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EXHIBIT 10.9
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of October 31, 1996, by and among
MAXCO, INC., a Michigan corporation ("Maxco"), XXXXXX PLASTIC PRODUCTS, INC., a
Michigan corporation ("WPP") and PACER TOOL AND MOLD, INC., a Michigan
corporation ("Pacer" and, together with WPP, jointly, severally and
collectively referred to as the "Sellers") and PLASTICS ACQUISITION CO., LLC,
an Ohio limited liability company ("Purchaser"), with reference to the
following RECITALS:
A. WPP is a wholly-owned subsidiary of CMC, Inc., a Michigan
corporation ("CMC"). CMC is a wholly-owned subsidiary of Maxco. Pacer is a
wholly-owned subsidiary of WPP.
B. WPP and Pacer are engaged, in part, in the business of
fabricating injection molded custom plastic products and related molds and
tooling (such business operations, together with all of the business operations
incidental thereto or connected therewith, the "Business"). Such business
operations of WPP and Pacer have been carried on as distinct businesses within
such corporations and are united only by WPP's stock ownership of Pacer.
C. Subject only to the limitations and exclusions contained in
this Agreement and on the terms and conditions hereinafter set forth, Sellers
desire to sell, and Purchaser desires to purchase, the Business, its
operations, and substantially all of the assets of the Sellers, including all
such assets used in the conduct of the Business.
NOW, THEREFORE, in consideration of the recitals and of the respective
covenants, representations, warranties and agreements herein contained, and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
ARTICLE I - PURCHASE AND SALE
1.1 Agreement to Sell. At the Closing hereunder (as defined in
Section 2.1 hereof), Sellers shall grant, sell, convey, assign, transfer and
deliver to Purchaser, upon and subject to the terms and conditions of this
Agreement, all right, title and interest of Sellers in and to:
(a) the Business as a going concern;
(b) the names "XXXXXX PLASTIC PRODUCTS, INC.", "PACER TOOL AND
MOLD, INC.", "PACER ENGINEERED PRODUCTS" and any and all variations
thereof used in the Business (collectively, the "Operating Names") and
all goodwill associated therewith; and
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(c) all of the assets, properties and rights described in
Section 1.1.1 hereof (which assets, properties and rights, together
with the Business, Operating Names and associated goodwill, are herein
sometimes called the "Assets").
Sellers agree that the Assets will be conveyed, assigned, transferred and
delivered to Purchaser free and clear of all mortgages, liens, pledges,
security interests, charges, claims, restrictions and encumbrances of any
nature whatsoever except for (i) liens for current real or personal property
taxes not yet due and payable, (ii) worker's, carrier's and materialman's
liens, (iii) liens that are immaterial in character, amount, and extent, and
which do not detract from the value or interfere with the present or proposed
use of the properties they affect, (iv) any "Permitted Real Estate Exceptions"
(as herein defined) and (v) such liens, if any, as are itemized and described
on SCHEDULE 1.1 attached hereto (collectively, the "Permitted Liens").
1.1.1 Included Assets. Except as otherwise expressly set
forth in Section 1.1.2 hereof, the Assets shall include, without limitation,
the following assets, properties and rights:
(a) that certain real property described on SCHEDULE 1.1.1(A)
attached hereto, together with all structures, improvements and
fixtures and all water lines, rights of way, uses, licenses,
easements, hereditaments, tenements and appurtenances belonging or
appertaining thereto (collectively, the " Owned Real Property");
(b) the rights of Pacer in and to that certain real property
and related improvements and fixtures located at 00 Xxxxx Xxxx,
Xxxxxxxxxx, Xxxxxxxx (the "Leased Real Property" and, together with
the Owned Real Property, the "Real Property") under and pursuant to
the terms of that certain Lease dated January 1, 1995 between Xxxx X.
Xxxx (the "Lessor"), as successor-in-interest to C. Xxxxxx Xxxx and
Xxxxx Xxxx and Pacer (the "Marysville Plant Lease");
(c)(i) all machinery, equipment, tools, vehicles, furniture,
furnishings, leasehold improvements, goods, and other tangible
personal property described or listed in that certain Appraisal (FMV)
dated August 15, 1996 as prepared by Collateral Evaluation Associates
and (ii) to the extent of the right, title and interest of the Sellers
therein, all such other machinery, equipment, tools, vehicles,
furniture, furnishings, leasehold improvements, goods, and other
tangible personal property owned by the Sellers or otherwise used,
directly or indirectly, in the conduct of the Business (collectively,
the "Machinery and Equipment" and, together with the Real Property,
the Fixed Assets");
(d) all accounts receivable, notes receivable and other
rights or claims to the payment of monies, whether for goods sold or
leased or services rendered or otherwise, together with all unbilled
costs and fees, whether arising out of the conduct of the Business or
otherwise owned by the Sellers;
(e) all raw materials, work-in-process and finished goods
inventories, shipping materials, supplies and other personal property
held for sale or lease or used or consumed in the manufacture of
finished goods, together with all office supplies and other supplies
of any nature, used, directly or indirectly, in the conduct of the
Business or otherwise owned by the
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Sellers;
(f) to the extent the assignment thereof is permitted by
applicable law, all federal, state, local or foreign governmental
franchises, licenses, registrations, permits, certifications and other
similar governmental authorizations which are held by Sellers in
connection with (i) the operation of the Business or (ii) the
ownership, use or operation of any of the Assets (collectively, the
"Authorizations"), including, without limitation, all such
Authorizations listed on SCHEDULE 1.1.1(F) attached hereto;
(g) subject to the provisions of Section 2.3 below, all
rights of the Sellers in, to and under all contracts, agreements,
commitments, purchase orders, bids, quotations and other arrangements
of any nature, written or oral, to which either of the Sellers are a
party or pursuant to which either such Seller or any of its assets or
properties are bound (collectively, the " Contracts"), including,
without limitation, the Marysville Plant Lease and such other
Contracts listed on SCHEDULE 1.1.1(G) attached hereto (the Marysville
Plant Lease and such listed Contracts, together with all such other
Contracts not otherwise "Excluded Contracts" as defined in Section
1.1.2(e) below, being referred to as the " Assumed Contracts");
(h) all right, title and interest of the Sellers in and to
all (i) patents, trademarks, service marks, trade names and
copyrights, whether registered or unregistered, and any applications
therefor, used in the Business or under development and (ii)
technologies, methods, formulations, data bases, trade secrets,
know-how, inventions and other intellectual property used in the
Business or under development (collectively, the "Intellectual
Property");
(i) all right, title and interest of the Sellers in and to
all computer software used in the conduct of the Business (other than
any such software as is otherwise generally commercially available,
the "Software"), including all related documentation and related
object and source codes;
(j) all rights under express or implied warranties relating
to the Assets and all rights in, to and under any representations,
warranties, covenants and guaranties made or provided to either of the
Sellers by any third parties with respect to any of the Assets or
under any Assumed Contracts;
(k) all information, files, records, data, plans, customer
lists, supplier lists and other recorded knowledge related to the
Business or any of the Assets;
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(l) such right, title and interest of the Sellers, if any, in
and to such tangible personal property, including molds, materials and
other products in the possession or control of either of the Sellers
which is owned by any customer or supplier of the Business (herein
referred to as " Property Held as Bailee"); and
(m) all right, title and interest of the Sellers in and to
such other assets, properties, rights and interests of every kind and
description, tangible and intangible, and wherever situated, used in,
arising out of the conduct of, or comprising a part of, the Business,
including, without limitation, all such assets and properties
otherwise reflected on the "Consolidated Closing Balance Sheet" as
defined in Section 1.6.
The Purchaser acknowledges (x) that the Sellers expressly disclaim any
representation, express or implied, that the Sellers have any exclusive right
to use the Operating Names and (y) that the Seller's interest in any Software
used in the conduct of the Business is limited to the right to use such
software and source codes as a licensee thereof and that Sellers do not warrant
their respective ownership of any such Software.
