EXHIBIT 10.16
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into as of
February ____, 2002, between and among AMERICAN GLASSMITH, INC. ("AGI"), a
Delaware corporation, AMERICAN ARCHITECTURAL PRODUCTS CORPORATION ("AAPC" and
with AGI jointly referred to as "Seller"), a Delaware corporation, ARCH OHIO,
INC. ("Arch Ohio"), a Florida corporation, and ARCH ALUMINUM & GLASS CO., INC.
("Arch" and with Arch Ohio jointly referred to as "Buyer"), a Florida
corporation.
RECITALS
WHEREAS, Seller and its affiliated companies have each filed a
bankruptcy petition under Chapter 11 of the United States Bankruptcy Code (the
"Bankruptcy Code") on December 18, 2000 (the "Filing Date") in the United States
Bankruptcy Court for the Northern District of Ohio (the "Bankruptcy Court"),
which cases are being jointly administered under the common caption In re:
American Architectural Products Corporation, et al, Case No.
00-43726 (the "Bankruptcy Case"); and,
WHEREAS, AGI is engaged in the manufacture and sale of specialty glass
products through its manufacturing facility located in Columbus, Ohio (the
"Purchased Business"); and,
WHEREAS, Arch Ohio wishes to purchase and acquire from AGI, and AGI
wishes to sell, assign and transfer to Arch Ohio, the Purchased Business, with
the approval of the Bankruptcy Court pursuant to Sections 363 and 365 of
the Bankruptcy Code, all for the Purchase Price and upon the terms and subject
to the conditions herein set forth; and,
WHEREAS, the transactions contemplated in this Agreement involve a
sale, other than in the ordinary course of business, of certain of AGI's assets
and properties out of AGI's bankruptcy estate pursuant to Bankruptcy Code
Sections 363 and 365.
NOW, THEREFORE, in consideration of the premises and of the
representations, warranties, and covenants hereinafter set forth, and intending
to be legally bound hereby, the parties agree as follows:
ARTICLE I
SALE OF ASSETS
SECTION 1.01. SALE OF ASSETS. Pursuant to the provisions set forth in
this Agreement, at the Closing (as defined in Section 3.01 of this Agreement)
AGI shall sell, convey, transfer, assign, and deliver to Arch Ohio, and Arch
Ohio shall purchase and acquire from AGI, all of the assets, properties, and
rights (other than the Excluded Assets defined below in Section 1.02 of this
Agreement) owned by AGI that are used or held for use in the operation of the
Purchased Business of every kind, character, and
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description, whether tangible, intangible, personal or mixed, and wheresoever
located, whether carried on the books of AGI or not carried on the books of AGI,
due to expense, full depreciation, or otherwise (the "Purchased Assets")
including, but not limited to:
(A) All rights, title, and interests owned or possessed by AGI in, to,
and under the real property lease (the "Real Property Lease") listed in Schedule
4.04 of the schedules attached to or accompanying this Agreement and any
supplement to this Agreement (the "Schedule" or the "Schedules");
(B) All rights, title, and interests owned or possessed by AGI in and
to the fixed assets, machinery, and equipment, computer hardware and software,
supplies, spare parts, tools, jigs, patterns, trade fixtures, vehicles (whether
titled or untitled), furniture, designs, and drawings, and any other such items
used in the Purchased Business (the "Equipment"), including, but not limited to,
the items listed on Schedule 1.01(B);
(C) All inventory, raw materials, components, work-in-process, finished
goods, service parts and supplies, packaging materials, and other similar items
(whether new or used) (the "Inventory");
(D) All rights, title, and interests in, to, and under all leases of
tools, furniture, machinery, supplies, vehicles, equipment, and other items of
personal property listed in Schedule 4.05; provided, however, that to the extent
the assignment of any such lease or any claim or right or any benefit arising
under or resulting from such lease(s) shall require the consent of another
party, this Agreement shall not constitute an assignment of such lease(s) if an
attempted assignment would constitute a breach of such lease(s) and, in lieu of
such consent, AGI shall cooperate with Arch Ohio in any reasonable arrangement
designed to provide Arch Ohio the benefits under, or any claim or right arising
under, such lease(s);
(E) All rights in, to, and under all contracts, agreements, purchase
orders, customer orders, and work orders of AGI, including, but not limited to,
those listed in Schedule 4.06(A); provided, however, that to the extent the
assignment of, or any claim or right or any benefit arising under or resulting
from, any such contract, agreement, purchase order, customer order or work order
shall require the consent or approval of another party to such contract,
agreement, purchase order, customer order or work order, this Agreement shall
not constitute an assignment, if an attempted assignment would constitute a
breach of such contract, agreement, purchase order, customer order or work order
and, in lieu of such consent, AGI shall cooperate with Arch Ohio in any
reasonable arrangement designed to provide Arch Ohio with the benefits under
such contract, agreement, purchase order, customer order, or work order, or any
claim or right arising thereunder;
(F) All prepaid expenses and other similar items, other than items
relating to the Excluded Assets (as defined in Section 1.02 of this Agreement);
(G) To the extent legally assignable, all franchises, licenses,
permits, certificates, approvals, and other governmental authorizations
necessary to own or lease and operate
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the Purchased Assets and to conduct the Purchased Business as it has been
conducted by AGI;
(H) All of AGI's rights, title, and interests in the inventions, trade
secrets, know-how, business plans and strategies, proprietary processes and
formulae, databases, telephone numbers, and all other proprietary technical
information, whether patentable or unpatentable, related to the products,
services, and operations of the Purchased Business as presently conducted;
(I) The books and records of AGI relating to the Purchased Business,
including, but not limited to, property records, production records, engineering
records, environmental compliance records, customer lists, customer records and
information, supplier lists, parts lists, manuals, correspondence, files, and
any similar items;
(J) All rights, claims, and choses in action against third parties
including, but not limited to, all rights against suppliers under warranties
covering any of the Inventory or Equipment;
(K) All stationery, forms, labels, shipping materials, brochures, art
work, photographs, advertising materials, and any similar items;
(L) All Sumiglass Deposits (hereinafter defined);
(M) All of AGI's right, title and interest in patents, trademarks,
trademark registrations, trade names (including, without limitation, the names
"American Glassmith" and "Sumiglass"), service marks, copyrights and copyright
registrations, and all other intellectual property and proprietary information
of AGI; and
(N) All other tangible and intangible assets owned by AGI relating to
the Purchased Business, whether or not carried at value or listed on the books
and records of AGI, and whether or not in the possession of AGI or others.
SECTION 1.02. EXCLUDED ASSETS. Notwithstanding the provisions of
Section 1.01, AGI shall not sell or deliver to Arch Ohio, and Arch Ohio shall
not purchase or acquire, the following assets owned by AGI (the "Excluded
Assets"):
(A) AGI's cash and cash equivalents; provided, however, that cash
deposits on "Sumiglass" products ("Sumiglass Deposits") shall be excepted from
the Excluded Assets on a case-by-case basis depending on the production status
of the order for said product as more fully set forth in Schedule 1.02(A), which
shall be updated at the Closing accurately to reflect the status of these orders
as of the Closing;
(B) All accounts receivable of AGI including, but not limited to,
inter-company receivables, and the right to take all necessary and proper
actions to collect those receivables;
(C) All rights to receive and/or collect any judgments taken by or on
behalf of AGI against third parties, including, but not limited to, the amounts
payable to AGI by
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Xxxxxx'x Stained Glass Factory, Inc. pursuant to its confirmed plan of
reorganization in In re: Xxxxxx'x Stained Glass Factory, Inc., Case No.
00-59424, U.S. Bankruptcy Court, Southern District of Ohio (Columbus), and by
Xxxxxxxxxxx Xxxxxx pursuant to the judgment taken in the matter of American
Glassmith, Inc. x. Xxxxxx'x Stained Glass Factory, Inc., et al., Case No.
00CVH03-2132, Franklin County (Ohio) Court of Common Pleas;
(D) The minute books and stock records of AGI;
(E) AGI's insurance policies; and,
(F) All claims and rights to deposits and prepaid expenses relating to
any of the other Excluded Assets.
SECTION 1.03. ASSUMPTION OF OBLIGATIONS OR LIABILITIES. At Closing,
Arch Ohio shall assume and agree to pay or perform the Assumed Obligations,
which, for the purposes of this Agreement, are defined as follows:
(A) The Assumed Liabilities, which for the purposes of the Agreement
are defined as follows:
(1) All accounts payable of AGI as of the Closing Date (the
"Post-Petition Payables"), which are disclosed as of November 30, 2001
in Schedule 1.03(A)(1), which schedule shall be updated immediately
prior to the Closing accurately to reflect the amount of said payables
as of the Closing Date; provided, however, Arch Ohio does not assume
liability for
(a) Any expenses or payables accrued on or before
December 18, 2000 (the "Prepetition Payables"); and,
(b) The Post-Petition Payables to the extent that the
amount of Inventory, which shall be valued in accordance with
Section 10.09 below, minus the Post-Petition Payables at
Closing, is less than Nine Hundred and Fifty Thousand Dollars
($950,000); and,
(2) Warranty obligations and responsibilities of AGI as of the
Closing Date under the written warranties attached hereto as Exhibit
4.12 and any applicable implied warranties, such the warranties of
merchantability or fitness for a particular purpose, for all products
manufactured by AGI on or after December 18, 2000, provided, however,
such warranty obligations and responsibilities (i) are limited to
monetary claims to the extent they comply precisely with the terms of
such written warranties, and (ii) do not include any consumer claims,
any claims that are outside the terms of such written warranties, any
remedies that are not expressly provided for in such written
warranties, or any obligation or responsibility arising out of a
finding or claim that any part of such written warranties or any
disclaimer or limitation therein is unenforceable or ineffective.
