AGREEMENT
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THIS AGREEMENT is made on March 18, 1998, between Milford
Manufacturing Corporation, a Michigan corporation (referred to as "MMC" and
"Seller") and PGK Acquisition Corp. ("Buyer").
RECITALS
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WHEREAS, upon the terms and conditions set forth herein, Buyer
desires to acquire certain assets of Seller and Seller desires to sell those
assets to Buyer; and
WHEREAS, in a separate transaction (the "K-H Sale"), Seller is
selling other assets to Xxxxxx-Xxxxx Company ("K-H"), and K-H will then
subsequently sell those assets to Buyer.
AGREEMENTS
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NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual terms and conditions set forth herein and pursuant to the terms and
conditions set forth in this Agreement, Seller agrees to sell and the Buyer
agrees to purchase certain assets that are used by Seller in the production
of parts for K-H (the "K-H Business") as follows:
1. Assets Purchased. At Closing, Seller shall sell, assign, convey,
transfer, set over, and deliver to Buyer all of the scheduled assets, whether
tangible or intangible (which are not being sold by Seller to K-H in the K-H
Sale) which on the Closing Date are owned by Seller and used by it
exclusively in the K-H Business (collectively, the "Purchased Assets").
1.1 Definition of Purchased Assets. For purposes of this Agreement,
the term Purchased Assets shall be defined as including only the following:
1.1.1 Tangible Personal Property. The water debur unit described
in Schedule 2.1.2 that is used in the production of ZWAL,
together with, to the extent transferable, all express and
implied warranties by manufacturers or sellers of that
equipment and all maintenance records, brochures,
catalogues and other documents relating to that equipment
or to their installation or functioning.
1.1.2 Inventory and Supplies. All inventories of raw materials, operating
supplies, packaging materials, component parts, replacement and spare parts,
work in process and finished goods relating to the K-H Business (the
"Inventories") and listed in Schedule 1.1.2.
1.1.3 Prepaid Items. The prepaid items are listed in Schedule
1.1.3, subject to any prorations.
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1.1.4 Permits. All transferable local, state, and federal
franchises, licenses, bonds, permits, and similar items
pertaining to the K-H Business and/or the Purchased Assets.
1.1.5 Name, Telephone Number and Advertising. All telephone and
FAX numbers, yellow-page advertisements, and Seller's right
to use the name "Milford Manufacturing Corporation" and all
related names and derivations.
1.1.6 Purchase Contracts. All of Seller's rights in and to
contracts made or orders given by Seller relating to the
purchase of materials, parts, supplies and commodities for
use in the K-H Business (the "Purchase Contracts") listed
in Schedule 1.1.6.
1.1.7 Other Contracts. All of Seller's rights in and to those
contracts, licenses or other agreements listed on Schedule
1.1.7 (or otherwise entered into in the ordinary course of
business) to which Seller is a party and entered into for
the benefit of the K-H Business (the "Other Contracts").
1.1.8 K-H Contract. All of Seller's rights in and to the Machined
Valve Products Supply Agreement dated October 31, 1996 which
is attached as Schedule 1.1.8.
1.1.9 Books and Records. Books and records, files and other
documents (including such items recorded on computer
storage media) used exclusively in the ongoing operation of
the K-H Business and access to all other books, records,
files and other documents which may be necessary to such
ongoing operations for the purpose of copying such
materials on reasonable notice to Seller by Purchaser.
1.1.10 Other Intangible Assets. All licenses, copyrights, patents,
patent applications and trade secrets owned by Seller and
used in the K-H Business.
1.2 Excluded Assets. Other provisions notwithstanding, Seller
shall not sell to Buyer and Seller shall retain as its own
property the following assets, properties and rights
(whether or not related to or used in the K-H Business):
1.2.1 Cash, Cash Equivalents, and Accounts Receivables. All cash,
bank deposits, certificates of deposit, and accounts
receivable of Seller.
1.2.2 Corporate and Business Records. All corporate documents and
records, including, without limitation, minute books, stock
records, certificates, all tax records and any records
relating to any asset retained by Seller and any
liabilities or obligation of Seller, which Buyer is not
required to assume hereunder.
1.2.3 Non K-H Business Assets, Machinery, Equipment, Inventory
and Supplies. All Seller's right, title and interest in the
assets, machinery, equipment, inventory and supplies
related to Seller's business on behalf of Delco Remy
America ("DRA"), Allied Signal Corp. a/k/a Breed
Technologies ("Allied"), and Delphi Corp. ("Delphi") see
items listed in Schedule 1.2.3.
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1.2.4 Scrap. All Seller's right, title and interest in any
sellable scrap generated prior to the date of closing and
either removed from the premises or marked by Seller and
removed from the premises promptly following the Closing
Date.
1.2.5 K-H Sale. All Seller's right, title and interest in the
assets being sold to K-H pursuant to the K-H Sale.
2. Liabilities Assumed. Seller agrees that Buyer assumes no
liabilities of Seller, whether accrued, absolute,
contingent, known, unknown, or otherwise, except that Buyer
agrees to assume as of the Closing Date, and thereafter pay,
perform and discharge the following liabilities ("Assumed
Liabilities"):
2.1.1 Assigned Contracts. All of Seller's obligations and
liabilities either continuing after or arising after the
Closing Date under the Purchase Contracts and Other
Contracts listed in Schedules 1.1.6, and 1.1.7, and the K-H
Machined Valve Products Supply Agreement described in
Section 1.1.8 and attached as Schedule 1.1.8.
2.1.2 Capital Expenditures. Anything to the contrary herein
notwithstanding, the Buyer hereby assumes the obligations
and liabilities, and agrees to pay pursuant to their terms
and conditions, certain purchase orders for the purchase of
water deburring equipment related to or used in the K-H
Business listed in Schedule 2.1.2, and other capital
expenditures listed therein. To the extent that Seller has
paid in full, or in part, the cost of any listed capital
expenditure, Buyer shall reimburse Seller at Closing.