1.1.2 Excluded Assets. Notwithstanding the provisions of
Section 1.1.1 above, the Assets shall not include any of the following (the
"Excluded Assets"):
(a) cash or cash equivalents in transit, on hand or in bank
accounts, provided, that, remittances received by Sellers after
Closing in respect of accounts receivable shall not be deemed an
Excluded Asset hereunder;
(b) prepaid items not otherwise included in the "Total Assets
to be Sold" as defined in Section 1.3.1 below;
(c) the corporate seals, certificates of incorporation,
minute books, stock books, tax returns or other records having to do
with corporate organization of Sellers;
(d) WPP's right, title and interest in and to the capital
stock of Pacer;
(e) the following Contracts to which either of the Sellers
may be a party or pursuant to which either such Seller or any of its
assets or properties are bound (collectively, the "Excluded
Contracts"):
(i) employee benefit plans, whether formal or
informal, whether or not set forth in writing, and whether covering
one person or more than one person, sponsored or maintained by the
Sellers or Maxco for employees of Sellers, including, without
limitation, any plans, funds, programs, policies, arrangements,
practices, customs and understandings providing benefits of economic
value to any employee, former employee, or present or former
beneficiary, dependent or assignee of any such employee or former
employee, including, without limitation (x) plans or policies relating
to sick pay, vacation pay and the like, (y) any employee welfare
benefit plans within the meaning of section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended (" ERISA") and (z)
employee pension benefit plans within the meaning of section 3(2) of
ERISA (collectively, the "Employee Benefit Plans");
(ii) any Contract under which either of the Sellers
has outstanding, or the right or obligation to incur, any
indebtedness, obligation (including, without limitation, by way of a
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guaranty) or liability for borrowed money or the deferred purchase
price of property (collectively, ("Debt Instruments"), excepting,
however , the "Xxxx Note Obligations" as defined in Section 1.3.2 (c)
below; and
(iii) such other Contracts, if any (x) as listed on
SCHEDULE 1.1.2(E) attached hereto or (y) which, at the election of the
Purchaser, are excluded, to the extent required to be disclosed by
Seller's hereunder under the provisions of Section 3.1.19 hereof and
not so disclosed;
(f) the rights which accrue or will accrue to Sellers under
this Agreement;
(g) the rights to any of Sellers' claims for any federal,
state, local, or foreign tax refunds, excluding, however, any rights
Sellers may have for any real estate or personal property tax
abatement.
1.2 Agreement to Purchase. Subject otherwise to the terms and
conditions of this Agreement and in reliance on the representations, warranties
and covenants of Sellers and Maxco contained herein, Purchaser shall purchase
the Assets from Sellers at the Closing hereunder and, in exchange therefor,
Purchaser shall, at the Closing:
(a) assume and agree to pay, discharge or perform, as
appropriate, those liabilities and obligations of Sellers which
Purchaser agrees to assume as provided in Section 1.4 of this
Agreement (the "Assumed Liabilities"); and
(b) make the payments and deliveries in respect of the
"Cash Amount" as further described in Section 1.3.2 hereof.
1.3 Purchase Price. For purposes of this Agreement, the "Purchase
Price" shall mean the sum of (a) the amount determined under Section 1.3.1
below (as finally determined pursuant to the provisions of Section 1.7 hereof,
the "Cash Amount") plus (b) the amount of the "Closing Assumed Operating
Liabilities" as defined in Section 1.3.1 below and finally determined pursuant
to the provisions of Section 1.7 hereof.
1.3.1 Cash Amount. The Cash Amount shall be an amount equal
to:
(a) $7,338,178 (the "Base Net Book Value");
(b) (i) less, the amount, if any, by which the
"Closing Net Book Value" (as hereinafter defined in this Section
1.3.1) is less than the Base Net Book Value; or
(ii) plus, the amount, if any, by which such
Closing Net Book Value exceeds the Base Net Book Value.
The term "Closing Net Book Value" means the net book value of the "Total Assets
to be Sold", less the net book value of the "Closing Assumed Operating
Liabilities", less the remaining balance of the Xxxx Note Obligations
(inclusive of accrued interest) in each instance as determined as of the
Closing Date and as reflected on the Consolidated Closing Balance Sheet. For
purposes of the foregoing, (x) the term "Total Assets to be Sold" shall mean
the accounts receivable of the Sellers (net of allowance for bad debts) and
inventory of the Sellers (net of reserves) and other assets of the Sellers of
the nature itemized as "Total Assets to be Sold" on Schedule 1.3.1 attached
hereto (the "Adjusted September
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Balance Sheet") outstanding as of the Closing Date and (y) the term "Closing
Assumed Operating Liabilities" shall mean those liabilities of the Sellers of
the nature itemized as "Operating Liabilities Assumed" on the Adjusted
September Balance Sheet outstanding as of the Closing Date.
1.3.2 Payment of Cash Amount. The Cash Amount shall be
payable to the Sellers as follows:
(a) on the Closing Date, Purchaser shall pay Sellers the
amount of $6,038,178 (the "Cash Closing Payment") payable by wire
transfer of immediately available funds to such account as Sellers
shall designate;
(b) on the Closing Date, Purchaser shall deliver to
Sellers a Promissory Note in substantially the same form as EXHIBIT A
attached hereto (" Subordinated Note"), made payable to the Sellers in
the original principal balance of $1,300,000 (the "Note Amount" and,
together with the Cash Closing Payment, the "Closing Payment Amount"),
duly executed by the Purchaser; and
(c) within seven days after the "Adjustment Date" (as
defined in Section 1.7 hereof):
(i) if the Cash Amount exceeds the Closing Payment
Amount, Purchaser shall pay such excess to Sellers by delivery to
Sellers of a certified or bank cashier's check in the amount of such
excess; or
(ii) if the Closing Payment Amount exceeds the Cash
Amount, Sellers shall pay such excess to Purchaser by delivery to
Purchaser of a certified or bank cashier's check in the amount of such
excess.
1.3.3 Allocation of Purchase Price. The Purchase Price as
finally determined shall be allocated among the Assets acquired hereunder as
described on SCHEDULE 1.3.3 attached hereto (the "Allocation Schedule"). Maxco
and Purchaser each hereby covenant and agree that it will not take a position
on any income tax return, before any governmental agency charged with the
collection of any income tax, or in any judicial proceeding that is in any way
inconsistent with the terms of the Allocation Schedule.
1.4 Assumption of Liabilities. At the Closing hereunder, and except
as otherwise specifically provided in respect of "Excluded Liabilities" as
defined in Section 1.5 hereof, Purchaser shall assume and agree to pay,
discharge or perform, as appropriate, the following liabilities and obligations
of Sellers:
(a) the Closing Assumed Operating Liabilities, but only if
and to the extent that the same are accrued or reserved for on the
Consolidated Closing Balance Sheet;
(b) such liabilities and obligations of Sellers arising in
respect of the performance of the Assumed Contracts after the Closing
Date, except to the extent:
(i) such liabilities or obligations are of a nature
or character which under generally accepted accounting principles
should be accrued or reserved for on a balance sheet or the notes
thereto as a liability or obligation, if and to the extent that the
same are not accrued or reserved for on the Consolidated Closing
Balance Sheet; or
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(ii) such liabilities or obligations arise out of any
breach by Sellers of any provision of any such Contract, including but
not limited to liabilities or obligations arising out of Sellers'
failure to perform such Contract in accordance with its terms prior to
the Closing, excluding, however, any liability arising out of the
assignment of such Contract to the Purchaser in violation of the terms
thereof; and
(iii) such liabilities and obligations of Sellers
arising in respect of the Xxxx Note Obligations, other than the
guaranty from Maxco in respect thereof.