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(B) The obligations or liabilities of AGI as of the Closing Date in,
to, and under the leases, contracts, agreements, purchase orders, customer
orders, and work orders included in the Purchased Assets, including, but not
limited to, those which are set forth on Schedules 4.05 and 4.06(A); provided,
however, there shall be excepted from such obligations and liabilities, and Arch
Ohio shall not assume, any liability or obligation of AGI (i) that arises as a
result of a breach by AGI of any such leases, contracts, agreements, purchase
orders, customer orders, and work orders; (ii) that arises or accrues prior to
the Closing and is not set forth in Schedule 1.03(A)(1); (iii) that arises from
or relates to product liability relating to products or services manufactured or
sold by, or on behalf of, AGI prior to the Closing Date; or (iv) that is a
material contract that is not set forth in Schedule 4.05 or Schedule 4.06(A)
unless such a material contract has been approved by Buyer in writing.
SECTION 1.04. EXCLUDED LIABILITIES. Except for the Assumed Obligations
that are explicitly assumed pursuant to Section 1.03, Arch Ohio shall not assume
or agree to perform, pay, discharge, or otherwise satisfy any obligations,
liabilities, and commitments, fixed or contingent, known or unknown, disclosed
or undisclosed, of or related to AGI, AAPC, the Purchased Business, the
Purchased Assets, or any other liability (the "Excluded Liabilities"),
including, but not limited to, the following:
(A) Employment related obligations incurred by AGI prior to the Closing
Date, including, without limitation, any obligation for accrued wages,
severance, termination or similar benefits and any obligation arising under or
related to any pension, retirement, vacation, insurance, option, or other form
of benefit plan sponsored by AGI;
(B) All liabilities and obligations relating to the Purchased Business
or the Real Property prior to the Closing, whether known or unknown, filed or
unfiled, matured or unmatured, arising out of or relating to any Environmental
Laws;
(C) Any obligation with respect to taxes due, accrued, or relating to a
time period prior to the Closing or resulting from the transactions contemplated
hereby; and,
(D) Any accounts payable arising on or prior to December 18, 2000.
SECTION 1.05. TRANSFER OF TITLE TO THE PURCHASED ASSETS. The sale,
assignment, conveyance, transfer, and delivery by AGI of the Purchased Assets
shall be made at the Closing by such bills of sale, assignments, licenses,
endorsements, and other appropriate instruments of transfer as shall be
necessary to vest in Arch Ohio, as of the Closing Date, good and marketable
title to the Purchased Assets, free and clear of any liens, charges, and
encumbrances, except for the Assumed Obligations.
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ARTICLE II
PURCHASE PRICE
SECTION 2.01. THE PURCHASE PRICE, ALLOCATION.
(A) As consideration for the purchase of the Purchased Business, Arch
Ohio shall pay to AGI Three Hundred and Fifty Thousand Dollars ($350,000),
payable as set forth in Section 2.02, (the "Purchase Price").
(B) The parties shall allocate the aggregate consideration received by
Seller with respect to the Purchased Assets in accordance with Section 1060 of
the Tax Code, as mutually agreed to by the parties pursuant to the procedure
described below. Subject to the requirements of any applicable tax law or
election, all such mutually agreed-to allocations shall be used by each party in
preparing any filings required pursuant to Section 1060 of the Tax Code or any
similar provisions of state or local law and all relevant income tax returns.
Neither Buyer nor Seller will take any position before any taxing authority or
in any judicial proceeding with respect to income taxes that is inconsistent
with such mutually agreed-to allocations without the prior written consent of
the other party, in the consenting party's commercially reasonable discretion.
The parties shall exercise commercially reasonable efforts to support such
mutually agreed-to reported allocations in any audit proceedings initiated by
any taxing authority; provided, however, that Seller shall not have any
obligation to pay for an appraisal or in any other way incur unreasonable or
extraordinary out-of-pocket expenses.
(C) Within 60 days after the Closing Date, Buyer will provide to Seller
for Seller's approval, which shall not be unreasonably withheld, copies of IRS
Form 8594 and any required exhibits thereto with Buyer's proposed allocation of
the consideration received by Seller with respect to the Purchased Assets. If
Seller fails to respond to Buyer within 30 days of Seller receiving such IRS
Form 8594, then Seller shall be deemed to have approved Buyer's allocation.
SECTION 2.02. PAYMENT OF THE PURCHASE PRICE. At the Closing, Arch Ohio
shall pay to AGI in immediately available funds the amount of Three Hundred and
Fifty Thousand Dollars ($350,000.00) less the amount of the Sumiglass Deposits
not excepted from the Excluded Assets pursuant to Section 1.02(A). Said payment
shall be made by wire transfer at the time of Closing on the Closing Date.
SECTION 2.03. TAXES; OTHER CHARGES. AGI shall pay all income taxes, if
any, arising out of the sale of the Purchased Business to Arch Ohio. Arch Ohio
shall pay all transfer taxes, if any, arising out of the purchase of the
Purchased Business from AGI.
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ARTICLE III
CLOSING
SECTION 3.01. THE CLOSING. Subject to the provisions of Article XI of
this Agreement, the consummation of the transactions contemplated by this
Agreement (the "Closing") shall occur at the corporate offices of American
Glassmith, Inc., 860 Xxxxxxxx-Xxxxxxxx Road, Xxx Xxxx Xxxxxxxx, Xxxxx 000,
Xxxxxxxx, Xxxx, within ten (10) days following the approval of this transaction
by the Bankruptcy Court or as otherwise agreed to by Arch Ohio and AGI (the
"Closing Date"). Upon execution of this Agreement, Seller shall within ten (10)
days move the Bankruptcy Court to approve the transaction proposed herein and
provide proper notice thereof to (i) all parties on the official service list in
the Bankruptcy Case and (ii) all other persons that, to Seller's knowledge, have
any interest in any of the Purchased Assets. Upon mutual agreement of the
parties, the Closing may take place by facsimile, in which case a facsimile
signature shall be deemed an original of such signature. In the event of a
facsimile closing, each party agrees to execute an original counterpart of each
Closing document immediately following the Closing Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
As a material inducement to Buyer to enter into this Agreement and to
consummate the transactions contemplated by this Agreement, Seller represents
and warrants to Buyer as follows:
SECTION 4.01. ORGANIZATION; POWER. AGI is a corporation duly organized,
validly existing, and in good standing under the laws of Delaware, and is
qualified as a foreign corporation and in good standing in every other state
where the failure to so qualify would have a material adverse effect on the
financial condition, business, assets, or results of operations of the Purchased
Business taken as a whole (a "Material Adverse Effect"). AGI has all of the
requisite corporate power and authority to own, lease, and operate its assets
and to carry on the Purchased Business as it is now being conducted.
SECTION 4.02. AUTHORITY, NO VIOLATION, ETC.
(A) The execution and delivery of this Agreement by Seller and the
consummation of the transactions contemplated by this Agreement have been duly
and validly authorized by the necessary corporate action on the part of Seller.
Subject to approval by the Bankruptcy Court, the Agreement and the other
agreements and documents to be executed and delivered by AGI pursuant to the
provisions of this Agreement constitute legal, valid, and binding obligations of
AGI, enforceable against AGI in accordance with their respective provisions,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other similar laws and equitable principles of
general application affecting the rights of creditors and general principles of
equity affecting the right to specific enforceability of any of the remedies
contained herein and therein. The execution and delivery of this Agreement, the
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consummation of the transactions contemplated by this Agreement, and compliance
by AGI with the provisions of this Agreement will not:
(1) Result in a default or give rise to any right of
termination, cancellation, or acceleration under any of the provisions
of any note, lien, bond, mortgage, indenture, license, lease,
agreement, or other instrument or obligation to which AGI is a party or
by which AGI or any Purchased Asset may be bound, except for such
breach or default as to which valid waivers or consents shall be
obtained prior to Closing;
(2) Violate any judgment, order, writ, injunction or decree of
any court, administrative agency, or governmental body applicable to
AGI or any Purchased Asset; or
(3) Cause or give any person grounds to cause (with or without
notice, the passage of time, or both) the maturity of any liability or
obligation of AGI to be accelerated or increased.