2.1.3 Accounts Payable and Accruals.
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a) All accounts payable relating to goods and
services ordered in the usual and ordinary course
of the K-H Business after the Effective Date,
b) all accounts payable or obligations attributable
to goods or services relating to the K-H Business
that were ordered in the usual and ordinary course
of the K-H Business on or before the Effective
Date but not received as of 11:00 pm on the
Effective Date,
c) the assumption and payment of $1,200,000.00 of
Seller's outstanding accounts payable listed on
Schedule 2.1.3 or relating to goods and services
that were received by Seller on or before 11:00 pm
on the Effective Date, and
d) the first $200,000 (or as may be adjusted pursuant
to footnote 1 on Schedule 2.1.3)of any accruals
related to Pre Closing period(s), which accruals
will be specifically identified and allocated at
Closing, and
e) the capital expenditures which are unpaid at
Closing pursuant to Section 2.1.2.
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2.1.4 Employee Matters; Collective Bargaining Agreement. For
purposes of this Agreement, all of Seller's current,
former, active, inactive, hourly and salaried employees are
collectively referred to herein as the "Transferred
Employees". Except as otherwise provided in this Agreement,
Seller shall assign and Buyer shall assume, pay, and/or
perform the following items relating to Seller and its
business.
a) Buyer shall hire all union employees. Buyer shall
hire substantially all salaried employees of
Seller under the terms and conditions of the
employment agreements in Schedule 2.1.4. Buyer
shall bear the responsibility to comply with, and
pay for any notification under, or employee
benefits required by the Consolidated Omnibus
Budget Reconciliation Act of 1985 ("COBRA").
b) Any and all claims, causes of action, judgments,
damages, penalties and liabilities related to the
Transferred Employees under Section 2.1.4(a),
2.1.4(c), 2.1.4 (d), 2.1.5, 2.1.6, 2.1.7, 2.1.8,
or 2.1.9, asserted after the Closing Date
regardless of when the underlying facts and
circumstances occurred,
c) Any and all of Seller's duties, obligations, and
liabilities under the following Agreements and
plans related to the Transferred Employees:
i) Milford Value Plant Insurance Program for
Hourly-Rated Employees
ii) Supplemental Unemployment Plan for Hourly-Rated
Employees at Milford
iii) Varity Xxxxxx-Xxxxx Savings Plan for Represented
Employees now known as Milford
Manufacturing Corporation Profit Sharing
and 401(k) Plan and Trust
iv) Xxxxxx-Xxxxx Company Milford Hourly Pension Plan,
and the Special Maintenance Skilled Trade
Retirement Plan
v) Medical and Dental Plans for both hourly and
salaried employees
vi) Life Insurance, Short and Long Term Disability
Plans for both hourly and salaried
employees
vii) Any holiday pay and vacation pay owing and/or
accrued for Seller's employees
viii) Any other fringe benefit plans for the
benefit of Seller's employee.
ix) $.40 per hour target benefit Plan described in
the ratified Proposed Settlement
Agreement dated March 28, 1997 (which
plan was to replace the Hourly Pension
Plan described in Section 2.1.4(c)(iv)),
including any payment required for time
during which Seller owned the K-H
Business, and
x) Seller's liability and/or contingent liability for
all currently retired and/or Transferred
Employees' retiree health benefits under
any collective bargaining agreement.
d) Any and all obligations arising under the
Collective Bargaining Agreement, the ratified
Proposed Settlement Agreement dated March 28,
1997, all related exhibits, schedules, ancillary
agreements (herein collectively referred to as the
"Collective Bargaining Agreement") between the
International Union, United Automobile, Aerospace
and Agricultural Implement
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Workers of America ("UAW") and its Local 985, and
Seller, which Collective Bargaining Agreement will
be assigned by Seller and assumed by Buyer.
2.1.5 Benefit Plans. Buyer will succeed Seller as the successor
employer-sponsor of all plans listed in Section 2.1.4,
including but not limited to pension and welfare benefit,
health care plans for past, present, and retired employees,
and shall assume all of the duties and obligations as the
successor employer-sponsor of such plans, or in the case of
health care, provide a replacement plan with substantially
identical benefits.
2.1.6 Post-Retirement Health Benefits. Seller's liability and/or
contingent liability for all retired and Transferred
Employees' retiree health benefits under any collective
bargaining agreement.
2.1.7 Workers' Compensation. Buyer is obligated for all workers'
compensation claims made by Transferred Employees
regardless of when the injury occurred or when the claim is
made, except that for a period of sixty (60) days after
Closing, Seller shall be liable for injuries which occurred
during Seller's ownership of the K-H Business, and which
are not aggravated during Post Closing employment. Seller's
insurance company's determination of when the injury
occured and whether it was aggravated Post-Closing shall be
determinate of Seller's obligation under this Section
2.1.7.
2.1.8 Medical. Buyer is obligated to insure, or in lieu of
insurance to pay, as the successor employer to Seller, the
Post Closing medical expenses of the Transferred Employees.
Post closing medical expenses means medical expense claims
made after the Closing regardless of when the illness,
disease process, injury or medical necessity was first
incurred.
2.1.9 Grievances. Buyer agrees to assume, defend, and/or
prosecute to resolution the grievances related to
Transferred Employees described in Schedule 2.1.9, and to
assume and pay the cost of any resolution therefrom.
2.1.10 Leased Assets. Buyer agrees to pay the attributed portion
of a master lease for the assets set forth in Section
1.1.7. Buyer acknowledges that the leased assets are a
portion of a multi company Applicon equipment lease.
Buyer's payment represents that potion of the master lease
attributable to the equipment located on the Business
premises. Buyer shall have the right to exercise any
purchase option under the master lease with respect to the
equipment located on the Business Premises.
