ASSET PURCHASE AGREEMENT
AMONG
PARK-OHIO INDUSTRIES, INC.
(PARENT)
GAMCO COMPONENTS GROUP LLC
(PURCHASER)
AND
AMCAST INDUSTRIAL CORPORATION
(SELLER)
DATED AS OF AUGUST 23, 2004
TABLE OF CONTENTS
1. AGREEMENT TO SELL AND AGREEMENT TO PURCHASE............................. 1
1.1 ASSETS TO BE CONVEYED............................................... 1
1.2 EXCLUDED ASSETS..................................................... 3
1.3 CLOSING............................................................. 4
2. CONSIDERATION TO BE PAID BY PURCHASER................................... 4
2.1 PURCHASE PRICE FOR ACQUIRED ASSETS; PAYMENT THEREOF................. 4
2.2 LIABILITIES ASSUMED BY PURCHASER.................................... 5
2.3 LIABILITIES NOT ASSUMED BY PARENT OR PURCHASER...................... 5
2.4 PURCHASE PRICE ADJUSTMENT........................................... 6
2.5 SALES TAXES......................................................... 7
2.6 PRICE ALLOCATION.................................................... 7
3. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER.................. 8
3.1 ORGANIZATION, GOOD STANDING, AUTHORITY AND ENFORCEABILITY........... 8
3.2 AGREEMENT NOT IN BREACH OF OTHER INSTRUMENTS........................ 8
3.3 CONSENTS............................................................ 8
3.4 AVAILABLE FUNDS..................................................... 8
3.5 NO BROKERAGE FEES................................................... 8
3.6 DUE DILIGENCE MATTERS............................................... 8
4. REPRESENTATIONS AND WARRANTIES OF SELLER................................ 9
4.1 ORGANIZATION, GOOD STANDING AND AUTHORITY........................... 9
4.2 AUTHORIZATION OF AGREEMENT.......................................... 9
4.3 ACQUIRED ASSETS..................................................... 9
4.4 FINANCIAL STATEMENTS................................................ 10
4.5 REAL PROPERTY AND LEASEHOLDS........................................ 10
4.6 TANGIBLE PERSONAL PROPERTY OTHER THAN INVENTORY..................... 11
4.7 INTELLECTUAL PROPERTY ASSETS........................................ 12
4.8 INSURANCE........................................................... 12
4.9 ENVIRONMENTAL MATTERS............................................... 12
4.10 EMPLOYMENT MATTERS.................................................. 13
4.11 EMPLOYEE BENEFIT PLANS.............................................. 14
4.12 ASSUMED CONTRACTS................................................... 14
4.13 CONSENTS............................................................ 15
4.14 LIABILITIES......................................................... 15
4.15 DISCLAIMER.......................................................... 15
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4.16 INVENTORY........................................................... 15
4.17 PRODUCTS LIABILITY AND WARRANTY..................................... 15
4.18 CUSTOMERS AND SUPPLIERS............................................. 16
4.19 LITIGATION.......................................................... 16
4.20 TAXES............................................................... 16
4.21 AGREEMENTS AND TRANSACTIONS WITH RELATED PARTIES.................... 16
4.22 ABSENCE OF CHANGES.................................................. 17
4.23 COMPLIANCE WITH LAWS................................................ 17
4.24 UTILITIES........................................................... 18
4.25 RECEIVABLES......................................................... 18
4.26 NO BROKER'S FEES.................................................... 18
4.27 NO OTHER REPRESENTATIONS AND WARRANTIES............................. 18
5. CERTAIN UNDERSTANDINGS AND AGREEMENTS OF THE PARTIES.................... 18
5.1 REASONABLE EFFORTS; FURTHER ASSURANCES.............................. 18
5.2 COVENANT NOT TO COMPETE............................................. 19
5.3 ACCOUNTS RECEIVABLE................................................. 19
5.4 EMPLOYEES........................................................... 19
5.5 CONSENTS............................................................ 20
5.6 USE OF BUSINESS NAMES BY PURCHASER.................................. 20
5.7 BULK TRANSFER LAWS.................................................. 20
5.8 EMPLOYEE BENEFIT MATTERS............................................ 20
5.9 PRORATIONS.......................................................... 21
5.10 ACCESS TO RECORDS................................................... 21
5.11 TAX MATTERS......................................................... 21
5.12 ENVIRONMENTAL MATTERS............................................... 21
6. CONDITIONS TO CLOSING................................................... 22
6.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY............................. 22
6.2 CONDITIONS TO OBLIGATIONS OF PURCHASER AND PARENT................... 22
6.3 CONDITIONS TO OBLIGATIONS OF SELLER................................. 23
7. INDEMNIFICATION......................................................... 24
7.1 INDEMNIFICATION BY SELLER........................................... 24
7.2 INDEMNIFICATION BY PARENT AND PURCHASER............................. 26
7.3 DETERMINATION OF LOSS............................................... 28
7.4 LIMITATIONS ON INDEMNIFICATION...................................... 28
7.5 INDEMNIFICATION PROCEDURE........................................... 34
7.6 EXCLUSIVE REMEDY.................................................... 35
8. ADDITIONAL COVENANTS AND AGREEMENTS..................................... 35
8.1 EXPENSES............................................................ 35
8.2 PUBLIC RELEASES..................................................... 35
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9. MISCELLANEOUS........................................................... 35
9.1 ENTIRE AGREEMENT.................................................... 35
9.2 AMENDMENTS; WAIVER.................................................. 35
9.3 SUCCESSORS; ASSIGNMENT.............................................. 36
9.4 NOTICES............................................................. 36
9.5 SEVERABILITY........................................................ 37
9.6 NO THIRD PARTY BENEFICIARY.......................................... 37
9.7 APPLICABLE LAW...................................................... 37
9.8 ARBITRATION......................................................... 37
9.9 COUNTERPARTS........................................................ 38
9.10 HEADINGS; CONSTRUCTION.............................................. 38
9.11 CONSENT TO SERVICE OF PROCESS AND JURISDICTION...................... 38
9.12 CERTAIN INFORMATION................................................. 39
10. CERTAIN DEFINITIONS..................................................... 39
10.1 DEFINITIONS......................................................... 39
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is dated as of August 23,
2004, among Park-Ohio Industries, Inc., an Ohio corporation ("Parent"), GAMCO
Components Group LLC, an Ohio limited liability company ("Purchaser") and Amcast
Industrial Corporation, an Ohio corporation ("Seller"). Section 10 of this
Agreement defines certain capitalized terms used but not elsewhere defined in
this Agreement.
RECITALS:
A. WHEREAS, Seller is engaged in the business of manufacturing and selling
to original equipment manufacturers and tier-one suppliers in the automotive
industry aluminum castings, produced using gravity and low-pressure production
processes, for suspension and brake systems for use on automobiles and light
trucks as conducted at the Facilities (the "Business").
B. WHEREAS, Parent, primarily through its subsidiaries, is a provider of
supply chain logistics services and a manufacturer of highly engineered
products;
C. WHEREAS, Purchaser is a direct or indirect wholly owned subsidiary of
Parent; and
D. WHEREAS, Purchaser desires to purchase substantially all of the assets
of Seller used exclusively by Seller in or necessary for the operation of the
Business (other than the Facility located in Cedarburg, Wisconsin), and Seller
desires to sell such assets to Purchaser, all upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, for and in consideration of the mutual promises and
covenants herein contained and for other good and valuable consideration, the
receipt and adequacy of which hereby are acknowledged, the parties hereto agree
as follows:
1. AGREEMENT TO SELL AND AGREEMENT TO PURCHASE.
1.1 ASSETS TO BE CONVEYED. On the terms and subject to the
conditions set forth herein, and except as provided in Section 1.2 hereof, on
the Closing Date (as defined in Section 1.3 hereof), Seller shall convey, sell,
transfer, assign and deliver to Purchaser, and Purchaser shall purchase, acquire
and accept from Seller, the following assets owned by Seller as of the Closing
Date but only to the extent that such assets are used exclusively by Seller in
or are necessary for the operation of the Business at the Facilities
(collectively, the "Acquired Assets"):
(a) All inventories of finished goods, raw materials, work in
process, spare parts, replacement and component parts (collectively, the
"Inventory");
(b) All machinery and equipment, including those items listed
on Schedule 1.1(b) (the "M&E");
(c) All parts, toolings, dies, jigs, molds, office,
maintenance and other supplies, packaging materials, computers, tools, furniture
and other tangible personal property, including those items listed on Schedule
1.1(c);
(d) The prepaid items, deposits, advance payments, deferred
charges and other similar assets listed on Schedule 1.1(d) hereto (the "Prepaid
Expenses");
(e) All accounts and notes receivable and any security held by
Seller for the payment thereof, including those items listed on Schedule 1.1(e)
(the "Accounts Receivable");
(f) All customer lists, computer software and software in
progress, sales brochures, data bases, books and records, correspondence and
production records;
(g) All warranties and guaranties by, and rights, choses in
action and claims, known or unknown, matured or unmatured, accrued or contingent
against, third parties;
(h) Seller's right, title and interest in and to all
contracts, agreements and commitments (including unfilled customer and purchase
orders) to which Seller is a party at the Closing Date or by which any of the
Acquired Assets is then bound and, in each case, which are utilized in the
conduct of the Business (all of the foregoing to be assigned to Purchaser
pursuant hereto (subject to Section 5.5), including the Agreement between Amcast
Automotive (Richmond Plant) and United Automobile, Aerospace & Agricultural
Implement Workers of America, UAW and Local 2374 dated October 6, 2000 and the
Agreement between Amcast Automotive (Cedarburg Plant) and Local 185 Glass
Molders, Pottery, Plastics & Allied Workers International Union (AFL-CIO, CLC)
dated April 28, 2002 (collectively, the "Union Contracts"), are hereinafter
referred to collectively as the "Assumed Contracts" and individually as an
"Assumed Contract");
(i) Motor vehicles listed on Schedule 1.1(i) hereto;
(j) Those leasehold improvements and construction in progress
with respect to the Owned Real Property as set forth on Schedule 1.1(j) hereto;
(k) All intellectual property licenses, patents, patent
applications, copyrights, copyright applications, trademarks, trademark
registrations issued or applied for, trade names, computer programs and formula,
including those items listed on Schedule 1.1(k) (the "Intellectual Property
Assets");
(l) The owned real estate described on Schedule 1.1(l),
together with all rights of way, licenses, permits, easements and appurtenances
thereto (the "Owned Real Property");
(m) (i) the Industrial Development Project Lease by and
between Amcast and Richmond Power and Light dated August 31, 1992, (ii) the
Lease Agreement by and between Amcast and Bellevue Partners, LLC, dated October
28, 1999, including extension dated
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November 19, 2003, and (iii) the Lease dated March 9, 1994 between Amcast
Automotive, Inc. and GALLERIA EQUITIES, LLC, as successor to FCN Associates,
L.L.C., as supplemented by that certain Commencement Date Amendment dated March
6, 1994 and as amended by a First Amendment to Lease dated November 3, 1998 and
a Second Amendment to Lease dated March 26, 2004 (collectively, the "Real
Property Leases");
(n) All business, proprietary and confidential information,
including trade secrets, capabilities, technical information, know-how, process
technology, ideas, designs, processes, procedures, algorithms, discoveries,
inventions, blueprints, engineering data, patterns, bills of materials, and
drawings and specifications, and all improvements thereof;
(o) All governmental approvals, licenses and permits which are
utilized in the conduct of the Business, including those listed on Schedule
1.1(o) (the "Transferred Permits"); and
(p) All goodwill associated with the other Acquired Assets.
1.2 EXCLUDED ASSETS. Notwithstanding anything contained in Section
1.1 hereof to the contrary, Seller is not selling, and Purchaser is not
purchasing, pursuant to this Agreement, any of the following, all of which shall
be retained by Seller (the "Excluded Assets"):
(a) Any cash, investments and other cash equivalents;
(b) Seller's minute books, Tax returns and other
organizational documents, and Seller's financial records and employment records,
other than those employment records pertaining to Employees and allowed to be
transferred to Purchaser under applicable Laws;
(c) Assets of Seller that are not used in or necessary for the
operation of the Business, but as of the Closing Date, are subleased to
Affiliates of Seller or other divisions of Seller, including the assets set
forth on Schedule 1.2(c);
(d) All qualifications to transact business as a foreign
corporation, arrangements with registered agents with respect to foreign
qualifications, and taxpayer and other identification numbers;
(e) Any Tax benefits and rights to refunds, including rights
to any net operating losses;
(f) Any contracts or rights relating to borrowed money;
(g) Any contracts, agreements or rights between Seller and any
of its Affiliates, including any Tax-sharing agreements;
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(h) All insurance contracts and policies, insurance refunds
from prepaid insurance, and insurance deposits, recoveries and rights under any
current or prior insurance contracts or policies;
(i) Any pension, profit sharing, welfare or other benefit
plans, and any assets, contracts or rights relating to any such plans;
(j) The trademarks, trade names and business names "Amcast,"
"Izumi" and any and all variations thereof and any related goodwill, trademark
applications and registrations, and internet domain names which consist of or
incorporate the names "Amcast" and "Izumi" and any and all variations thereof;
(k) The real property lease described on Schedule 1.2(k) for
the Facility located in Detroit, Michigan;
(l) All tangible assets located at Seller's facilities in
Dayton, Ohio and at the leased Facility in Detroit, Michigan described on
Schedule 1.2(k);
(m) Seller's real property located in Cedarburg, Wisconsin
together with all rights of way, licenses, permits, easements and appurtenances
thereto (the "Cedarburg Facility");
(n) Any assets or rights certain benefits of which are
provided to Purchaser pursuant to a mutually acceptable transition services
agreement executed by Seller and Purchaser at Closing (the "Transition Services
Agreement"); and
(o) The assets listed on Schedule 1.2(o).
1.3 CLOSING. The closing of the transactions herein contemplated
(the "Closing") shall, unless another date, time or place is agreed to by the
parties, take place at the offices of Seller in Dayton, Ohio, at 10 A.M., local
time, simultaneously with the execution of this Agreement and will be effective
as of the date of this Agreement (the "Closing Date").