(B) Subject to approval by the Bankruptcy Court, the Schedules, the
execution, and delivery of this Agreement by AGI; the consummation by AGI of the
transactions contemplated by this Agreement; and compliance by AGI with the
provisions of this Agreement will not:
(1) Conflict with or result in a breach of any provision of
the organizational documents of AGI or result in a default or give rise
to any right of termination, cancellation, or acceleration under any of
the provisions of any note, lien, bond, mortgage, indenture, license,
lease, agreement, or other instrument or obligation to which AGI is a
party or by which AGI , any of the Purchased Assets, or AGI's business
may be bound, except for such conflict, breach or default as to which
valid waivers or consents shall be obtained prior to Closing;
(2) Violate any judgment, order, writ, injunction, or decree
of any court, administrative agency, or governmental body applicable to
the Purchased Business or the Purchased Assets; or
(3) Cause, or give any person grounds to cause (with or
without notice, the passage of time, or both), the maturity of any
liability or obligation of the Purchased Business to be accelerated or
increased.
(C) Except as set forth in Schedule 4.02(C) and subject to the approval
of the Bankruptcy Court, all filings, consents, and approvals of third parties
and governmental authorities required in connection with the execution and
delivery by AGI of this Agreement and the consummation by AGI of the
transactions contemplated by this Agreement (including any consents required
under any contracts, agreements, permits, licenses, leases, notes or other
instruments of AGI in connection with the change of ownership of the Purchased
Business resulting from such transactions) have been obtained.
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SECTION 4.03. NO RESTRAINING LITIGATION.
(A) There are no actions, suits, claims, investigations, or legal,
arbitration, or administrative proceedings in progress, pending or, to the best
knowledge of Seller, threatened against any Seller with respect to the
consummation of the transactions contemplated by this Agreement.
(B) No action, suit, or proceeding has been instituted or, to the best
knowledge of Seller, is threatened to restrain or prohibit or otherwise
challenge the legality or validity of the transactions contemplated by this
Agreement.
SECTION 4.04. REAL PROPERTY LEASE. AGI leases from JMJ Partnership, an
Ohio partnership, the real property listed on Schedule 4.04 (the "Real
Property"). A true and accurate copy of the lease for the Real Property (the
"Real Property Lease") and all modifications and corrections thereto are
attached as Exhibit 4.04. The Real Property Lease is in full force and effect
and there are no defaults thereunder on the part of AGI or, to the best
knowledge of AGI, any other party thereto, nor has any event occurred that, with
notice or lapse of time or both, would constitute a default thereunder by AGI.
SECTION 4.05. PERSONAL PROPERTY LEASES. Schedule 4.05 contains a true
and complete list and copies of all leases and other agreements under which AGI
is a lessee (including, but not limited to, tools, furniture, machinery,
vehicles, equipment, or other personal property) owned by any other person (the
"Leased Personal Property"). Each of the leases listed in Schedule 4.05 is in
full force and effect and there are no defaults thereunder on the part of AGI
or, to the best knowledge of AGI, any other party thereto, nor has any event
occurred that, with notice or lapse of time or both, would constitute a default
thereunder by AGI.
SECTION 4.06. MATERIAL CONTRACTS.
(A) Schedule 4.06(A) lists any and/or all contracts, leases (other than
those described in Schedule 4.05, which are incorporated by reference into
Schedule 4.06(A)), agreements, commitments, purchase orders, work orders,
customer orders, and other arrangements, including all amendments thereto, to
which AGI is a party (the "Material Contracts"), except for those contracts,
leases, commitments, purchase orders, work orders, and agreements (1) that were
entered into in the ordinary course of business, (2) under which the obligations
of AGI have been or shall be fully discharged within ninety (90) days from the
date such obligation was entered into, and (3) that individually involve an
obligation or liability on the part of AGI in any amount less than Fifteen
Thousand Dollars ($15,000).
(B) All of the Material Contracts are valid and binding obligations of
AGI and, except as set forth on Schedule 4.02(C), do not require the consent of
any other party thereto to the sale of the Purchased Business or the Purchased
Assets to Arch Ohio hereunder to continue to be valid and binding, except as
enforceability may be limited by (1) applicable bankruptcy, insolvency,
reorganization, moratorium, and other similar laws and equitable principles of
general application affecting the rights of creditors and
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(2) general principles of equity affecting the right to specific enforceability
of any of the remedies contained therein.
SECTION 4.07. CERTAIN TRANSACTIONS; ADVERSE CHANGE. Except as set forth
in Schedule 4.07, since November 30, 2001, AGI has not:
(A) Sold or in any way transferred or otherwise disposed of any
material assets or property, except for sales of inventory in the ordinary
course of its business or the disposition of other assets or property in the
ordinary course of business, consistent with past practice;
(B) Incurred any obligation or liability, absolute, accrued, contingent
or otherwise, whether due or to become due, except liabilities and obligations
incurred in the ordinary course of its business that will not have a Material
Adverse Effect; or,
(C) Made (or committed to make) capital expenditures in an amount that
exceeds Fifty Thousand Dollars ($50,000.00) in the aggregate except as disclosed
in the Schedules or as approved by Buyer.
SECTION 4.08. COMPLETENESS AND CONDITION OF ASSETS. The Purchased
Assets include all of the assets and properties that are necessary to conduct
the Purchased Business as presently conducted and to perform, in all material
respects, all of the contracts, leases, agreements, commitments, purchase
orders, work orders, customer orders, and other arrangements of the Purchased
Business.
SECTION 4.09. ENVIRONMENTAL MATTERS.
(A) Except as set forth in Schedule 4.09(A), to the best of the
knowledge of Sellers, AGI is in compliance with all Environmental Laws.
(B) Except as set forth on Schedule 4.09(B), neither Seller nor, to
Seller's knowledge, any other person has caused or taken any action that will
result in, and Seller is not subject to, any material liability or obligation
relating to (1) the environmental conditions on, under, or about the Real
Property or other properties or assets owned, leased, operated, or used by AGI
at the present time or in the past, including without limitation, the air, soil,
and groundwater conditions at such properties or (2) the past or present use,
management, handling, transport, treatment, generation, storage, disposal or
release of any Hazardous Materials in connection with the Real Property or the
Purchased Business.
(C) Except as set forth on Schedule 4.09(C), no claim involving the
violation of any Environmental Laws or release of Hazardous Materials is being
asserted against the Seller nor does the Seller have knowledge or notice of any
threatened or pending claim against Seller in connection with the Real Property
or the Purchased Business.
(D) Seller has made available to Arch for inspection all information
including, without limitation, all studies, analyses and test results, in the
possession, custody or control of or otherwise known to Seller relating to (1)
the environmental conditions on,
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under or about the Real Property and (2) any Hazardous Materials used, managed,
handled, transported, treated, generated, stored, or released by Seller or any
other Person on, under, about, or from any of the Real Property, or otherwise in
connection with the use or operation of any of the properties and assets of AGI
or the Purchased Business.
(E) For purposes of this Agreement, "Environmental Laws" means all
applicable Federal, state, and local laws, regulations or ordinances or
amendments to such regulations or ordinances relative to air quality, water
quality, solid waste management, hazardous or toxic substances or the protection
of health or the environment including, but not limited to, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (42
U.S.C. Section 9601, et seq.), the Hazardous Material Transportation Act (49
U.S.C. Section 1801, et seq.), the Federal Water Pollution Control Act (33
U.S.C. Section 1251, et seq.), the Resource Conservation and Recovery Act of
1976, as amended (42 U.S.C. Section 6901, et seq.) ("RCRA"), the Clean Air Act,
as amended (42 U.S.C. Section 7401, et seq.), the Toxic Substances Control Act,
as amended (15 U.S.C. Section 2601, et seq.), the Federal Insecticide,
Fungicide, and Rodenticide Act, as amended (7 U.S.C. Section 136, et seq.), the
Clean Water Act of 1977, as amended (33 U.S.C. Section 1251, et seq.), and the
National Environmental Policy Act of 1969, as amended (42 U.S.C. Section 4321,
et seq.) and any analogous state or local statutes and the regulations
promulgated pursuant thereto.
"Hazardous Materials" means any substance that (i) is or contains
asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls,
petroleum or petroleum-derived substances or wastes, radon gas or related
materials, (ii) requires investigation, removal or remediation under any
Environmental Law, or is defined, listed or identified as a "hazardous waste" or
"hazardous substance" thereunder, or (iii) is toxic, explosive, corrosive,
flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise
hazardous and is regulated by any governmental authority or Environmental Law.
SECTION 4.10. TWENTY LARGEST CUSTOMERS AND SUPPLIERS. AGI has made
available to Arch Ohio a complete list of AGI's twenty largest customers and
suppliers during the past twelve months. No such customer or supplier of AGI has
notified Seller that it intends to terminate its relationship with AGI, except
as otherwise set forth in the list AGI has made available to Arch Ohio. AGI
agrees immediately to notify Arch if any such customer or supplier notifies it
of such an intention prior to Closing. AGI has not engaged in any forward
selling or granted any unusual sales or terms of sale to any customer. There are
no customer prepayments or deposits except as set forth on Schedule 1.02(A).