1.5 Excluded Liabilities. Except as specifically provided in Section
1.4 hereof, Sellers shall remain liable and responsible for all liabilities or
obligations of the Business or Sellers of every kind, nature and description
whatsoever, howsoever and whenever arising, whether known or unknown and
whether contingent or matured (such liabilities and obligations being referred
to herein as the "Excluded Liabilities"). Without limiting the foregoing,
Sellers expressly acknowledge and agree that the Excluded Liabilities shall
include the following:
(a) except as related to the Xxxx Note Obligations, any
liabilities or obligations of either the Sellers or Maxco in respect
of borrowed money, including any indebtedness arising out of any Debt
Instrument, loan or other financing arrangement of similar nature,
including any purchase-money financing or capital lease obligations;
(b) any claim, including, without limitation, product
liability or similar claims for injury to person or property,
regardless of when made or asserted, which arises out of or is based
upon any express or implied representation, warranty, agreement or
guarantee made by Sellers, or alleged to have been made by Sellers, or
which is imposed, or asserted to be imposed, by operation of law, in
connection with any service performed or product manufactured by or on
behalf of Sellers prior to the Closing Date, including without
limitation any claim relating to any product delivered in connection
with the performance of such service and any claim seeking recovery
for consequential damage, lost revenue or income;
(c)(i) any federal, state, local or foreign taxes,
assessments, interest, penalties, deficiencies, fees or other
governmental charges or impositions, including, without limitation,
all income tax, unemployment compensation, social security, payroll,
sales and use, excise, privilege, property, ad valorem, franchise,
license, school and any other tax or similar governmental charge or
imposition under laws of the United States or any state or municipal
or political subdivision thereof or any foreign country or political
subdivision thereof, payable by either of the Sellers or Maxco with
respect to the business, assets, properties or operations of Sellers
or Maxco or any member of any affiliated group of which either is a
member for any period prior to the Closing Date (" Taxes") or (ii) any
federal, state, local or foreign taxes, assessments, interest,
penalties, deficiencies, fees or other governmental charges or
impositions incident to or arising as a consequence of the negotiation
or consummation by Sellers or Maxco or any member of any affiliated
group of which either is a member of this Agreement and the
transactions contemplated hereby;
(d) any liability or obligation under or in connection with
any Excluded Assets;
(e) any liability or obligation arising out of the violation
of any federal, state or local statute, regulation, rule, ordinance or
law of other nature relating to or regulating (i) the emission,
discharge or release of pollutants, contaminants, chemicals, or
industrial, toxic or
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hazardous substances or wastes into the environment (including without
limitation ambient air, surface water, groundwater, or land), or (ii)
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants,
chemicals, or industrial. toxic or hazardous substances or wastes
(collectively, " Environmental Laws"), to the extent such liability or
obligation relates to or arises out of the condition of the Real
Property or the conduct of the Business prior to Closing.
(f) any liability or obligation arising prior to, or as a
result of, the Closing to any employees, agents or independent
contractors of Sellers, whether or not employed by Purchaser after the
Closing, or under any benefit arrangement with respect thereto, except
as expressly set forth in Section 7.1 hereof; or
(g) any liability or obligation of Sellers or Maxco arising
or incurred in connection with the negotiation, preparation and
execution of this Agreement and the transactions contemplated hereby
and fees and expenses of counsel, accountants and other experts.
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1.6 Closing Balance Sheet. Not later than 60 days after the Closing
Date, Purchaser shall deliver a balance sheet setting forth the Purchaser's
determination of the Closing Net Book Value (the "Consolidated Closing Balance
Sheet"). The Consolidated Closing Balance Sheet shall be so prepared in a
manner consistent with the principles employed by Sellers in the preparation of
the Year-End Financials (as defined in Section 3.1.6 hereof), provided, that:
(a) in determining the Closing Assumed Operating Liabilities
such adjustments shall be made as may otherwise be required by
generally accepted accounting principles, consistently applied; and
(b) in determining the book value of the inventory of the
Business at the Closing Date, and in addition to the accounting
principles to be otherwise employed in such determination, (i)
inventory will be determined by a physical count as of Closing Date,
(ii) regrind and all defective or unmerchantable inventory will be
allocated no (or a zero) value, (iii) mixes (i.e. virgin material to
which less than 50% regrind has been added) will be valued using the
lower of last cost or market value of the raw material included in
such raw material inventory, (iv) other raw materials inventory will
be valued using the lower of last cost or market values, provided,
that , such value shall in no event exceed the net realizable value of
such inventory, (v) finished goods inventory will be valued at 75% of
net selling price and (vi) slow-moving inventory (i.e. more than
120-day supply based on current unshipped orders) will be valued at
net realizable value.
Subject to the foregoing agreed-upon valuation standards, the
Consolidated Closing Balance Sheet shall be prepared by the Purchaser and
reviewed by Purchaser's independent accountants ("Purchaser's Auditors") in
accordance with a standard of review consistent with the "review" provisions of
Statement No. 1, entitled "Compilation and Review of Financial Statements"
(December 1978) of the Accounting and Review Services Committee of the American
Institute of Certified Public Accountants. The Consolidated Closing Balance
Sheet as so delivered to Sellers shall include a report of the Purchaser's
Auditors to the effect that such balance sheet fairly presents the Closing Net
Book Value, determined in conformity with the principles to be applied under
the terms of this Section 1.6 and also include a schedule setting forth the
calculation of the Cash Amount and the Purchase Price. In rendering the
foregoing review and report, Purchaser's Auditors shall consult with Sellers'
independent accountants ("Sellers' Auditors"), and permit Sellers' Auditors at
the earliest practicable date to review the report of Purchaser's Auditors,
including all work papers, schedules and calculations related thereto, prior to
the issuance thereof. Sellers' Auditors shall commence its review of said work
papers, schedules and calculations as soon as practicable after Purchaser's
Auditors has completed the field work phase of its review.
1.7 Review and Finalization of Consolidated Closing Balance Sheet.
The report of Purchaser's Auditors, including the determination of the Cash
Amount and the Purchase Price as therein set forth, shall be final and binding
upon the parties unless Sellers shall give the Purchaser written notice (a
"Dispute Notice") of their dispute with the Consolidated Closing Balance Sheet
or the determination of the Cash Amount and the Purchase Price as made by the
Purchaser's Auditors, specifying the nature and amount of such dispute(s) with
reasonable specificity, within 15 days after the issuance of the report of
Purchaser's Auditors. Subject to the delivery by the Sellers of a Dispute
Notice as so provided, any such dispute which may arise between Sellers and
Purchaser as to the Consolidated Closing Balance Sheet or the determination of
the Cash Amount and the Purchase Price as made by the Purchaser's Auditors
shall be resolved in the following manner:
(a) during the 15 day period following the date of such
Dispute Notice, Sellers and
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Purchaser shall attempt to resolve such dispute and to determine the
appropriateness of the Consolidated Closing Balance Sheet, the Cash
Amount or the Purchase Price; and
(b) if, at the end of the 15 day period specified in
subsection (b) above, Sellers and Purchaser shall have failed to reach
a written agreement with respect to such dispute, the matter shall be
referred to, Xxxxxx Xxxxxxxx & Co., independent certified public
accountants (the "Arbitrator"), which shall act as an arbitrator and
shall use its best efforts to issue its report as to such matters in
dispute within sixty (60) days after such dispute is referred to the
Arbitrator. Each of the parties hereto shall bear all costs and
expenses incurred by it in connection with such arbitration, except
that the fees and expenses of the Arbitrator hereunder shall be borne
equally by Sellers and Purchaser. This provision for arbitration
shall be specifically enforceable by the parties and the decision of
the Arbitrator in accordance with the provisions hereof shall be final
and binding and there shall be no right of appeal therefrom.
The term "Consolidated Closing Balance Sheet" as used elsewhere in
this Agreement shall mean the Consolidated Closing Balance Sheet as prepared,
reviewed and finally determined as described in Section 1.6 and this Section
1.7. The term "Adjustment Date" shall mean the date which is the later of the
15th day after delivery of the report of Purchaser's Auditors pursuant hereto
or the date upon which any dispute concerning the Consolidated Closing Balance
Sheet, Cash Amount or the amount of the Purchase Price is otherwise finally
resolved.