2.2 Retained Liabilities. Buyer shall not assume or be liable for
any liabilities or obligations of the Seller arising during Seller's
ownership , whether primary or secondary, direct or indirect, absolute or
contingent, contractual, tortious or otherwise, other than those specifically
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identified or described in this Agreement (all such liabilities and
obligations of Seller other than those specifically assumed by Buyer
identified or described in this Agreement are hereinafter collectively
referred to as the "Retained Liabilities"). To the extent Buyer does not
assume such Retained Liabilities, Buyer shall also not be entitled to any
benefits related thereto. To the extent Buyer does not assume the obligations
under a contract involving capital expenditures, Buyer shall not be entitled
to the uses or benefit of such capital items.
3. Purchase Price for Purchased Assets.
3.1 The Purchase Price. The amount of the Assumed Liabilities plus
any amounts to be paid pursuant to Section 3.2.3 shall equal the purchase
price to be paid by Buyer to Seller for the Purchased Assets (the "Purchase
Price").
3.2 Payment of Purchase Price. Buyer shall pay the Purchase Price
on the Closing Date as follows:
3.2.1 At Closing, Buyer shall execute an assumption agreement in the
form attached hereto as Schedule 3.2.1 wherein Buyer agrees to
assume and pay the Assumed Liabilities.
3.2.2 At Closing, Buyer shall pay any remaining adjusted Purchase
Price by wire transfer of immediately available funds to the
account of Seller as directed at Closing.
3.2.3 a) The Purchase Price shall be adjusted at closing should
actual inventory, work in process, and supplies inventory
exceed $750,000.00 (increase) or are less than $700,000.00
(decrease). The parties agree that the indirect inventory
will be caused at $340,000.00. The actual value of the
direct Inventory shall be based upon a physical inventory
of the direct Inventories conducted by representatives of
the Seller and Buyer on March 16, 1998 ("Physical
Inventory"). Such inventory shall be valued in a manner
consistent with Seller's previous valuations of its
inventory.
b) The Purchase Price shall further be adjusted
by the amount that the total of account payables and
accruals described in Section 2.1.3 are less than
$1,400,000.00 (minus any amount by which Buyer's share of
the accruals is reduced below $200,000.00 pursuant to the
formula and terms within footnote 1 of Schedule 2.1.3).
3.2.4 At Closing Buyer shall reimburse Seller for capital
expenditures pursuant to Section 2.1.2.
3.3 Allocation of Purchase Price. The Purchase Price shall be
allocated among the
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Purchased Assets in accordance with attached Schedule 3.3. Buyer and Seller
agree to execute and deliver at the Closing duplicate IRS Forms 8594, with an
allocation of the Purchase Price in accordance with this Section 3.3 which is
mutually acceptable to both parties, and to file all other returns and
reports in a manner consistent with the allocations in this Section.
4. Delivery Free of Encumbrances. Except with respect to the water
debur unit's expenses being assumed by Buyer, Seller shall deliver good title
to the Purchased Assets free and clear of all mortgages, liens, claims,
demands, charges, options, equity interests, leases, tenancies, easements,
pledges, security interests, and other encumbrances ("Encumbrances").
5. Preclosing Actions. Before the Closing:
5.1 Conduct of Business. Seller shall carry on and conduct the K-H
Business in the ordinary course consistent with past practices.
5.2 Buyer's Access. From the date of this Agreement through the
Closing, Seller shall permit Buyer and its representatives to make a full
business, financial, accounting, and legal audit of Seller, the K-H Business,
the Purchased Assets, and the Assumed Liabilities. Seller shall take all
reasonable steps necessary to cooperate with Buyer in undertaking this audit.
5.3 MESC Notice. Pursuant to the provisions of Section 15(g) of the
Michigan Employment Security Act (M.C.L.A. 421.15(g)), Seller has provided
Buyer with an accurately and fully completed copy of MESC Form 1027 -
Business Transferor's Notice to Transferee of Unemployment Tax Liability and
Rate. That completed form has been provided to Buyer at least two days (not
including Saturday, Sunday or legal holidays) before the date hereof.
6. Closing Matters.
6.1 Closing. The closing of the transactions contemplated in this
Agreement (the "Closing") shall be effective as of 11:00 p.m. Sunday, March
15, 1998 ("Effective Date") and take place at the offices of Xxxxx and Xxxxx,
P.C., 0000 Xxxx Xxx Xxxxxx, Xxxxx 000, Xxxx, Xxxxxxxx at 10:00 a.m. on Monday,
March 16, 1998 or at such other place and/or on such other date as the parties
may agree on (the "Closing Date").
6.2 Certain Closing Expenses; Prorations. Personal property taxes
paid with respect
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to the Purchased Assets shall be prorated ratably as of the Closing Date and
paid at the Closing. Security and other deposits shall be reimbursed by Buyer
to Seller.
7. Seller's Representations and Warranties. As of the date of this
Agreement and as of the Closing, the Seller represents and warrants to Buyer,
and acknowledges and confirms, that Buyer is relying on these representations
and warranties in entering into this Agreement:
7.1 Organization and Standing. Seller is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Michigan, and Seller has all requisite power and authority (corporate and
otherwise) to own its properties and conduct its business as it is now being
conducted.
7.2 Authorization. Seller has all requisite power and authority
(corporate and otherwise), and has all requisite legal capacity (a) to
execute, deliver, and perform this Agreement, to which it is a party and (b)
to consummate the transactions contemplated under this Agreement. Seller has
taken all necessary corporate action (including the approval of its board of
directors and shareholders) to approve the execution, delivery, and
performance of this Agreement to be executed and delivered by it and the
consummation of the transactions contemplated in this Agreement. The Seller
has duly executed and delivered this Agreement. This Agreement, when executed
and delivered, will be, legal, valid, and binding obligations of the Seller,
enforceable against it, except as such enforcement may be limited by
bankruptcy, insolvency, moratorium, or similar laws relating to the
enforcement of creditors' rights.
