietary know-how and use and application
know-how), manufacturing, engineering and other drawings,
formulae, process and material specifications, product/process
test specifications and test methods, technology, technical
information, engineering data, design and engineering
specifications, if any (the "Intellectual Property");
(h) All promotional literature, customer and supplier lists
(including, without limitation, all lists of customers of the
Business maintained by Seller) and similar written data;
(i) All current customer and work-in-process records,
correspondence and other files and records of Seller,
manufacturing and quality control and product development
records, and any financial information and other files and
records of Seller pertaining solely to the Business, wherever
located on the Effective Date;
(j) Such rights as Seller has to use its present telephone and
facsimile transmission numbers and its post office box, from
and after the Effective Date;
(k) All other tangible or intangible assets used directly or
indirectly in the operation of the Business or benefiting the
Business, including, but not limited to goodwill, not
otherwise described in this Section 1.1 except for the
excluded assets described in Section 1.2 below.
The Acquired Assets shall also include all of Seller's right, title and interest
in the items described on Schedule 1.1(l) which have been leased to Seller (the
"Leased Assets"), and Buyer shall assume
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all of Seller's obligations pursuant to the leases of the Leased Assets as of
the Effective Date. Each of the parties shall use its best efforts to cause each
lease governing a Leased Asset to be assigned to Buyer as of the Effective Date,
or as soon as practicable thereafter.
The sale and transfer of the Acquired Assets shall be made free and clear of all
liabilities, obligations, security interests, liens and encumbrances, except
those specifically assumed by Buyer described in Section 1.3 below.
1.2 Excluded Assets. Buyer shall not acquire the following assets
of Seller:
(a) Seller's land and building (including fixtures associated
therewith) located on South River Drive, Burlington, North
Carolina from which Seller currently operates its Business
(the "Property");
(b) Cash and cash equivalents, prepaid expenses, securities and
bank deposits;
(c) Tax refunds and tax benefits; and
(d) Corporate seals, minute books, stock books, tax returns,
financial and tax records to the extent not expressly acquired
by Buyer, and any other records related to the corporate
organization of Seller.
1.3 Assumed Obligations. At Closing Buyer shall assume Seller's
liability for the following (the "Assumed Obligations"):
(a) All trade accounts payable of Seller existing and identified
on the Effective Date as identified in the Assumption
Agreement, which have arisen in the ordinary course of
business ("Trade Accounts Payable");
(b) The contracts listed on Schedule 1.3-(b); and
(c) The leases of the Leased Assets listed on Schedule 1.1(l).
The Assumed Obligations will be transferred to Buyer at Closing pursuant to an
assumption agreement in the form of Exhibit 1.3 attached hereto (the Assumption
Agreement"). Except as provided above or as otherwise expressly provided in this
Agreement or in any other agreement executed and delivered by Buyer incident to
the consummation of the transactions contemplated hereby, Buyer does not assume
and shall not be bound by any obligations or liabilities of Seller of any kind
or nature, known or unknown, contingent or otherwise which liabilities shall
remain the obligation of Seller.
ARTICLE II
PURCHASE PRICE AND PAYMENT
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2.1 Purchase Price. The parties have agreed that the purchase price for
the machinery, equipment and other tangible and intangible assets of Seller
other than Accounts Receivable, Finished Goods, Raw Materials and
Work-in-Process shall be $625,000.00. The purchase price for such other assets
shall be calculated as follows:
(a) Accounts Receivable. The purchase price of the Accounts
Receivable shall equal their face amount, as set forth in
Seller's books and records, as maintained in accordance with
Seller's regular business practices. Seller shall guarantee
the collection of all Accounts Receivable to Buyer. To the
extent an Account Receivable acquired hereunder remains
uncollected ninety (90) days after Closing, Buyer shall assign
the uncollected Account Receivable to Seller and shall deliver
to Seller all of the records relating to the generation of
such Account Receivable and Buyer's efforts to collect it;
Seller shall pay Buyer the face amount thereof from the
escrowed funds described below, and to the extent no funds
remain in escrow Seller shall pay Buyer the balance thereof
within five (5) days after receiving notice that the escrowed
funds have been depleted.
(b) Finished Goods. The purchase price of Finished Goods shall
equal 85% of Seller's most recent selling price for such
items.
(c) Raw Materials and Work-in-Process. The purchase price of Raw
Materials and Work-in-Process shall equal Seller's verifiable
cost in such items.
Buyer and Seller agree to use their respective best efforts to review and reach
agreement upon the purchase price calculations for the various assets described
above in a four (4) day period prior to Closing. To the extent there is a
disagreement on the calculation of purchase price which cannot be resolved prior
to closing, neither party shall be obligated to close but the Closing may be
extended by mutual agreement of the parties.
2.2 Payment of Purchase Price. Upon calculation of the purchase price
for the Acquired Assets by the parties immediately prior to Closing, the
purchase price shall be paid by Buyer to Seller as follows:
(a) Buyer will pay $50,000.00 into an interest bearing trust
account to be held and disbursed by an escrow agent pursuant
to the escrow agreement in the form of Exhibit 2.2(a) (the
"Escrow Agreement");
(b) Buyer will assume the trade accounts payable of Seller as of
the effective date;
(c) Buyer will pay Seller the balance of the purchase price in
cash at Closing;
(d) Personal property taxes for the current year will be
appropriately allocated at Closing between Buyer and Seller,
with the portion allocated to Buyer to be added to the amount
due from Buyer to Seller at Closing, and Seller will pay the
full 1999
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personal property taxes on the Acquired Assets to the
appropriate taxing authorities when such taxes are due.
A closing statement reflecting the calculation and payment of the purchase price
will be executed at Closing.
2.3 Allocation of Purchase Price. Buyer and Seller agree to cooperate
in the allocation of the Purchase Price incident to the applicable provisions of
the Internal Revenue Code and to file Form 8594 as required thereby. The value
of the Accounts Receivable and Inventory will be allocated based upon the method
set forth herein. A value of $625,000.00 shall be allocated to machinery,
equipment and all tangible and intangible assets other than Accounts Receivable,
Work-in-Process, Finished Goods and Raw Materials inventory which shall be
valued as provided in Section 2.2 above.
ARTICLE III
CLOSING
3.1 Closing. The Closing of the sale and purchase of the Assets shall
take place as soon as possible, but no later than 10:00 a.m. Eastern Daylight
Savings Time on September 1, 1999 at the offices of Xxxxxx Xxxxxxx & Meschan,
P.A., 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000 or on such other
date as may be mutually agreed upon in writing by Buyer and Seller. The
transactions described herein shall all be effective as of the Effective Date,
except that all income and expenses of the business incurred after 12:01 a.m. on
August 30, 1999 shall be for the benefit or responsibility of the Buyer, as
further set forth in Section 6.18 below.