2. CONSIDERATION TO BE PAID BY PURCHASER.
2.1 PURCHASE PRICE FOR ACQUIRED ASSETS; PAYMENT THEREOF. The
purchase price for the Acquired Assets shall be $10,000,000 (Ten Million
Dollars) (the "Initial Cash Purchase Price"), subject to adjustment pursuant to
Section 2.4 below, plus the assumption of the Assumed Liabilities (as defined in
Section 2.2). At the Closing, Purchaser shall pay, in cash, certified check,
wire transfer or other immediately available funds ("Immediately Available
Funds"), (a) $500,000 of the Initial Cash Purchase Price to an escrow agent
designated by Seller and Purchaser, which amount shall be held and disbursed in
accordance with the terms of a mutually acceptable escrow agreement ("Escrow
Agreement") that provides, among other things, for the escrowed funds to be
disbursed to Purchaser to satisfy any indemnification obligations of Seller
under Section 7 of this Agreement and the balance to be paid to Seller 18 months
after Closing, and (b) the balance of the Initial Cash Purchase Price to Seller,
less the $250,000
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deposit which Seller previously received from Purchaser and which shall be
retained by Seller at Closing.
2.2 LIABILITIES ASSUMED BY PURCHASER. As further consideration for
the purchase of the Acquired Assets and consummation of the other transactions
contemplated hereby, on the Closing Date, Purchaser shall, and Parent shall
cause Purchaser to, assume and agree to pay, perform and discharge in full, when
due, the following liabilities of Seller with respect to the Business (the
"Assumed Liabilities") by execution and delivery to Seller of an instrument of
assumption reasonably satisfactory to Seller (the "Instrument of Assumption"):
(a) All obligations and liabilities arising under or
associated with the Assumed Contracts, including all obligations and liabilities
arising under or associated with any Assumed Contract requiring the consent of
any third party to be assigned to Purchaser pursuant hereto, regardless of
whether such consent is delivered to Purchaser at or after Closing; provided,
however, that the obligations and liabilities arising under and associated with
any Assumed Contract that is the subject of a Material Consent (as defined in
Section 6.2(h)) listed on Schedule 6.2(h) hereto shall be assumed, paid,
performed and discharged by Purchaser if, and only if, such Material Consent is
delivered to Purchaser at Closing; and provided further, however, that the
Assumed Liabilities shall not include any pension or welfare benefit plan
liabilities arising under or associated with the Union Contracts for periods
prior to Closing other than any such welfare benefit plan liabilities that are
reflected on, accrued for or reserved against on the Final Closing Working
Capital Statement, which shall be Assumed Liabilities;
(b) All accounts payable and other liabilities reflected on,
accrued for or reserved against in the Final Closing Working Capital Statement,
but only to such extent, including all accrued payroll, accrued vacation and
accrued sick pay liabilities, medical program liabilities, all accrued payroll
Taxes, all accrued real and personal property Taxes (all such Taxes being
assumed by Purchaser are referred to in this Agreement as the "Affected Taxes"),
workers' compensation claims, and all other current liabilities of Seller with
respect to the Business;
(c) All product repair and product replacement claims that
arise under, and are made pursuant to and consistent with, the terms of Seller's
standard outstanding warranty obligations, which terms are specifically
identified on Schedule 4.17 hereto (but excluding any Product Liability Claims
(as defined in Section 7.1(e)) with respect to any goods manufactured or sold or
services provided by the Business before and after Closing, but only to the
extent reflected on, accrued for or reserved against in the Final Closing
Working Capital Statement; and
(d) The employment and retention obligations of Seller set
forth on Schedule 2.2(d).
2.3 LIABILITIES NOT ASSUMED BY PARENT OR PURCHASER. (a) Except for
the Assumed Liabilities, neither Parent nor Purchaser shall assume or be liable
or responsible for, whether as a successor or otherwise, any obligation or
liability of Seller of any kind or nature whatsoever.
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2.4 PURCHASE PRICE ADJUSTMENT.
(a) The Initial Cash Purchase Price shall be adjusted by an
amount (which may be a positive or negative number) equal to the difference
between the Working Capital (as defined below) of the Business at Closing as set
forth on the Final Closing Working Capital Statement and $3,625,000 (the "Target
Working Capital").
(b) Seller shall prepare and deliver to Purchaser within 45
days after Closing an unaudited statement of Working Capital as of the Closing
Date in accordance with the same methodologies, assumptions and accounting
practices used to prepare the Audited Financial Statements (as defined in
Section 4.4) (the "Closing Working Capital Statement") and the methodology used
to prepare the Target Working Capital as set forth in Schedule 2.4(b). Purchaser
shall provide Seller reasonable access to all books, records and other documents
and information requested by Seller to prepare the Closing Working Capital
Statement. Purchaser shall have 45 days from the date on which the Closing
Working Capital Statement is delivered to it to review the Closing Working
Capital Statement (the "Review Period"). During the Review Period Seller shall
provide Purchaser reasonable access to the information used by Seller to prepare
the Closing Working Capital Statement for purposes of Purchaser's review.
Purchaser may dispute items or amounts reflected on the Closing Working Capital
Statement on any reasonable basis consistent with this Agreement and with
Seller's historical accounting methodologies, assumptions and practices, by
delivering to Seller, on or prior to the last day of the Review Period, a notice
of objection setting forth, in reasonable detail, each disputed item or amount
and the basis for Purchaser's disagreement therewith, together with supporting
calculations. If no notice of objection is received by Seller on or prior to the
last day of the Review Period, the Closing Working Capital Statement shall be
deemed accepted by Parent and Purchaser and shall be final, binding and
conclusive on Parent and Purchaser. If Purchaser gives such notice of objection,
then Purchaser and Seller shall use their reasonable efforts to resolve such
dispute. In the event such dispute is not resolved by the parties within fifteen
(15) days of the receipt of notice of such objection by Seller, then the issues
in dispute shall be submitted to BDO Xxxxxxx, LLP, certified public accountants
(the "Accountants") and the Accountants shall determine the Working Capital of
the Business at Closing in accordance with the terms of this Agreement,
including the first sentence of this Section 2.4(b), but within the range of
differences between the parties. If issues in dispute are submitted to the
Accountants for resolution, (i) each party shall furnish to the Accountants such
workpapers and other documents and information relating to the disputed issues
and the Closing Working Capital Statement as the Accountants may request
(including a copy of this Agreement) and which are available to that party (or
its independent public accountants), and shall be afforded the opportunity to
present to the Accountants any material relating to the determination and to
discuss the determination with the Accountants; (ii) the determination by the
Accountants, which shall be set forth in a written notice delivered to Seller
and Purchaser as soon as practical by the Accountants, shall be final, binding
and conclusive on the parties for all purposes; and (iii) Parent and Purchaser
shall bear one-half and Seller shall bear one-half of the fees of the
Accountants for such determination. The Closing Working Capital Statement and
Initial Cash Purchase Price, as both are finally adjusted pursuant to this
Section, are referred to in this Agreement as the "Final Closing Working Capital
Statement" and the "Final Cash Purchase Price," respectively.
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(c) No later than five (5) business days after the final
determination of the Working Capital of the Business at Closing, whether by the
passing of the forty-five (45) day objection period without written notice of
objection as set forth in subsection (b) above, or by the resolution of the
parties or the determination of the Accountants, if the Working Capital of the
Business at Closing as finally determined is greater than the Target Working
Capital, Purchaser shall pay such difference to Seller, and if the Working
Capital of the Business at Closing as finally determined is less than the Target
Working Capital, Seller shall pay such difference to Purchaser. Payments must be
made in Immediately Available Funds as requested by the party receiving the
funds.
(d) For purposes hereof, the term "Working Capital" shall mean
(i) the sum of Total Receivables, Total Inventory and Total Other Current
Assets, less (ii) the sum of Total Accounts Payable, Total Compensation
Accruals, Total Withholding Accruals, Total Accrued Worker's Compensation, Total
Benefits Accruals, Total Miscellaneous Accruals and Total Accrued Taxes, as
these terms are commonly used as line item categories in the internally prepared
balance sheet for the Business. Notwithstanding the foregoing, for purposes of
this Agreement, Working Capital shall not include (A) bank debt, (B) costs and
expenses associated with the transactions contemplated by this Agreement, or (C)
long-term indebtedness and the current portion of any such long term
indebtedness.
2.5 SALES TAXES. Seller shall be responsible for and duly pay
one-half, and Purchaser shall be responsible for and duly pay one-half, of all
sales, use, excise, transfer, value added and similar Taxes imposed by any
Government in any jurisdiction on the purchase and sale of any of the Acquired
Assets.
2.6 PRICE ALLOCATION. Promptly following the determination of the
Final Cash Purchase Price pursuant to Section 2.4, Purchaser shall cause to be
prepared and delivered to Seller a schedule setting forth the allocation of the
Final Cash Purchase Price and the Assumed Liabilities that are taken into
account for federal income Tax purposes among the Acquired Assets. Such
allocation shall be subject to the review and approval of Seller, which approval
shall not be unreasonably withheld or delayed. The allocation of the Final Cash
Purchase Price and the Assumed Liabilities shall be made in accordance with (i)
the reasonable fair market value of such items and (ii) the provisions of
Section 1060 of the Internal Revenue Code of 1986, as amended (the "Code"), and
the rules and regulations promulgated thereunder, and shall be binding, to the
extent not in conflict with applicable Law, upon Parent, Purchaser and Seller
for all purposes (including financial and regulatory reporting purposes and Tax
purposes). Parent, Purchaser and Seller further agree to file, as applicable,
their respective U.S. federal income Tax returns and Form 8594 and, to the
extent not in conflict with applicable Law, their other Tax returns reflecting
such allocation and any other reports required by Section 1060 of the Code, in
accordance with said allocation. Each party agrees to prepare and timely file
all applicable IRS forms, to cooperate with the other parties in the preparation
of such forms and to furnish the other parties with a copy of such forms
prepared in draft, within a reasonable period before the due date thereof. In
addition, each party agrees to notify the other parties in the event any taxing
authority takes or purports to take a position inconsistent with the agreed-upon
allocations.
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3. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER.
Parent and Purchaser, jointly and severally, represent and warrant to, and
covenant and agree with, Seller that:
3.1 ORGANIZATION, GOOD STANDING, AUTHORITY AND ENFORCEABILITY. Parent is
a corporation duly organized, validly existing and in good standing under the
Laws of the State of Ohio. Purchaser is a limited liability company duly
organized, validly existing and in good standing under the Laws of the State of
Ohio. Each of Parent and Purchaser has all requisite power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. This Agreement and each other agreement and instrument to be executed by
Parent and/or Purchaser in connection herewith have been (or upon execution
shall have been) duly executed and delivered by Parent and Purchaser, as
applicable, have been duly authorized by all necessary action and constitute (or
upon execution shall constitute) legal, valid and binding obligations of Parent
and Purchaser, as applicable, enforceable against Parent and Purchaser in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other Laws relating to or affecting
the rights and remedies of creditors generally and to general principles of
equity (regardless of whether considered in a proceeding in equity or at law).
3.2 AGREEMENT NOT IN BREACH OF OTHER INSTRUMENTS. Neither the execution
and delivery of this Agreement by Parent or Purchaser nor the consummation of
the transactions contemplated herein shall result in a violation or breach of,
or constitute a default under (i) any agreement, indenture or other instrument
to which Parent or Purchaser is a party or by which it is bound, (ii) the
organizational and charter documents of Parent or Purchaser, (iii) any judgment,
decree, order or award of any court, Government or arbitrator by which Parent or
Purchaser is bound, or (iv) any Law applicable to Parent or Purchaser.
3.3 CONSENTS. The execution and delivery of this Agreement by Parent or
Purchaser and the consummation of the transactions contemplated by this
Agreement by Parent or Purchaser (i) do not require the consent, approval or
action of, or any filing with or notice to, any Person or Government, except as
specified in Schedule 3.3, and (ii) do not require the consent or approval of
Parent's or Purchaser's respective shareholders or boards of directors, except
such as have been obtained and are in full force and effect.
3.4 AVAILABLE FUNDS. Purchaser has readily available to it committed
funds sufficient to allow it to consummate the transactions contemplated by this
Agreement on a timely basis. 3.5 NO BROKERAGE FEES. Neither Parent, Purchaser
nor anyone acting on Parent's or Purchaser's behalf has incurred any liability
or obligation to pay fees or commissions to any broker, finder or agent with
respect to the transactions contemplated by this Agreement for which Seller or
any of its Affiliates shall be liable.
3.6 DUE DILIGENCE MATTERS. Parent and Purchaser have carefully evaluated
the risks associated with the Acquired Assets and the operation of the Business
following the
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Closing. Parent and Purchaser have been given the opportunity to ask questions
and receive answers from Seller concerning the financial condition of the
Business and such other information pertaining to the purchase of the Acquired
Assets as Parent and Purchaser desire, and have been given the opportunity to
obtain additional information necessary to verify the accuracy thereof. The
foregoing shall not serve to diminish any representation or warranty given by
Seller hereunder.
4. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller represents and warrants to, and covenants and agrees with, Parent
and Purchaser that:
4.1 ORGANIZATION, GOOD STANDING AND AUTHORITY. Seller is a
corporation duly organized, validly existing and in good standing under the Laws
of the jurisdiction of its incorporation. Seller has full corporate authority
and power to carry on its business as it is now conducted, and to own, lease or
operate the Acquired Assets. Seller is qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which its failure to
obtain or maintain such qualification or good standing would reasonably be
expected to have a Material Adverse Effect.
4.2 AUTHORIZATION OF AGREEMENT. (a)
(a) Seller has all requisite power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby. This
Agreement and each other agreement and instrument to be executed by Seller in
connection herewith have been (or upon execution shall have been) duly executed
and delivered by Seller, have been duly authorized by all necessary corporate or
partnership action and constitute (or upon execution shall constitute) legal,
valid and binding obligations of Seller, enforceable against Seller in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other Laws relating to or affecting
the rights and remedies of creditors generally and to general principles of
equity (regardless of whether considered in a proceeding in equity or at law);
and
(b) Except as set forth in Schedule 4.2, neither the
execution and delivery of this Agreement by Seller nor the consummation of the
transactions contemplated herein shall result in a material violation or breach
of, or constitute a material default under (i) the Articles of Incorporation or
By-Laws of Seller, (ii) any material term or provision of any Assumed Contract
or other contract, indenture, note, mortgage, bond, security agreement, loan
agreement, guaranty, pledge, or other agreement, instrument or document to which
Seller is a party or by which Seller is bound, (iii) any judgment, decree, order
or award of any court, Government or arbitrator by which Seller is bound, or
(iv) to Seller's Knowledge any Law applicable to Seller.