SECTION 4.11. EMPLOYEES. Seller has provided to Buyer a true and
complete list of all the employees of AGI employed in the Purchased Business as
of February 5, 2002, and, for each such employee, Seller has disclosed said
employee's current title, exempt or non-exempt status, salary or wage, and date
of hire. Except for the employment agreement between AGI and Xxxx Xxxxxxxx, its
General Manager, there are no employment contracts with any of the employees
that require AGI to employ an employee for a fixed term or restrict the right of
AGI to terminate such employee.
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SECTION 4.12. PRODUCT WARRANTY. To Seller's knowledge, each product
manufactured or sold by AGI since December 18, 2000, has been in conformity in
all material respects with all applicable contractual commitments and all
express and implied warranties, and Seller knows of no liability or obligation
for replacement or repair thereof or other damages in connection therewith,
subject, in each case, only to the reserve for product warranty claims contained
in the Financial Statements and except as incurred in the ordinary course of
business. No product manufactured, sold, leased, or delivered by AGI since
December 18, 2000, is subject to any guaranty or warranty beyond the applicable
standard terms and conditions of sale or lease, except as may be required by
law. Exhibit 4.12 contains copies of the three standard warranties issued by
AGI, which set forth the aforementioned standard terms and conditions of sale
for AGI (containing applicable guaranty and warranty provisions).
SECTION 4.13. FINANCIAL STATEMENTS. AGI's income statement for the
period ended November 30, 2001 and balance sheet dated as of November 30, 2001
have been furnished to Arch (collectively, the "Financial Statements"). The
Financial Statements have been prepared in accordance with generally accepted
accounting principles and past practices, consistently applied, are true and
correct in all material respects, contain no untrue statements of a material
fact, do not omit any material fact necessary in order to make such Financial
Statements not misleading, and are a true and accurate reflection of the
operations of AGI for the periods described therein in accordance with generally
accepted accounting principles consistently applied.
SECTION 4.14. TAXES. Within the times and in the manner prescribed by
law, Seller has filed all federal, state and local tax returns and reports
required by law to have been filed by them relating to AGI, the Purchased Assets
and the Purchased Business, and have paid all taxes, assessments, and penalties
due and payable by them. There are no federal, state or local tax liens (other
than a lien for property taxes not delinquent) against any of the Purchased
Assets, nor are there any overdue federal, state or local taxes with respect to
the Purchased Business or any of the Purchased Assets. At the Closing, all taxes
and other assessments and levies that AGI is required by law to withhold or
collect, will have been duly withheld and collected, and if due, will be paid
over to or deposited with the proper governmental authorities. Seller is not
presently under nor has it received any notice of, any contemplated
investigation or audit by the Internal Revenue Service or any state or local
government or governmental agency concerning Seller's taxes relating to AGI.
SECTION 4.15. LITIGATION. Neither Seller nor any employee or officer of
either Seller is a party to any pending or, to the best of Seller's knowledge,
threatened litigation or administrative investigation or proceeding that would
materially or adversely affect the Purchased Assets or the Purchased Business,
nor does Seller know of any basis therefor. No complaints or charges of unlawful
conduct have been made against either Seller, any employees or officers of
either Seller, that relate in any way to the Purchased Assets or the Purchased
Business.
SECTION 4.16. EMPLOYEE BENEFIT PLANS. Except as described in Schedule
4.16, neither Seller has any bonus, pension, profit sharing, or retirement
income, stock purchase, stock option, hospitalization insurance or similar
agreements, plans or
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practices, formal or informal, covering any of the employees employed in the
Purchased Business, or under which either Seller has any present or future
obligation or liability or under which any current or former employee of AGI has
any present or future rights to benefits ("Employee Plans"). With respect to
each Employee Plan that is an employee pension benefit plan, as defined in
Section 3.2 of Employee Retirement Income Security Act of 1974, as amended
("ERISA"), that is intended to be qualified within the meaning of Section 401(a)
of the Code ("Pension Plan"), a copy of the latest available summary plan
description, determination letter, and Form 5500 for the most recent plan year
have been made available to Buyer. Each Pension Plan has been determined by the
Internal Revenue Service to be qualified. Each Employee Plan has been operated
and administered in accordance with the requirements of ERISA and the Code. No
Employee Plan or any trustee or administrator thereof has engaged in a
"prohibited transaction" (as defined in Section 406 of ERISA or in Section 4975
of the Code) that would subject AGI, any Employee Plan, any trust created
thereunder, any trustee or administrator thereof, or any party dealing with any
Employee Plan to the liability set forth in Section 409(a) of ERISA or to the
tax or penalty on prohibited transactions imposed by Section 502 of ERISA or
Section 4975 of the Code. Neither Seller is or has ever been a party to a
Multi-Employer Plan and has no current or due "withdrawal liability" with
respect to any such Multi-Employer Plan. Buyer is not assuming any liability of
either Seller to any of AGI's employees or by reason of any Employee Plans.
Neither Seller is a party to any collective bargaining agreement or other labor
union or similar agreement relating to the employees of AGI, and neither Seller
is the subject of or, to the best of Seller's knowledge, threatened by any
strike or other labor disturbance by any group of employees, and to the best of
Seller's knowledge, no attempt or plan to organize AGI's employees is threatened
or contemplated. Except as set forth on Schedule 4.16, there are no claims, nor,
to the best of Seller's knowledge, has any event occurred that could be the
basis for any claim under workmen's compensation, occupational safety and
health, discrimination, ERISA or similar laws and regulations relating to the
employees of AGI.
SECTION 4.17. ABSENCE OF UNDISCLOSED LIABILITIES. To the best of
Seller's knowledge, there are no liabilities of AGI that have not been disclosed
in the Financial Statements or this Agreement or the schedules attached hereto
that could materially and adversely affect the Purchased Assets or the Purchased
Business. To the best of Seller's knowledge, there is no basis for the assertion
against AGI of any liability of any nature or in any amount that is not fully
reflected or reserved against in the Financial Statements.
SECTION 4.18. FRANCHISES, PERMITS AND LICENSES. Schedule 4.18 contains
a complete and correct list or summary description of all material franchises,
permits, licenses, approvals and other authorizations from federal, state and
local governmental authorities held by AGI in connection with the conduct of the
Purchased Business as presently conducted or the Purchased Assets.
SECTION 4.19. LEGAL COMPLIANCE. To the best of Seller's knowledge, AGI
has complied in all material respects with all applicable laws (including rules,
regulations, codes, plans, injunctions, orders, decrees, rulings, and charges
thereunder) of federal, state, local, and foreign governments (and all agencies
thereof), and Seller has not
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been notified of any action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand against either Seller alleging any failure so to
comply.
ARTICLE V
WARRANTIES AND REPRESENTATIONS OF BUYER
As a material inducement to Seller to enter into this Agreement and to
consummate the transactions contemplated by this Agreement, Buyer represents and
warrants to Seller as follows:
SECTION 5.01. ORGANIZATION; POWER. Arch Ohio is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Florida. Arch Ohio has all the requisite corporate power and authority to own,
lease and operate its business as it is now being conducted and to enter into
this Agreement.
SECTION 5.02. AUTHORITY, NO VIOLATION, ETC. The execution and delivery
of this Agreement by Arch Ohio and the consummation of the transactions
contemplated by this Agreement have been duly and validly authorized by all
necessary corporate action on the part of Arch Ohio. This Agreement and the
other agreements and documents to be executed and delivered by Arch Ohio
pursuant to the provisions of this Agreement, constitute legal, valid, and
binding obligations of Arch Ohio, enforceable against Arch Ohio in accordance
with their respective provisions and conditions, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other similar laws and equitable principles of general application affecting the
rights of creditors and general principles of equity affecting the right to
specific enforceability of any of the remedies contained herein and therein. The
execution and delivery of this Agreement, the consummation of the transactions
contemplated by this Agreement and compliance by Arch Ohio with the provisions
of this Agreement will not:
(A) Conflict with or result in a breach of any provision of the
organizational documents of Arch Ohio or result in a default or give rise to any
right of termination, cancellation or acceleration under any of the provisions
of any note, lien, bond, mortgage, indenture, license, lease, agreement, or
other instrument or obligation to which Arch Ohio is a party or by which Arch
Ohio, any of its assets, or its business may be bound, except for such conflict,
breach, or default as to which valid waivers or consents have been obtained;
(B) Violate any judgment, order, writ, injunction, or decree of any
court, administrative agency, or governmental body applicable to Arch Ohio, its
assets or its business; or,
(C) Cause or give any person grounds to cause (with or without notice,
the passage of time, or both) the maturity of any liability or obligation of
Arch Ohio to be accelerated or increased.
All filings, consents, and approvals of third parties and governmental
authorities required in connection with the execution and delivery by Arch Ohio
of this Agreement and
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the consummation by Arch Ohio of the transactions contemplated by this Agreement
have been obtained.