3.2 Items to be Delivered at Closing. At the Closing and subject to the
terms and conditions herein contained:
(a) Seller shall deliver to Buyer such bills of sale with
covenants of warranty, assignments, endorsements or other good
and sufficient instruments and documents of conveyance and
transfer, in form and substance satisfactory to Buyer and its
counsel, as shall be necessary and effective to transfer and
assign to and vest in Buyer all of Seller's right, title and
interest in and to the Acquired Assets and Business, including
without limitation:
(i) good and valid title in and to all the Acquired
Assets owned by Seller;
(ii) all vehicle titles;
(iii) good and valid leasehold interest in and to the
personal property leased by Seller as lessee and
acquired hereunder;
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(iv) to the extent assumed by Buyer, all of Seller's
rights under all agreements, contracts, commitments,
leases, plans, bids, quotations, proposals,
instruments and other documents to which a Seller is
a party or by which it has rights at the Effective
Date;
(v) a mutually satisfactory, and executed, lease for the
Property (the "Burlington Lease");
(vi) A non-competition agreement executed by Seller;
(vii) A non-competition agreement executed by Gibraltar
Packaging Group, Inc. ("Gibraltar");
(viii) A Guaranty Agreement executed by Gibraltar.
Simultaneously with such delivery, all such steps will be
taken as may be required to place Buyer in actual possession
and control of the Acquired Assets;
(b) Buyer shall deliver to the Escrow Agent Fifty Thousand Dollars
($50,000.00) in cash or certified funds as required under the
Escrow Agreement;
(c) Buyer shall deliver the balance of the Final Purchase Price to
Seller in cash or certified funds; and
(d) At or prior to Closing, the parties shall deliver to each
other the agreements, opinions, certificates and other
documents and instruments referred to in Articles VII and VIII
hereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
4. Representations and Warranties of Seller. Seller represents and
warrants to Buyer as follows:
4.1 Due Incorporation and Authority. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Seller is qualified to transact business in North Carolina and
Delaware which are the only states in which qualification is necessary for
Seller to conduct its Business as such is presently being conducted. Seller has
all requisite corporate power and authority to own, lease and operate its
properties and assets and to carry on the Business as presently conducted.
Gibraltar owns all of the issued and outstanding capital stock of Seller and
there exists no options, warrants or rights to such stock vested in any third
party. North Carolina is the only state in which Seller is required to file
state income tax or sales tax returns and is the only state where Seller is
required to qualify to do business.
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4.2 Validity of Agreement. Seller has full legal right and all
requisite power, legal capacity and authority to enter into this Agreement, and
any other agreement contemplated hereunder, and to perform its obligations
hereunder and thereunder. This Agreement has been duly executed and delivered by
Seller and is a valid and legally binding obligation of Seller, enforceable
against Seller in accordance with its terms and conditions. The execution,
delivery and performance of this Agreement by Seller has been duly authorized by
all requisite corporate action.
4.3 Intentionally Omitted.
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4.4 No Approvals or Notices Required; No Conflict with Other
Instruments. Except as described in Schedule 4.4 hereto, the execution, delivery
and performance of this Agreement by Seller and the consummation by Seller of
the transactions contemplated hereby will not violate (with or without the
giving of notice or the lapse of time or both), or require any consent,
approval, filing or notice under any law applicable to Seller, and will not
require any consent, approval or notice under and will not conflict with, or
result in the breach or termination of any provision of, or constitute a default
under, or result in acceleration of the performance of the obligations of Seller
under, or result in the creation of a lien, charge or encumbrance upon any of
the properties or assets of Seller pursuant to Seller's charter or bylaws or any
mortgage, deed of trust, indenture, lease, contract, instrument or other
agreement, or any order, judgment or decree, to which Seller is a party or by
which it or any of its assets or properties are bound. The consents, approvals,
filings or notices listed on Schedule 4.4 are referred to herein as the
"Required Consents."
4.5 Financial Statements. The audited financial statement of Seller as
of the end of its 1996, 1997 and 1998 fiscal years, copies of which have been
previously delivered to Buyer, in each case prepared by Seller's accountants,
fairly present the financial position of Seller as at such dates and the results
of operations of Seller for such periods, in each case in accordance with GAAP
consistently applied for the periods covered thereby, but recognizing that
Seller is part of a consolidated group of affiliated companies and that such
statements were part of the consolidated audited financial statements for such
companies (the foregoing financial statements are collectively referred to as
the "Audited Financial Statements"). The financial statements dated July 31,
1999 (the "Balance Sheet Date"), prepared by Seller and reviewed by Seller's
accountants, were previously delivered to Buyer, are attached hereto as Schedule
4.5 (the "July, 1999 Financial Statements"), and fairly present the financial
position of Seller as at such date and the results of operations of Seller for
such period, in accordance with GAAP applied on a basis consistent with that of
the Audited Financial Statements; subject, however, to changes resulting from
normal year-end audit adjustments that will not in the aggregate be material.
4.6 No Undisclosed Liabilities. Except as and to the extent disclosed
in the Audited Financial Statements or the July, 1999 Financial Statements,
Seller has no liabilities or obligations of any kind, whether accrued, absolute,
contingent or otherwise, of a kind required to be disclosed on a balance sheet
prepared in accordance with GAAP.
4.7 No Material Adverse Change. Since the Balance Sheet Date, there has
been no material adverse change in the assets, liabilities, properties,
business, prospects, results of operations
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or financial condition of Seller, nor has there been any material damage,
destruction or loss since the date of a certain appraisal of personal property
prepared by AccuVal and dated June 22, 1998 (the "Appraisal Date") to any of the
properties or assets of Seller, whether or not covered by insurance.
4.8 Tax Matters. Buyer shall have no liability for any federal, state
or local tax of any type due and payable by Seller.
4.9 Ownership and Adequacy of Acquired Assets. Seller has good and
marketable title to the Acquired Assets, free and clear of all mortgages, deeds
of trust, claims, liens, security interests and other encumbrances, except (i)
as specifically set forth in Schedule 4.9 hereto and (ii) liens for personal
property taxes not yet due and payable.
4.10 Acquired Assets. Seller has delivered to Buyer a list of all
Acquired Assets owned by Seller as of the Appraisal Date (such list of Acquired
Assets being set forth in Schedule 4.10(a) hereto), together with such additions
thereto and deletions therefrom as shall have occurred in the ordinary course of
business prior to the Effective Date, which list is correct and complete in all
material respects. Seller has also delivered to Buyer a list of all leased
personal property ("Leased Personal Property") utilized by Seller as of the
Effective Date which leases are listed in Schedule 4.10(b). The operation and
maintenance of the Acquired Assets and Leased Personal Property in the ordinary
course of Seller's business does not violate any restrictive covenant or any
federal, state or local law, ordinance, code, rule or regulation including, but
not limited to, infringement of any patent or proprietary intellectual property
of any other party. During the past three (3) years, there has not been any
significant interruption in the operations of Seller due to a failure of any
such property to operate or to operate properly.
4.11 Inventory. All Inventory is useable in the ordinary course of
business and is not defective. Seller is not aware of any adverse conditions
affecting the supply of materials available to Seller and consummation of the
transactions provided for herein will not adversely affect such supply.
4.12 Patents, Trademarks, Etc. Other than Seller's corporate name,
Seller does not own any patents, trademarks, copyrights, service marks, or trade
names, and none of the foregoing is necessary in order to operate the Seller's
business as presently conducted. Seller has the right to use its corporate name,
free and clear of any claims or rights of others. Any software utilized by
Seller is validly licensed for use by the Seller.