7.3 Existing Agreements and Governmental Approvals.
a) To the Seller's knowledge, the execution, delivery, and
performance of this Agreement and the consummation of the
transactions contemplated by them: (i) do not and will
not violate any provisions of law applicable to any of
the Seller, the K-H Business, or the Purchased Assets;
(ii) do not and will not conflict with, result in the
breach or termination of any provision of, or constitute
a default under (in each case whether with or without the
giving of notice or the lapse of time or both) Seller's
Articles of Incorporation or Bylaws, or any indenture,
mortgage, lease, deed of trust, or other instrument,
contract, or agreement or any order, judgment,
arbitration award, or decree to which the Seller is a
party or by which any of them or any of their respective
assets and properties are bound which would not be paid
at closing (including, without limitation, the Purchased
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Assets); and (iii) do not and will not result in the
creation of any Encumbrance on any of the Seller's
properties, assets, or K-H Business (including, without
limitation, the Purchased Assets).
b) Except as separately scheduled, no approval, authority, or
consent of, or filing by, the Seller with, or
notification to, any federal, state, or local court,
authority or governmental or regulatory body or agency or
any other corporation, partnership, individual or other
entity is necessary (i) to authorize the execution and
delivery of this Agreement or any of the Agreements
attached as Schedules hereto by Seller, (ii) to authorize
the consummation of the transactions contemplated by this
Agreement, or (iii) to continue Buyer's use and operation
of the Purchased Assets after the Closing Date.
7.4 No Subsidiaries. Seller does not have any subsidiaries or
directly or indirectly own any interest or have any investment in any other
corporation, partnership, or other entity.
7.5 No Insolvency. No insolvency proceeding of any character,
including, without limitation, bankruptcy, receivership, reorganization,
composition, or arrangement with creditors, voluntary or involuntary,
affecting Seller or any of its assets or properties is pending or threatened.
7.6 Employees. There is not now, nor has there been at any time
since November 1, 1996, a strike, lockout, grievance, other labor dispute, or
trouble of any nature pending or threatened against Seller that is not listed
on a Schedule hereto, or that Buyer is unaware of.
7.7 Employee Agreements. Schedule 2.1.4 contains a true and complete
list of all employment agreements, plans, Union contracts, programs, and
arrangements (including, but not limited to, collective bargaining
agreements, pensions, retirement, hospitalization, insurance, and other
employee benefit plans, programs, or arrangements) maintained since November
1, 1996 by Seller or under which Seller has had any obligations with respect
to former, current, laid off, and/or retired employees of Seller (the
"Plans").
7.8 Contracts. Except as described within this Agreement, including
but not limited to the Contracts and Commitments referenced in Sections
1.1.6, 1.1.7, and 1.1.8, which have been made available to Buyer, Seller is
not a party to nor bound by any agreement or commitment that materially
affect the K-H Business, the Purchased Assets, or the Assumed Liabilities.
Buyer is
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not acquiring any of the equipment, related fixtures, related inventory,
tooling, and related supplies being used by Seller in producing its DRA,
Allied, or Delphi jobs.
7.9 Title to Purchased Assets. Seller is the sole and absolute owner
of the Purchased Assets and has good title to all of the Purchased Assets,
and at Closing shall be free and clear of any and all encumbrances.
7.10 Condition of Purchased Assets. In material respect, the
Inventory being sold to Buyer, whether finished goods, work in process, raw
materials or indirect factory supplies, are items usable in the ordinary
course of the K-H Business. The water deburr process was used in obtaining he
part submission warrant dated 12/4/97 with K-H which is attached as
Schedule7.10.
7.11 Taxes.
a) For the purposes of this Agreement, Tax or Taxes
shall mean all federal, state, county, local, and
other taxes (including, without limitation, income
taxes; premium taxes; single-business taxes;
excise taxes; sales taxes; use taxes; value-added
taxes; gross receipts taxes; franchise taxes; ad
valorem taxes; real estate taxes; severance taxes;
capital levy taxes; transfer taxes; stamp taxes;
employment, unemployment, and payroll-related
taxes; withholding taxes; and governmental charges
and assessments), and include interest, additions
to tax, and penalties.
b) Seller has filed on a timely basis all Tax returns it is
required to file under federal, state, or local
law and has paid or established an adequate
reserve with respect to all Taxes for the periods
covered by such returns. No agreements have been
made by or on behalf of Seller for any waiver or
for the extension of any statute of limitations
governing the time of assessment or collection of
any Taxes. Seller and its officers have received
no notice of any pending or threatened audit by
the IRS or any state or local agency related to
Seller's Tax returns or Tax liability for any
period, and no claim for assessment or collection
of Taxes has been asserted against Seller. There
are no federal, state, or local tax liens
outstanding against any of Seller's assets
(including, without limitation, the Purchased
Assets) or the K-H Business.
c) The sale by Seller of the Purchased Assets and the
Buyer's acquisition of such assets will not result
in the imposition of or liability for any sales or
use taxes except in connection with the transfer
of any motor vehicles that are part of the
Purchased Assets.
d) All Taxes related to the Purchased Assets or the
Transferred Employees which Seller is required by
law to withhold or collect have been duly withheld
or collected, and have been timely paid to the
proper authorities to the extent due and payable.
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7.12 Litigation. Except as disclosed within this Agreement and
attached Schedules, there are no claims, disputes, actions, suits,
proceedings, or investigations pending or, to the best knowledge of Seller,
threatened against or affecting Seller, the K-H Business, or the Purchased
Assets, which threats are unknown to Buyer.
7.13 Compliance with Laws. At all times prior to the Closing Date,
and to the best of Seller's knowledge and belief, Seller has complied, in all
material respects, with all laws, orders, regulations, rules, decrees, and
ordinances affecting to any extent or in any manner any aspects of the
Purchased Assets.