ARTICLE II - CLOSING, ITEMS TO BE DELIVERED, THIRD PARTY
CONSENTS CHANGE IN NAME AND FURTHER ASSURANCES
2.1 Closing. The closing (the "Closing") of the sale and purchase of
the Assets shall take place at 10:00 A.M., local time, on October 31, 1996 at
the offices of Xxxxx & Xxxxxx, 1100 Huntington Building, 000 Xxxxxx Xxxxxx,
Xxxxxxxxx, Xxxx 00000 or on such other date as may be mutually agreed upon in
writing by Purchaser and Sellers. The date of the Closing is sometimes herein
referred to as the "Closing Date".
2.2 Items to be Delivered at Closing. At the Closing and subject to
the terms and conditions herein contained:
(a) Sellers shall deliver to Purchaser the following:
(i) such bills of sale, with warranty of title,
assignments, endorsements, deeds, and other good and sufficient
instruments and documents of conveyance and transfer, in form
reasonably satisfactory to Purchaser and its counsel, as shall be
necessary and effective to transfer and assign to, and vest in,
Purchaser all of Sellers' right, title and interest in and to the
Assets, including without limitation, (A) good and valid title in and
to all of the Assets owned by Sellers, (B) good and valid leasehold
interests in and to all of the Assets leased by Sellers as lessee, and
(C) all of Sellers' rights under all Contracts, Authorizations and
other documents included in the Assets, as determined on the Closing
Date; and
(ii) an owner's title insurance policy issued by
Ticor Title Insurance Company, as of the Closing Date, in the amount
of $1,390,000 insuring fee simple title to the real property described
in the Preliminary Title Report attached as EXHIBIT B as of Closing.
Simultaneously with such deliveries, all such steps will be taken as
may be required to put Purchaser in actual possession and operating
control of the Assets.
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(b) Purchaser shall deliver to Sellers the following:
(i) the Cash Closing Payment in accordance with
Section 1.3.2 (a) hereof;
(ii) an undertaking whereby Purchaser will assume
and agree to pay, discharge or perform, as appropriate, Sellers'
liabilities and obligations to the extent and as provided in Section
1.4 hereof in form reasonably satisfactory to Sellers and its counsel.
(iii) the Subordinated Note.
(c) At or prior to the Closing, the parties hereto shall
also deliver to each other the agreements, opinions, certificates and
other documents and instruments referred to in Article V hereof.
2.3 Third Party Consents. To the extent that Sellers' rights under
any Assumed Contract, Authorization or other Asset to be assigned to Purchaser
hereunder may not be assigned without the consent of another person which has
not been obtained, this Agreement shall not constitute an agreement to assign
the same if an attempted assignment would constitute a breach thereof or be
unlawful. If any such consent shall not be obtained or if any attempted
assignment would be ineffective or would impair Purchaser's rights under the
Asset in question so that Purchaser would not in effect acquire the benefit of
all such rights, Sellers, to the maximum extent permitted by law, shall act
after the Closing as Purchaser's agent in order to obtain for it the benefits
thereunder and shall cooperate, to the maximum extent permitted by law, with
Purchaser in any other reasonable arrangement designed to provide such benefits
to Purchaser, provided, that, in such event, Purchaser shall indemnify and hold
harmless Sellers from and against, and reimburse Sellers for, any and all
liability or out-of-pocket costs or expense incurred by Sellers in providing
such benefits to Purchaser, other than any suchliabilities or obligations as
may relate to or arise out of any claim that the Contract or Authorization has
been violated by the assignment of the same in any instance where the Purchaser
loses the benefit of the use of such Contract or Authorization.
2.4 Change of Names. On the Closing Date, Sellers and Maxco shall
deliver to Purchaser all such executed documents as may be required to change
the corporate names, or any registered tradenames or ficticious names, of each
of the Sellers to another name bearing no similarity to the Operating Names.
Such documents shall include, without limitation, name change amendments with
the Secretary of State of Michigan and an appropriate name change notice for
each state where Sellers is qualified to do business.
2.5 Further Assurances. Sellers, from time to time after the
Closing, at Purchaser's request, will execute, acknowledge and deliver to
Purchaser such other instruments of conveyance and transfer and will take such
other actions and execute and deliver such other documents, certifications and
further assurances as Purchaser may reasonably require in order to vest more
effectively in Purchaser, or to put Purchaser more fully in possession of, any
of the Assets, or to better enable Purchaser to complete, perform or discharge
any of the liabilities or obligations assumed by Purchaser at the Closing
pursuant to Section 1.4 hereof. Each of the parties hereto will cooperate with
the other and execute and deliver to the other parties hereto such other
instruments and documents and take such other actions as may be reasonably
requested from time to time by any other party hereto as necessary to carry
out, evidence and confirm the intended purposes of this Agreement.
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ARTICLE III - REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Maxco and Sellers. Maxco and
each of the Sellers hereby jointly and severally represent and warrant to
Purchaser that:
3.1.1 Corporate Existence. Each of the Sellers is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Michigan. Neither of the Sellers are otherwise required
to be qualified or licensed to do business as a foreign corporation in any
other jurisdiction.
3.1.2 Corporate Power: Authorization; Enforceable
Obligations. Maxco and the Sellers each have (or will have upon their
respective board approval) the corporate power, authority and legal right to
execute, deliver and perform this Agreement. The execution, delivery and
performance of this Agreement by Maxco and Sellers will, by Closing, have been
duly authorized by all necessary corporate and shareholder action. This
Agreement has been, and the other agreements, documents and instruments
required to be delivered by Sellers or Maxco in accordance with the provisions
hereof (the "Seller Documents") will be, duly executed and delivered on behalf
of Maxco and Sellers by duly authorized officers of Maxco and Sellers, and this
Agreement constitutes, and the Seller Documents when executed and delivered
will constitute, the legal, valid and binding obligations of Maxco and Sellers,
to the extent a party thereto, enforceable against such party in accordance
with their respective terms.
3.1.3 No Interest in Other Entities. Except for the interest
of WPP in Pacer, neither of the Sellers own any shares of any other corporation
or any ownership or other investment interest, either of record, beneficially
or equitably, in any association, partnership, joint venture or other legal
entity.
3.1.4 Validity of Contemplated Transactions, etc. The
execution, delivery and performance of this Agreement by Maxco and Sellers does
not and will not:
(a) violate, conflict with or result in the breach of any
term, condition or provision of (i) any existing law, ordinance, or
governmental rule or regulation to which Sellers or Maxco is subject,
(ii) any judgment, order, writ, injunction, decree or award of any
court, arbitrator or governmental or regulatory official, body or
authority which is applicable to Sellers or Maxco, (iii) the charter
documents of Sellers or Maxco or any securities issued by Sellers or
Maxco, (iv) any Excluded Contract or any mortgage, indenture,
agreement, contract, commitment, lease, plan, permit, authorization or
other instrument, document or understanding, oral or written, to which
Maxco is a party or by which Maxco may be bound or affected or (v)
except as may relate to, or arise by reason of, the failure to obtain
any consent otherwise required thereunder, any Authorization or
"Material Contract" (as defined in Section 3.1.19 hereof); or
(b) except as may relate to, or arise by reason of, the
failure to obtain any consent otherwise required thereunder, give any
person with rights under any Authorization or Material Contract, the
right to terminate, modify, accelerate or otherwise change the
existing rights or obligations of Sellers under such Authorization or
Material Contract.
Except as may relate to filings required to be made by Maxco with the
Securities and Exchange Commission, no authorization, approval or consent of,
and no registration or filing with, any governmental or regulatory official,
body or authority is required in connection with the execution, delivery or
performance of this Agreement by Sellers or Maxco.
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3.1.5 No Third Party Options. There are no existing
agreements, options, commitments or rights with, of or to any person to
acquire, directly or indirectly, any of the Assets or any interest therein,
except for those contracts entered into in the normal course of business
consistent with past practice for the sale of inventory of Sellers.