4.13 Actions and Proceedings. Except as set forth on Schedule 4.13,
there are no outstanding orders, judgments, injunctions, awards or decrees of
any court, arbitrator or governmental or regulatory body against Seller and
there are no actions, suits, investigations, claims or proceedings, including
arbitration proceedings, whether or not the defense thereof or liabilities in
respect thereof are covered by insurance, pending, threatened against or
involving Seller or any of its properties or assets, and, there is no reasonable
basis for any such action or proceeding. All notices required to have been given
to any insurance company which insures against any action, suit, investigation,
claim or proceeding set forth on Schedule 4.13 have been timely and duly given.
Except as set forth on
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Schedule 4.13, there have been no claims of any type against Seller which have
been settled, adjudicated or other otherwise disposed of within the two (2)
years prior to the date of this Agreement, including but not limited to,
employee claims, product claims, or patent, trademark, copyright, service xxxx
infringement claims, against or involving of Seller or any product manufactured,
marketed or distributed by Seller.
4.14 Contracts and Other Agreements. Schedule 4.14 sets forth a correct
and complete list and brief description of the following agreements (including
any renewal or escalation terms) concerning the Business of Seller, or the
Acquired Assets being acquired by Buyer pursuant to this Agreement, and
specifically identifies those agreements which are not terminable by Seller
without penalty upon thirty (30) days or less notice:
(i) All purchase orders (whether between Seller and its suppliers
or Seller and its customers) which require future payments,
performance of services or delivery of goods and/or materials
to or on behalf of the Business;
(ii) All mortgages, deeds of trust, indentures, agreements,
contracts, arrangements, commitments, instruments,
understandings or obligations, oral and written, to which
Seller is a party and to which any of the Acquired Assets are
subject and which are to be performed by any party in whole or
in part on or after the date hereof;
(iii) Intentionally Omitted.
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(iv) Intentionally Omitted.
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(v) Intentionally Omitted.
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(vi) All contracts and other agreements with any person to sell,
distribute or otherwise market any products manufactured or
distributed by Seller;
(vii) All contracts and other agreements with any person for the
manufacture of any products sold or distributed by Seller;
(viii) Any contract or other agreement containing covenants or
agreements of Seller not to compete in any line of business or
with any person in any geographical area or covenants or
agreements of any other person not to compete with Seller in
any line of business or in any geographical area;
(ix) All leases for Leased Personal Property;
(x) All relationships wherein Seller is holding a deposit for a
third party or such Seller has deposited funds with a third
party; and
(xi) Intentionally Omitted. .
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There have been made available to Buyer true and complete copies of all
contracts and other agreements set forth on Schedule 4.14. All of such contracts
and other agreements are valid and binding upon Seller, and neither Seller nor
any other party, is in default thereunder in any material respect. Schedule 4.14
also lists all contracts and other agreements currently in negotiation or
proposed by Seller of a type which if entered into by Seller would be required
to be listed on Schedule 4.14. Seller has made available to Buyer true and
correct drafts or summaries of all such contracts and other agreements in
negotiation or proposed and true and complete copies of all documents in the
custody or control of Seller relating thereto. Except as set forth in Schedule
4.14, none of the rights of Seller under any of the contracts and agreements set
forth on Schedule 4.14 will be adversely affected by consummation of the
transactions provided for in this Agreement and all rights of Seller are
assignable to Buyer at Closing without penalty.
4.15 Compliance with Laws. Except as set forth on Schedule 4.15 hereto,
to the best of Seller's knowledge, Seller is in compliance in all material
respects with all applicable federal, state, local and foreign laws, ordinances,
regulations, orders, judgments and decrees, including, without limitation, all
Environmental Laws (as defined below), and all federal, state and local labor
and employment laws, and Seller has not received notice nor is aware that
violation of any such law, ordinance, regulation, order, judgment or decree is
being alleged. To the best of Seller's knowledge, there are no proposed laws,
ordinances or regulations that, if enacted, would materially and adversely
affect the business of Seller.
4.16 Environmental Compliance.
4.16.1
(a) As used in this Agreement, "Environmental Laws" shall mean any
and all federal, state and local laws, regulations,
ordinances, administrative rules, orders, decrees, decisions
and the like, and all other requirements under law relating to
pollution or protection of the environment, including, without
limitation, laws, regulations and requirements relating to the
ownership, possession, storage and/or control of the
Facilities (as defined below) and to emissions, discharges,
releases or threatened releases of storm water, pollutants,
contaminants, toxic or hazardous chemicals, materials, or
substances, or solid or hazardous wastes into the environment
(including without limitation ambient air, surface water,
groundwater or land), or otherwise relating to the
manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants,
contaminants, toxic or hazardous substances, or solid or
hazardous wastes. The Environmental Laws include, without
limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, and any
comparable applicable state law. To the best of Seller's
knowledge, Seller is in possession of all records and
documents required to be retained under applicable laws and
all rules and regulations thereunder.
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(b) As used herein, the term "Hazardous Materials" means any
pollutant, chemical, substance, material or waste which is or
becomes regulated as hazardous, toxic or unsafe under any
federal, state or local law or regulation, including, without
limitation:
(i) designated as a hazardous material pursuant to the
Hazardous Materials Transportation Act, 49 U.S.C.
ss. 5102;
(ii) listed as a "hazardous substance" as defined in the
Comprehensive Environmental Response, Compensation
and Liability Act (42 U.S.C. xx.xx. 9601-9674);
(iii) designated a "hazardous substance" pursuant to xx.xx.
307 and 311 of the Federal Water Pollution Control
Act as amended (33 U.S.C. xx.xx. 1251-1387);
(iv) listed as a "hazardous air pollutant" pursuant to ss.
7412 of the Clean Air Act (42U.S.C.ss.ss.7401-7671);
(v) defined as a "hazardous waste" pursuant to ss. 1004
of the Resource Conservation Recovery Act (42 U.S.C.
xx.xx. 6901-6992k);
(vi) regulated under the Solid Waste Disposal Act
(42 X.X.X.xx.xx. 6901-6992);
(vii) subject to rules promulgated under the Toxic
Substance Control Act (15 U.S.C. xx.xx. 2601-2671),
including, but not limited to, PCBs and
asbestos-containing materials; and
(viii) any amendments now existing or hereinafter enacted to
the above-described statutes, rules and regulations.
(c) As used in this Agreement, the term "Environmental Condition"
means any set of circumstances (physical, chemical or
otherwise) in, on, under or affecting the Facilities that: (i)
constitutes the presence of Hazardous Materials; or (ii)
otherwise constitutes a threat to or endangerment to the
environment.
(d) As used in this Agreement, the term "Facilities" means the
real property and all buildings, improvements and
appurtenances owned by Seller at South Riverview Drive,
Burlington, North Carolina.