SECTION 5.03. NO LITIGATION. No action, suit, or proceeding has been
instituted or, to the best knowledge of Buyer, is threatened to restrain or
prohibit or otherwise challenge the legality or validity of the transactions
contemplated by this Agreement.
SECTION 5.04. INVESTIGATIONS. With respect to the subject matter of
this Agreement, Buyer is relying solely on its own investigation of the
Purchased Business and the Purchased Assets and on AGI's representations and
warranties set forth in this Agreement and is assuming the risk that adverse
physical, economic, or other conditions or circumstances may not have been
revealed by such investigations. Said investigations by Buyer do not discharge
Seller from any breach of warranty or representation set forth in this
Agreement.
SECTION 5.05. ACCESS. Buyer is acquainted with the Purchased
Businesses, has had an opportunity to review the assets, books, records, and
contracts of the Purchased Businesses, and has been given the opportunity to
meet with officers and other representatives of AGI for the purpose of
investigating and obtaining information regarding the Purchased Business's
operations and its financial and legal affairs.
SECTION 5.06. NO OTHER REPRESENTATIONS. Buyer acknowledges that it is
the explicit intent and understanding of each party hereto that Seller is not
making any representation or warranty whatsoever, express or implied, except
those representations and warranties contained in this Agreement. In particular,
Seller makes no representation or warranty to Buyer with respect to any
financial projection or forecast relating to the business, financial conditions,
results, of operations, or prospects of the Purchased Business. With respect to
any projection or forecast delivered by on behalf of Seller to Buyer, Buyer
acknowledges that (A) there are uncertainties inherent in attempting to make
such projections and forecasts, (B) it is familiar with such uncertainties, (C)
it is taking full responsibility for making its own evaluation of the adequacy
and accuracy of such projections and forecasts furnished to it, and (D) it shall
have no claim against Seller with respect thereto.
SECTION 5.07. BUYER AWARENESS. Buyer does not have any actual knowledge
of any fact, circumstance, or condition that would constitute a breach of any
representation or warranty of Seller contained in this Agreement or that could
reasonably be expected to have a Material Adverse Effect on the Purchased
Businesses.
ARTICLE VI
CERTAIN PRE-CLOSING COVENANTS OF SELLER
Seller covenants and agrees, between the date of this Agreement and the
Closing, except as otherwise consented to by Arch Ohio:
SECTION 6.01. MAINTENANCE OF CORPORATE STATUS. AGI shall (A) be
maintained at all times as a corporation validly existing and in good standing
under the laws of Delaware,
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and duly authorized to do business in each and every jurisdiction material to
the operation of AGI and (B) timely file all required reports with every
governmental or taxing authority applicable to AGI.
SECTION 6.02. OPERATION OF THE PURCHASED BUSINESS. Except as may be
otherwise expressly permitted by this Agreement or with the prior written
consent of Arch Ohio, and subject to any order of the Bankruptcy Court that
shall take precedence over any provision of this Agreement, from the date hereof
and prior to the Closing, AGI shall use all commercially reasonable efforts (A)
to preserve intact the organization of the business, (B) to preserve good
relations with its customers and suppliers, (C) to maintain in full force and
effect all material contracts, licenses and permits required for the operation
of the Purchased Business as presently conducted, (D) to maintain and repair in
good condition all of the its buildings, offices, shops, other structures,
machinery, tools, equipment, fixtures, and other properties, (E) not to enter
into any new material contracts or assume any additional material liabilities or
obligations without the written consent of Buyer, and (F) not knowingly to do
any act, omit any act, or permit any omission to act, reasonably within its
control, that will cause a breach or default under any of the Material
Contracts.
SECTION 6.03. OBTAINING CONSENTS; NOTICES. AGI shall use its best
efforts promptly to obtain all consents and authorizations of third parties and
governmental authorities, to make all filings, and to give all notices to third
parties or governmental authorities that may be necessary or required in order
to effect, and in connection with, the transactions contemplated by this
Agreement.
SECTION 6.04. TERMINATION OF CERTAIN EMPLOYEES. At the Closing, AGI
shall terminate all of its employees. Said terminations shall be in accordance
with all local, state and federal laws, rules, and regulations.
SECTION 6.05. REVIEW OF BANKRUPTCY MOTION BY BUYER. Buyer shall have
had a reasonable opportunity to review and offer comments on Seller's motion
asking the Bankruptcy Court for approval of this Agreement. Seller, however,
shall retain all rights and authority to prepare and file the motion as it in
good faith decides in its full discretion.
ARTICLE VII
CONDITIONS PRECEDENT TO ARCH OHIO'S PERFORMANCE
The obligation of Arch Ohio to consummate the transactions contemplated
pursuant to the provisions of this Agreement is subject to the satisfaction,
prior to or at the Closing, of each of the following conditions:
SECTION 7.01. BANKRUPTCY COURT APPROVAL. This Agreement shall have been
approved by the Bankruptcy Court after due notice to all appropriate parties in
a manner and form reasonably satisfactory to Arch Ohio.
SECTION 7.02. CONTINUED OPERATIONS. Except as may be otherwise
expressly permitted by this Agreement or approved by the Bankruptcy Court or
with the prior
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written consent of Arch Ohio, which shall not be unreasonably withheld, delayed,
or conditioned, from the date hereof through the Closing, there shall have
occurred no capital expenditure in excess of Fifty Thousand Dollars
($50,000.00), singly or in the aggregate, to which Arch Ohio has not given its
prior written consent, which consent shall not unreasonably be withheld. From
the date hereof through the Closing, AGI shall have made no capital expenditure
of any size that creates an ongoing liability for the Purchased Business.
SECTION 7.03. REPRESENTATIONS AND WARRANTIES OF AGI. Each of the
representations and warranties of AGI contained in this Agreement shall be true
and correct in all material respects at and as of the Closing Date with the same
force and effect as if made at and as of the Closing Date.
SECTION 7.04. COMPLIANCE. AGI shall have performed, complied with, and
fulfilled all of the covenants, agreements, obligations, and conditions required
by this Agreement to be performed, complied with or fulfilled by any of them
prior to or at the Closing.
SECTION 7.05. LITIGATION. No order, decree or ruling of any
governmental authority or court shall have been entered and no governmental
proceeding or other action, suit, claim or investigation shall be pending or, to
the best knowledge of AGI, threatened, pertaining to the transactions
contemplated by this Agreement.
SECTION 7.06. CLOSING DELIVERIES. Arch Ohio shall have received from
AGI all of the instruments, documents, and other items described in Section
9.02, and the form and substance of all such deliveries shall be satisfactory in
all reasonable respects to Arch Ohio.
SECTION 7.07. MATERIAL THIRD PARTY CONSENTS. Seller shall have obtained
from the lessor of the Real Property written consent to assign the Real Property
Lease to Arch Ohio or shall have otherwise provided for the effective assignment
of the Real Property Lease to Arch Ohio pursuant to the Bankruptcy Code. Seller
shall also have obtained all other consents, approvals, authorizations, and
notifications of any third party to a material contract, lease, or other
agreement with AGI that is necessary to consummate the transactions contemplated
by this Agreement.
SECTION 7.08. TERMINATION OF EMPLOYMENT AGREEMENT. The employment
agreement between AGI and Xxxx Xxxxxxxx ("Xxxxxxxx") dated as of September 17,
1999, shall be terminated by mutual agreement of the parties immediately prior
to Closing.
ARTICLE VIII
CONDITIONS PRECEDENT TO AGI'S PERFORMANCE
The obligation of AGI to consummate the transactions contemplated
pursuant to the provisions of this Agreement is subject to the satisfaction,
prior to or at the Closing, of each of the following conditions:
17
SECTION 8.01. BANKRUPTCY COURT APPROVAL. This Agreement shall have been
approved by the Bankruptcy Court after due notice to all appropriate parties.
SECTION 8.02. REPRESENTATIONS AND WARRANTIES OF BUYER. Each of the
representations and warranties of Buyer contained in this Agreement shall be
true and correct in all material respects at and as of the Closing Date with the
same force and effect as if made at and as of the Closing Date.
SECTION 8.03. COMPLIANCE. Buyer shall have performed, complied with,
and fulfilled all of the covenants, agreements, obligations, and conditions
required by this Agreement to be performed, complied with or fulfilled by Buyer
prior to or at the Closing.
SECTION 8.04. LITIGATION. No order, decree, or ruling of any
governmental authority or court shall have been entered and no governmental
proceeding or other action, suit, claim, or investigation shall be pending or,
to the best knowledge of Buyer, threatened, pertaining to the transactions
contemplated by this Agreement.
SECTION 8.05. CLOSING DELIVERIES. AGI shall have received from Buyer
all of the instruments, documents, and other items described in Section 9.01 and
the form and substance of all such deliveries shall be satisfactory in all
reasonable respects to AGI.
SECTION 8.06. TERMINATION OF EMPLOYMENT AGREEMENT. The employment
agreement between AGI and Xxxxxxxx shall be terminated by mutual agreement of
the parties immediately prior to Closing. Additionally, Arch Ohio and Xxxxxxxx
shall have come to a mutual agreement for the continued employment of Xxxxxxxx
by Arch Ohio.