7.14 Bulk Transfer Act. Buyer acknowledges that Seller will not
comply with the provisions of Michigan's bulk transfer act. However, Seller
agrees to indemnify and hold Buyer harmless from all losses attributable to
Seller's failure to comply with the provisions of that Act with respect to
the Purchased Assets.
7.15 No Brokers. Seller has not engaged, and is not responsible for
any payment to, any finder, broker, or consultant in connection with the
transactions contemplated by this Agreement.
7.16 Progress Payments. Seller has received no progress payments or
prepayments from customers for work or products not heretofore completed and
delivered.
7.17 Warranties; Product Liability. In connection with the K-H
Business, there are no (a) liabilities of Seller, fixed or contingent,
asserted and arising out of or based upon incidents occurring on or before
the Closing Date with respect to any products liability or any similar claim
that relates to any product sold by Seller to K-H before the effective date
of closing or (b) liabilities of Seller, fixed or contingent asserted and
arising out of or based upon incidents occurring with respect to any claim
for the breach of any express or implied product warranty, or any similar
claim that relates to any product sold by Seller on or before the Closing
Date, and Seller has no knowledge of any product defects which could give
rise to any such liabilities or claims.
7.18. Environmental Matters. To the best of Seller's knowledge,
Seller's operations
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have not added to the environmental issues as disclosed in the Baseline
Environmental Assessment, attached as Schedule 7.18, that Seller had prepared
with respect to the premises occupied by the K-H Business. The Baseline
Environmental Assessment shows numerous environmental issues that were caused
prior to Seller's occupation of those premises and which are subject to an
agreement with K-H for remediation.
7.19 Intellectual Property Rights. Other than the nontransferable
license contained in the supply agreement between Seller and K-H, to Seller's
knowledge, Seller does not own or have any rights in any patents, patent
applications, inventions or proprietary processes that are needed in the
continuing operation of the K-H Business. Buyer will be responsible for
obtaining its own license from K-H. No claim, suit or action is pending or,
to the best of Seller's knowledge, threatened alleging that the K-H Business
conducted by Seller infringes upon the intellectual property rights of
others.
8. Buyer's Representations and Warranties. Buyer represents and
warrants to Seller that:
8.1 Organization and Standing. Buyer is a corporation duly organized
and validly doing business under the laws of the State of Michigan, and Buyer
has all the requisite power and authority (corporate and otherwise) to own its
properties and to conduct its business as it is now being conducted.
8.2 Authorization. Buyer has taken all necessary corporate action
(a) to duly approve the execution, delivery, and performance of this
Agreement, and (b) to consummate any related transactions. Buyer has duly
executed and delivered this Agreement. This Agreement, when executed and
delivered, will be, legal, valid, and binding obligations of Buyer,
enforceable against Buyer in accordance with their respective terms, except
as such enforcement may be limited by bankruptcy, insolvency, moratorium, or
similar laws relating to the enforcement of creditor's rights and by general
principles of equity (regardless of whether such enforceability is considered
in a proceeding at law or in equity).
8.3 Environmental Condition. Seller has provided Buyer with a copy
of the Baseline
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Environmental Assessment that Seller had obtained with respect to the plant,
property and real estate currently occupied by Seller that Buyer will lease
from K-H. Accordingly, Buyer is aware of the environmental condition of and
agrees to accept that real property "as is".
9. Employees. Buyer shall have no obligation to hire any of Seller's
salaried employees; PROVIDED, HOWEVER, that Buyer shall be free to negotiate
with and hire any of Seller's salaried employees, and Seller shall cooperate
and encourage such employees to accept employment with Buyer.
10. Postclosing Receipts. After the Closing, Seller will immediately
notify and transfer to Buyer any payments or other receipts it receives with
respect to any of the Purchased Assets. Pending any such transfer, Seller
will segregate any such payments from its other assets and will clearly xxxx
or designate them as the property of Buyer. Buyer shall immediately notify
and transfer, without setoff or deduction, to Seller any payment or other
receipt Buyer receives with respect to an Excluded Asset(s). Further, Buyer
agrees that Seller may place labels on Excluded Assets identified within
Schedule 1.2.3.
11. Indemnification. All of the representations and warranties of
Seller contained in Sections 7 through 7.16 of this Agreement shall survive
the Closing (unless the Buyer knew or had reason to know of any
misrepresentation or breach of warranty at the time of Closing) and continue
in full force and effect for a period of one year thereafter. All of the
other representations and warranties of the Buyer and the Seller contained in
this Agreement shall survive the Closing (unless the damaged Party knew or
had reason to know of any misrepresentation or breach of warranty at the time
of Closing) and continue in full force and effect forever thereafter subject
to any applicable statutes or limitations.
a). In the event Seller breaches any of its
representations, warranties, and covenants
contained in this Agreement, and, if there is an
applicable survival period pursuant to Section 11
above, provided that the Buyer makes a written
claim for indemnification against Seller pursuant
to Section 11 below within such survival period,
then Seller agrees to indemnify the Buyer from and
against the entirety of any Adverse Consequences
(as defined below) the Buyer shall suffer through
and after the date of the claim for
indemnification (but excluding any Adverse
Consequences the Buyer shall suffer after the end
of any applicable
Page -13-
survival period) caused proximately by the breach.
b) Seller agrees to indemnify the Buyer from and
against the entirety of any Adverse Consequences
the Buyer shall suffer caused proximately by any
liability of Seller which is not an Assumed
Liability.
c) In the event the Buyer breaches any of its
representations, warranties, and covenants
contained in this Agreement, and provided that
Seller makes a written claim for indemnification
against the Buyer pursuant to Section 11 below
within such survival period, then the Buyer agrees
to indemnify Seller from and against the entirety
of any Adverse Consequences the Seller shall
suffer through and after the date of the claim of
indemnification (but excluding any Adverse
Consequences the Seller shall suffer after the end
of any applicable survival period) caused
proximately by the breach.