4.16.2 Seller has made Buyer aware of certain environmental
conditions which exist at the Facilities, and of existing
claims related thereto (the "Litigation"). At the present time
(a) there are no Hazardous Materials (including, without
limitation, oil and petroleum products) which are currently
being used at the Facilities in a manner which does not comply
with the Environmental Laws; and (b) Seller is presently
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conducting its activities at the Facilities in compliance with
any and all Environmental Laws and in a manner designed to
manage, store, treat, transport and dispose of any Hazardous
Material and the constituents thereof, on and off-site, in
compliance with any and all Environmental Laws.
4.16.3 Intentionally Omitted.
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4.16.4 Intentionally Omitted.
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4.16.5 Intentionally Omitted.
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4.16.7 Seller has not used the Facilities for a landfill or solid
waste disposal site.
4.16.8 Intentionally Omitted.
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4.16.9 Intentionally Omitted.
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4.16.10 There are no transformers, capacitors, or other appliances or
equipment, in use upon or at or stored upon or at the Facilities, which contain
PCBs.
4.16.11 There are no asbestos-containing materials in use at, or
stored at, the Facilities.
4.16.12 No lead paint or similar material is used at, or stored at,
the Facilities.
4.16.13 Seller agrees to indemnify and hold Buyer harmless from any
claims or causes of action related to the Litigation or to the violation of any
other Environmental Laws by the Seller prior to closing.
4.16.14 Intentionally Omitted.
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4.16.15 Intentionally Omitted.
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4.16.16 Intentionally Omitted.
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4.17 Governmental Licenses, Permits and Related Approvals. Seller has
obtained and presently maintains all licenses, permits, consents, approvals,
authorizations, qualifications and orders of governmental authorities
(collectively, the "Permits") that are required to enable Seller to own, occupy,
operate the Facilities and to conduct the Business as presently conducted,
including without limitation all Permits required under the Environmental Laws.
All such permits are valid and in full force and effect and freely transferable
by Seller, and upon the Closing, Buyer will have all right, title and interest
as the holder thereof. No proceeding is pending or threatened to limit, suspend
or revoke any Permit, and the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby will not
violate or result in the revocation, suspension or limitation of any Permit. To
the best of Seller's knowledge, there are no
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limitations on the continued and future use, occupation, operations or expansion
of the Business at its present Facilities.
4.18 Labor Matters. There are no controversies pending or threatened
between Seller and any of its employees or former employees, job applicants or
any association or group of such persons and such Seller has not taken or failed
to take any action which would provide a reasonable basis for such a
controversy. Seller has complied with all laws applicable to it relating to the
employment of labor, including any provisions thereof relating to wages, hours,
collective bargaining and the payment of social security, Medicare, unemployment
compensation and similar taxes. During the five (5) year period preceding the
date of this Agreement, there has not been any union activity involving persons
employed by Seller.
4.19 Customer and Suppliers. Schedule 4.19 lists, by dollar volume paid
for the prior twelve (12) months ended on June 30, 1999, (i) the ten largest
customers of Seller, (ii) the ten largest suppliers of Seller, and (iii) any
other supplier which is Seller's sole supplier of a product of which Seller
purchased in excess of $5,000 of such product during such twelve (12)-month
period and (iv) any contracts with suppliers that cannot be terminated without
penalty on thirty (30) days notice. To the best of Seller's knowledge, no entity
or person listed on Schedule 4.19 (A) intends or within the last twelve (12)
months has threatened to cancel or otherwise terminate the relationship of such
person with Seller, or (B) intends to modify materially its relationship with
Seller or to decrease materially or limit materially services, supplies or
materials to Seller or its usage or purchase of the products or services of a
Seller, as the case may be. To the best of Seller's knowledge, there are no
material customer disputes or dissatisfaction related to Seller's Business.
4.20 Employee Benefit Plans. Seller shall indemnify Buyer for any claim
or causes of action made under ERISA (including but not limited to COBRA)
related to any employee benefit plans maintained by Seller whether such claims
arise before or the Effective Date.
4.21 Insurance. During each of the past five (5) fiscal years, Seller
has been insured with respect to occurrences normally insured against in amounts
normally carried by companies similarly situated and in the same business as
Seller and there are no outstanding material unpaid claims under any such policy
or binder.
4.22 Operations of Seller. Since the Balance Sheet Date Seller has
not:
(a) incurred any material obligation or liability (contingent or
otherwise) except (i) normal trade or business obligations
incurred in the ordinary course of business, the performance
of which will not, individually or in the aggregate, have an
adverse effect on Seller's Business, prospects, financial
condition or results of operations, and (ii) obligations under
contracts and agreements described in this Agreement or the
Schedules hereto, the performance of which will not,
individually or in the aggregate, have an adverse effect on
Seller's Business, prospects, financial condition or results
of operations;
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(b) incurred any indebtedness for borrowed money;
(c) sold, assigned, transferred, leased or otherwise disposed of
or agreed to sell, assign, transfer, lease or otherwise
dispose of, any of its properties or assets, except for a fair
consideration in the ordinary course of business;
(d) acquired or leased any material assets or property, except for
the purchase of inventory in the ordinary course of business;
(e) paid any bonus or similar payment or made or granted any
general wage or salary increase (whether effective before or
after Closing) or entered into any employment contract, or
adopted any increase in any bonus, incentive compensation,
pension, profit sharing or other employee benefit plan or
arrangement;
(f) suffered any material casualty loss or damage, whether or not
such loss or damage shall have been covered by insurance;
(g) lost any supplier or suppliers, which loss or losses,
individually or in the aggregate, has or may have an adverse
effect on its results of operations; or
(h) lost any customer or customers, which loss or losses,
individually or in the aggregate, has or may have an adverse
effect on its results of operations.
4.23 Intentionally Omitted.
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4.24 Leased Real Property. Upon the execution by Buyer and Seller of
the Burlington Lease, Buyer shall be entitled to utilize the realty of Seller
located at 0000 Xxxxx Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx (the "Leased
Real Property") in the same manner as Seller, which use shall not result in the
violation of any law or ordinance.
4.25 Full Disclosure. All documents and other papers delivered by or on
behalf of Seller in connection with this Agreement and the transactions
contemplated hereby are true and complete in all material respects. No
representation or warranty of Seller contained in this Agreement contains an
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements made, in the context in
which made, not materially false or misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
5. Buyer represents and warrants to Seller as follows:
5.1 Due Incorporation and Authority. Buyer is a corporation duly
organized, validly existing under the laws of the State of North Carolina and
has all requisite corporate power
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and authority to own, lease and operate its properties and assets and to carry
on its business as presently conducted.
5.2 Authorization and Validity of Agreement. Buyer has all requisite
corporate power and authority to enter into this Agreement and to perform its
obligations hereunder. The execution, delivery and performance of this Agreement
by Buyer and the consummation by Buyer of the transactions contemplated hereby
have been duly and effectively authorized by all requisite corporate action.
This Agreement has been duly executed and delivered by Buyer and constitutes a
valid and legally binding obligation of Buyer.