ARTICLE IX
DELIVERIES
SECTION 9.01. DELIVERIES TO AGI AT THE CLOSING. At the Closing, and
simultaneously with the deliveries to Arch Ohio specified in Section 9.02 of
this Agreement, Arch Ohio shall deliver or cause to be delivered to AGI the
following:
(A) Payments equal in aggregate to the Purchase Price in accordance
with the provisions set forth in Article II of this Agreement, to be allocated
as set forth in Section 2.01;
(B) An executed Assignment and Assumption Agreement relating to the
Assumed Obligations;
(C) A Secretary's Certificate certifying as to due authorization,
incumbency and other customary matters;
(D) An original certificate of good standing for Arch Ohio from the
office of the Florida Secretary of State;
18
(E) A duly executed Assignment and Assumption Agreement transferring
the obligations of the Real Property Lease from AGI to Arch Ohio;
(F) A "bring down" certificate;
(G) A statement from Arch Ohio and Xxxxxxxx certifying that Arch Ohio
has agreed to retain Xxxxxxxx on terms mutually agreeable to the parties and
that Xxxxxxxx has agreed to work for Arch Ohio on said terms; and,
(H) Any other documents or instruments of conveyance and transfer as
AGI may reasonably request for the purpose of assigning, transferring, granting,
conveying and confirming the sale of the Purchased Business and the Purchased
Assets or any part thereof to Arch Ohio.
SECTION 9.02. DELIVERIES TO ARCH OHIO AT THE CLOSING. At the Closing,
and simultaneously with the deliveries to AGI specified in Section 9.01 of this
Agreement, AGI shall deliver or cause to be delivered to Arch Ohio the
following:
(A) A duly executed Xxxx of Sale;
(B) Wire transfer instructions for payment of the cash portion of the
Purchase Price;
(C) Secretary's Certificate certifying as to due authorization,
incumbency, and other customary matters;
(D) An original certificate of good standing for AGI from the office of
the Delaware Secretary of State;
(E) Possession of the Purchased Assets;
(F) A time-stamped copy of the executed Order of the Bankruptcy Court
approving the transaction set forth in the Agreement;
(G) A time-stamped copy of the Certificate of Service relating to the
motion asking the Bankruptcy Court for approval of the transaction set forth in
this Agreement and the Notice thereof;
(H) A "bring down" certificate;
(I) A written agreement between Seller and Xxxxxxxx terminating
Xxxxxxxx employment agreement as of the Closing; and,
(J) Any other documents or instruments of conveyance and transfer as
Arch Ohio may reasonably request for the purpose of assigning, transferring,
granting, conveying, and confirming the sale of the Purchased Business and the
Purchased Assets or any part thereof to Arch Ohio.
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ARTICLE X
ADDITIONAL COVENANTS OF THE PARTIES
SECTION 10.01. FURTHER ASSURANCES. Each of AGI and Arch Ohio, after the
Closing, without further consideration, shall execute, acknowledge, and deliver
any further assignments, conveyances, and other assurances, documents, and
instruments of transfer, reasonably requested by the other party, and shall take
any other action consistent with the terms of this Agreement that may reasonably
be requested by said party for the purpose of assigning, transferring, granting,
conveying, and confirming the Purchased Business or the Purchased Assets or any
part thereof to Arch Ohio.
SECTION 10.02. ACCESS TO RECORDS. For a period of two (2) years after
the Closing Date, AGI and Arch Ohio shall retain and make the books and records
of the Purchased Business available for inspection at no cost by the other party
or its duly authorized representatives, and each party and its representatives
shall have reasonable access to (including the right to receive copies of) all
of such books and records, to the extent that such access may reasonably be
required in connection with municipal, state, and/or federal tax returns and
legally required filings with other governmental entities, such as the
Securities Exchange Commission.
SECTION 10.03. PUBLIC STATEMENTS. Neither Buyer nor Seller will issue
any press release or make any public statement with respect to this Agreement or
the transaction contemplated therein or disclose the existence of this Agreement
to any person or entity prior to the Closing. After the Closing, neither Buyer
nor Seller will issue any such press release or make any such public statement
without the prior consent of the other party, which consent shall not be
unreasonably withheld or delayed. Notwithstanding the restrictions in the
previous two sentences, a party may make such disclosures as are required by
relevant state and or federal law (including any requirement to issue a press
release promptly after the execution of this Agreement, obligation to file a
Form 8-K with the U.S. Securities and Exchange Commission, and disclosures
required in connection with the Bankruptcy Case); provided, however, that the
party proposing to issue any such announcement shall use commercially reasonable
efforts to consult in good faith with the other party before doing so. In
addition, Seller may inform its employees of the transaction contemplated
herein, and Seller may continue to communicate with persons potentially
interested in acquiring all or part of the Businesses to the extent required by
the Bankruptcy Code.
SECTION 10.04. CHECKS AND DRAFTS. Seller shall honor (whether presented
before, on, or after the Closing, but in any event subject to the Bankruptcy
Code and orders of the Bankruptcy Court) all checks and drafts drawn by it prior
to the Closing Date to pay trade payables and other liabilities of AGI in
conducting the Purchased Business.
SECTION 10.05. COLLECTION OF RECEIVABLES. Arch Ohio shall promptly
forward to Seller any funds submitted to it that should have been paid or are
otherwise due to AGI per the terms of this Agreement. Additionally, Arch Ohio
shall use commercially reasonable efforts to assist AGI with collecting accounts
receivable retained by AGI pursuant to Section 1.02(B) of this Agreement. Arch
Ohio and AGI shall apply any
20
payments received subsequent to Closing to the invoice specified by the payee
or, if application of the payment is unspecified, Arch Ohio or AGI, as the case
may be, shall promptly advise the other of this issue so that they may jointly
contact the payee to determine the proper application of the payment and make
the appropriate disbursement.
SECTION 10.06. RETENTION OF EMPLOYEES. Immediately prior to execution
of this Agreement, Arch Ohio will provide to AGI the names of those employees of
AGI to whom Arch Ohio intends to offer employment as of the Closing Date. Said
offer of employment shall be on substantially the same terms and conditions as
currently enjoyed by Buyer's employees generally, which terms Buyer has
previously disclosed to Seller. Arch Ohio shall provide Buyer at Closing with a
definitive list of the employees it will retain.
SECTION 10.07. EMPLOYEE BENEFIT PLANS.
(A) Effective as of the Closing Date, only those former employees of
AGI who shall be offered employment by Arch Ohio pursuant to Section 10.06 and
who accept such offer of employment shall cease to be covered under any employee
benefit plans of AGI and shall participate under the employee benefit plans,
programs, and policies maintained by Arch Ohio or any of its affiliates, subject
to any applicable eligibility periods or conditions or pre-existing condition
limitations. AGI shall remain liable for all benefits accrued or claims incurred
prior to the Closing Date under any employee benefit plans, programs, and
policies maintained by AGI or for AGI's employees by any affiliate of AGI. Arch
Ohio shall only be liable for benefits accrued and claims under the employee
benefit plans, programs, and policies maintained by Arch Ohio incurred on or
after the Closing Date by those employees of AGI whom shall be offered
employment by Arch Ohio pursuant to Section 10.06.
(B) Seller shall be solely responsible for the provisions of health
care continuation coverage required under COBRA for those former employees of
AGI and other persons whose entitlement to continuation coverage occurred on or
before the Closing Date.
SECTION 10.08. CONDITIONS TO CLOSING. Each party will use best efforts
to ensure the prompt fulfillment of the conditions precedent to Arch Ohio and
AGI's performance set forth in Article VII and Article VIII, respectively.
SECTION 10.09. PRE-CLOSING INVENTORY. Within two days prior to the
Closing, the parties shall use their best efforts jointly to conduct a physical
inventory of the Purchased Assets. The parties shall come to an agreement for
the valuation, consistent with past practices of AGI, of the inventory and
certify that valuation to each other in writing, which certification shall be
attached as Schedule 10.09.
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ARTICLE XI
TERMINATION
SECTION 11.01. TERMINATION BY MUTUAL AGREEMENT. This Agreement may be
terminated by the mutual agreement in writing of the parties at any time prior
to the Closing.
SECTION 11.02. TERMINATION DEADLINE. This Agreement shall terminate at
11:59 p.m. on April 15, 2002 (the "Termination Date"), unless the Closing shall
have occurred and the transactions contemplated by this Agreement have been
completed by that time and date, or unless extended by mutual agreement of the
parties.
SECTION 11.03. DISAPPROVAL OF AGREEMENT BY BANKRUPTCY COURT. This
Agreement shall terminate if the Bankruptcy Court does not enter an order
approving it after due notice to all parties.