4.3 ACQUIRED ASSETS. Except as set forth in Schedule 4.3, Seller
is, or at the Closing shall be, the lawful owner of or have the right to use
each of the Acquired Assets owned or used by Seller in the Business, free and
clear of all Liens. Except for Excluded Assets and
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except as set forth on Schedule 4.3, there are no assets or properties used
exclusively in or necessary for the operation of the Business and owned by any
Person other than Seller that shall not be leased or licensed to Purchaser under
a valid, current lease or license arrangement included among the Assumed
Contracts or other Acquired Assets. The tangible Acquired Assets shall be in the
possession of Seller at Closing or at such other locations set forth on Schedule
4.3. Except for the Excluded Assets, there are no assets or properties used
exclusively in or necessary for the operation of the Business as currently
conducted by Seller not included in the Acquired Assets.
4.4 FINANCIAL STATEMENTS. Seller has made available to Parent and
Purchaser copies of Seller's audited consolidated balance sheets as at August
31, 2003 and August 31, 2002, and related consolidated audited statements of
operations, shareholders' equity and cash flows for each of the three years in
the period ended August 31, 2003 (the "Audited Financial Statements"). The
Audited Financial Statements include the opinion of Ernst & Young LLP,
independent certified public accountants, that such financial statements present
fairly, in all material respects, the consolidated financial position of Seller
and subsidiaries as at their respective dates and the consolidated results of
their operations and cash flows for each of the three years in the period ended
August 31, 2003, in conformity with GAAP. Seller also has made available to
Parent and Purchaser copies of the unaudited balance sheet of the Business as at
May 31, 2004 (the "Unaudited Balance Sheet"), and the unaudited statement of
income of the Business for the nine-month period then ended (such unaudited
statement of income, together with the Unaudited Balance Sheet, being
collectively referred to as the "Unaudited Financial Statements"). Except for
footnotes, normal year-end adjustments and as set forth in Schedule 4.4, the
Unaudited Financial Statements have been prepared in accordance with the same
methodologies, assumptions and accounting practices used to prepare the Audited
Financial Statements and present fairly, in all material respects, the financial
condition of the Business as at the date thereof and the results of operations
of the Business for the nine-month period then ended. The Audited Financial
Statements and the Unaudited Financial Statements are collectively referred to
in this Agreement as the "Financial Statements."
4.5 REAL PROPERTY AND LEASEHOLDS. Except as set forth in Schedule 4.5:
(a) Seller owns, free and clear of all Liens, the Owned Real
Property. Seller owns the Cedarburg Facility free and clear of all Liens other
than Liens arising under or associated with the Amended and Restated
Restructuring Agreement, dated as of August 23, 2003, among Seller, KeyBank
National Association and certain other lenders party thereto and certain
security and mortgage agreements related to such Amended and Restated
Restructuring Agreement.
(b) The Owned Real Property constitutes all of the real property
currently owned by Seller and used for the operation of the Business as
presently conducted, other than the Cedarburg Facility and Seller's facility in
Dayton, Ohio. The real property leased by Seller under the Real Property Leases
constitutes all of the real property leased, subleased to, or otherwise occupied
(and not owned) by Seller and used for the operation of the Business as
presently conducted, other than the leased real property set forth on Schedule
1.2(k);
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(c) To Seller's Knowledge, each parcel of Owned Real Property,
each parcel of real estate leased by Seller under the Real Property Leases and
the Cedarburg Facility (collectively, the "Real Property") have adequate access
to the existing roads and other public rights of way for the operation of the
Business as presently conducted;
(d) To Seller's Knowledge, the present use, occupancy and
operation of the Real Property, and all aspects of the improvements to the Real
Property (the "Real Property Improvements"), are in compliance in all material
respects with all applicable Laws. To Seller's Knowledge, all Real Property
Improvements are located within the lot lines (and within the mandatory
set-backs from such lot lines established by applicable Law or otherwise) and
not over areas subject to easements or rights of way;
(e) To Seller's Knowledge, all material certificates of occupancy
and other permits and approvals required with respect to the Real Property
Improvements and the use, occupancy and operation thereof have been obtained and
paid for and are currently in effect, and Seller has not received any notices of
violations in connection with such items;
(f) To Seller's Knowledge, no portion of the Real Property is
subject to any classification, designation or determination of any Government or
pursuant to any Law that would reasonably be expected to materially restrict the
current use, occupancy or operation of the Real Property in connection with the
Business as currently conducted;
(g) Seller has made available to Purchaser correct and complete
copies of each Real Property Lease. Each of the Real Property Leases is valid
and in full force and effect, and Seller holds a valid and existing leasehold
interest under each of the Real Property Leases, free and clear of all Liens.
Seller is not in default under the terms of any Real Property Lease, and, to
Seller's Knowledge, no events have occurred and no circumstances exist which, if
not remedied, and whether with or without notice or the passage of time or both,
would result in such a default.
4.6 TANGIBLE PERSONAL PROPERTY OTHER THAN INVENTORY.
(a) Except as set forth in Schedule 4.6, to Seller's Knowledge all
of the M&E and other items of tangible personal property included among the
Acquired Assets (other than the Inventory and office and maintenance supplies),
or which are leased by Seller pursuant to an Assumed Contract, have been
operated by Seller in material conformity with all applicable Laws,
manufacturer's operating manuals, manufacturer's warranties, and insurance
requirements.
(b) Except as set forth in Schedule 4.6, to Seller's Knowledge,
all lessors of all M&E and other tangible personal property leased to Seller
pursuant to an Assumed Contract have performed and satisfied in all material
respects their respective duties and obligations under such Assumed Contracts.
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4.7 INTELLECTUAL PROPERTY ASSETS. Except as set forth on Schedule 4.7:
(a) To Seller's Knowledge, Seller owns or has the right to use
each Intellectual Property Asset owned or used by Seller, free and clear of all
Liens;
(b) No interference Actions concerning Seller's use of any of its
Intellectual Property Assets are pending with a Government or, to Seller's
Knowledge, threatened;
(c) To Seller's Knowledge, Seller has the right and authority to
use the Intellectual Property Assets owned by it in connection with the conduct
of the Business in the manner presently conducted and, to Seller's Knowledge,
such use does not violate in any respect the legally enforceable rights of any
other Person other than any such violation that would not reasonably be expected
to have a Material Adverse Effect. Except as set forth on Schedule 4.7, Seller
has not received any notice that the use of any Intellectual Property Asset
infringes upon or conflicts with any rights claimed by any other Person; and
(d) Seller has complied in all material respects with the terms of
any Assumed Contract respecting Intellectual Property Assets and, to Seller's
Knowledge, each other party to such Assumed Contract has complied in all
material respects with such terms.
4.8 INSURANCE. Schedule 4.8 lists each liability, crime, fidelity, fire,
product liability, workers' compensation, life and health insurance policy owned
by Seller with respect to the Business or the Acquired Assets, including for
each policy the name of the insurer, the type of policy and the amount of
coverage. Except as set forth on Schedule 4.8, to Seller's Knowledge, Seller has
not received any written notice from any such insurance company within the 12
months preceding the date hereof canceling or materially amending any insurance
policies applicable to the Business or, except in connection with or as a result
of general market or industry conditions, materially increasing the annual or
other premiums payable under any of such insurance policies, and to Seller's
Knowledge no such cancellation, amendment or material increase of premiums is
threatened.
4.9 ENVIRONMENTAL MATTERS.
(a) Except as set forth on Schedule 4.9, Seller has not stored,
treated, disposed of, managed, generated, manufactured, produced, released (as
"release" is defined in Section 101(22) of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA")), emitted or
discharged in any material respect any toxic, hazardous, explosive or otherwise
dangerous materials, substances, pollutants or wastes (as those terms are used
in CERCLA, the Clean Air Act, the Clean Water Act, the Resource Conservation and
Recovery Act of 1976, the Hazardous Materials Transportation Act, the Emergency
Planning and Community Right-to-Know Act or in any other Environmental Law ),
petroleum products, poly-chlorinated biphenyls, urea-formaldehyde foam, or
radioactive materials (all of the above being collectively referred to herein as
"Hazardous Materials") on, to, in, under or from the Real Property.
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(b) Except as set forth in Schedule 4.9, Seller (i) is conducting
and, during all applicable limitations periods, has conducted the Business in
material compliance with all Environmental Laws and has obtained and complied
with in all material respects all permits, licenses, consents, approvals,
registrations and other authorizations required under Environmental Law in order
to operate the Business as currently conducted, and (ii) Seller has not been
notified that it is potentially liable under, or received any written requests
for information or other correspondence under, any Environmental Law concerning
the Real Property.
(c) Except as set forth on Schedule 4.9, Seller has prepared and
timely filed with the appropriate jurisdictions all reports and filings required
pursuant to any Environmental Law applicable to or affecting the Business or the
Acquired Assets, and such reports and filings were accurate in all material
respects.
(d) Schedule 4.9 contains a list of all environmental studies,
analyses and reports prepared during the last five years and in Seller's
possession relating to the environmental condition of the Real Property, and
Seller has made available to Parent and Purchaser copies of all such studies,
analyses and reports, if any.
(e) Except as set forth on Schedule 4.9, no audit or other
investigation has been conducted by Seller or, to Seller's Knowledge, by any
governmental authority as to environmental matters at the Real Property within
the past five (5) years.
(f) Except as set forth on Schedule 4.9, with respect to the
Business or any Acquired Asset, Seller has not sent any Hazardous Material to a
site that, pursuant to any Environmental Law, has been placed on the National
Priorities List or any similar state list or is subject to, or the source of,
any written demand to Seller to take response, removal, corrective, remedial or
other responsive action under or pursuant to any Environmental Law or to pay for
the costs of any such action at the site.
(g) Except as set forth on Schedule 4.9, no Action against Seller
to enforce or impose liability under any Environmental Laws with respect to the
operation of the Business or any Real Property is pending or, to Seller's
Knowledge, threatened.
4.10 EMPLOYMENT MATTERS.
(a) For each Employee set forth on Schedule 4.10 is such Employee's date
of birth, date of hire, the years of service required under each applicable Plan
for purposes of eligibility, vesting and accrual of benefits, and annual salary
or hourly wage rate, as applicable, and accrued vacation. Seller or an Affiliate
has paid in full to all Employees, or made appropriate accruals for on the books
of account of Seller, all wages, commissions, bonuses and other direct
compensation for all services performed by them. Seller or an Affiliate has
withheld or collected from each payment made to each of the Employees the amount
of all Taxes required to be withheld or collected therefrom, and Seller or an
Affiliate has paid the same when due to the applicable Government agency.
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(b) Except as set forth on Schedule 4.10, (i) there are no pending
or, to Seller's Knowledge, threatened claims by any Employee or former Employee
against Seller with respect to the Business other than for compensation and
benefits due in the ordinary course of employment or workers' compensation
claims arising in the Ordinary Course of Business of the Business, (ii) there
are no pending or, to Seller's Knowledge, threatened claims against Seller with
respect to the Business arising out of any applicable Law relating to employment
practices or occupational or safety and health standards of the Business, (iii)
there are no pending or, to Seller's Knowledge, threatened labor disputes,
strikes or work stoppages against Seller affecting the Business, and (iv) to
Seller's Knowledge, there are no union organizing activities in process
involving any of the Employees with respect to the Business.
(c) Schedule 4.10 lists all union and collective bargaining agency
agreements to which Seller is a party and that relate to the Business.
(d) Schedule 4.10 identifies all Employees and former Employees
and their dependents receiving health benefits, or eligible to receive health
benefits, as required by COBRA. To Seller's Knowledge, notice of the
availability of healthcare continuation coverage for Employees, former Employees
and their respective dependents and qualified beneficiaries, in accordance with
the requirements of COBRA has been provided to all persons entitled thereto, and
all persons electing such coverage are being (or have been, if applicable)
provided such coverage.
4.11 EMPLOYEE BENEFIT PLANS. Schedule 4.11 hereto lists all plans,
programs, agreements, commitments and arrangements, including any "employee
benefit plan" within the meaning of Section 3(3) of ERISA, maintained by or on
behalf of Seller that provide any present or future benefits or compensation to,
or for the benefit of, any Employee or former Employee of Seller, or under which
Seller has any present or future liability with respect to any Employees (the
"Plans"), complete copies of which have been made available to Parent and
Purchaser. To Seller's Knowledge, except as set forth on Schedule 4.11, each
Plan, and the administration of each Plan, complies with all applicable Laws
(including, in the case of Plans which are intended to be tax-qualified, all
applicable provisions of the Code, including Sections 401(a) and 401(k)), except
for any noncompliance that would not reasonably be expected to have a Material
Adverse Effect. Except as set forth on Schedule 4.11, Seller has not, with
respect to the Business, established, maintained or contributed to or otherwise
participated in a multi-employer retirement plan (as defined in Section 3(37)(A)
of ERISA), any defined benefit plan within the meaning of Section 3(35) of
ERISA, or any other plan which is subject to the provisions of Sections 302 or
Title IV of ERISA or Section 412 of the Code, and Seller and all Affiliates of
Seller have timely made any contributions required by them to any such plan, and
have no unpaid withdrawal liability or termination liability under Title IV of
ERISA with respect to any such plan.
4.12 ASSUMED CONTRACTS. Schedule 4.12 sets forth each Assumed Contract
that (a) cannot be terminated by Seller within ninety (90) days after the date
of this Agreement without any penalty or premium or (b) provides for annual
payments or receipts in excess of $100,000.00 in the aggregate. Except as set
forth on Schedule 4.12: each Assumed Contract is in full force and effect;
Seller has performed in all material respects its obligations under each
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Assumed Contract; to Seller's Knowledge each other party to an Assumed Contract
has performed in all material respects each of its obligations under such
Assumed Contract; and to Seller's Knowledge no event has occurred which, with
the giving of notice or the lapse of time, or both, would constitute a material
default or breach on the part of Seller under any of the Assumed Contracts or on
the part of any other party to the Assumed Contracts.