5.3 No Approvals or Notices Required: No Conflict with Instruments to
which Buyer is a Party. The execution, delivery and performance of this
Agreement by Buyer and the consummation by Buyer of the transactions
contemplated hereby will not violate (with or without the giving of notice or
the lapse of time or both), or require any consent, approval, filing or notice
under any provision of law applicable to Buyer, and will not require any
consent, approval or notice under and will not conflict with, or result in the
breach or termination of any provision of, or constitute a default under, or
result in the acceleration of the performance of Buyer's obligations under, or
result in the creation of a lien, charge or encumbrance upon any of the
properties, assets or business of Buyer pursuant to Buyer's charter or bylaws or
any indenture, mortgage, deed of trust, lease, contract, instrument or other
agreement, or any order, judgment or decree, to which Buyer is a party or by
which Buyer or any of its properties or assets is bound.
ARTICLE VI
COVENANTS AND AGREEMENTS
6. The parties covenant and agree as follows:
6.1 Conduct of Business. From the date hereof through the Effective
Date, Seller shall conduct its Business in the ordinary course, consistent with
past practice, and, without the prior written consent of Buyer, Seller will not
take any action that would cause the representations and warranties contained in
Section 4.22 hereof not to be true and correct immediately after the taking of
such action. From the date hereof through the Effective Date, Seller will
conduct its business in such a manner so that the other representations and
warranties contained in Article IV hereof, in addition to those contained in
Section 4.22, shall continue to be true and correct on and as of the Effective
Date as if made on and as of the Effective Date.
6.2 Maintenance of Assets: Casualty Loss. From the date hereof through
the Effective Date, Seller will maintain its assets in customary repair, order
and condition, reasonable wear and tear accepted, and, in the event of a
casualty, loss or damage prior to the Effective Date to any of such assets for
which Seller is insured, Seller will, at the option of Buyer, and subject to the
requirements of any applicable loss payee or mortgagee clauses, either repair or
replace such damaged assets or to transfer the proceeds of such insurance to
Buyer on the Effective Date.
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6.3 Notice of Certain Events. Seller hereby agree to give Buyer prompt
notice of (i) any event, condition or circumstances occurring from the date
hereof through the Effective Date that would constitute a violation or breach of
any representation, warranty or covenant of Seller contained in this Agreement,
or (ii) any event, occurrence, transaction or other item which would have been
required to have been disclosed in this Agreement or any Schedule or statement
delivered hereunder, had such event, occurrence, transaction or item existed on
the date hereof.
6.4 Corporate Examinations and Investigations. Prior to the Effective
Date, Buyer shall be entitled, through its employees, representatives and
contractors, including, without limitation, Xxxxxx Xxxxxxx & Meschan, P.A., and
Buyer's accountants to make such investigation of the assets, Facilities,
properties, employees, business and operations of Seller, and such examination
of the books, records and financial condition of Seller as it wishes; provided,
however, that each such person or entity shall keep such information provided
confidential. Any such investigation and examination shall be conducted at
reasonable times and under reasonable circumstances and Seller shall cooperate
fully therein. No investigation by or on behalf of Buyer, however, shall
diminish or obviate any of the representations, warranties, covenants or
agreements of Seller under this Agreement; provided, however, that Buyer agrees
to inform Seller, in writing, prior to the Closing, of any information it may
obtain which might cast doubt upon the accuracy of any representation or
warranty of Buyer contained herein (hereinafter, a "Negative Disclosure"). In
order that Buyer may have full opportunity to make such physical, business,
accounting and legal review, examination or investigation as it may wish of the
business and affairs of Seller, Seller shall make available to the
representatives of Buyer during such period all such information and copies of
such documents concerning the affairs of Seller as such representatives may
reasonably request, shall permit the contractors and representatives of Buyer
access to the properties of Seller and all parts thereof and shall cause
Seller's officers, employees, advisors, staff, consultants, agents, accountants
and attorneys to cooperate fully with such contractors and representatives in
connection with such review and examination.
6.5 Expenses. The parties to this Agreement shall bear their own
respective expenses incurred in connection with the negotiation, preparation,
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby, including, without limitation, all fees
and expenses of agents, brokers, representatives, counsel and accountants.
6.6 Indemnification of Brokerage. Seller represents and warrants to
Buyer that if a broker, finder, agent or similar intermediary has acted on
behalf of Seller in connection with this Agreement or the transactions provided
for herein, Seller shall be responsible for any brokerage commissions, finder's
fees or similar fees or commissions payable with respect to this Agreement or
such transactions based on any agreement, arrangement or understanding with
Seller, or any action taken by Seller. Seller agrees to indemnify and save Buyer
harmless from any claim or demand for commission or other compensation by any
broker, finder, agent or similar intermediary employed by or on behalf of
Seller, and to bear the cost of legal expenses incurred in defending against any
such claim.
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Buyer represents and warrants to Seller that there are no brokerage
commissions, finder's fees or similar fees or commissions payable in connection
with this Agreement or the transactions provided for herein based on any
agreement, arrangement or understanding with Buyer, or any action taken by
Buyer. Buyer agrees to indemnify and save Seller harmless from any claim or
demand for commission or other compensation by any broker, finder, agent or
similar intermediary employed by or on behalf of Buyer and to bear the cost of
legal expenses incurred in defending against any such claim.
6.7 Exclusive Dealing. From the date hereof through the Effective Date
Seller agrees that it will not, directly or indirectly, encourage, initiate or
engage in discussions or negotiations with, or provide any information to, any
corporation, partnership, person or other entity or group, other than Buyer,
concerning any purchase of any equity interest in Seller, or any merger, sale of
substantial assets or similar transaction involving Seller.
6.8 Third Party Consents. To the extent that Seller's rights under any
agreement, contract, commitment, lease or other Acquired Asset to be assigned to
Buyer hereunder may not be assigned without the consent of another person which
consent has not been obtained, this Agreement shall not constitute an agreement
to assign such contract(s) if an attempted assignment would constitute a breach
thereof or be unlawful, and Seller, at its expense, shall use its best effort to
obtain any such required consents as promptly as possible. If any such consent
shall not be obtained or if any attempted assignment would be ineffective or
would impair Buyer's rights in an Acquired Asset in question so that Buyer would
not acquire the benefit of all such rights, to the maximum extent permitted by
law Seller shall act after the Closing as Buyer's agent in order to obtain for
Buyer the maximum benefits thereunder and shall cooperate with Buyer and any
other reasonable arrangement designed to provide such benefits to Buyer.
6.9 Change in Name. As soon as practicable after the Closing, Seller
shall amend its name to another name bearing no similarity to the name "G B
Labels, Inc."
6.10 Further Assurances. Each of the parties hereto shall execute such
agreements, certificates, documents and other instruments and take such further
action as may be reasonably necessary or appropriate to carry out the provisions
hereof and the transactions provided for herein. Each such party shall use its
best commercially reasonable efforts to fulfill or obtain the fulfillment of all
conditions to the Closing. After the Closing, at Buyer's request Seller will
execute, acknowledge and deliver to Buyer such other instruments of conveyance
and transfer and will take such other actions and execute and deliver such other
documents, certifications and further assurances as Buyer may reasonably require
in order to vest more effectively in Buyer, or to put Buyer more fully in
possession of any of the Acquired Assets, or to better enable Buyer to complete,
perform or discharge any of the Assumed Liabilities. Each of the parties hereto
will cooperate with the other and execute and deliver to the other parties
hereto such other instruments and documents and take such other actions as may
be reasonably requested from time to time by any other party hereto as necessary
to carry out, evidence and confirm the intended purposes of this Agreement.