d) Buyer agrees to indemnify Seller from and against
the entirety of any Adverse Consequences the
Seller shall suffer caused proximately by any
liability of the Seller which is an Assumed
Liability.
e) If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a
"Third Party Claim") which may give rise to a
claim for indemnification against the other Party
(the "Indemnifying Party") under this Section 11,
then the Indemnified Party shall promptly (and in
any event within five business days after
receiving notice of the Third Party Claim) notify
the Indemnifying Party thereof in writing.
f) The Indemnifying Party will have the right at any
time to assume and thereafter conduct the defense
of the Third Party Claim with counsel of its
choice reasonably satisfactory to the Indemnified
Party; provided, however, that the Indemnifying
Party will not consent to the entry of any
judgment or enter into any settlement with respect
to the Third Party Claim without the prior written
consent of the Indemnified Party (not to be
withheld unreasonably) unless the judgment or
proposed settlement involves only the payment of
money damages and does not impose an injunction or
other equitable relief upon the Indemnified Party.
g) Unless and until the Indemnifying Party assumes
the defense of the Third Party Claim as provided
in Section 11(f) above, however, the Indemnified
Party may defend against the Third Party Claim in
any manner it reasonably may deem appropriate.
h) In no event will the Indemnified Party consent to
the entry of any judgment or enter into any
settlement with respect to the Third Party Claim
without the prior written consent of the
Indemnifying Party (not to be withheld
unreasonably).
i) Determination of Adverse Consequences. The Parties
shall make appropriate adjustments for tax
benefits and insurance coverage and take into
account a reasonable in determining Adverse
Consequences for purposes of this Section 11. All
indemnification payments under this Section 11
shall be deemed adjustments to the Purchase Price.
j) For purposes of this Section 11, Adverse
Consequences shall mean all actions, suits,
proceedings, hearings, investigations, charges,
complaints, claims, demands, injunctions,
judgments, orders, decrees, rulings,
Page -14-
damages, dues, penalties, fines, costs, reasonable
amounts paid in settlement, liabilities,
obligations, taxes, liens, losses, expenses, and
fees, including court costs and reasonable
attorneys' fees and expenses.
12. Expenses. Each of the parties shall pay all of the costs that
it incurs incident to the preparation, execution, and delivery of this
Agreement and the performance of any related obligations, whether or not the
transactions contemplated by this Agreement shall be consummated.
13. Risk of Loss. The risk of loss of or damage to the Purchased
Assets from fire or other casualty or cause shall be on Seller at all times
up to the Closing, and it shall be the responsibility of Seller to repair, or
cause to be repaired, and to restore the property to the condition it was
before the loss or damage.
14. Seller's Name. Seller agrees that from and after the Closing
Date, Buyer shall have the right to use in or in connection with the conduct
of any business (whether carried on by it directly or through any related
corporation) the name "Milford Manufacturing Corporation". Buyer shall permit
Seller to use the name "Milford Manufacturing Corporation" post closing for
purposes of completing the liquidation of Seller's business.
15. Termination.
15.1 This Agreement may be terminated at any time before the
Closing Date as follows:
a) By Buyer and Seller jointly in writing, or
b) By Buyer or Seller if there has been a material
breach of any of the representations or
warranties, covenants or agreements set forth
in this Agreement on the part of the other, and
this breach by its nature cannot be cured before
the Closing.
16. Miscellaneous Provisions.
16.1 Representations and Warranties. All representations,
warranties, and agreements made by the parties pursuant to this Agreement
shall survive the consummation of the transactions contemplated by this
Agreement, without limitation as to time except as set forth in Section 11.
Page -15-
16.2 Notices. All notices, demands, and requests
required or permitted to be given under
the provisions of this Agreement shall be
in writing and shall be deemed given (a)
when personally delivered or sent by
facsimile transmission to the party to be
given the notice or other communication
or (b) on the business day following the
day such notice or other communication is
sent by overnight courier to the
following:if to Seller Parties: Xxxxxx X.
Xxxxxxxx, President
Milford Manufacturing Corporation
00000 Xxxxx Xxxxx
Xxxx, Xxxxxxxx 00000
with a copy (which shall not constitute notice) to:
Xxxxxx X. Xxxxx, Esquire
Xxxxx and Xxxxx, P.C.
0000 Xxxx Xxx Xxxxxx Xxxx;Xxxxx 000
Xxxx, Xxxxxxxx 00000
Tel (000) 000-0000
Fax (000) 000-0000
if to Buyer: Xx. Xxxxxxx Xxxxx
PGK Acquisition Corp.
0000 Xxxxxxxx Xxxxx
Xxxx, Xxxxxxxx 00000
with a copy (which shall not constitute notice) to
Xxxxxx X. Xxxxxx, Esquire
Xxxxx Xxxxxxx P.C.
000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Tel (000) 000-0000
Fax (000) 000-0000
or to such other address or facsimile number that the parties may
designate in writing.
16.3 Assignment. Buyer may not assign this Agreement, or any
interest in it, without the prior written consent of the other, except that
Buyer may assign any or all of its rights under this Agreement to any
subsidiary without Seller's consent.
16.4 Parties in Interest. This Agreement shall inure to the benefit
of, and be binding on, the named parties and their respective successors and
permitted assigns, but not any other person.
16.5 Choice of Law. This Agreement shall be governed, construed, and
enforced in accordance with the laws of the State of Michigan. Buyer and
Seller shall be jointly considered
Page -16-
the authors and drafters of this Agreement.
16.6 Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signature on each counterpart
were on the same instrument.
16.7 Entire Agreement. This Agreement and all related documents,
schedules, exhibits, or certificates, including the terms and conditions of a
certain Pension Plan Succession Agreement which has or will be executed,
represent the entire understanding and agreement between the parties with
respect to the subject matter and supersede all prior agreements or
negotiations between the parties. This Agreement may be amended,
supplemented, or changed only by an agreement in writing that makes specific
reference to this Agreement or the agreement delivered pursuant to it and
that is signed by the party against whom enforcement of any such amendment,
supplement, or modification is sought.