ARTICLE XII
INDEMNIFICATION
SECTION 12.01. INDEMNIFICATION BY SELLER. Subject to the limitations
stated in Section 12.07, Seller shall indemnify, defend, and hold each of Arch
Ohio and the Purchased Business and their respective successors, permitted
assigns, shareholders, directors, officers, employees, and other affiliates
(collectively, "Arch Ohio's Indemnified Persons") harmless from and against any
loss, damage, liability, claim, action, cause of action, regulatory, legislative
or judicial proceedings or investigations, assessments, levies, fines,
penalties, costs, and expenses including, but not limited to, attorneys',
accountants', investigators' and experts' fees and expenses, each reasonably
sustained or incurred in connection with the defense or investigation of any
such claim (collectively "Damages"), arising out of or in any way relating to:
(A) Any misrepresentation in or breach of the representations and
warranties of Seller or the failure of Seller to perform any of its covenants or
obligations contained in this Agreement or in any instrument or document
furnished or to be furnished by Seller pursuant to this Agreement or in
connection with the transactions contemplated by this Agreement;
(B) Any liabilities, obligations, claims, suits or proceedings asserted
by third parties due to, arising out of, or by reason of the operation of the
Purchased Business prior to the Closing Date;
(C) The failure by Seller to discharge when due any Excluded Liability;
(D) Any actions, claims, suits or proceedings asserted by third parties
alleging personal injury or property damage due to, arising out of, or by reason
of the design, manufacture, or use of any products of the Purchased Business
prior to the Closing Date;
22
(E) Any workers' compensation claims of any employee or former employee
of AGI arising from events occurring prior to the Closing Date;
(F) Any environmental claim under any Environmental Laws, including,
but not limited to, investigation, remediation, or removal of any contaminant
under any Environmental Laws, arising out of or based upon the operation of the
Purchased Business prior to the Closing Date; and,
(G) All claims, investigations, actions, suits, proceedings, demands,
assessments, judgments, costs, and expenses, including reasonable attorneys'
fees and expenses (incurred thereon at trial and upon appeal), incident to the
foregoing.
Seller shall be obligated to indemnify Arch Ohio only to the extent the above
amounts exceed the proceeds of insurance, if any, paid to Buyer covering the
claims or recoveries from third parties, and Arch Ohio covenants and agrees to
pursue in good faith and with reasonable diligence any claims available under
applicable insurance policies.
SECTION 12.02. INDEMNIFICATION BY ARCH OHIO. Arch Ohio shall indemnify,
defend, and hold Seller and its respective successors, permitted assigns,
shareholders, directors, officers, employees, and other affiliates
(collectively, " Seller's Indemnified Persons") harmless from and against any
Damages arising out of or in any way relating to:
(A) Any misrepresentation in or breach of the representations and
warranties of Arch Ohio or the failure of Arch Ohio to perform any of its
covenants or obligations contained in this Agreement or in any instrument or
document furnished or to be furnished by Arch Ohio pursuant to this Agreement or
in connection with the transactions contemplated by this Agreement;
(B) Any liabilities, obligations, claims, suits or proceedings asserted
by third parties due to, arising out of, or by reason of the operation of the
Purchased Business on or after the Closing Date;
(C) The failure to discharge when due the Assumed Obligations, but not
relative to or resulting from Seller's breach of the warranties or
representations regarding the Assumed Obligations;
(D) Any actions, claims, suits, or proceedings asserted by third
parties alleging personal injury or property damage due to, arising out of, or
by reason of the design, manufacture, or use of any products of the Purchased
Business on or after the Closing Date;
(E) Any workers' compensation claims of any employee of Arch Ohio
arising from events occurring on or after the Closing Date;
(F) Any environmental claim under any Environmental Laws, including,
but not limited to, investigation, remediation or removal of any contaminant
under any
23
Environmental Laws, arising out of or based upon the operation of the Purchased
Business on or after the Closing Date; and,
(G) All claims, investigations, actions, suits, proceedings, demands,
assessments, judgments, costs, and expenses, including reasonable attorneys'
fees and expenses (incurred thereon at trial and upon appeal), incident to the
foregoing.
Arch Ohio shall be obligated to indemnify Seller only to the extent the above
amounts exceed the proceeds of insurance, if any, paid to Seller covering the
claims or recoveries from third parties, and Seller covenants and agrees to
pursue in good faith and with reasonable diligence any claims available under
applicable insurance policies.
SECTION 12.03. NOTICE. If any party believes that it has suffered or
incurred any Damages, that party shall so notify the indemnifying party promptly
in writing describing such loss or expense, the amount thereof, if known, and
the method of computation of such Damages, all with reasonable particularity to
permit the indemnifying party to assess the nature and cost of the claim. If any
action at law, suit in equity or administrative action is instituted by or
against a third party with respect to which any person intends to claim any
liability or expense as Damages under this Article XII, such party shall
promptly notify the indemnifying party of such action.
SECTION 12.04. DEFENSE OF CLAIMS. The indemnifying party shall have
thirty (30) calendar days after receipt of either notice referred to in Section
12.03 of this Agreement to notify the indemnified party that it elects to
conduct and control any legal or administrative action or suit with respect to
an indemnifiable claim. If the indemnifying party does not give such notice, the
indemnified person shall have the right to defend, contest, settle or compromise
such action or suit in the exercise of its exclusive discretion, and the
indemnifying party shall, upon request from the indemnified person, promptly pay
the indemnified person in accordance with the other provisions of this Article
XII the amount of any Damages resulting from its liability to the third party
claimant. If the indemnifying party gives such notice, it shall have the right
to undertake, conduct, and control, through counsel of its own choosing at its
sole expense, the conduct and settlement of such action or suit, and the
indemnified person shall cooperate with the indemnifying party in connection
therewith; provided, however, that (A) the indemnifying party shall not thereby
permit to exist any lien, encumbrance, or other adverse charge securing the
claims indemnified hereunder upon any asset of the indemnified person, (B) the
indemnifying party shall not thereby consent to the imposition of any injunction
against the indemnified person without the written consent of the indemnified
person, (C) the indemnifying party shall permit the indemnified person to
participate in such conduct or settlement through counsel chosen by the
indemnified person, but the fees and expenses of such counsel shall be borne by
the indemnified person except as provided in clause (D) below, and (D) upon a
final determination of such action or suit, the indemnifying party shall agree
promptly to reimburse to the extent required under this Article XII (subject to
the provisions of Section 12.07 of this Agreement) the indemnified person for
the full amount of any Damages resulting from such action or suit and all
reasonable and related expenses incurred by the indemnified person, except fees
and expenses of counsel for the indemnified person incurred after the assumption
of the conduct and control of such action or suit by the indemnifying party. So
long as the
24
indemnifying party is contesting any such action in good faith, the indemnified
person shall not pay or settle any such action or suit. Notwithstanding the
foregoing, the indemnified person shall have the right to pay or settle any such
action or suit, provided that in such event the indemnified person shall waive
any right to indemnity therefor from the indemnifying party and no amount in
respect therefor shall be claimed as Damages under this Article XII.
SECTION 12.05. COOPERATION. If requested by the indemnifying party, the
indemnified person shall cooperate with the indemnifying party and its counsel
in contesting any claim that the indemnifying party elects to contest or, if
appropriate, in making any counterclaim against the person asserting the claim
or any cross-complaint against any person and further agrees to take such other
action as reasonably may be requested by an indemnifying party to reduce or
eliminate any loss or expense for which the indemnifying party would have
responsibility, but the indemnifying party will reimburse the indemnified person
for any expenses incurred by it in so cooperating or acting at the request of
the indemnifying party.
SECTION 12.06. PAYMENT OF DAMAGES. The indemnifying party shall
promptly pay to the indemnified person in immediately available funds the amount
of any Damages to which the indemnified person is entitled by reason of the
provisions of this Agreement. The parties covenant that any payment made
pursuant to this Article XII will be treated by the parties on their respective
tax returns as an adjustment to the Purchase Price.
SECTION 12.07. LIMITATIONS ON INDEMNIFICATION. Anything else in this
Agreement notwithstanding, Arch Ohio and Seller shall not have any obligation to
indemnify any other party's Indemnified Person under this Article XII (A) for
any claim that is not delivered in writing to the person from whom
indemnification is sought on or before 11:59 p.m. on the eighteen month
anniversary of the Closing Date; (B) for any claim unless and until the
aggregate amount of all such claims that may be asserted under this Article XII
exceed Twenty Five Thousand Dollars ($25,000), and then said Indemnified Person
may only assert a claim for the excess of such aggregate claims over Twenty Five
Thousand Dollars ($25,000); or (C), in excess of One Hundred and Fifty Thousand
Dollars ($150,000) for the aggregate of all claims made under this Article XII.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01. EXPENSES. Each of the parties shall pay all costs and
expenses incurred by it in negotiating and preparing this Agreement and in
closing and carrying out the transactions contemplated by this Agreement.
SECTION 13.02. HEADINGS. The subject headings of the Articles and
Sections of this Agreement are included for purposes of convenience only and
shall not affect the construction or interpretation of any of its provisions.