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6.11 Transfer Taxes. Seller will pay all sales, transfer and
documentary taxes, if any, payable in connection with the sales to be made
hereunder.
6.12 Bulk Transfer Laws. Buyer hereby waives compliance by Seller with
the provisions of any bulk transfer laws of any jurisdiction in connection with
the sale of the Assets to Buyer. Seller shall indemnify and hold harmless Buyer
against any and all liabilities which may be asserted by third parties against
Buyer as a result of Seller's noncompliance with any such bulk transfer law.
6.13 Sale Announcement. The parties hereto agree that upon the Closing
of this transaction, the parties shall agree upon and issue a mutually
acceptable announcement to be sent to all of Seller's customers.
6.14 Printing Press. Seller agrees to be responsible for the cost of
freight, and no other cost, associated with returning the printing press located
in Hastings, Nebraska to Alamance County, North Carolina in its present
disassembled condition (such press being included in the Acquired Assets).
6.15 Future Business. Seller will use its best efforts to provide Buyer
(directly and/or through the direction of business from customers of Seller for
other products) with pressure sensitive flexo label business in an amount of not
less than $200,000 per year for two (2) years following the Closing, and shall
exclusively use Buyer to meet its pressure sensitive flexo label requirements
for such two (2) year period.
6.16 Intentionally Blank.
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6.17 Collection of Receivables. Buyer shall use all reasonable efforts
to collect the Accounts Receivable during the first ninety (90) days after the
Closing, and such efforts shall be no less than the efforts Buyer expends in the
collection of other accounts receivable. Payments made to designated Accounts
Receivable will be credited to such Accounts. In the event that an account
debtor who is both the debtor with respect to an Account Receivable and with
respect to an account generated with Buyer after the Closing, makes an
unallocated payment of funds, such unallocated funds will be deemed to be made
first on the oldest outstanding invoice (including Accounts Receivable). Any
amount paid to Buyer which is a payment of an Account Receivable (including
payments to any lockbox) or which is allocable to any of the Accounts Receivable
pursuant hereto will be delivered by Buyer to Seller, in the form received,
without delay.
6.18 Interim Period Operations. During the period from the Effective
Date through the Closing (the "Interim Period"), Buyer hereby engages Seller as
its agent for the purpose of operating the Business for Buyer's account, and
Seller accepts such engagement. During the Interim Period, Seller shall continue
to occupy the Facilities, and shall use the Assets to produce and ship products.
Buyer shall be responsible for (i) the reimbursement to Seller of any and all
documented costs and expenses incurred by seller in such endeavor, computed in a
manner consistent with Seller's past practices, and, (ii) to the extent
applicable, the direct payment of any documented costs and expenses arising out
of or related to Seller's Interim Period operations as may be charged to buyer's
account,
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if any. Buyer shall reimburse Seller for the costs and expenses incurred by
Seller as soon as practicable after receipt of Seller's invoices.
ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATION OF BUYER TO CLOSE
7. The obligation of Buyer to enter into and complete the Closing is
subject, at the option of Buyer acting in accordance with the provisions of this
Agreement with respect to termination hereof, to the fulfillment on or prior to
the Effective Date of the following conditions, any one or more of which may be
waived by it:
7.1 Accuracy of Representations and Warranties. The representations and
warranties of Seller contained in this Agreement shall be true on and as of the
Effective Date, with the same force and effect as though made on and as of the
Effective Date.
7.2 Performance of Agreements. Seller shall have performed and complied
with all covenants and agreements required by this Agreement to be performed or
complied with or Seller on or prior to the Effective Date.
7.3 Certificates of Seller. Buyer shall have received a certificate,
dated the Effective Date, of Seller to the effect set forth in Sections 7.1 and
7.2 above.
7.4 Permits and Required Consents. All Permits and Required Consents
necessary to operate the Business shall have been assigned to Buyer or obtained
by Buyer and shall be in full force and effect.
7.5 Opinions of Counsel to Seller. Buyer shall have received the
opinion of Xxxxxxx Xxxxxxx & Xxxxxx P.L.L., counsel to Seller , dated the date
of the Closing, addressed to Buyer, substantially in the form of Exhibit 7.5
attached hereto.
7.6 No Adverse Change. Since the date of this Agreement, there shall
have been no material adverse change in the financial condition, results of
operations, business or prospects of Seller.
7.7 No Casualty. Since the date of this Agreement, no damage,
destruction or loss, whether or not covered by insurance, adversely affecting in
any material respect any of the properties or assets of Seller shall have
occurred.
7.8 Other Documents. Seller shall deliver to Buyer the following
agreements or documentation:
(a) the Assumption Agreement;
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(b) Non-Competition Agreements for Seller and Gibraltar;
(c) the Escrow Agreement;
(d) vehicle titles and Xxxx of Sale;
(e) Intentionally omitted;
----------------------
(f) the Guaranty Agreement of Gibraltar;
(g) A Certificate of Good Standing from the Secretaries of State
of Delaware and North Carolina;
(h) the Burlington Lease;
(i) A Tax Certificate from the North Carolina Department of
Revenue; and
(j) UCC termination statements terminating all liens and
encumbrances on the Assets not being assumed hereunder.
7.9 No Proceeding or Litigation. No action, suit, claim, proceeding or
investigation before any federal or state court or any federal or state
governmental or regulatory authority shall have been commenced, and no action,
suit, claim or proceeding by any such governmental or regulatory authority shall
have been threatened, against Seller seeking to restrain, prevent or change the
transactions contemplated by this Agreement or seeking material damages in
connection with any of such transactions.
7.10 Employees. Through the Effective Date, Seller shall pay or accrue
to all employees all due and proper allowances for wages, commissions, salaries,
holiday and vacation pay, bonuses and past service claims; and shall have made
and remitted (or will be holding in trust for the beneficiaries thereof and at
the Closing shall make and remit) all proper deductions, remittances and
contributions for employees' wages, commissions and salaries required of them
under all contracts and statutes (including without limitation for health,
hospital and medical insurance, group life insurance, pension plans, workmen's
compensation, unemployment insurance, income tax, FICA taxes and the like) and,
wherever required by such contracts and/or statutes, all proper deductions and
contributions from its own funds for such purposes. Seller agrees to perform all
reporting duties in respect of all such wages, commissions, salaries and other
compensation and in respect of all such deductions and contributions. Buyer
assumes no liability for any amounts which have been paid or should have been
paid to or for the benefit of, or withheld from, any employee of Seller.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLER TO CLOSE
8. The obligation of Seller to enter into and complete the Closing is
subject, at the
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option of Seller acting in accordance with the provisions of this Agreement with
respect to termination hereof, to the fulfillment on or prior to the Effective
Date of the following conditions, any one or more of which may be waived by it:
8.1 Accuracy of Representations and Warranties. The representations and
warranties of Buyer contained in this Agreement shall be true on and as of the
Effective Date, with the same force and effect as though made on and as of the
Effective Date.