3.1.6 Financial Statements. The balance sheet of WPP at
March 31, 1994 and the consolidated and consolidating balance sheets of Sellers
at March 31, 1995 and 1996, and the related statements of income (consolidated
and consolidating, where applicable) for the fiscal years then ended attached
as SCHEDULE 3.1.6A hereto (the "Year-End Financials") and the consolidated and
consolidating balance sheets of Sellers at September 30, 1996 and related
statements of income for the period then ended attached as SCHEDULE 3.1.6B
hereto (the "Interim Financials" and, together with the Year-End Financials,
the "Financials") fairly present the financial position of the Sellers at the
dates indicated and the results of operations of Sellers for the periods
indicated. Sellers have otherwise disclosed to the Purchaser all material
variations from generally accepted accounting principles used in the
preparation of the Financials and any adjustments necessary to fairly present
the financial position of the Sellers for the periods then ended. The Adjusted
September Balance Sheet has been prepared on a basis consistent with the
preparartion of the Interim Financials. References in this Agreement to the
"Year-End" shall be deemed to refer to March 31, 1996.
3.1.7 Accounts Receivable. The accounts receivable of
Sellers arising from the Business are valid and genuine and have arisen solely
out of bona fide sales and deliveries of goods, performance of services and
other business transactions in the ordinary course of business consistent with
past practice.
3.1.8 Inventory. The raw materials, work-in-process and
finished goods inventory of Sellers used in the conduct of the Business consist
of goods of a quality, quantity and condition which will be usable or saleable
by the Purchaser in the ordinary course of the Business. Neither of the
Sellers is under any liability or obligation with respect to the return of
inventory in the possession of wholesalers, retailers or other customers.
3.1.9 Tax and Other Returns and Reports. All federal, state,
local and foreign tax returns, reports, statements and other similar filings
required to be filed by Maxco or the Sellers (the "Tax Returns") with respect
to the Taxes have been (or, to the extent not yet due, will be) filed with the
appropriate governmental agencies in all jurisdictions in which such Tax
Returns are required to be filed, and all such Tax Returns properly reflect (or
will properly reflect) the liabilities of Maxco and/or Sellers for Taxes for
the periods, property or events covered thereby. All Taxes relating to past
periods of operations, whether reflected on the Tax Returns or otherwise
claimed to be due by any taxing authority, have been properly accrued or paid.
There are not any pending tax examinations of, or tax claims asserted against,
either of the Sellers, Maxco or any of the Assets in respect of any Taxes or
Tax Returns. Sellers have no knowledge of any basis for any additional
assessment of any Taxes. Sellers have made all deposits required by law to be
made with respect to employees' withholding and other employment taxes,
including without limitation the portion of such deposits relating to taxes
imposed upon Sellers.
3.1.10 Books of Account. The books, records and accounts of
Sellers maintained with respect to the Business accurately and fairly reflect,
in reasonable detail, the transactions, assets, liabilities, costs and expenses
of Sellers with respect to the Business.
3.1.11 Existing Condition. Except as set forth on SCHEDULE
3.1.11 attached hereto,
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since Year-End, Sellers have not, with respect to the Business:
(a) incurred any liabilities or discharged or satisfied any
liabilities other than in the ordinary course of business consistent
with past practice, or failed to pay or discharge any liabilities,
which failure has caused, or will cause, any material damage or risk
of material loss to the Business or any of the Assets;
(b) sold, transferred or otherwise disposed of any assets or
properties which would have been included in the Assets if the Closing
had been held at Year-End or on any date since then, except for (i)
such assets or properties as have been used or consumed in the
ordinary course of business, (ii) the sale of inventory in the
ordinary course of business consistent with past practice and (iii)
the disposition of any such assets or properties (x) which were
obsolete and immaterial in value and (y) which has otherwise been
fully reflected in the Adjusted August Balance Sheet;
(c)(i) suffered any damage, destruction or loss, whether or
not covered by insurance, (x) materially and adversely affecting the
Business or Assets or (y) of any item or items carried on its books of
account individually or in the aggregate at more than $50,000.00, or
(ii) suffered any repeated, recurring or prolonged shortage, cessation
or interruption of supplies or utility or other services required to
conduct the Business;
(d) suffered any material adverse change in its business,
operations, assets, properties, prospects or condition (financial or
otherwise);
(e)(i) made any advance (excluding advances for ordinary and
necessary business expenses) or loan to, any of its employees or (ii)
other than in the ordinary course of business consistent with past
practice, increased the salaries or other compensation payable to, or
made any increase in, or any addition to, other benefits provided to,
any of its employees;
(f) changed any of the accounting principles followed by it,
or the methods of applying such principles, in any material respect;
or
(g) entered into any transaction other than in the ordinary
course of business consistent with past practice.
3.1.12 Title to Properties. The Sellers are, respectively,
the owners of all real, personal and mixed properties and assets used in the
conduct of the Business, except for:
(a) the Leased Real Property;
(b) such tangible personal property leased by either of the
Sellers as set forth on SCHEDULE 3.1.12A attached hereto (the "Leased
Personalty"); and
(c) the Property Held as Bailee as identified on SCHEDULE
3.1.12B attached hereto.
The Sellers have good, valid and marketable title to its owned properties and
assets, and all other properties and assets reflected on the August Adjusted
Balance Sheet or thereafter acquired (except for inventory sold in the ordinary
course of business consistent with past practice), free and clear of all
mortgages, liens, pledges, security interests, charges, claims, restrictions
and other encumbrances and defects of title of any nature whatsoever, except
for (i) Permitted Liens and (ii) such liens disclosed on
15
SCHEDULE 3.1.12C attached hereto which will be otherwise released and
discharged as of Closing.
3.1.13 Condition of Tangible Assets. Except for normal wear
and maintenance requirements and as otherwise set forth on SCHEDULE 3.1.13
attached hereto, all Fixed Assets material to the conduct of the Business,
including all Property Held as Bailee:
(a) will be in working condition at Closing;
(b) conform to all applicable laws, ordinances, codes, rules
and regulations and all Authorizations relating to their construction,
use and operation; and
(c) have been maintained and serviced by Sellers in the
ordinary course of business.
The Property Held as Bailee as identified on SCHEDULE 3.1.12B attached hereto
constitutes all such property in the possession of the Sellers and all such
property of such a nature in respect of which Sellers may have any liability or
obligation of any nature to any third party. Sellers are in compliance with
all of their respective obligations in respect of all Property Held as Bailee
and, except as set forth on SCHEDULE 3.1.13, the physical and mechanical
condition of all such property is such that Seller would not have any liability
to the owner thereof if returned to such owner in its present condition.
3.1.14 Compliance with Laws. Except as otherwise described
on SCHEDULE 3.1.14 attached hereto or otherwise permitted under the provisions
of Section 3.1.15 hereof or elsewhere herein, Sellers have complied with each,
and neither Seller is in violation of any, law, ordinance, or governmental or
regulatory rule or regulation, whether federal, state, local or foreign, to
which Sellers' business, operations, assets or properties is subject
("Applicable Laws"). To the knowledge of Maxco and Sellers, neither Maxco, nor
Sellers, have received any notice of any claim that Sellers are currently in
violation of any Applicable Laws.
3.1.15 Authorizations. The Authorizations constitute all of
the franchises, licenses, permits, registrations, certifications and other
authorizations which are in any manner necessary, or otherwise required to be
held by any Applicable Laws, for the conduct of the Business as now or
previously conducted or for the ownership and use of the Assets, other than any
such franchise, license, permit, registration, certification or other
authorization:
(a) which is otherwise procurable by Purchaser without the
incurrence of any material cost or delay or the requirement to comply
with any special qualification procedure; and
(b) which, if not so held in connection with the operation of
the Business, would not (i) subject Purchaser to any penalty, fine or
other liability (other than such of the foregoing as may be nominal in
amount) or (ii) result in any cessation or interruption in the conduct
of the Business.
To the knowledge of Maxco and Sellers, neither Maxco, nor Sellers, have
received any notice of any claim that Sellers are currently in violation of any
their respective obligations under or with respect to any such Authorization.