4.13 CONSENTS. The execution and delivery of this Agreement by Seller and
the consummation of the transactions contemplated by this Agreement by Seller
(i) do not require the consent, approval or action of, or any filing with or
notice to, any Person or Government, except as specified in Schedule 4.13, and
(ii) do not require the consent or approval of Seller's shareholders or board of
directors, except such as has been obtained and is in full force and effect.
4.14 LIABILITIES. To Seller's Knowledge, Seller has no liability or
obligation (whether absolute, accrued, contingent or otherwise) with respect to
the Business that is of a nature required by GAAP to be recorded on financial
statements, except (i) those reflected on, accrued for or reserved against in
the Financial Statements or that will be reflected on, accrued for or reserved
against in the Final Closing Working Capital Statement, (ii) current liabilities
incurred in the Ordinary Course of Business of the Business since the date of
the Unaudited Balance Sheet, (iii) relating to transactions disclosed in or
contemplated by this Agreement (including the Schedules hereto), (iv) those that
have not had and would not reasonably be expected to have a Material Adverse
Effect, and (v) as set forth in Schedule 4.14.
4.15 DISCLAIMER. EXCEPT AS SPECIFICALLY SET FORTH HEREIN, (I) ALL
ACQUIRED ASSETS ARE BEING CONVEYED HEREUNDER ON AN "AS IS, WHERE IS" BASIS AND
(II) EXCEPT AS SPECIFICALLY SET FORTH HEREIN, SELLER MAKES NO WARRANTIES OR
REPRESENTATIONS, EXPRESS OR IMPLIED, WITH RESPECT TO THE ACQUIRED ASSETS OR THE
BUSINESS, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE AND WARRANTIES AS TO THE PROSPECTS OF THE BUSINESS AFTER THE CLOSING.
ALL OF SUCH EXPRESS AND IMPLIED WARRANTIES AND REPRESENTATIONS ARE HEREBY
EXCLUDED, EXCEPT AS EXPRESSLY SET FORTH HEREIN.
4.16 INVENTORY. To Seller's Knowledge, subject to any reserves included
in the Final Closing Working Capital Statement (the "Reserves"), all Inventory
reflected on the Final Closing Working Capital Statement shall be of a quality
and quantity suitable and useable in the Ordinary Course of Business of the
Business, except, subject to Reserves, for excess and obsolete items or items
below standard quality that in each case have been written off or written down
to net realizable value.
4.17 PRODUCTS LIABILITY AND WARRANTY. (a) Except as set forth on Schedule
4.17, during the prior three years there has not been any, and currently there
is no pending or, to Seller's Knowledge, threatened Action against Seller nor to
Seller's Knowledge any circumstance that would reasonably be expected to result
in the filing of an Action against Seller, relating to, or otherwise involving,
any Product Liability Claims, but excluding any Actions or
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liability that has not had and would not reasonably be expected to have a
Material Adverse Effect.
(b) Schedule 4.17 contains a true and complete copy of the terms
and conditions of Seller's standard warranties which are utilized in the
Business. Except as set forth and described on Schedule 4.17, Seller has not
modified, either orally or in writing, any of the terms or conditions of such
warranty for any Person. Schedule 4.17 sets forth an accurate and complete
history for the Business of (i) warranty claims made against Seller during the
last three years that resulted in an economic payment by or against Seller, (ii)
all unresolved warranty claims, and (iii) product returns during the last six
months.
4.18 CUSTOMERS AND SUPPLIERS. Schedule 4.18 sets forth the name of the 10
largest customers and suppliers of the Business (by dollar volume) in terms of
purchases and sales for the years ended August 31, 2003 and August 31, 2002. To
Seller's Knowledge, except as set forth in Schedule 4.18, no customer or
supplier set forth on Schedule 4.18 intends to discontinue or substantially and
adversely change its relationship with Seller with respect to the Business.
4.19 LITIGATION. Except as set forth in Schedule 4.19, there is no Action
pending with a Government or, to Seller's Knowledge, threatened, against or
affecting Seller with respect to the Business or any of the Acquired Assets
that, if adversely decided, would reasonably be expected to have a Material
Adverse Effect.
4.20 TAXES. Except as set forth on Schedule 4.20, all Taxes that are due
and payable by Seller with respect to the Business or the Acquired Assets for
all periods through the date of the Unaudited Balance Sheet have been paid or
accrued for on the Unaudited Balance Sheet and all such Taxes due and payable by
Seller with respect to the Business or the Acquired Assets for all periods
through the Closing Date shall be paid or accrued for on the Final Closing
Working Capital Statement. Seller has timely and accurately filed all federal,
state, local and foreign returns and reports required to be filed with any
Government with respect to all Taxes with respect to the Business and the
Acquired Assets on or before the date of this Agreement, and there is no pending
or, to Seller's Knowledge, threatened, audit of any of those returns by any
Government. Except as set forth on Schedule 4.20, there is not now in force any
extension of time with respect to the date on which any return relating to any
Taxes owed by Seller with respect to the Business or the Acquired Assets was or
is due to be filed by Seller, or any waiver or agreement by Seller for the
extension of time for the assessment of any such Taxes.
4.21 AGREEMENTS AND TRANSACTIONS WITH RELATED PARTIES. Except as set
forth in Schedule 4.21, none of the following Persons is a party to any Assumed
Contract with Seller: (i) any Person owning, or formerly owning, beneficially or
of record, directly or indirectly, a ten percent (10.0%) or more beneficial
interest in capital stock of Seller, (ii) any person related by blood, adoption
or marriage to any such Person, or (iii) any director or officer of Seller (any
or all of the foregoing being herein referred to as "Related Parties"). Except
as set forth in Schedule 4.21, the terms of conditions of each Assumed Contract
between Seller and a Related Party are, in all material respects, consistent
with the terms and conditions that would have been obtainable at the time in a
comparable arm's-length transaction. Except as set forth on Schedule 4.21, no
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Related Party has received any loans from or is otherwise a debtor, or has made
any loans to or is otherwise a creditor of, Seller, other than any such loans or
debts that will be settled on or before Closing or that are not included in the
Acquired Assets or Assumed Liabilities and other than ordinary advances to
directors and officers of Seller.
4.22 ABSENCE OF CHANGES. Except as provided for in this Agreement or as
set forth in Schedule 4.22 or any other Schedule to this Agreement, since the
date of the Unaudited Balance Sheet, to Seller's Knowledge:
(a) no event has occurred that has had or would reasonably be
expected to have a Material Adverse Effect;
(b) the Business has been operated in the Ordinary Course of
Business;
(c) other than in the Ordinary Course of Business of the Business
or as set forth on Schedule 2.2(d), there has been no (i) increase in the
compensation or in the rate of compensation or commissions payable or to become
payable by Seller to any Employee earning $50,000 or more per annum, (ii)
Employee hired at a salary in excess of $50,000 per annum, or (iii) commitment
to pay any new bonus, profit sharing or other extraordinary compensation to any
Employee;
(d) no liability or obligation (whether absolute, accrued,
contingent or otherwise) in excess of $25,000 has been incurred by Seller with
respect to the Business, other than liabilities incurred in the Ordinary Course
of Business of the Business since the date of the Unaudited Balance Sheet or
reflected in the Final Closing Working Capital Statement;
(e) Seller has not (i) paid any judgment in excess of $25,000
resulting from any Action against Seller relating to the Business or the
Acquired Assets or (ii) made any payment to any Person in excess of $25,000 in
settlement of any Action against Seller relating to the Business or the Acquired
Assets;
(f) there has been no sale, transfer, lease or other disposition
of any assets of Seller that are necessary for or used exclusively in the
Business, other than sales of Inventory in the Ordinary Course of Business of
the Business and any other asset that is not material to the current operation
of the Business; or
(g) Seller has not entered into any contract, oral or written, to
do or engage in any of the foregoing after the date hereof.
4.23 COMPLIANCE WITH LAWS. Except as set forth on Schedule 4.23, to
Seller's Knowledge, Seller is and during all applicable limitations periods has
been in compliance with all Laws with respect to the operation of the Business,
except where the failure to be in compliance would not reasonably be expected to
have a Material Adverse Effect. Except as set forth on Schedule 4.23, to
Seller's Knowledge, no event has occurred or conditions exists that would
reasonably be expected to give rise to any violation by Seller of any Law in
connection
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with Seller's operation of the Business, except any violation that would not
reasonably be expected to have a Material Adverse Effect. Except as set forth on
Schedule 4.23, Seller possesses all Transferred Permits that are necessary for
the lawful operation of the Business and is in compliance with all such
Transferred Permits.
4.24 UTILITIES. To Seller's Knowledge, except as set forth on Schedule
4.24, each parcel of Real Property at which the Business is conducted has access
to utilities (including electric, natural gas, water, sewer, telephone, and
similar services but excluding electronic data transmission services) adequate
to operate the Business operated at such Facility in the manner currently
conducted.
4.25 RECEIVABLES. Subject to any reserves set forth in the Final Closing
Working Capital Statement, (i) all Accounts Receivable represent or shall
represent valid obligations arising from sales actually made or services
actually performed in the Ordinary Course of Business of the Business, and (ii)
to Seller's Knowledge, except as set forth on Schedule 4.25, there is no claim,
or right of set-off, other than returns in the Ordinary Course of Business of
the Business, under any contract with any obligor of an Accounts Receivable
relating to the amount or validity of such Account Receivable.
4.26 NO BROKER'S FEES. Neither Seller nor anyone acting on Seller's
behalf has incurred any liability or obligation to pay fees or commissions to
any broker, finder or agent with respect to the transactions contemplated by
this Agreement for which Parent, Purchaser or any of Affiliate of Parent or
Purchaser shall be liable.
4.27 NO OTHER REPRESENTATIONS AND WARRANTIES. Seller has not made, and
Seller shall not be deemed to have made, any representation or warranty other
than as expressly made by Seller in this Section 4. Without limiting the
generality of the foregoing, and notwithstanding any representations and
warranties made by Seller in this Section 4, Seller makes no representation or
warranty with respect to (i) any projections, estimates or budgets delivered or
made available to Parent, Purchaser or their Representatives at any time with
respect to future revenues, expenses or expenditures or future results of
operations, or (ii) except as expressly covered by a representation and warranty
contained in this Section 4, any other information or documents (financial or
otherwise) made available to Parent, Purchaser or their Representatives before
or after the date of this Agreement.
5. CERTAIN UNDERSTANDINGS AND AGREEMENTS OF THE PARTIES.
5.1 REASONABLE EFFORTS; FURTHER ASSURANCES. Each party shall use
its reasonable efforts to take or cause to be taken all actions necessary,
proper or advisable to fulfill and perform its obligations in respect of this
Agreement, or otherwise to consummate and make effective the transactions
contemplated hereby and to cause its respective conditions set forth in Sections
6.1, 6.2 and 6.3 to be satisfied. Each party shall furnish to the other parties
and keep the other parties informed concerning the status of its filings and its
communications with any Government with respect to its filings. Parent shall
cause Purchaser to timely and fully perform all of its agreements and covenants
made in, and obligations arising under, this Agreement and each other document
executed and delivered by or on behalf of Parent or Purchaser to Seller at
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Closing with respect to the transactions contemplated by this Agreement. From
time to time after the Closing, each party shall execute and deliver any
documents and take any other actions that another party reasonably requests to
confirm or effectuate the consummation of the transactions contemplated by this
Agreement.
5.2 COVENANT NOT TO COMPETE. Seller covenants and agrees that it shall
not, for the period ending five (5) years after Closing, participate, directly
or indirectly, in the ownership, management, financing or control of, or act as
a consultant or agent to, or furnish services or advice to, any Person that
develops, manufactures or sells Competitive Products to original equipment
manufacturers and tier-one suppliers in the automotive industry (a "Competitive
Business"). For purposes of this Agreement, "Competitive Products" means
aluminum castings, produced using gravity and low-pressure production processes,
for suspension and brake systems. The geographic scope of the foregoing
covenants is worldwide. The covenants set forth in this Section shall not
prohibit Seller or its Affiliates from, directly or indirectly, (i) entering
into any contract, arrangement or other relationship with any Person that is not
for any Competitive Product (by way of example, Seller may enter into an
agreement to sell products that are not Competitive Products to a company that
operates a Competitive Business as a division, subsidiary or other Affiliate),
(ii) making any equity investments in any publicly owned company that conducts a
Competitive Business, provided that the investment does not confer control of
more than 5% of the outstanding voting securities of such company upon Seller,
or (iii) acquiring any Person that conducts a Competitive Business with revenues
of less than $100 million if Seller or the applicable Affiliate divests itself
within 12 months after such acquisition of that portion of the business of the
acquired Person that constitutes a Competitive Business. The parties agree and
intend that the time period, geographic coverage and scope of the covenants set
forth in this Section 5.3 are reasonable. The covenants set forth in this
Section 5.3 will not extend to or bind any purchaser of the assets of the
businesses being retained by Seller and its Affiliates (other than any purchaser
who is an Affiliate of Seller at the time of the purchase).
5.3 ACCOUNTS RECEIVABLE. Seller agrees to promptly forward to Purchaser
any monies, checks or negotiable instruments received by Seller after the
Closing Date relating to any Accounts Receivable for Purchaser's own account.
Seller hereby appoints Purchaser as its attorney-in-fact to endorse, cash and
deposit any monies, checks and other negotiable instruments so forwarded to
Purchaser.
5.4 EMPLOYEES. On and effective as of the Closing Date, Purchaser shall
offer employment to all of the Employees on substantially the same terms and
conditions, including pay and benefits, as they enjoy on the Closing Date or
those which Purchaser or Parent provides to its similarly situated employees.