8.2 Performance of Agreements. Buyer shall have performed and complied
with all covenants and agreements required by this Agreement to be performed or
complied with by Buyer on or prior to the Effective Date.
8.3 Certificates of Buyer. Seller shall have received a certificate,
dated the Effective Date, of Buyer to the effect set forth in Sections 8.1 and
8.2 above.
8.4 Opinion of Counsel to Buyer. Seller shall have received the opinion
of Xxxxxx Xxxxxxx & Meschan, P.A., counsel to Buyer dated the date of the
Closing, addressed to Seller, substantially in the form of Exhibit 8.4 attached
hereto.
8.5 Other Documents. Buyer shall deliver to Seller the following
Agreements:
(a) the Assumption Agreement; and
(b) the Escrow Agreement.
ARTICLE IX
INDEMNIFICATION
9.1 Survival of Representations and Agreements. Notwithstanding any
right of Buyer fully to investigate the affairs of Seller and subject to the
provisions of Section 6.4 related to Negative Disclosures, Buyer has the right
to rely fully upon the representations, warranties, covenants and agreements of
Seller contained in this Agreement or in any certificate deliverable pursuant to
this Agreement. All such representations, warranties, covenants and agreements
shall survive the execution and delivery of this Agreement and the Closing
hereunder and shall continue in full force and effect thereafter subject however
to the following:
(a) All representations and warranties, of Seller and Buyer
contained in this Agreement or made pursuant hereto shall
terminate and expire one (1) year after the Effective Date and
all covenants and agreements shall expire three (3) years
after the Effective Date provided, however (i) the
representations and warranties of Seller in respect of title
to the Acquired Assets in Section 4.9 shall be unlimited as to
duration and (ii) any indemnification claim related to Section
4.8 (Tax Matters), Section 4.16 (Environmental Compliance) and
Section 4.20 (Employee Benefit
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Plans) shall expire upon the expiration of the applicable
statute of limitations.
(b) With respect to any matter as to which a Claims Notice (as
defined in Section 9.4.1) is given prior to expiration of the
applicable limitation period described in Section 9.1(a)
above, any and all rights of a party hereto related to said
Claims Notice shall continue in full force and effect and
shall not terminate until final resolution of the matter in
question.
9.2 Obligation of Seller to Indemnify. Seller agrees to indemnify,
defend and hold harmless Buyer (and its directors, officers, affiliates,
successors and assigns) from and against all losses, liabilities, damages,
deficiencies, costs or expenses (including interest, penalties and reasonable
attorneys' fees and disbursements) (a "Loss" or "Losses") based upon, arising
out of or otherwise in respect of
(i) any inaccuracy in or any breach of any representation,
warranty, covenant or agreement of Seller contained in this
Agreement or in any agreement, certificate, document or other
instrument delivered by Seller pursuant to this Agreement;
(ii) any obligation, liability, action, claim, suit or proceeding
arising out of any action or inaction by Seller or the
operations or business of Seller or the Environmental
Condition of the Facilities, prior to the Effective Date
whether or not disclosed in this Agreement; or
(iii) any claims made against Buyer or any of the Acquired Assets
for violation of any applicable Bulk Sales statute.
Provided, however, except with regard to any payment which may be due Buyer from
Seller under any of the Assumed Obligations, Seller shall have no indemnity
obligation hereunder to Buyer with respect to any liability or obligation
assumed by Buyer pursuant to the Assumption Agreement.
9.3 Obligation of Buyer to Indemnify. Buyer agrees to indemnify,
defend and hold harmless Seller (and its directors, officers, affiliates,
successors and assigns) from and against any Losses based upon, arising out of
or otherwise in respect of any inaccuracy in or any breach of any
representation, warranty, covenant or agreement of Buyer contained in this
Agreement or in any agreement, certificate, document or other instrument
delivered by Buyer pursuant to this Agreement.
9.4 Notice and Opportunity to Defend.
9.4.1 Notice of Asserted Liability. Promptly after receipt by any party
hereto (the "Indemnitee") of notice of any demand, claim or circumstances which,
with the lapse of time, would or might give rise to a claim or the commencement
(or threatened commencement) of any
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action, proceeding or investigation (an "Asserted Liability") that may result in
a Loss, the Indemnitee shall give notice thereof (the "Claims Notice") to any
other party (or parties) obligated to provide indemnification pursuant to
Section 9.2 or 9.3 (the "Indemnifying Party"). The Claims Notice shall describe
the Asserted Liability in reasonable detail, and shall indicate the amount
(estimated, if necessary and to the extent feasible) of the Loss that has been
or may be suffered by the Indemnitee.
9.4.2 Opportunity to Defend. The Indemnifying Party may elect to
compromise or defend, at its own expense and by its own counsel, any Asserted
Liability. If the Indemnifying Party elects to compromise or defend such
Asserted Liability, it shall within thirty (30) days (or sooner, if the nature
of the Asserted Liability so requires) notify the Indemnitee of its intent to do
so, and the Indemnitee shall cooperate, at the expense of the Indemnifying
Party, in the compromise of, or defense against, such Asserted Liability. If the
Indemnifying Party elects not to compromise or defend the Asserted Liability,
fails to notify the Indemnitee of its election as herein provided or contests
its obligation to indemnify under this Agreement, the Indemnitee may pay,
compromise or defend such Asserted Liability and seek repayment from the
Indemnifying party. Notwithstanding the foregoing, neither the Indemnifying
Party nor the Indemnitee may settle or compromise any claim over the objection
of the other; provided, however, that consent to settlement or compromise shall
not be unreasonably withheld. If the Indemnifying Party chooses to defend any
claim, the Indemnitee shall make available to the Indemnifying Party any books,
records or other documents within its control that are necessary or appropriate
for such defense.
9.4.3 Disputes with Customers, Distributors, Sales Agents or Suppliers.
Anything in Section 9.4.2 to the contrary notwithstanding, in the case of any
Asserted Liability by any supplier, distributor, sales agent or customer of
Seller with respect to the business conducted by Seller prior to the Closing in
connection with which Buyer may make a claim against Seller for indemnification
pursuant to Section 9.2, Buyer shall give a Claims Notice with respect thereto
but, unless Buyer and Seller otherwise agree, Buyer shall have the exclusive
right at its option to defend any such matter subject to the duty of Buyer to
consult with the Indemnifying Party and its attorneys in connection with such
defense and provided that no such matter shall be compromised or settled by
Buyer without the prior consent of Seller, which consent shall not be
unreasonably withheld. Seller shall have the right to recommend in good faith to
Buyer proposals to compromise or settle claims brought by a supplier,
distributor, sales agent or customer, and Buyer agrees to present such proposed
compromise or settlements to such supplier, distributor or customer. All amounts
required to be paid in connection with any such Asserted Liability under this
Section 9.4.3 shall be borne and paid by Seller . The parties agree to cooperate
fully with one another in the defense, compromise or settlement of any Asserted
Liability.