Insofar as known to Maxco and Sellers, all Authorizations are renewable in the
ordinary course of business without the need to comply with any special
qualification procedures or any requirement to pay any amounts other than
customary renewal fees and none of such Authorizations will be adversely
affected by consummation of the transactions contemplated hereby.
3.1.16 Transactions With Affiliates, Etc. To the knowledge
of the Sellers and Maxco:
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(a) no business arrangements or transactions between either of
the Sellers and either (i) Maxco, (ii) any entity in which Maxco,
directly or indirectly, has an ownership interest of in excess of 20%
(a " Maxco Corporate Affiliate") or (iii) any corporation or other
business entity in which any director or officer of either Maxco, the
Sellers or any other Maxco Corporate Affiliate has an ownership
interest of in excess of 20% (an "Indirect Affiliate") are material in
any respect to either the operation of the Business or the results of
operations of the Sellers as reflected in the Financials;
(b) neither (i) Maxco, (ii) any other Maxco Corporate
Affiliate or (iii) any Indirect Affiliate is engaged in, or otherwise
owns or controls any corporation or other entity which is engaged in,
direct or indirect competition with the Business in any material
respect;
(c) no portion of either of the sales or other ongoing
business relationships of either of the Sellers is dependent upon the
friendship or the personal relationships (other than those customary
within business generally) between Maxco or any of the officers or
directors of Maxco and any customer or supplier of the Business; and
(d) neither Maxco or either of Sellers, nor any person acting
on behalf of Maxco or either of the Sellers, has, in connection with
the Business, (i) violated the published business policies of any
third party with respect to gifts, services or corporate business
practices or (ii) engaged in any business practice in the operations
of the nature referred to in the Report of the Securities and Exchange
Commission ("SEC") dated May 12, 1976, on Questionable and Illegal
Corporate Payments & Practices.
3.1.17 Litigation. Except as set forth in SCHEDULE 3.1.17
attached hereto, no litigation, including any arbitration, investigation or
other proceeding of or before any court, arbitrator or governmental or
regulatory official, body or authority is pending or, to the knowledge of
Sellers and Maxco, threatened against Sellers or which relates to the Business,
the Assets or the transactions contemplated by this Agreement, nor does Maxco
or either Seller know of any reasonably likely basis for any such litigation,
arbitration, investigation or proceeding, the result of which could adversely
affect the Business, the Assets or the transactions contemplated hereby.
Neither of the Sellers is a party to or subject to the provisions of any
judgment, order, writ, injunction, decree or award of any court, arbitrator or
governmental or regulatory official, body or authority which may adversely
affect such Seller, its assets or the transactions contemplated hereby.
3.1.18 Insurance. Neither Maxco, nor either of the Sellers,
is aware of any existing condition relating to the operation of the Business,
or the nature or condition of any of the Assets, which could form the basis for
the denial of coverage under any of the insurance policies under which the
operations of the Business and the Assets are currently insured. Neither of
the Sellers has been refused any insurance, nor has its coverage been limited,
by any insurance carrier to which it has applied for insurance or with which it
has carried insurance during the past five years. No bonds or other surety
arrangements are currently issued or otherwise existing in connection with the
Business or any Assumed Contract, and the capability to obtain any such bonding
or other surety arrangement has historically been immaterial to the operation
of the Business.
3.1.19 Contracts and Commitments. Except to the extent
described in SCHEDULE 3.1.19 attached hereto, neither of the Sellers is a
party to any Contract of the following nature (together with the Marysville
Plant Lease, a "Material Contract"), whether written or oral:
17
(a) any Contract with any present employee, agent or
consultant for the employment of such person, to the extent not
otherwise terminable by the Sellers, without liability or cost, on no
more than thirty (30) days notice;
(b) to the extent not otherwise terminable by Sellers without
liability or cost, any Contract for (i) the purchase by Sellers of, or
payment by Sellers for, (x) tooling, design or similar engineering
services to the extent such Contract involves a cost of in excess of
$20,000 remaining unpaid or (y) the purchase of raw materials,
supplies or other products (other than tooling), to the extent such
Contract involves a cost of in excess of $25,000 remaining unpaid or
(ii) the provision of services by a third party (except for tooling,
design or similar engineering services), to the extent the annualized
cost of such Contract is in excess of $10,000;
18
(c) to the extent not otherwise terminable by Sellers without
liability or cost, any Contract ("Sales Contract") to (i) sell or
supply products (excluding tooling, design or similar engineering
services), to the extent such Contract involves annualized sales
(based on the Sellers' 1997FYE sales forecast) of $100,000 or more or
(ii) any Contract to provide tooling, design or similar services, to
the extent such Contract involves an amount in excess of $25,000;
(d) any agreement, contract or commitment relating to the
Business (and not otherwise of the nature covered by paragraphs (b)
and (c) above) which, if violated by Sellers, could result in the
incurrence of a liability or cost (including damages) of in excess of
$10,000;
(e) any distribution, dealer, representative or sales agency
agreement, contract or commitment relating to the Business;
(f) any lease under which either of the Sellers is either
lessor or lessee, relating to any personal property or any real
property at which the Assets are located, other than (i) the
Marysville Plant Lease and (ii) any such lease relating to the lease
by either of the Sellers, as lessee, of personal property not
otherwise having an annual cost of in excess of $5,000;
(g) any commitment or agreement for any capital expenditures
or leasehold improvements relating to the Business exceeding, in the
aggregate, the amount of $10,000;
(h)(i) any Contract limiting or restraining Sellers, the
Business or any successor thereto from engaging or competing in any
manner in any business, (ii) insofar as known to Maxco or either of
the Sellers, any such similar Contract to which any employee of the
either of the Sellers is subject and (iii) any confidentiality or
nondisclosure agreements to which either of the Sellers is a party;
(i) any license, royalty or other similar agreement which
relates in whole or in part to any Intellectual Property, other than
customary license agreements relating to any commercially available
Software not otherwise proprietary to the Sellers;
(j) any tax abatement agreement or similar arrangement; or
(k) any material agreement, contract or commitment relating
to the Business not made in the ordinary course of business.
Purchaser has been provided with true and correct copies (or,
where oral, written summaries) of all such Material Contracts, as amended to
date, together with the standard forms of written purchase and sales orders and
product warranty used by Sellers.
19
Each of the Material Contracts is valid and enforceable by
Sellers in accordance with its terms, and the Sellers, and to knowledge of
Maxco and Sellers, all other parties thereto, are each in material compliance
with the provisions thereof and no event has occurred which, with or without
the giving of notice or lapse of time, or both, would constitute a default or
grounds for termination thereunder.
No information has been brought to the attention of Sellers or
Maxco which has led any of them to believe that (1) any customer of Sellers who
within the 12 months previous to the Closing Date has purchased more than
$100,000.00 worth of products from Sellers intends to cease purchasing from
either of the Sellers or intends to alter in any material respect such
purchases or (2) there are any quality or performance problems with respect to
any molds or products used or sold in the conduct of the Business, other than
in the usual and ordinary course of business.
In the reasonable opinion of Sellers, no Sales Contract
otherwise required to be disclosed on SCHEDULE 3.1.19 contains any contractual
requirement with which there is a reasonable likelihood Sellers or any other
party thereto will be unable to comply. SCHEDULE 3.1.19 otherwise sets forth a
good faith reasonable estimate, as of the date hereof, of (i) the costs which
will be incurred in fulfilling the remaining balance of such Contract and (ii)
whether or not Sellers have any reason to believe that its profit margin with
respect to such goods subject to the contract might be less than it has
customarily achieved in the past for similar contracts.
3.1.20 Employee Matters. Schedule 3.1.20 contains accurate
lists and summary descriptions of the following:
(a) the names and titles of and current annual base salary or
hourly rates for all employees of Sellers engaged in the conduct of
the Business, together with a statement of the full amount and nature
of any other remuneration, whether in cash or kind, paid to each such
person during the past or current fiscal year or payable to each such
person in the future and the bonuses accrued for, the vacation and
severance benefits to which, each such person is entitled; and
(b) the names of any officer or other key employee of Sellers
who terminated employment with such entity since December 31, 1994 or
otherwise transferred from Sellers to another operation of Maxco.