SECTION 13.03. ENTIRE AGREEMENT. This Agreement, including the Exhibits
and Schedules referred to in this Agreement, all of which form a part of this
Agreement, and
25
the instruments and documents to be delivered by the parties pursuant to the
provisions of this Agreement, contain the entire understanding of the parties
with respect to the transactions contemplated by this Agreement. There are no
representations, warranties, covenants or undertakings other than those
expressly set forth or provided for in this Agreement and such other instruments
and documents. This Agreement supersedes all agreements and understandings
between the parties with respect to the transactions contemplated by this
Agreement.
SECTION 13.04. MODIFICATION AND WAIVER. No supplement, modification, or
amendment of this Agreement shall be binding unless executed in writing by all
the parties. The party for whose benefit a warranty, representation, covenant or
condition is intended may in writing waive any inaccuracies in the warranties
and representations contained in this Agreement or waive compliance with any of
the covenants or conditions contained in this Agreement and so waive performance
of any of the obligations of the other party to this Agreement and any defaults
under this Agreement; provided, however, that such waiver shall not affect or
impair the waiving party's rights with respect to any other warranty,
representation or covenant or any default under this Agreement, nor shall any
waiver constitute a continuing waiver.
SECTION 13.05. COUNTERPARTS. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
SECTION 13.06. SCHEDULES. All Schedules attached to this Agreement are
incorporated in this Agreement and made a part of this Agreement in the same
manner as if such Schedules were set forth at length in the text of this
Agreement
SECTION 13.07. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon, and shall inure to the benefit of, the parties and their respective
successors and assigns.
SECTION 13.08. NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made by any party to this Agreement or
pursuant to this Agreement and the indemnification rights and obligations with
respect thereto set forth in Article XII of this Agreement shall survive until
11:59 p.m. on the eighteen month anniversary of the Closing Date.
SECTION 13.09. NOTICES. All notices, requests, demands, waivers and
other communications required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given if delivered
personally, mailed by certified mail, return receipt requested, postage prepaid,
sent by next-day or overnight mail or courier, or sent by facsimile
transmission. All such notices, requests, demands, waivers and other
communication shall be deemed to have been received if by personal delivery,
upon delivery, if by certified or registered mail, on the third business day
after the mailing thereof, if by next-day or overnight mail or courier, on the
business day after such mailing, if by facsimile, three hours after the sender
receives a fax confirmation, unless the fax is sent after 5:00 p.m. (Eastern
time) on a business day or on a non-business day, in which case it shall be
deemed received on the next business day.
26
If to Buyer: Arch Ohio, Inc.
Attention: Chief Executive Officer
00000 X.X. 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Facsimile No.: 954.724.2083
With a copy to: Xxxxxx X. Xxxxxx, Esq.
Xxxxxxxx Xxxxxxxx Xxxxx & Xxxxx LLP
Suite 3600, 0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Facsimile No.: 215.751.2205
If to Seller: American Glassmith, Inc.
Attn: Chief Executive Officer
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxxxx 00000-0000
Facsimile No.: 724.940.2340
With a copy to: American Glassmith, Inc.
Attn: General Counsel
000 Xxxxxxxx-Xxxxxxxx Xxxx
Xxx Xxxx Xxxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxx 00000-0000
Facsimile No.: 330.965.9915
SECTION 13.10. GENDER. Any reference to the masculine, feminine, or
neuter gender shall be deemed to include each other gender unless the context
otherwise requires.
SECTION 13.11. KNOWLEDGE OF AGI, SELLER. As used in this Agreement, the
phrase "to the knowledge of AGI" or phrases of like import shall mean and be
construed as the knowledge of the officers of AGI and the phrase "to the
knowledge of Seller" or phrases of like import shall mean and be construed as
the knowledge of the officers of AGI and AAPC.
SECTION 13.12. GOVERNING LAW; CHOICE OF FORUM: SERVICE OF PROCESS; JURY
TRIAL WAIVER.
(A) The validity, interpretation, and enforcement of this Agreement,
all transactions contemplated by this Agreement and any dispute arising out of
the relationship between the parties hereto, whether in contract, tort, equity
or otherwise, shall be governed by the internal laws of the state of Ohio
(without giving effect to principles of conflicts of law).
(B) THE BANKRUPTCY COURT SHALL HAVE JURISDICTION OVER ALL MATTERS,
INCLUDING, BUT NOT LIMITED TO, ANY LEGAL ACTION, SUIT OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT, ANY RELATED AGREEMENTS, OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR
27
THEREBY AND THE INTERPRETATION, IMPLEMENTATION AND ENFORCEMENT OF THIS
AGREEMENT, AND THE PARTIES HERETO IRREVOCABLY SUBMIT AND CONSENT TO SUCH
JURISDICTION. Each of Buyer and Seller further agrees that service of any
process, summons, notice or document by U.S. registered mail to such party's
respective address set forth in Section 13.09 of this Agreement shall be
effective service of process for any action, suit, or proceeding with respect to
any matters to which it has submitted to jurisdiction as set forth above. Each
of Buyer and Seller irrevocably and unconditionally waives any objection to the
laying of venue of any action, suit, or proceeding arising out of this Agreement
in the Bankruptcy Court, and irrevocably and unconditionally waives and agrees
not to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum. In the
event that a court should find that subject matter jurisdiction is not available
in the Bankruptcy Court, Buyer and Seller hereby agree to submit any and all
disputes arising out of this Agreement to the jurisdiction and venue of the U.S.
District Court for the Northern District of Ohio and agree that any dispute with
respect to any such matters shall be heard only in the courts described above.
SECTION 13.13. SEVERABILITY. In the event that any of the provisions of
this Agreement are determined to be unenforceable by any court of competent
jurisdiction, the parties to this Agreement shall consider such provisions
amended and modified so as to eliminate such invalidity or unenforceability and
all other provisions shall remain in full force or effect as originally written.
SECTION 13.14. CONFIDENTIAL NATURE OF INFORMATION.
(A) Each party shall treat in confidence all documents, materials, and
other information that it has and shall have obtained regarding the other party
during the course of the negotiations leading to the consummation of the
transactions contemplated by this Agreement (whether obtained before or after
the date of this Agreement) and the preparation of this Agreement and other
related documents. The obligation of each party to treat such documents,
materials and other information in confidence shall not apply to any information
that
(1) Such party can demonstrate was already lawfully in its
possession prior to the disclosure thereof by the other party,
(2) Is known to the public and did not become so known through
any violation of a legal obligation,
(3) Became known to the public through no fault of such party,
(4) Is later lawfully acquired by such party from other
sources,
(5) Is required to be disclosed under the provisions of any
Federal, state or local statute or regulation issued by a duly
authorized agency, board or commission thereof, or
28
(6) Is required to be disclosed by a rule or order of any
court of competent jurisdiction.
Each party agrees, if it breaches any of the terms of this Section 13.14, it
will consent to the issuance of a temporary and/or permanent injunction by any
court of competent jurisdiction enjoining such party from continuing to breach
the terms of this Section 13.14. Notwithstanding anything herein to the
contrary, AGI shall not be under any restrictions with respect to disclosures to
the Unsecured Creditors Committee, CIT Group/Business Credit, Inc., or the
Bankruptcy Court.
(B) If the transactions contemplated by the Agreement are not
consummated, each party will immediately return or destroy all such confidential
information and any and all copies thereof, however stored, and, if requested by
the other party, shall certify conformity with this Section 13.14(B) in writing.
[Remainder of page intentionally left blank.]
29
IN WITNESS WHEREOF, each of the parties to the Agreement has executed
this Agreement as of this day of February 2002.
--------
AMERICAN GLASSMITH, INC.
By:/s/Xxxxxx Xxxxxxxxxxx, President
-----------------------------------
Xxxxxx Xxxxxxxxxxx, President
AMERICAN ARCHITECTURAL PRODUCTS CORP.
By:/s/Xxxxxx Xxxxxxxxxxx, President
-----------------------------------
Xxxxxx Xxxxxxxxxxx, President
ARCH OHIO, INC.
By:
-------------------------------
Xxxx Xxxxxxxxxxx, President
ARCH ALUMINUM & GLASS CO., INC.
By:
-------------------------------
Xxxx Xxxxxxxxxxx, President
30
LIST OF EXHIBITS AND SCHEDULES
Exhibit 4.04 Real Property Lease
Exhibit 4.12 Product Warranties
Schedule 1.01(B) Personal Property Listing
Schedule 1.02(A) Sumiglass Deposits
Schedule 1.03(A)(1) Assumed Accounts Payable
Schedule 4.02(C) Consents
Schedule 4.04 Real Property
Schedule 4.05 Personal Property Leases
Schedule 4.06(A) Material Contracts
Schedule 4.07 Certain Transactions; Adverse Change
Schedule 4.09(A) Compliance with Environmental Laws
Schedule 4.09(B) Environmental Matters
Schedule 4.09(C) Allegations of Violation of Environmental Laws
Schedule 4.16 Employee Benefit Plans
Schedule 4.18 Franchises, Permits, and Licenses
Schedule 10.09 Pre-Closing Inventory Certificate