Purchaser shall also take all other steps necessary to eliminate any obligation
of Seller or any of its Affiliates under the Worker Adjustment and Retraining
Notification Act and related regulations ("WARN") and any similar Laws to give
notice of the transfer of any operations or the loss of employment or loss of
pay or benefits or to pay any amounts in lieu of such notice. Those Employees
who accept offers of employment are referred to as the "Hired Employees." In
addition, after Closing Parent and Purchaser shall comply with the notice
provisions of WARN and any similar Laws in connection with the
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termination of any Hired Employees by Purchaser. Purchaser's commitment to hire
all of the Employees shall not be construed as a contract of employment and all
of the Employees hired by Purchaser shall be employees at will except to the
extent expressly agreed in writing by Purchaser with respect to any individual
Employee. To the extent that any employees or agents of Seller make
recommendations to Parent or Purchaser relating to discontinuation of employment
of any of the Employees, such persons shall be deemed to be acting as agents of
Parent and Purchaser for such purpose. The parties agree that the provisions of
this Section are solely among and for the benefit of the parties hereto and do
not inure to the benefit of or confer rights upon any third party, including any
Employees.
5.5 CONSENTS. Each party shall use its reasonable efforts to cooperate
with the other party to obtain any necessary consent to assignment and transfer
of the Acquired Assets to Purchaser at Closing. If consent to a particular
Acquired Asset is not obtained or if such assignment is not permitted regardless
of consent, Seller shall use its reasonable efforts to cooperate with Purchaser
(at Purchaser's cost) in any reasonable arrangement designed to provide
Purchaser all material benefits of that Acquired Asset.
5.6 USE OF BUSINESS NAMES BY PURCHASER. To the extent the trademarks,
service marks, brand names or trade, corporate or business names of Seller that
are not included in the Acquired Assets but are used by the Business on
stationery, signage, invoices, receipts, forms, packaging, advertising and
promotional materials, product, training and service literature and materials,
computer programs or like materials included in the Acquired Assets ("Marked
Materials") or appear on Inventory at the Closing, Purchaser shall remove,
"sticker over" or obscure such trademarks, service marks, brand names or trade,
corporate or business names to the extent commercially feasible and, to the
extent not commercially feasible, may use such Marked Materials or sell such
Inventory after the Closing for a period of 90 days without altering or
modifying such Marked Materials or Inventory, or removing such trademarks,
service marks, brand names, or trade, corporate or business names, but Purchaser
shall not thereafter use such trademarks, service marks, brand names or trade,
corporate or business names in any other manner without the prior written
consent of Seller. Neither Parent nor Purchaser shall otherwise use, attempt to
register or otherwise seek protection for, or challenge Seller's ownership of,
such trademarks, service marks, brand names or trade, corporate or business
names. Any rights in and to such trademarks, service marks, brand names or
trade, corporate or business names that may accrue to Parent or Purchaser and/or
are deemed to accrue to Parent or Purchaser subsequently by operation of Law or
otherwise shall inure to the benefit of Seller.
5.7 BULK TRANSFER LAWS. Parent and Purchaser hereby waive compliance
with any bulk transfer Laws applicable to the transactions contemplated by this
Agreement.
5.8 EMPLOYEE BENEFIT MATTERS. At Closing, or as soon as practicable
thereafter, Purchaser shall cause a defined contribution plan sponsored by
Parent, Purchaser or one of their Affiliates and which, to the knowledge of
Parent and Purchaser, is in all material respects qualified under Section 401(a)
of the Code and otherwise organized and operated in compliance with applicable
Law to accept rollovers of amounts distributed from qualified plan accounts of
Hired Employees maintained in any qualified plan sponsored by Seller. Any such
rollover shall be accomplished in accordance with applicable Law, and the
parties agree to
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reasonably cooperate to accomplish such rollovers. With respect to any amounts
so rolled over, Seller shall have no, and disclaims all, fiduciary or other
responsibilities for acts and omissions occurring after such rollover under any
plan maintained by Parent, Purchaser or any of their Affiliates, and Parent and
Purchaser shall have no, and disclaim all, fiduciary or other responsibilities
for acts and omissions occurring prior to such rollover under any qualified
retirement plans maintained by Seller.
5.9 PRORATIONS. All personal and real property Taxes affecting the
Acquired Assets that are not included in the Assumed Liabilities shall be
prorated to the Closing Date on a due date basis as if paid in advance
(regardless of the practice of the applicable taxing authority). Unless
otherwise an Assumed Liability and except for any installments payable by any
lessor under the Real Property Leases and except as otherwise provided under the
Cedarburg Lease, Seller shall pay all installments of special assessments with
respect to the Real Property that come due on or before the Closing Date, and
Purchaser shall pay all such installments that come due after the Closing Date.
Except to the extent included in the Assumed Liabilities, all water, sewer,
utility and other similar charges, and all prepaid rent and other similar
credits, affecting the Real Property shall be prorated to the Closing Date (with
Closing Date meter readings as appropriate). The foregoing prorations shall be
paid by Purchaser to Seller, insofar as feasible, at the Closing, or to the
extent not feasible, within 30 days following the Closing, by Immediately
Available Funds. Any errors or omissions in computing prorations at the Closing,
or any re-computations required as a result of facts that become known after the
Closing, shall be corrected (and paid as specified above) as soon as practicable
thereafter.
5.10 ACCESS TO RECORDS. Each party shall preserve for six years after
Closing all business records relating to the Business and shall provide each
other party and its Representatives, during reasonable business hours and upon
reasonable advance notice, access to and the right to copy (at the other party's
own expense) such records for any legitimate business purpose, including a Tax
audit or governmental inquiry, and each party to whom the records are disclosed
hereby agrees to keep confidential any confidential or proprietary information
included in those records and to use the records for no other purpose.
5.11 TAX MATTERS. The parties shall cooperate in the preparation of all
federal, state, local and foreign Tax returns and reports for which one party
could reasonably require the assistance of another party, including providing
any information reasonably requested by another party to assist in the
preparations of any such returns.
5.12 ENVIRONMENTAL MATTERS. With respect to the Cedarburg Facility, as
soon as reasonably practicable after Closing, Seller shall:
(a) Revise the Cedarburg Facility's Spill Prevention Control and
Countermeasures Plan so that it accurately reflects current facility conditions,
is certified by a professional engineer and otherwise complies with applicable
Environmental Law; and
(b) Revise the Cedarburg Facility's Storm Water Pollution
Prevention Plan in accordance with applicable Environmental Law.
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Purchaser acknowledges and agrees that after Closing Purchaser (and not Seller)
shall have the obligation to comply with the plans referenced in Sections
5.12(a) and (b) above (the "Environmental Plans") and to update or amend the
Environmental Plans in accordance with applicable Environmental Law, provided,
however, that Seller acknowledges and agrees that Seller (and not Purchaser)
shall have the obligation to construct and install, at Seller's sole cost and
expense, any improvements required in order to bring the Environmental Plans
into compliance with applicable Environmental Law as of the Closing Date.
6. CONDITIONS TO CLOSING.
6.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. (a) As a condition to
the obligations of Parent, Purchaser and Seller to consummate the transactions
contemplated hereby (which condition may be waived by any party and which shall
be deemed to have been waived in whole if the Closing occurs), all consents,
approvals and authorizations of, and any filings with or notices to, any
Government, as well as any consents under Sellers' credit facilities, that are
necessary for the consummation of the transactions contemplated by this
Agreement must have been received and must be in full force and effect.
6.2 CONDITIONS TO OBLIGATIONS OF PURCHASER AND PARENT. As an
additional condition to the obligation of Parent and Purchaser to consummate the
transactions contemplated hereby (which condition may be waived by Parent, as to
itself and Purchaser, in whole or in part, and which shall be deemed to have
been waived in whole if the Closing occurs), Parent and Purchaser must have
received the following documents, dated the Closing Date:
(a) A copy, certified by an authorized officer of Seller, of
resolutions of the board of directors of Seller authorizing the execution,
delivery and performance of this Agreement and all other agreements, documents
and instruments relating hereto and the consummation of the transactions
contemplated hereby;
(b) A xxxx of sale for the Acquired Assets and such other
bills of sale and assignments, in form and substance reasonably satisfactory to
counsel for Purchaser, covering items of tangible and intangible personal
property included in the Acquired Assets;
(c) Certificates of title to the motor vehicles identified
on Schedule 1.1(i) hereto, duly endorsed, completed and acknowledged for
transfer;
(d) General warranty deeds to the Owned Real Property and
the Real Property Improvements;
(e) The Transition Services Agreement;
(f) The Escrow Agreement;
(g) A lease, on terms acceptable to Purchaser and Seller,
under which Purchaser leases the Cedarburg Facility from Seller (the "Cedarburg
Lease");
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(h) The consents set forth on Schedule 6.2(h) (the "Material
Consents");
(i) One or more instruments assigning the Real Property Leases to
Purchaser and providing for the assumption by Purchaser of Seller's obligations
thereunder pursuant to the Instrument of Assumption (collectively, the "Lease
Assignment"); and
(j) Such further documents and instruments of sale, transfer,
conveyance, assignment or delivery covering the Acquired Assets or any part
thereof as Purchaser may reasonably require to assure the sale and assignment of
the Acquired Assets as contemplated by this Agreement.
6.3 CONDITIONS TO OBLIGATIONS OF SELLER. The obligation of Seller to
consummate the transactions contemplated hereby shall be subject to the
fulfillment, at or prior to the Closing Date, of the following additional
conditions (any of which condition may be waived, in whole or in part, by Seller
in writing and shall be deemed to be waived in whole if the Closing occurs):
(a) Tender of Purchase Price. Purchaser must have tendered the
Initial Cash Purchase Price for the Acquired Assets in Immediately Available
Funds pursuant to Section 2.1 of this Agreement; and
(b) Additional Closing Documents of Purchaser. Seller must have
received at the Closing the following documents, each dated the Closing Date:
(i) Copies, certified by the respective Secretaries of
Parent and Purchaser, of resolutions of the respective boards of directors of
Parent and Purchaser authorizing the execution and delivery of this Agreement
and all other agreements, documents or instruments relating hereto and the
consummation of the transactions contemplated hereby;
(ii) The Instrument of Assumption, duly executed by Parent
and Purchaser, pursuant to Section 2.2 hereof;
(iii) The Transition Services Agreement;
(iv) The Escrow Agreement;
(v) The Cedarburg Lease;
(vi) The Lease Assignment; and
(vii) Such further documents and instruments reasonably
requested by Seller to assure the assumption of the Assumed Liabilities as
contemplated by this Agreement.
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7. INDEMNIFICATION.
7.1 INDEMNIFICATION BY SELLER. Subject to the terms hereof,
irrespective of any investigation (including any environmental investigation or
assessment or any due diligence review or investigation) conducted with respect
to, or any knowledge acquired (or capable of being acquired) at any time before
or after the execution and delivery of this Agreement, with respect to the
accuracy or inaccuracy of or compliance with any representation, warranty,
covenant or obligation of Seller in this Agreement, Seller agrees to defend,
indemnify and hold Parent, Purchaser and their directors, officers, Affiliates
and Representatives (the "Purchaser Indemnified Parties") harmless from and
against any claim, liability, expense, loss or other damage (including
reasonable attorneys' fees and expenses) (collectively, "Claims") asserted
against, imposed upon or incurred by any Purchaser Indemnified Party by reason
of, resulting from or arising out of:
(a) any breach by Seller of any representation or warranty
made by Seller in Section 4 of this Agreement or in the Cedarburg Lease or any
other any document executed and delivered by or on behalf Seller to Purchaser at
Closing with respect to the transactions contemplated by this Agreement;
(b) any breach or non-performance by Seller of any covenant or
agreement made by Seller in this Agreement or in the Cedarburg Lease or any
other document executed and delivered by or on behalf of Seller to Purchaser at
Closing with respect to the transactions contemplated by this Agreement;
(c) failure to comply with any bulk sale statutes applicable
to the transactions contemplated by this Agreement;
(d) any Plan liabilities of Seller or any other benefit
liabilities of Seller or any Affiliate of Seller (other than any such Plan or
other benefit liabilities included in the Assumed Liabilities);
(e) any injury or damage alleged to have been caused by or the
result of any product sold, distributed or otherwise placed in the stream of
commerce by or on behalf of Seller in the Business on or prior to the Closing,
or manufactured by or on behalf of Seller in the Business on or prior to the
Closing, but not including any Claims solely for product repair or product
replacement that arise under, and are made pursuant to and consistent with, the
terms of Seller's standard outstanding warranty obligations, which terms are
specifically identified on Schedule 4.17 (collectively, the "Product Liability
Claims"). For purposes of clarification, if a Claim is made by a third party
solely for product repair or replacement arising under and made pursuant to and
consistent with, the terms of Seller's standard outstanding warranty obligations
(a "Warranty Claim"), Seller shall have no obligation to indemnify the
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Purchaser Indemnified Parties for such Warranty Claim pursuant to this Section
7.1(e). However, if a third party pursues two claims, one of which is a Warranty
Claim, and the other of which is brought as a result of injury or damage alleged
to have been caused by or as the result of a product sold, manufactured,
distributed or otherwise placed in the stream of commerce by or on behalf of
Seller in the Business on or prior to the Closing, Seller shall have no
obligation to indemnify the Purchaser Indemnified Parties for the Warranty Claim
pursuant to this Section 7.1(e), however Seller shall indemnify the Purchaser
Indemnified Parties for the Claim brought as a result of injury or damage
alleged to have been caused by or as the result of a product sold, manufactured,
distributed or otherwise placed in the stream of commerce by or on behalf of
Seller in the Business on or prior to the Closing pursuant to this Section
7.1(e);
(f) each of the following matters:
(i) any violation of or non-compliance with any
Environmental Law by Seller with respect to the operation of the Business
occurring before or existing as of the Closing Date;
(ii) any generation, treatment, storage, transport,
management, use, handling, disposal, leakage, spill or release of any Hazardous
Material on, under or from the Real Property on or before Closing;
(iii) any disposal or arrangement for disposal of any
Hazardous Material from the Real Property directly or indirectly arranged for by
or on behalf of Seller on or before the Closing Date;
(iv) any Recognized Environmental Condition (as defined
in ASTM E1527-00, Standard Practice for Environmental Site Assessments: Phase I
Environmental Site Assessment Process) or any Hazardous Materials which existed
on or before the Closing Date on the Real Property;
(v) any PCB Contamination (and for purposes of this
Section 7.1(f)(v), there shall be a rebuttable presumption that any PCB
Contamination that was present in the environment at, on or emanating from the
Real Property or present in any equipment or machinery included in the Acquired
Assets located thereon was present prior to the Closing Date);
(vi) any failure of Seller to comply with the AOC or
with Seller's covenants under Section 5.12 of this Agreement;
(vii) any bodily injury (including illness, disability
and death, regardless of when any such bodily injury occurred, was incurred or
manifested itself), personal injury, property damage (including trespass,
nuisance, diminution in property value, wrongful eviction and deprivation of the
use of real property) or other damage of or to any Person, property (real or
personal) or any Acquired Assets arising from or related to any Hazardous
Material that was (A) present on or before the Closing Date on or at the Real
Property (or present on any other property, if such Hazardous Material emanated
from any Real Property and was present on any Real Property, on or prior to the
Closing Date) or (B) released by any Person on or at any Real Property or any
Acquired Assets at any time on or prior to the Closing Date;
(viii) any and all necessary and reasonable costs and
expenses, including costs of environmental studies, field investigations,
remedial design and work and any
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and all necessary remediation related to the matters set forth in clauses (i)
through (vii) of this Section 7.1(f); and
(ix) any entry by Seller or its Representatives onto any
affected Real Property in connection with the performance of any Work under
Section 7.4(j) of this Agreement;
(g) any brokerage or finders' fees arising out of the
transaction contemplated hereby owing to any party engaged by Seller;
(h) any Tax liability of Seller that is not included in the
Assumed Liabilities or that is not the responsibility of Parent or Purchaser
under Section 2.5 above;
(i) any sale-success fees payable to any employees of Seller
in connection with the closing of the transaction contemplated by this Agreement
in excess of $160,000 in the aggregate;
(j) (i) any recall by a third party of a product of such third
party which utilizes a product of Seller sold, distributed or otherwise placed
in the stream of commerce by or on behalf of Seller in the Business on or prior
to the Closing, or manufactured by or on behalf of Seller in the Business on or
prior to the Closing, for purposes of repair or replacement of such product of
Seller (a "Product Recall"), but excluding any Claims with respect to the
Product Recall to the extent that they are solely for product repair or product
replacement that arise under, and are made pursuant to and consistent with, the
terms of Seller's standard outstanding warranty obligations, and (ii) any Claims
solely for product repair or product replacement of any product of Seller sold,
distributed or otherwise placed in the stream of commerce by or on behalf of
Seller in the Business on or prior to the Closing, or manufactured by or on
behalf of Seller in the Business on or prior to the Closing in excess of the
amount reflected on, accrued for or reserved against in the Final Closing
Working Capital Statement, regardless of whether such Claims arise under
Seller's standard outstanding warranty obligations; and
(k) the enforcement of the indemnification rights under this
Section 7.