To the knowledge of Maxco or either of the Sellers, no key employee of the
Sellers is considering the termination of such employee's employment, and
neither Maxco, nor any Maxco Corporate Affiliate has offered to employ any of
the Sellers' key operating employees, not otherwise already an employee of
Maxco, other than upon the condition that such employee is not otherwise
offered employment by the Purchaser.
3.1.21 Labor Matters. Sellers have not suffered any strike,
slowdown, picketing or work stoppage by any union or other group of employees
affecting the Business and, to the knowledge of Maxco and Sellers, no such
action has been threatened by any such union or group of employees. Neither of
the Sellers is a party to any collective bargaining agreement, no such
agreement determines the terms and conditions of employment of any employee of
Sellers, no collective bargaining agent has been certified as a representative
of any of the employees of Sellers, and no representation campaign or election
is now in progress with respect to any of the employees of Sellers.
3.1.22 Employee Benefit Plans and Arrangements. SCHEDULE
3.1.22 attached hereto
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contains a complete list of all Employee Benefit Plans and designates each plan
providing benefits which are funded through a policy of insurance by the word
"insured" placed by the listing of the plan.
3.1.23 Intellectual Property Matters. The Intellectual
Property, other than trade secrets, general know-how and similar property not
suseptible to summary or itemization, is listed on SCHEDULE 3.1.23A attached
hereto and, except as disclosed thereon, all Intellectual Property is owned by
the Sellers and is free and clear of any liens, claims, charges or
encumbrances, including, without limitation, any claims, or any proprietary,
financial or other interest, of any person, including any present or former
employee of Maxco, either of the Sellers or any predecessor of Sellers. To the
knowledge of Maxco and Sellers (a) neither of the Sellers infringe upon, or
otherwise unlawfully or wrongfully use, any patent, trademark, tradename,
service xxxx, copyright or trade secret owned or claimed by another and (b) no
claim of any such infringement has been made by any third party. SCHEDULE
3.1.23B otherwise lists all confidentiality or nondisclosure agreements
executed by any of the employees of the Sellers, to the extent in favor of
either of the Sellers.
3.1.24 The Software.
(a) Performance. To the best of Sellers' knowledge, the
Software performs free from material defects in programming and operation, is
in machine readable form and includes all computer programs, materials, tapes,
know-how, object and source codes, other written materials, know-how and
processes material to the use and performance of such Software in the conduct
of the Business.
(b) Nonproprietary Nature. All of the Software is generally
commercially available to third-party users and is not otherwise proprietary to
Sellers in nature or subject to any material enhancements developed by, or on
behalf of, the Sellers.
(c) Title. The Sellers have the absolute right to use the
Software, and such right, and all related licenses, are fully transferable to
the Purchaser. Sellers do not have any obligation to compensate any person for
the development, use, sale or exploitation of the Software, nor have Sellers
granted to any other person or entity any license, option or other rights to
develop, use, sell or exploit in any manner the Software whether requiring the
payment of royalties or not.
(d) Protection of Proprietary Information. Sellers have
taken all appropriate measures to protect any confidential or proprietary
information which may be stored in any machine readable form, including without
limitation the access to source and object codes for the Software.
3.1.25 Environmental Matters. Except as set forth in
SCHEDULE 3.1.25 attached hereto:
(a) Sellers have obtained all permits, licenses and other
authorizations which are required under any Environmental Laws.
(b) Sellers are in full compliance in the conduct of the
Business with all terms and conditions of all required permits, licenses and
authorizations, and is also in full compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables under any Environmental Laws or contained in any
order, decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder.
(c) There are no conditions or circumstances, and neither of
the Sellers have engaged in any activities or practices, which may interfere
with or prevent compliance or continued compliance
21
with any Environmental Laws or any order, decree, judgment, injunction, notice
or demand letter issued, entered, promulgated or approved thereunder, or which
may give rise to any common law or legal liability, or otherwise form the basis
of any claim, action, demand, suit, proceeding, hearing, study or
investigation, based on or related to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling, or the
emission, discharge, release or threatened release into the environment, of any
pollutant, contaminant, chemical, or industrial, toxic or hazardous substance
or waste.
(d) There is no civil, criminal or administrative action,
suit, demand, claim, hearing, notice or demand letter, notice of violation,
investigation or proceeding pending or threatened against Sellers in connection
with the conduct of the Business or the condition of the Real Property relating
in any way to any claimed violation of any Environmental Laws or any order,
decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder.
(e) Sellers agree to cooperate with Purchaser in connection
with Purchaser's application for the transfer, renewal or issuance of any
permits, licenses, approvals or other authorizations or to satisfy any related
regulatory requirements involving the Business.
3.1.26 Real Property.
(a) Use of Real Property. The Real Property constitutes all
of the real property (including, without limitation, all interests in and
rights to real property) and improvements which are owned or leased by Sellers
or otherwise used in connection with the Business.
(b) Title to Owned Real Property. With respect to the Owned
Real Property, title to such Real Property is, and at Closing shall be, good
and marketable, fee simple absolute, free and clear of all liens, adverse
claims and other matters affecting Sellers' title to or possession of such Real
Property, including, but not limited to, all encroachments, boundary disputes,
covenants, restrictions, easements, rights of way, mortgages, security
interests, leases, encumbrances and title objections, excepting only such
easements, restrictions and covenants presently of record which will not, in
Purchaser's sole judgment, interfere with or impair Purchaser's intended use of
any of the Real Property, reduce the value of any of the Real Property, or
prevent Purchaser from obtaining financing of Purchaser's acquisition of the
Real Property (the "Permitted Real Estate Exceptions").
(c) Zoning. Sellers use of the Real Property is in
compliance with all applicable zoning and other land use requirements
applicable thereto.
(d) Utility Services. The water, electric, gas and sewer
utility services and any septic tank or storm drainage facilities currently
available to the Real Property are adequate for the present use of the Real
Property by Sellers in conducting the Business.
(e) Assessments or Hazards. Neither Maxco nor Sellers have
received notices, oral or written, from any governmental body, that the
assessed value of the Real Property has been determined to be greater than that
upon which county, township or school tax was paid for the tax year applicable
to each such tax, or from any insurance carrier of Sellers of fire hazards with
respect to the Real Property. If, at the time of Closing, the Real Property or
any portion thereof is affected by any assessment which is or may become
payable in annual installments, of which one or more is then payable or has
been paid, then for the purpose of this Agreement, all the unpaid installments
of any such assessment including, without limitation, those which are to become
due and payable after Closing, shall be deemed to be liens on the Real Property
and shall be paid or discharged at or prior to
22
Closing.
(f) Eminent Domain. Sellers have received no notices, oral
or written, and have no reason to believe, that any governmental body having
the power of eminent domain over any of the Real Property has commenced or
intends to exercise the power of eminent domain or a similar power with respect
to all or any part of the Real Property.
(g) Public Improvements. No work for municipal improvements
has been commenced on or in connection with the Real Property or any street
adjacent thereto. No assessment for public improvements has been made against
the Real Property which remains unpaid. No notice from any county, township or
other governmental body has been served upon the Real Property or received by
Sellers requiring or calling attention to the need for any work, repair,
construction, alteration or installation on or in connection with the Real
Property which has not been complied with.
3.1.27 Availability of Documents. Sellers have made
available to Purchaser copies of all documents, including without limitation
all agreements, contracts, commitments, insurance policies, leases, plans,
instruments, undertakings authorizations, permits, licenses, patents,
trademarks, tradenames, service marks, copyrights and applications therefor
listed in any Schedules or otherwise referred to therein. Such copies are true
and complete and include all amendments, supplements and modifications thereto
or waivers currently in effect thereunder.