16.8 Operation of K-H Business. Seller will not engage in any
practice, take any action, or enter into any transaction outside the ordinary
course of business between the time the Agreement is executed and Closing.
16.9 Litigation Support. In the event and for so long as any party
to this Agreement, its agents, successors, assigns, owners, is actively
contesting or defending against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand in connection with (i) any
transaction contemplated under this Agreement or (ii) any fact, situation,
circumstance, status condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction involving the Milford
business, the other party to this Agreement will, upon payment for the cost
thereof, cooperate with the contesting or defending party and its counsel in
the contest or defense, make available its personnel, and provide such
testimony and access to its books and records as shall be necessary in
connection with the contest or defense.
16.10 Press Releases. Neither party to this Agreement shall issue
any press release of make any public announcement relating to the subject
matter of this Agreement without the prior written approval of the other
party; provided however, that any party may make any public disclosure it
believes in good faith is required by applicable law or any listing or
trading
Page -17-
agreement concerning its publicly-traded securities, or required to
be made to its shareholders, in which case the disclosing party will use
reasonable efforts to advise the other party prior to making the
disclosure(s).
16.11 Arbitration.
a) Any dispute, controversy, or claim arising out of
or relating to this Agreement or relating to the
breach, termination, or invalidity of this
Agreement, whether arising in contract, tort, or
otherwise, shall be resolved in binding
arbitration. Any arbitration shall proceed in
accordance with Title 9 of the United States Code,
as it may be amended or recodified from time to
time ("Title 9"), and the current Commercial
Arbitration Rules (the "Arbitration Rules") of the
American Arbitration Association ("AAA") to the
extent that Title 9 and the Arbitration Rules do
not conflict with any provision of this Section
16.11.
b) No provision of or the exercise of any rights under
this Section 16.11 shall limit the right of any
party to seek and obtain provisional or ancillary
remedies (such as injunctive relief, attachment,
or the appointment of a receiver) from any court
having jurisdiction before, during, or after the
pendency of an arbitration proceeding under this
Section. The institution and maintenance of any
such action or proceeding shall not constitute a
waiver of the right of any party (including the
party taking the action or instituting the
proceeding) to submit a dispute, controversy, or
claim to arbitration under this Section.
c) Any award, order, or judgment made pursuant to
arbitration shall be deemed final and may be
entered in any court having jurisdiction over the
enforcement of the award, order, or judgment. Each
party agrees to submit to the jurisdiction of any
court for purposes of the enforcement of the
award, order, or judgment.
d) The arbitration shall be held before one arbitrator
knowledgeable in the general subject matter of the
dispute, controversy, or claim and selected by AAA
in accordance with the Arbitration Rules, except
that any arbitration in which the disputed,
controverted, or claimed amount (as reflected on
the demand for arbitration, as the same may be
amended) exceeds $50,000.00 shall be held before
three arbitrators, one arbitrator being selected
by Buyer, one by the Seller, and the third by the
other two from a panel of persons identified by
AAA who are knowledgeable in the general subject
matter of the dispute, controversy, or claim.
e) The arbitration shall be held at the office of AAA
located in Southfield, Michigan (as the same may
be from time to time relocated), or at another
place the parties agree on.
f) In any arbitration proceeding under this Section
16.11, subject to the award of the arbitrator(s),
each party shall pay all its own expenses, an
equal share of the fees and expenses of the
arbitrator, and, if applicable, the fees and
expenses of its own appointed arbitrator. The
arbitrator(s) shall have the power to award
recovery of costs and fees (including reasonable
attorney fees, administrative and AAA fees, and
arbitrators' fees) among the parties as the
arbitrators determine to be equitable under the
circumstances.
Page -18-
g) The interpretation and construction of this Section
16.11 including, but not limited to, its validity
and enforceability, shall be governed by Title 9
of the U.S. Code, notwithstanding the choice of
law set forth in Section 16.5 of this Agreement.
16.12 Other Agreements . The Closing of this Agreement shall be
conditioned upon Seller and Buyer executing the Product Supply Agreement
attached hereto as Schedule 16.12, and the closing of the K-H Sale. The
Closing of this Agreement shall be further conditioned upon the Seller and
UAW entering into a novation with respect to the Collective Bargaining
Agreement.
16.13 Post Closing Inspection. For the purpose of closing out
Seller's accounting period(s), employees of Seller shall have the right to
maintain Xxxxx'x office at the Business premises, to enjoy necessary ingress
and egress from said office, and to access information concerning the
operation of Seller's business prior to the Closing Date that are contained
in any transferred books and records, whether kept as computer records or as
tangible records, for a period of ninety (90) days after Closing. Buyer
agrees to retain any transferred books and records for a period not less than
four (4) years from Closing, and to permit Seller reasonable access to such
books and records for all reasonable purposes.
17. Conditions to Closing.
17.1 Conditions Precedent to Obligations of Buyer. The obligations
of Buyer under this Agreement are subject to the satisfaction, at or before
the Closing, of each of the following conditions precedent:
a) Representations and Warranties. The
representations and warranties made by Seller
herein shall be true on and as of the Closing
Date, as though such representations and
warranties had been made at and as of such time.
b) Performance. Seller shall have performed and
complied with all agreements and conditions
contained herein required to be performed or
complied with by it prior to or at the Closing.
c) Copies of Agreements. Seller shall have provided
and/or made available to Buyer, copy of all
agreements (or ratified Settlement Proposals in
the cases of the Collective Bargining Agreement)
to be assigned to, and assumed by, Buyer
hereunder.