Seller's obligation to defend, indemnify and hold the Purchaser Indemnified
Parties harmless from and against any Claims pursuant to Sections 7.1(b)-(k) is
made notwithstanding, and shall not be affected or diminished in any way by, any
disclosure contained in or on this Agreement or the Schedules.
7.2 INDEMNIFICATION BY PARENT AND PURCHASER. Subject to the terms
hereof, irrespective of any investigation (including any environmental
investigation or assessment or any due diligence review or investigation)
conducted with respect to, or any knowledge acquired (or capable of being
acquired) at any time before or after the execution and delivery of this
Agreement, with respect to the accuracy or inaccuracy of or compliance with any
representation, warranty, covenant or obligation of Parent or Purchaser in this
Agreement, Parent and Purchaser, jointly and severally, agree to defend,
indemnify and hold Seller and its directors, officers,
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Affiliates and Representatives (the "Seller Indemnified Parties") harmless from
and against any Claim asserted against, imposed upon or incurred by any Seller
Indemnified Party by reason of, resulting from or arising out of:
(a) the Assumed Liabilities;
(b) excluding matters addressed in Sections 7.2(c), Parent's
or Purchaser's conduct of the Business or use of the Acquired Assets after
Closing;
(c) (i) any Tax liability of Parent or Purchaser that is not
the responsibility of Seller under Section 2.5 above, (ii) any injury or damage
caused by or the result of any product sold, distributed or otherwise placed in
the stream of commerce by or on behalf of Parent or Purchaser in the Business
after Closing (other than any such product that was manufactured by or on behalf
of Seller on or before Closing), or manufactured by or on behalf of Parent or
Purchaser in the Business after Closing, (iii) any recall by a third party of a
product of such third party which utilizes a product sold, distributed or
otherwise placed in the stream of commerce by or on behalf of Parent or
Purchaser in the Business after Closing (other than any such product that was
manufactured by or on behalf of Seller on or before Closing), or manufactured by
or on behalf of Parent or Purchaser in the Business after Closing, (iv) any
pension or other employee benefit liability of Parent or Purchaser, and (v) any
failure by Seller, Purchaser or their respective Affiliates to comply, in
connection with the transactions contemplated by this Agreement, with the Union
Contracts, or with the National Labor Relations Act and any other Laws relating
to labor or employment with respect to the Union Contracts, Employees covered by
the Union Contracts or the applicable unions under the Union Contracts, but with
respect to Seller and its Affiliates only to the extent that any such Claims
result from or arise out of any failure to provide proper and timely notice of
the transactions contemplated by this Agreement to the applicable unions under
the Union Contracts and any failure to afford such unions the opportunity to
bargain about the effects of such transactions; provided, however, this shall
not result in any indemnification of Seller by Purchaser or Parent of any Plan
liabilities that are not Assumed Liabilities.
(d) [Reserved];
(e) any brokerage or finders' fees arising out of the
transaction contemplated hereby owing to any party engaged by Parent or
Purchaser;
(f) any breach by Parent or Purchaser of any representation or
warranty made by Parent or Purchaser in Section 3 of this Agreement or in the
Cedarburg Lease or any other document executed and delivered by or on behalf of
Parent or Purchaser to Seller at Closing with respect to the transactions
contemplated by this Agreement;
(g) any breach or non-performance by Parent or Purchaser of
any covenant or agreement made by Parent or Purchaser in this Agreement or in
the Cedarburg Lease or any other document executed and delivered by or on behalf
of Parent or Purchaser to Seller at Closing with respect to the transactions
contemplated by this Agreement; and
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(h) the enforcement of the indemnification rights under this
Section 7.
Parent's and Purchaser's obligation to defend, indemnify and hold the Seller
Indemnified Parties harmless from and against any Claims pursuant to Sections
7.2(a)-(e) and Sections 7.2(g)-(h) is made notwithstanding, and shall not be
affected or diminished in any way by, any disclosure contained in or on this
Agreement or the Schedules.
7.3 DETERMINATION OF LOSS. Indemnification pursuant to this
Section 7 shall be payable with respect to any Claim described herein as subject
to indemnification upon the happening of the earlier of the following:
(a) Resolution of such Claim by mutual agreement of Seller,
Parent and Purchaser; or
(b) The issuance of a final, non-appealable judgment, award,
order or other ruling by an arbitrator pursuant to Section 9.8 hereof or by a
court of competent jurisdiction.
7.4 LIMITATIONS ON INDEMNIFICATION.
(a) Seller shall not have any liability under this Section 7
until the aggregate amount of all Claims described in Section 7.1 exceeds
$150,000 (the "Threshold Amount"), and then only for the amount by which such
Claims exceed the Threshold Amount. Upon reaching the Threshold Amount, Seller
shall be liable to the Purchaser Indemnified Parties with respect to Claims
described in Section 7.1 in excess of the Threshold Amount up to an aggregate
amount of $2,500,000 (the "Cap"). Notwithstanding anything contained herein to
the contrary, the limitations set forth in this Section 7.4(a) will not apply to
a Claim (i) for a breach of a representation or warranty contained in Section
4.2(a) or the first sentence of Section 4.3, (ii) under Sections 7.1(b)-(j),
(iii) under Section 7.1(k) except to the extent the Claim relates to enforcement
of indemnification rights under Section 7.1(a) (in which case the Claim, to the
extent otherwise applicable hereunder, will be subject to the Threshold Amount
and the Cap), or (iv) for fraud.
(b) Neither Parent nor Purchaser shall have any liability
under this Section 7 until the aggregate amount of all Claims described in
Section 7.2 exceeds the Threshold Amount, and then only for the amount by which
such Claims exceed the Threshold Amount. Upon reaching the Threshold Amount,
Parent and Purchaser shall be liable to the Seller Indemnified Parties with
respect to Claims described in Section 7.2 in excess of the Threshold Amount up
to an aggregate amount equal to the Cap. Notwithstanding anything contained
herein to the contrary, the limitations set forth in this Section 7.4(b) will
not apply to a Claim (i) under Sections 7.2(a), 7.2(c)-(e), and 7.2(g), (ii)
under 7.2(h) except to the extent the Claim relates to enforcement of
indemnification rights under Sections 7.2(b) or 7.2(f) (in which case the Claim,
to the extent otherwise applicable hereunder, will be subject to the Threshold
Amount and the Cap), or (iii) for fraud.
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(c) No Claim may be made by any Purchaser Indemnified Party or
Seller Indemnified Party under Sections 7 unless the indemnifying party shall
have received a written claim for indemnification from the person seeking such
indemnification as provided herein on or before the expiration of eighteen (18)
months following the Closing Date (the "Indemnity Period"); provided, however,
that:
(i) with respect to Claims for indemnification under
Section 7.1(a) or 7.2(f), as applicable, for a breach of the representations and
warranties in Sections 3.1, 3.2, 4.1, 4.2, 4.3 (as it relates to good title to
the Acquired Assets), 4.11 (with respect to the last two sentences thereof) and
4.20, the Indemnity Period shall be thirty (30) days following the expiration of
the applicable statute of limitations for the assertion by third parties of
claims that would give rise to indemnification under Sections 7.1(a) or Section
7.2(f) for the breach of such representations and warranties;
(ii) with respect to Claims for indemnification under
Section 7.1(a) for a breach of Section 4.9 or Claims for indemnification under
Section 7.1(f), the Indemnity Period shall be the expiration of ten (10) years
following the Closing Date except with respect to Claims for indemnification
under Section 7.1(a) for a breach of Section 4.9 or Claims for indemnification
under Section 7.1(f) that, in each case, directly or indirectly relate to the
Cedarburg Facility, in which case the Indemnity Period shall have no expiration
following the Closing Date;
(iii) with respect to Claims for indemnification under
Sections 7.1(b) or 7.2(g), the Indemnity Period shall be thirty (30) days
following the expiration of the applicable statute of limitations for the
assertion of a claim for the breach of the covenant or agreement for which
indemnification is sought;
(iv) with respect to Claims for indemnification under
Sections 7.1(c)-(e), Sections 7.1(h)-(j), or under Section 7.2(c), the Indemnity
Period shall be ten (10) years after the Closing Date;
(v) with respect to Claims for indemnification under
Sections 7.1(g) or 7.2(e), the Indemnity Period shall be three (3) years after
the Closing Date;
(vi) with respect to Claims for indemnification under
Section 7.2(a), the Indemnity Period shall have no expiration following the
Closing Date; and
(vii) with respect to Claims under Sections 7.1(k) or
7.2(h) for the enforcement of indemnification rights, the Indemnity Period shall
be the same as the Indemnity Period that applies to the indemnification rights
being enforced. For example, if Purchaser seeks indemnification against Seller
under 7.1(a), then the Indemnity Period applicable to the Claim under 7.1(a)
shall be the Indemnity Period for the assertion of a related Claim under Section
7.1(k).
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(d)
(i) Except with respect to Claims under Section 7.1(f),
to the extent that recovery from a third party is available to any Purchaser
Indemnified Party to cover any item for which indemnification may be sought
hereunder, Parent and Purchaser shall exhaust, and cause each other Purchaser
Indemnified Party to exhaust, all available remedies or causes of action to
recover the amount of its claim as may be available from such other third party
and shall only seek indemnification against Seller in the event that any
Purchaser Indemnified Party fails to obtain such reimbursement from a third
party or if such reimbursement is insufficient to satisfy the claim (and in the
latter instance shall only seek indemnity for the amount of such deficiency).
(ii) To the extent Seller indemnifies any Purchaser
Indemnified Parties on any Claim (including any Claim under Section 7.1(f)),
Parent and Purchaser shall, and shall cause each other Purchaser Indemnified
Party to, assign to Seller, to the fullest extent allowable, their rights and
causes of action with respect to such Claim against third parties, or in the
event assignment is not permissible, Seller shall be allowed to pursue such
Claim in the name of Parent and Purchaser and each other Purchaser Indemnified
Party, as applicable, at Seller's expense. Seller shall be entitled to retain
all recoveries for its own accounts made as a result of any such action. Parent
and Purchaser shall provide, and shall cause each other Purchaser Indemnified
Party to provide, at no expense to themselves, to Seller reasonable assistance
in prosecuting such Claim, including making their books and records relating to
such Claim available to Seller and making their employees available for
interviews and similar matters. If Parent, Purchaser or any other Purchaser
Indemnified Party recovers from a third party any part of a Claim that had been
paid by Seller pursuant to its indemnification obligations hereunder, Parent and
Purchaser shall, and shall cause each other Purchaser Indemnified Party to,
promptly remit to Seller the amount of such recovery without regard to the time
limitations described in Section 7.4(c).
(e) In computing the amount of any indemnification to which
any Purchaser Indemnified Party may be entitled under this Section 7 by virtue
of a breach of Sections 4.4 or 4.14, if the amount of any liability has been
understated or unrecorded, on one hand, but on the other hand the amount of any
other liabilities has been overstated or any assets understated, only the net
effect (benefits or detriment as the same are determined in accordance with
GAAP) of such errors shall be taken into account.
(f) Any amounts recoverable by any Purchaser Indemnified Party
from Seller under this Section 7 shall be treated as an adjustment to the Final
Cash Purchase Price or Assumed Liabilities, as appropriate.
(g) No Purchaser Indemnified Party shall be entitled to any
indemnity (i) on account of consequential, incidental or indirect damages or
losses (unless such damages or losses are asserted against any Purchaser
Indemnified Party by a third party) and, in particular, no "multiple of profits"
or other items shall be applied in calculating any indemnity amount, or (ii) in
respect of any claim to the extent that the matter that is the subject of the
claim is reflected on, accrued for or reserved against or otherwise provided for
in the Final Closing Working Capital Statement (but only up to the amount for
which the matter is reflected on, accrued for or reserved against or otherwise
provided for in the Final Closing Working Capital Statement).