ARTICLE X
TERMINATION OF AGREEMENT
10.1 Termination. This Agreement may be terminated prior to the Closing
as follows:
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(a) At the election of Seller if any one or more of the conditions
to the obligation of Seller to close has not been fulfilled as
of the scheduled Effective Date and such noncompliance shall
not have been caused by Seller;
(b) At the election of Buyer, if any one or more of the conditions
to its obligation to close has not been fulfilled as of the
scheduled Effective Date and such noncompliance shall not have
been caused by Buyer;
(c) At the election of Seller, if Buyer has breached any material
representation, warranty, covenant or agreement contained in
this Agreement, which breach cannot be or is not cured by the
Effective Date;
(d) At the election of Buyer, if Seller has breached any material
representation, warranty, covenant or agreement contained in
this Agreement, which breach cannot be or is not cured by the
Effective Date; or
(e) At any time on or prior to the Effective Date, by mutual
written consent of Seller and Buyer. If this Agreement so
terminates, it shall become null and void and have no further
force or effect, except as provided in Section 10.2
10.2 Survival. If this Agreement is terminated and the transactions
contemplated hereby are not consummated as described above, this Agreement shall
become void and of no further force and effect, except for the provisions of
Section 6.4 and Exhibit 6.4 (Confidentiality [tbd]), Section 6.5 (Expenses) and
6.6 (Indemnification of Brokerage). Nothing herein shall relieve either party
for any willful breach of this Agreement.
ARTICLE XI
MISCELLANEOUS
11.1 Publicity. No publicity release or announcement concerning this
Agreement or the transactions provided for herein shall be made without written
advance approval thereof by Seller and Buyer.
11.2 Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, sent by
facsimile transmission, or sent by certified, registered or express mail, or
sent by Federal Express (or similar overnight delivery service), postage or
other charges prepaid. Any such notice shall be deemed given when so delivered
personally, sent by facsimile transmission or, if mailed, two days after the
date of deposit in the United States mails, as follows:
If to Buyer to: With a copy to:
JIT Manufacturing, Inc. XXXXXX XXXXXXX & MESCHAN, P.A.
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PO Box 1339 H. Xxxxxx Xxxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000 000 Xxxx Xxxxxx Xxxxxx (27401)
Xxxx Xxxxxx Xxx 0000 (00000)
Xxxxxxxxxx, Xxxxx Xxxxxxxx
Telephone: Telephone: (000) 000-0000
Facsimile: Facsimile: (000) 000-0000
If to Seller to: With a copy to:
Gibraltar Packaging Group, Inc. XXXXXXX XXXXXXX & XXXXXX
P.L.L. G B Labels Division Xxxx X. Xxxxx, Esq.
0000 Xxxxxx Xxxxxx 0000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000-0000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
Any party may by notice given in accordance with this Section to the other
parties designate another address or person for receipt of notices hereunder.
11.3 Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto) and the collateral agreements executed in connection with the
consummation of the transactions provided for hereby contain the entire
agreement among the parties with respect to the purchase of certain assets
described in Article I hereof and supersedes all prior agreements, written or
oral, if any there be, with respect thereto.
11.4 Waivers and Amendments: Non-Contractual Remedies: Preservation of
Remedies. This Agreement may be amended, superseded, cancelled, renewed or
extended, and the terms hereof may be waived, only by a written instrument
signed by Buyer and Seller, or in the case of a waiver, by the party waiving
compliance. No delay on the part of any part in exercising any right, power or
privilege hereunder shall operate as a waiver thereof. Nor shall any waiver on
the part of any party of any such right, power or privilege, nor any single or
partial exercise of any such right, power or privilege, preclude any further
exercise thereof or the exercise of any other such right, power or privilege.
The rights and remedies herein provided are cumulative and are exclusive of any
rights or remedies that any party may otherwise have at law or in equity except
rights and remedies in respect of claims for fraud. The rights and remedies of
any party based upon, arising out of or otherwise in respect of any inaccuracy
in or breach of any representation, warranty, covenant or agreement contained in
this Agreement shall in no way be limited by the fact that the act, omission,
occurrence or other state of facts upon which any claim of any such inaccuracy
or breach is based may also be the subject matter of any other representation,
warranty, covenant or agreement contained in this Agreement (or in any other
agreement between the parties) as to which there is no inaccuracy or breach.
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11.5 Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of North Carolina.
11.6 Binding Effect; No Assignment. This Agreement shall be binding
upon and shall inure to the benefit of the parties and its respective personal
representatives, heirs, successors and assigns; provided, however, that Seller
may not assign its rights hereunder without Buyer's prior written consent.
11.7 Variations in Pronouns. All pronouns and any variations thereof
refer to the masculine, feminine or neuter, singular or plural, as the context
may require.
11.8 Counterparts. This Agreement may be executed by the parties hereto
in any number of counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a copy hereof
containing multiple signature pages, each signed by less than all, but together
signed by all of the parties hereto.
11.9 Schedules and Exhibits. The Schedules and Exhibits are a part of
this Agreement as if fully set forth herein. All references herein to sections,
subsections, clauses, Exhibits and Schedules shall be deemed references to such
parts of this Agreement, unless the context shall otherwise require.
11.10 Headings. The headings in this Agreement are for reference only
and shall not affect the interpretation of this Agreement.
11.11 Severability of Provisions. If any provision or any portion of
any provision of this Agreement or the application of any such provision or any
portion thereof to any person or circumstance shall be held invalid or
unenforceable, the remaining portion of such provision and the remaining
provisions of this Agreement, or the application of such provision or portion of
such provision as is held invalid or unenforceable to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby.
11.12 Venue/Jurisdiction. This Agreement shall be governed in all
respects, including as to validity, interpretation and effect, by the internal
laws of the State of North Carolina, without giving effect to the conflict of
laws rules thereof. Buyer and Seller hereby irrevocably submit to the
jurisdiction of the courts of the State of North Carolina and the Federal courts
of the United States of America located in the County of Guilford of the State
of North Carolina in respect of the interpretation and enforcement of the
provisions of this Agreement and of the documents referred to in this Agreement,
and hereby waive, and agree not to assert, as a defense in any action, suit or
proceeding for the interpretation or enforcement hereof or of any such document,
that it is not subject thereto or that such action, suit or proceeding may not
be brought or is not maintainable in said courts or that the venue thereof may
not be appropriate or that this Agreement or any of such document may not be
enforced in or by said courts, and the parties hereto
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irrevocably agree that all claims with respect to such action or proceeding
shall be heard and determined in such a North Carolina State or Federal court.
Buyer and Seller hereby consent to and grant any such court jurisdiction over
the person of such parties and over the subject matter of any such dispute and
agree that mailing of process or other papers in connection with any such action
or proceeding in the manner provided in Section 11.2, or in such other manner as
may be permitted by law, shall be valid and sufficient service thereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement under seal
as of the date first above written.
G B LABELS, INC.
By: /s/ Xxxx X. Xxxxx
-----------------------------
Xxxx X. Xxxxx, Secretary
JIT MANUFACTURING, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------
Xxxxx X. Xxxxxxxx, President
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