Page -19-
d) Release of Liens. The Purchased Assets shall be
delivered to the Buyer free and clear of all liens
and encumbrances.
e) No Adverse Proceeding. There shall be no pending
or threatened claim, action, litigation or
proceeding against Seller, Buyer or the Purchased
Assets for the purpose of enjoining or preventing
the consummation of this Agreement or otherwise
claiming that this Agreement or the consummation
hereof is illegal.
f) Consents. Seller shall have received the written
consent from the appropriate parties, if required,
to the assignment to Buyer of all agreements to be
assigned to Buyer hereunder.
g) No Material Adverse Change. Prior to the Closing
Date, there shall not have occurred any material
adverse change in the Purchased Assets nor shall
any event have occurred which, with the lapse of
time or the giving of notice, may cause or create
any material adverse change in the Purchased
Assets.
h) Purchase of Assets from K-H. The K-H Sale shall
have been completed and Buyer shall have acquired
from K-H all of the assets acquired by K-H in the
K-H Sale, other than the real estate which shall
be leased to Buyer.
i) Proceedings and Documents. All proceedings in
connection with the transactions contemplated by
this Agreement and all documents and instruments
incident to such transactions shall be reasonably
satisfactory in substance and form to Buyer and
its counsel and Buyer shall have received all such
counterpart originals or certified or other copies
of such documents as it may reasonably request.
j) Opinion of Counsel to Seller. Buyer shall receive
an opinion dated the Closing Date of Xxxxx and
Xxxxx, P.C., counsel to Seller, in form
satisfactory to Buyer, to the effect that:
i) Seller is a corporation validly existing
and in good standing under the laws of
the State of Michigan;
ii) The execution and delivery by Seller of
this Agreement and the consummation of
the transactions contemplated hereby will
not conflict with or result in the breach
of any provision of Seller 's Articles of
Incorporation or Bylaws;
iii) This Agreement has been duly and validly
authorized, executed and delivered by
Seller; and
iv) Such counsel does not know of any suit,
action, arbitration or legal,
administrative or other proceeding or
governmental investigation pending
against Seller or its business or
properties or financial or other
condition, which would have a material
effect on the Purchased Assets.
17.2 Conditions Precedent to Seller's Obligations. The obligations
of Seller hereunder are subject to the satisfaction, at or before the
Closing, of each of the following conditions precedent:
a) Representations and Warranties. The
representations and warranties made by Buyer
herein shall be true on and as of the Closing Date
as though such
Page -20-
representations and warranties had been made at
and as of such time.
b) Performance. Buyer shall have performed and
complied with all agreements and conditions
contained herein required to be performed or
complied with by it prior to the Closing.
c) No Material Adverse Change. Prior to the Closing
Date, there shall not have occurred any material
adverse change in the financial condition,
business or operations of Buyer, nor shall any
event have occurred which, with the lapse of time
or the giving of notice, may cause or create any
material adverse change in the financial
condition, business or operations of Buyer.
d) No Adverse Proceeding. There shall be no pending
or threatened claim, action, litigation or
proceeding against Seller, Buyer or the Purchased
Assets for the purpose of enjoining or preventing
the consummation of this Agreement or otherwise
claiming that this Agreement or the consummation
hereof is illegal.
f) Proceedings and Documents. All corporate and other
proceedings in connection with the transactions
contemplated by this Agreement and all documents
and instruments incident to such transactions
shall be reasonably satisfactory in substance and
form to Seller and its counsel and Seller and its
counsel shall have received all such counterpart
originals or certified or other copies of such
documents as they may reasonably request.
g) Opinion of Counsel to Buyer. Seller shall receive
an opinion dated the Closing Date of Xxxxx Xxxxxxx
P.C., counsel to Buyer, in form satisfactory to
Seller, to the effect that:
i) Buyer is a corporation validly existing
and in good standing under the laws of
the State of Michigan;
ii) The execution and delivery by Buyer of
this Agreement and the consummation of
the transactions contemplated hereby will
not conflict with or result in the breach
of any provision of Buyer's Articles of
Incorporation or Bylaws;
iii) This Agreement has been duly and validly
authorized, executed and delivered by
Buyer; and
iv) Such counsel does not know of any suit,
action, arbitration or legal,
administrative or other proceeding or
governmental investigation pending
against Buyer or its business or
properties or financial or other
condition, which would have a material
effect on the purposed benefits of each
party's bargain.
The parties have executed this Agreement on the date set forth on
the first page of this Agreement.
SELLER
Milford Manufacturing Corporation
By: ___________________________
Xxxxxx X. Xxxxxxxx, President
Page -21-
BUYER
PGK Acquisition Corp.
By: /s/ Xxxxxxx Xxxxx
---------------------------
Xxxxxxx Xxxxx, President
Xxxxxxx Xxxxx in his capacity as President of PGK Services, Inc. does hereby
guarantee the prompt payment by PGK Acquisition Corp. of the accounts
payables and accruals assumed by PGK Acquisition Corp. in Sections 2.1.2,
2.1.3(c) & 2.1.3(d). PGK Services, Inc. agrees to be liable for the entire
amount of said unpaid account payables and unpaid accruals and agrees to
indemnify and hold Seller harmless therefrom, including reasonable
attorney fees and costs.
PGK Services, Inc.
DATED: 3/18/98 By:/s/ Xxxxxxx Xxxxx
-------------------------
Xxxxxxx Xxxxx, President
Xxxxxx X. Xxxxxxxx as the President of Secom General Corporation does hereby
guarantee the prompt payment by Secom General Corporation of any accounts
payable or obligations attributable to goods or services relating to the
K-H Business that were ordered in the usual and ordinary course of the K-H
Business on or before the Effective Date and received as of the Effective
Date, which obligations were not scheduled on Schedule 2.1.3, and any
payables or accruals on Schedule 2.1.3 which are MMC's responsibility to
pay which are not paid at closing.
Secom General Corporation
DATED: 3/18/98 By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------
Xxxxxx X. Xxxxxxxx, President
Page -22-