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(h) Seller shall have no liability for indemnification with
respect to any claim for indemnification that relates to the passing of, or any
change in, after the Closing Date, any Law or any accounting policy, principle
or practice or any increase in Tax rates in effect on the Closing Date, even if
the change or increase has retroactive effect or requires action at a future
date.
(i) With respect to any claim for indemnification relating to
environmental matters in which Parent, Purchaser or any other Purchaser
Indemnified Party is required under applicable Environmental Law to initiate or
conduct a response action (a "Response Action"), Seller shall only be
responsible to provide indemnification with respect to the most economically
reasonable Response Action required under applicable Environmental Law. A claim
arising out of off-site disposal that is resolved through agreement, settlement
or consent among a group of potentially responsible parties with the appropriate
Government shall be deemed economically reasonable as long as consistent with
that affecting other similarly situated Persons. Seller shall have the option to
supervise and perform any Response Action. Parent and Purchaser shall, and shall
cause each other Purchaser Indemnified Party to, reasonably cooperate with
Seller and its Representatives in connection with any Response Action.
(j) In connection with any Response Action performed by
Seller, any action required to be performed by Seller under the AOC ("AOC Work")
and any action performed by Seller under Section 5.12 ("Compliance Action")
("Response Action," "AOC Work" and "Compliance Action" shall be referred to
herein collectively as the "Work"), subject to the Cedarburg Lease and the Real
Property Leases, Parent and Purchaser shall, and shall cause each other
Purchaser Indemnified Party to, provide Seller and its Representatives
reasonable access to any affected Real Property to supervise and perform the
Work, subject to the following:
(i) Seller and its Representatives shall promptly
commence and diligently and expeditiously perform the Work to completion in a
good and workmanlike manner, in compliance with all applicable Laws and
Purchaser's reasonable health and safety requirements. The Work shall be
performed by competent, licensed contractors, under the supervision of a
competent, licensed consultant;
(ii) Purchaser grants to Seller and its Representatives
a revocable temporary permission to enter any affected Real Property in order to
supervise and perform any Work (the "Access"). Access may be exercised by Seller
and its Representatives for the sole purpose of supervising and performing the
Work. Access shall continue until ten (10) days after completion of the Work,
except that Access shall continue to the extent necessary to monitor the
affected Real Property;
(iii) Not later than ten (10) days after termination of
Access, Seller and its Representatives shall remove any tools, equipment or
materials placed on the affected Real Property by Seller or its Representatives
and shall repair any damage to any affected Real Property caused by Seller or
its Representatives;
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(iv) Seller and its Representatives shall use their
reasonable efforts to minimize any interference with Purchaser's activities at
any affected Real Property in connection with performance of the Work by or on
behalf of Seller or its Representatives;
(v) The grant of Access provided herein is intended to
be and shall be construed only as temporary permission to Seller and its
Representatives to supervise and perform the Work on any affected Real Property
and shall not be construed as a grant of easement or other interest in such Real
Property. Seller and its Representatives shall have Access only to such areas of
the affected Real Property as are necessary to supervise and perform the Work;
(vi) Seller shall give Purchaser reasonable advance
notice before any entry by Seller or its Representatives onto any affected Real
Property in connection with the supervision or performance of any Work;
(vii) Purchaser shall have the right, at its own cost,
to have one or more of its Representatives present during any activities
conducted by or for Seller in connection with any Response Action pursuant to
this Section 7.4(j) or the AOC Work. Purchaser shall also have the right, at its
own cost, to receive a "split" of any sample taken by or for Seller or its
Representatives on or from any affected Real Property in connection with any
Response Action or the AOC Work;
(viii) Seller shall give Purchaser reasonable advance
notice of any meeting to be held with any Government having jurisdiction over
any Response Action and the right to attend and participate in any such meeting.
With respect to the AOC Work, to the extent reasonably practicable in light of
applicable Law and the requirements of any Government, Seller shall provide to
Purchaser a copy of any work plan at least ten (10) days in advance of submittal
to any Government and shall revise such work plan to incorporate any reasonable
comments made by Purchaser;
(ix) Seller shall keep Purchaser reasonably informed of
the progress of any Response Action performed pursuant to this Section 7.4(j)
and the AOC Work. All information (including information from samples,
measurements or tests) and all documentation (including copies of field
documentation, chain-of-custody documents, laboratory records and reports and
quality assurance/quality control documentation) collected or created by or for
Seller or its Representatives in connection with performing any Response Action
or the AOC Work shall be provided to Purchaser as soon as practicable after it
comes into Seller's possession. All reports submitted to any Government by, to
or for Seller or its Representatives concerning any Response Action or the AOC
Work shall be provided to Purchaser no later than ten (10) days after completion
of such reports;
(x) Seller shall be solely and fully responsible for the
handling, storage and disposal of any Hazardous Materials created, collected or
otherwise generated in connection with any Work performed by Seller or its
Representatives;
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(xi) Seller shall keep any affected Real Property free
and clear of any and all Liens which may result from acts or omissions of Seller
and its Representatives in connection with any Work and shall cause all such
Liens to be bonded or otherwise discharged of record within thirty (30) days
after their filing;
(xii) Purchaser may refuse or terminate Access for
failure, or reasonable threat of failure, by Seller or its Representatives to
comply with applicable safety, health or Environmental Laws in connection with
the performance of the Work;
(xiii) If, after Seller's receipt of written notice that
Parent, Purchaser or any other Purchaser Indemnified Party is required under
applicable Environmental Law to initiate or conduct a Response Action or
Compliance Action that is subject to Seller's indemnity obligations under this
Section 7, Seller fails to commence and thereafter to prosecute diligently to
conclusion the Response Action or Compliance Action, Purchaser shall be entitled
to do so. If Seller fails to commence and diligently prosecute to conclusion
such Response Action or Compliance Action and Purchaser elects to conduct the
Response Action or Compliance Action as provided in the preceding sentence,
then, provided that Purchaser conducts (and Purchaser hereby agrees to conduct)
the Response Action or Compliance Action in accordance with the requirements of
Section 7.4(j) to the same extent that those requirements would be applicable to
Seller if Seller performed the Response Action or Compliance Action, then (A)
such Response Action or Compliance Action performed by Purchaser shall be deemed
to have been approved by, and shall be binding on, Seller, as though Seller had
assumed the obligation to supervise and perform the Response Action or
Compliance Action, and (B), in accordance with and subject to the
indemnification provisions of this Section 7, Seller shall pay any cost
reasonably incurred by Purchaser in connection with conducting the Response
Action or Compliance Action within fifteen (15) business days after receiving
evidence reasonably substantiating the incurring of such expense. If Purchaser
elects to conduct the Response Action or Compliance Action, (A) Purchaser shall
give Seller reasonable advance notice of any sampling or any other on-site
activities (other than such other activities that are not material to the
Response Action or Compliance Action (an "Immaterial Activity")) performed in
connection with such Response Action or Compliance Action, (B) Seller shall have
the right to have one or more of its Representatives present during such
sampling or other on-site activities (other than Immaterial Activities) and to
obtain a "split" of any sample taken by or for Purchaser in connection with such
Response Action or Compliance Action, and (C) Seller shall have the same rights
as Purchaser would have under Sections 7.4(j)(viii)-(ix) if Seller had conducted
the Response Action or Compliance Action;
(k) Notwithstanding anything contained herein to the contrary,
to the extent that any facts or circumstances give rise to a Claim under (i)
Section 7.1(a) and (ii) any of Sections 7.1(d)-(j), the liability of the Seller
for such Claim under Sections 7.1(d)-(j), as applicable, shall control.
(l) Notwithstanding anything contained herein to the contrary,
to the extent that any facts or circumstances give rise to (i) a Claim under
this Section 7 and (ii) a purchase price adjustment to the Initial Cash Purchase
Price under Section 2.4, such facts or circumstances shall first be resolved
under the purchase price adjustment mechanism pursuant to
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Section 2.4. To the extent that the Initial Cash Purchase Price has been
adjusted pursuant to Section 2.4 and Purchaser is paid in connection therewith,
neither Purchaser nor any other Purchaser Indemnified Party shall not be
entitled to a "second" payment under Section 7 for any facts or circumstances
which could have also given rise to a Claim under Section 7.
7.5 INDEMNIFICATION PROCEDURE.
(a) Third-Party Claims.
(i) Promptly after receipt by a party entitled to be
indemnified under this Section 7 (an "Indemnified Party") of notice of the
commencement of any Action for which the Indemnified Party intends to assert a
claim for indemnification against another party (an "Indemnifying Party") under
this Section 7, the Indemnified Party shall give notice to the Indemnifying
Party of the commencement of such Action with reasonable promptness (so as to
not prejudice the Indemnifying Party's rights).
(ii) The Indemnifying Party shall be entitled to
participate in any Action described in Section 7.5(a)(i) above and, to the
extent that it wishes, to assume the defense of such Action with counsel
reasonably satisfactory to the Indemnified Party. Following the assumption of
defense by an Indemnifying Party, the Indemnifying Party shall not be liable for
any subsequent fees of legal counsel or other expenses incurred by the
Indemnified Party in connection with the defense of such Action, and the
Indemnified Party shall have the right to participate in the defense with its
own counsel at its own expense. No compromise or settlement of any claims in an
Action shall be binding on an Indemnifying Party for purposes of the
Indemnifying Party's indemnity obligations under this Agreement without the
Indemnifying Party's express written consent. The Indemnifying Party may not
compromise or settle any claims in an Action without the Indemnified Party's
express written consent, which shall not be unreasonably withheld, unless the
compromise or settlement involves only the payment of money (which is paid by
the Indemnifying Party) and does not include any admission of liability by the
Indemnified Party.
(iii) A party granted the right to direct the defense of
any Action under this Section 7.5 shall (A) keep the other parties hereto
informed of material developments in the Action, (B) promptly submit to the
other parties copies of all pleadings, responsive pleadings, motions and other
similar legal documents and papers received in connection with the Action, (C)
permit the other parties and their counsel, to the extent practicable, to confer
on the conduct of the defense of the Action, and (D) to the extent practicable,
permit the other parties and their counsel an opportunity to review all legal
papers to be submitted prior to their submission. The parties shall make
available to each other and each other's counsel and accountants all of their
books and records relating to the Action, and each party shall provide to the
others such assistance as may be reasonably required to insure the proper and
adequate defense of the Action. Each party shall use its good faith efforts to
avoid the waiver of any privilege of another party. The assumption of the
defense of any Action by an Indemnifying Party shall not constitute an admission
of responsibility to indemnify or in any manner impair or restrict the
Indemnifying Party's rights to later seek to be reimbursed its costs and
expenses if indemnification under this Agreement with respect to the Action was
not required.
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(iv) Other Claims. A claim for indemnification for any
matter not involving a third-party claim may be asserted by written notice of
the claim, setting forth in reasonable detail the factual and contractual bases
for the claim, to the party from whom indemnification under this Section 7 is
sought.
7.6 EXCLUSIVE REMEDY. Except as provided in Section 2.4, this
Section 7 constitutes the sole and exclusive remedy of Purchaser and Seller for
money damages with respect to any matters arising under or with respect to this
Agreement or any document executed and delivered by any party to another party
at Closing, and Parent, Purchaser and Seller hereby irrevocably waive and
release the others from any and all claims and other causes of action, including
claims for contribution, relating to such matters. No party shall be entitled to
rescind this Agreement following the Closing in the event of a breach of any
representation, warranty or covenant made by another party in this Agreement.
8. ADDITIONAL COVENANTS AND AGREEMENTS.
8.1 EXPENSES. Except as otherwise set forth in this Agreement, each
party hereto shall bear and pay all costs and expenses incurred by it in
connection with the transactions contemplated by this Agreement, including fees,
costs and expenses of its own Representatives.
8.2 PUBLIC RELEASES. Parent, Purchaser and Seller shall agree with
each other as to the form and substance of any press release related to this
Agreement or the transactions contemplated hereby, shall consult with each other
as to the form and substance of other public disclosures related thereto, and
shall not make any such press release or such other disclosures prior to such
agreement or consultation; provided, however, that nothing contained herein
shall prohibit any party hereto from making any disclosure which it deems
necessary in light of applicable Law, after notice to the other parties with the
opportunity to comment to the extent that delay of the disclosure is permitted
under such Law.
9. MISCELLANEOUS.
9.1 ENTIRE AGREEMENT. Except for the Confidentiality Agreement dated
January 26, 2004 executed by Parent, this Agreement (including all Schedules,
Exhibits and other documents executed and delivered pursuant hereto) supersedes
any and all other agreements, oral or written, among the parties hereto with
respect to the subject matter hereof, and contains the entire agreement among
the parties with respect to the transactions contemplated hereby.
9.2 AMENDMENTS; WAIVER. This Agreement may be amended, modified,
superseded or canceled and any of its provisions may be waived only by a written
instrument executed by all of the parties or, in the case of a waiver, by or on
behalf of the party waiving compliance. The failure of any party at any time to
require performance of any provision of this Agreement shall in no manner affect
the right of that party at a later time to enforce the same or a different
provision. No waiver by any party of any condition or of any breach of any
provision of this Agreement, in any one or more instances, shall be deemed to be
or construed as a further or continuing waiver of any such condition or of any
breach of the same or a different provision.
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If any party expressly waives in writing an unsatisfied condition,
representation, warranty, undertaking, covenant or agreement (or portion
thereof) set forth herein, the waiving party shall thereafter be barred from
recovering, and thereafter shall not seek to recover, any Claims from the other
parties in respect of the matter or matters so waived.
9.3 SUCCESSORS; ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted transferees and assignees. Neither this Agreement nor any interest
herein may directly or indirectly be transferred or assigned by any party, in
whole or in part, without the written consent of the other parties, except that
Purchaser may effect any such assignment to any Affiliate, but any such
assignment shall not relieve Parent or Purchaser of its duties and obligations
contained in this Agreement.
9.4 NOTICES. Any notice, request, demand or other communication to
be given pursuant to the terms of this Agreement must be in writing and shall be
deemed to have been duly given on the day it is delivered by hand, on the day it
is sent by facsimile with confirmation of receipt by the transmitting facsimile
machine, on the next business day after it is sent by a nationally recognized
overnight mail service (delivery charge prepaid), or on the third business day
after it is mailed first class, postage prepaid, in each case to the following
addresses:
If to Seller: Amcast Industrial Corporation
0000 Xxxxxxxxxx Xxxxxxx Xxxxx
Xxxxxx, Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxx, President
and Chief Executive Officer
Facsimile: 000-000-0000
with copies to: Xxxxxx & Xxxxxxxxx LLP
000 Xxxxxx Xxxxxx Xxxxx
00 Xxxxxx Xxx., XX
Xxxxx Xxxxxx, Xxxxxxxx 00000
Attention: R. Xxxx Xxxxxx, Esq.
Facsimile: 000-000-0000
If to Parent or Purchaser: Park-Ohio Industries, Inc.
00000 Xxxxxx Xxx.
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile: 000-000-0000
with copies to: Xxxxxx, Xxxxxx & Xxxxxxxx XXX
0000 XxXxxxxx Xxxxxxxxxx Center
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile: 000-000-0000
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or to such other address or to such other person as any party shall have last
designated by written notice provided to the other parties in the manner set
forth in this Section.
9.5 SEVERABILITY. If any provision of this Agreement or any
application thereof shall be invalid or unenforceable, the remainder of this
Agreement and any other application of such provision shall not be affected
thereby.
9.6 NO THIRD PARTY BENEFICIARY. This Agreement is for the benefit
of, and may be enforced only by, Seller, Parent and Purchaser and their
respective successors and permitted transferees and assignees, and is not for
the benefit of, and may not be enforced by, any third party.
9.7 APPLICABLE LAW. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Ohio without
regard to conflict of law principles.
9.8 ARBITRATION. Subject to the indemnification provisions set forth
in Section 7 above:
(a) The parties agree that any and all disputes, claims or
controversies arising out of or relating to this Agreement or the breach,
termination, enforcement, interpretation or validity thereof, including the
determination of the scope or applicability of this agreement to mediate and
arbitrate, shall be mediated before a mediator agreeable to both parties or, if
they cannot agree, then before JAMS, or its successor. The mediation shall be
conducted at a mutually agreeable location or, if they cannot agree, then at the
JAMS office in Chicago, Illinois. Any party may commence mediation by providing
to the other parties a written request for mediation, setting forth the subject
of the dispute and the relief requested. The parties shall cooperate with one
another in selecting a mediator and in scheduling the mediation proceedings. The
parties covenant that they shall participate in the mediation in good faith, and
that they shall share equally in its costs. All offers, promises, conduct and
statements, whether oral or written, made in the course of the mediation by any
of the parties or their Representatives, and by the mediator or any JAMS
employees, are confidential, privileged and inadmissible for any purpose,
including impeachment, in any arbitration or other Action involving the parties,
provided that evidence that is otherwise admissible or discoverable shall not be
rendered inadmissible or non-discoverable as a result of its use in the
mediation.
(b) Any party may initiate arbitration with respect to the
matters submitted to mediation by filing a written demand for arbitration at any
time following the initial mediation session or 45 days after the date of filing
the written request for mediation, whichever occurs first. The mediation may
continue after the commencement of arbitration if the parties so desire. Unless
otherwise agreed by the parties, the mediator shall be disqualified from serving
as arbitrator in the case. Arbitration may be enforced by any court of competent
jurisdiction, and the party seeking enforcement shall be entitled to an award of
all costs, fees and expenses,
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including reasonable attorneys fees, to be paid by the party or parties against
whom enforcement is ordered.
(c) Any arbitration shall be conducted at a mutually agreeable
location or, if the parties cannot agree, in Chicago, Illinois. The arbitration
shall be before a sole arbitrator mutually selected by the parties or, if they
cannot agree, then before a retired judge to be selected by JAMS pursuant to its
Comprehensive Arbitration Rules and Procedures, who shall thereafter administer
the arbitration, provided however that JAMS shall identify the preceding ten
(10) arbitrations conducted by each arbitrator candidate and the lawyers
involved in the arbitration. The arbitration shall be conducted pursuant to the
foregoing rules except as set forth herein. The parties to the dispute shall be
permitted to conduct pre-hearing discovery in the form of depositions and
document production requests subject to the control of the arbitrator. The award
of the arbitrator shall be a reasoned award specifying all essential findings of
fact and conclusions of law necessary to support the award. Judgment on the
award may be entered in any court of competent jurisdiction. In any proceeding
to confirm the award, the court also shall have jurisdiction to review the award
for errors of law.
(d) The cost of the arbitration shall initially be borne
equally by the parties. In the award the arbitrator shall allocate, consistent
with Section 7 hereof, all of the costs of the arbitration (and the mediation,
if applicable), including the fees of the arbitrator and the reasonable
attorneys' fees of the prevailing party, against the party or parties who did
not prevail.
9.9 COUNTERPARTS. This Agreement may be executed in two or more
counterparts and by the parties on separate counterparts, all of which shall be
considered one and the same instrument, and each of which shall be deemed an
original. Each of the parties hereto (i) has agreed to permit the use, from time
to time, of faxed or otherwise electronically transmitted signatures in order to
expedite the consummation of the transactions contemplated hereby, (ii) intends
to be bound by its respective faxed or otherwise electronically transmitted
signature, (iii) is aware that the other parties hereto shall rely on the faxed
or otherwise electronically transmitted signature, and (iv) acknowledges such
reliance and waives any defenses to the enforcement of the documents effecting
the transaction contemplated by this Agreement based on the fact that a
signature was sent by fax or otherwise electronically transmitted.
9.10 HEADINGS; CONSTRUCTION. The headings of the sections and
paragraphs in this Agreement have been inserted for convenience of reference
only and shall not restrict or otherwise modify any of the terms or provisions
of this Agreement. Unless otherwise expressly provided, the words "including" or
"includes" whenever used in this Agreement do not limit the preceding words or
terms. With regard to all dates and time periods set forth or referred to in
this Agreement, time is of the essence.
9.11 CONSENT TO SERVICE OF PROCESS AND JURISDICTION. If it becomes
necessary for any party to enforce the provisions of Section 9.8 of this
Agreement or any arbitration award obtained pursuant to Section 9.8 of this
Agreement by legal action, the parties hereby consent that suit may be brought
hereunder in any court of appropriate jurisdiction in Xxxxxxxxxx County, Ohio,
U.S.A., or in the United States District Court for the Southern District of
Ohio,
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regardless of the state, county or country in which any party may reside or have
such party's domicile (corporate or individual) at the time of any such action.
Parent, Purchaser and Seller consent to service of process and other notices
given or required in any proceedings submitted to arbitration by either party
pursuant to the provisions of Section 9.8 by personal delivery or by registered
mail addressed to such party at the addresses set out in Section 9.4. However,
any party may serve legal process in any other manner permitted by Law or the
rules of the American Arbitration Association.
9.12 CERTAIN INFORMATION. Neither the specification of any dollar
amount in the representations and warranties contained in this Agreement nor the
inclusion of any item in any Schedule to this Agreement is intended, or will be
construed or offered in any dispute among the parties as evidence of, the
material nature of such dollar amount or item, nor shall it establish any
standard of materiality upon which to judge the inclusion of any other items in
any Schedules to this Agreement. The information contained in this Agreement and
the Schedules to this Agreement is disclosed solely for the purposes of this
Agreement, and no information contained herein or therein shall be deemed to be
an admission by any party to any Person of any matter whatsoever, including of
any violation of Law or breach of any contract.
10. CERTAIN DEFINITIONS.
10.1 DEFINITIONS. For purposes of this Agreement, the following
capitalized terms shall have the meanings given to them below, and all other
capitalized terms used in this Agreement that are not defined in this Section 10
but defined elsewhere in this Agreement shall have for purposes of this
Agreement the meanings set forth elsewhere in this Agreement:
"ACTION" means any action, suit, complaint, claim, counter-claim,
petition, set-off, inquiry, investigation, administrative proceeding,
arbitration, or private dispute resolution proceeding, whether at law, in
equity, by contract or agreement, or otherwise, and whether conducted by or
before any Government, any Forum, or other Person.
"AFFILIATE" of any Person means any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with the former Person. A Person shall be deemed to control another
Person if such Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
"AOC" means the Administrative Order on Consent issued by U.S. EPA
on February 28, 2003 in the case styled In the Matter of Cedar Creek, Amcast
Industrial Corp., Cedarburg, Wisconsin, Docket No. V-W-'03-C-737, and any
amendments thereto.
"EMPLOYEE" or "EMPLOYEES" means the persons listed on Schedule 4.10.
"ENVIRONMENTAL LAW" means any and all Laws in effect as of the date
of this Agreement relating to pollution or protection of human health or the
environment (including ambient air, indoor air, surface water, ground water,
land surface, or subsurface strata), including: (i) CERCLA, (ii) the Resource
Conservation and Recovery Act, as amended, 42
- 39 -
U.S.C. Sections 6901, et seq. ("RCRA"), (iii) the Clean Air Act, 42
U.S.C.Sections 7401 et seq.; (iv) the Clean Water Act, 33
U.S.C.Sections 1251, et seq., (v) the Emergency Planning and Community
Right-to-Know Act, 42 U.S.C.Sections 11011, et seq., (vi) the Oil Pollution
Act of 1990, 33 U.S.C.Sections 2701, et seq., (vii) the Hazardous Materials
Transportation Act, 49 U.S.C.Sections 1801, et seq., (viii) the Toxic
Substances Control Act, 15 U.S.C.Sections 2601, et seq., (ix) the
Occupational Safety and Health Act, 29 U.S.C.Sections 651, et seq., (x) any
state or local Law similar to the Laws listed in parts (i) - (ix) of this
paragraph, (xi) any amendments to the statues, laws or ordinances listed in
parts (i) - (ix) above, in existence on the date hereof, and (xii) any other Law
in effect as of the date of this Agreement relating to emissions, discharges,
releases, threatened releases, generation, management, handling, control, use,
treatment, storage, disposal, transport, removal, remediation or recovery of any
Hazardous Material.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"FACILITIES" means Seller's facilities located in Richmond, Indiana,
Detroit, Michigan, Southfield, Michigan, Wapakoneta, Ohio and Cedarburg,
Wisconsin at which the Business is conducted.
"FORUM" means any federal, state, local or municipal court,
governmental agency, administrative body or agency, tribunal, private
alternative dispute resolution system, or arbitration panel.
"GAAP" means United States generally accepted accounting principles.
"GOVERNMENT" means any court, tribunal, arbitrator, authority,
agency, commission, official or other instrumentality of the United States, any
foreign country or any domestic or foreign state, county, city or other
political subdivision.
"LAW" means all federal, state, local or municipal constitutions,
statutes, rules, regulations, ordinances, acts, codes, legislation, conventions
and similar laws and legal requirements, as in effect on the date of this
Agreement.
"LIEN" means any mortgage, pledge, hypothecation, security interest,
encumbrance, lien or charge of any kind, however evidenced or created, but
excluding any of the foregoing (i) disclosed in this Agreement (including any
Schedule to this Agreement), (ii) for water, sewage and similar charges and
current Taxes and assessments not yet due and payable or being contested in good
faith, (iii) relating to mechanics', carriers', workers', repairers',
materialmen's, warehousemen's and other similar liens arising or incurred in the
Ordinary Course of Business of the Business, (iv) arising or resulting from any
action taken by Purchaser or its Affiliates, (v) relating to easements, rights
of way, restrictions and other similar liens that do not materially interfere
with the ordinary conduct of operations, (vi) relating to imperfections or
defects in title that do not materially adversely affect the value or use of the
applicable asset, (vii) consisting of purchase money security interests created
in the Ordinary Course of Business, (viii) arising under Law in favor of
landlords, and (ix) to which Purchaser consents in writing.
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"MATERIAL ADVERSE EFFECT" means an actual, material adverse effect
on the financial condition of the Business considered as a whole, but shall be
deemed to exclude (i) any changes resulting from general economic, regulatory or
political conditions, (ii) acts attributable to, omissions by or circumstance
affecting Parent, Purchaser or their Affiliates, (iii) circumstances that affect
the industries in which the Business operates generally, or (iv) any changes
resulting from the announcement or pendency of the transactions contemplated by
this Agreement.
"ORDINARY COURSE OF BUSINESS" means an action taken by a Person that
is consistent with the past practices of such Person and is taken in the
ordinary course of the normal day-to-day operations of such Person.
"PCB CONTAMINATION" means any polychlorinated biphenyls ("PCBs")
that are or were: (i) present on or before the Closing Date on or at any Real
Property or any equipment or machinery located thereon (or present on any other
property, if such PCBs emanated or allegedly emanated from any Real Property or
any equipment or machinery located thereon and was present on any Real Property
or any equipment or machinery located thereon, on or prior to the Closing Date),
or (ii) released (as "release" is defined in Section 101(22) of CERCLA) on or at
any Real Property or any equipment or machinery located thereon on or prior to
the Closing Date.
"PERSON" means and includes an individual, a partnership, a joint
venture, a corporation, a limited liability company, a trust, an unincorporated
association or organization, and a Government.
"REPRESENTATIVE" means with respect to a particular Person, any
director, officer, manager, member, employee, agent, consultant, advisor or
other representative of such Person, including legal counsel, lenders,
accountants and financial advisors.
"SELLER'S KNOWLEDGE" shall means the actual knowledge of Xxxxxx
Xxxxx, Xxxxxxx Xxxx, Xxxxxxx Xxxxxx, Xxxxx Xxxxxxxxxxx, Xxxxx Xxxx and Xxx
Xxxxx.
"TAXES" shall mean all income, property, sales, use, customs,
franchise, value added, ad valorem, withholding, employees' income withholding,
and social security and Medicare taxes imposed by any Government, and all
interest and penalties thereon.
* * * * *
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Parent, Purchaser and Seller have caused this Asset Purchase Agreement to
be duly executed as of the date first set forth above.
PARENT:
PARK-OHIO INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Its: Secretary
-------------------------
PURCHASER:
GAMCO COMPONENTS GROUP LLC
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Its: VP and Secretary
-------------------------
SELLER:
AMCAST INDUSTRIAL CORPORATION
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Its: President
-------------------------
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