3.1.28 Adequacy of Assets. Other than as may arise by reason
of the exclusion of any of the Excluded Assets, the Assets, as existing at
Closing, will constitute all of the properties, assets and rights or interests
necessary for the Purchaser to conduct the Business in the manner heretofore
conducted by the Sellers and, except for the Excluded Assets, neither Maxco,
nor Sellers, are aware of any other properties, assets, rights or interests
used in, or are otherwise necessary to, the conduct of the Business in such
manner which will not otherwise be a part of the Assets.
3.1.29 Restrictions. Sellers are not a party to any
indenture, agreement, contract, commitment, lease, plan, license, permit,
authorization or other instrument, document or understanding, oral or written,
or subject to any charter or other corporate restriction or any judgment,
order, writ, injunction, decree or award which materially adversely affects or
materially restricts or, so far as Sellers can now reasonably foresee, may in
the future materially adversely affect or materially restrict, the business,
operations, assets, properties, prospects or condition (financial or otherwise)
of the Business after consummation of the transactions contemplated hereby.
3.1.30 Conditions Affecting Sellers. There is no fact,
development or threatened development with respect to the markets, products,
services, customers, facilities, computer software, data bases, personnel,
vendors, suppliers, operations, assets or prospects of the Business which are
known to Sellers or Maxco which would materially adversely affect the business,
operations or prospects of Sellers considered as a whole, other than such
conditions as may affect as a whole the economy generally. Sellers have used
their best efforts to keep available for Purchaser the services of the
employees, agents, customers and suppliers of Sellers active in the conduct of
the Business. Sellers do not have any reason to believe that any loss of any
employee, agent, customer or supplier or other advantageous arrangement will
result because of the consummation of the transactions contemplated hereby.
3.1.31 Completeness of Disclosure. No representation or
warranty by Sellers or Maxco in this Agreement nor any certificate, schedule,
statement, document or instrument furnished or to be furnished to Purchaser
pursuant hereto, or in connection with the negotiation, execution or
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performance of this Agreement, contains or will contain any untrue statement of
a material fact or omits or will omit to state a material fact required to be
stated herein or therein or necessary to make any statement herein or therein
not misleading.
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3.2 Representations and Warranties of Purchaser. Purchaser
represents and warrants to Sellers as follows:
3.2.1 Corporate Existence. Purchaser is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Ohio.
3.2.2 Corporate Power and Authorization. Purchaser has the
power, authority and legal right to execute, deliver and perform this
Agreement. The execution, delivery and performance of this Agreement by
Purchaser have been duly authorized by all necessary action. This Agreement
has been duly executed and delivered by Purchaser and constitutes the legal,
valid and binding obligation of Purchaser enforceable against Purchaser in
accordance with its terms.
3.2.3 Validity of Contemplated Transactions, etc. The
execution, delivery and performance of this Agreement by Purchaser does not and
will not violate, conflict with or result in the breach of any term, condition
or provision of, or require the consent of any other party to, (a) any existing
law, ordinance, or governmental rule or regulation to which Purchaser is
subject, (b) any judgment, order, writ, injunction, decree or award of any
court, arbitrator or governmental or regulatory official, body or authority
which is applicable to Purchaser, (c) the Operating Agreement of, or any
securities issued by, Purchaser, or (d) any mortgage, indenture, agreement,
contract, commitment, lease, plan or other instrument, document or
understanding, oral or written, to which Purchaser is a party or by which
Purchaser is otherwise bound. No authorization, approval or consent of, and no
registration or filing with, any governmental or regulatory official, body or
authority is required in connection with the execution, delivery and
performance of this Agreement by Purchaser.
3.3 Survival of Representations and Warranties. All representations
and warranties made by the parties in this Agreement or in any certificate,
schedule, statement, document or instrument furnished hereunder or in
connection with negotiation, execution and performance of this Agreement shall
survive the Closing for a period of two years except for (a) the warranties and
representations contained in Sections 3.1.1, 3.1.2, 3.1.4, 3.1.5, 3.1.12,
3.1.25, 3.2.1, 3.2.2 and 3.2.3 which shall survive Closing for a period of ten
years and (b) the representations and warranties contained in Section 3.1.10,
which shall survive Closing until the expiration of the statute of limitations
(including an extensions) applicable to tax returns or other forms relating to
any period prior to the Closing. Notwithstanding any investigation or audit
conducted before or after the Closing Date or the decision of any party to
complete the Closing, each party shall be entitled to rely upon the
representations and warranties set forth herein and therein.
ARTICLE IV - AGREEMENTS PENDING CLOSING.
4.1 Agreements of Sellers Pending the Closing. Sellers covenant and
agree that, pending the Closing and except as otherwise agreed to in writing by
Purchaser:
4.1.1 Business in the Ordinary Course. The Business shall be
conducted solely in the ordinary course consistent with past practice.
4.1.2 Existing Condition. Sellers shall not cause nor permit
to occur any of the events or occurrences described in Section 3.1.12 hereof.
4.1.3 Maintenance of Physical Assets. Sellers shall continue
to maintain and service the physical assets used in the conduct of the Business
in the same manner as has been its consistent past practice.
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4.1.4 Employees and Business Relations. Sellers shall use
its best efforts to keep available the services of the present employees and
agents of the Business and to maintain the relations and goodwill with the
suppliers, customers, distributors and any others having business relations
with the Business.
4.1.5 Maintenance of Authorizations etc. Sellers shall use
their best efforts to maintain in full force and effect all Authorizations.
4.1.6 Compliance with Laws. etc. Sellers shall comply with
all laws, ordinances, rules, regulations and orders applicable to the Business,
or Sellers' operations, assets or properties in respect thereof, the
noncompliance with which might materially affect the Business or the Assets.
4.1.7 Update Schedules. Sellers shall promptly disclose to
Purchaser any information contained in its representations and warranties or
the Schedules which, because of an event occurring after the date hereof, is
incomplete or is no longer correct as of all times after the date hereof until
the Closing Date; provided, however, that none of such disclosures shall be
deemed to modify, amend or supplement the representations and warranties of
Sellers or the schedules hereto for the purposes of Article V hereof, unless
Purchaser shall have consented thereto in writing.
4.1.8 Conduct of Business. Sellers shall use their best
efforts to conduct its respective business in such a manner that on the Closing
Date the representations and warranties of Maxco and Sellers contained in this
Agreement shall be true, except as specifically contemplated by this Article
IV, as though such representations and warranties were made on and as of such
date. Furthermore, Maxco and Sellers shall cooperate with Purchaser and use
their best efforts to cause all of the conditions to the obligations of
Purchaser and Sellers under this Agreement to be satisfied on or prior to the
Closing Date.
4.1.9 Sale of Assets; Negotiations. Neither Maxco nor
Sellers shall, directly or indirectly, sell or encumber all or any part of the
Assets, other than in the ordinary course of the Business consistent with past
practice, or initiate or participate in any discussions or negotiations or
enter into any agreement to do any of the foregoing. Maxco and Sellers shall
not provide any confidential information concerning the Business or its
properties or assets to any third party other than in the ordinary course of
business.
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4.1.10 Access. Maxco and Sellers shall give to Purchaser's
officers, employees, counsel, accountants and other representatives free and
full access to and the right to inspect, during normal business hours, all of
the premises, properties, assets, records, contracts and other documents
relating to the Business and shall permit them to consult with the officers,
employees, accountants, counsel and agents of Sellers for the purpose of making
such investigation of the Business, including without limitation the
Consolidated Interim Balance Sheet, as Purchaser shall desire to make,
provided, that, such investigation shall not unreasonably interfere with the
business operations of the Sellers. Furthermore, Sellers shall furnish to
Purchaser all such documents and copies of documents and records and
information with respect to the affairs of the Business and copies of any
working papers relating thereto as Purchaser shall from time to time reasonably
request and shall permit Purchaser and its agents to make such physical
inventories and inspections of the Assets as Purchaser may request from time to
time.
4.2 Agreements of Purchaser Pending the Closing. Purchaser covenants
and agrees that, pending the Closing and except as otherwise agreed to in
writing by Sellers:
4.2.1 Actions of Purchaser. Purchaser will not knowingly
take any action which would result in a breach of any of its representations
and warranties hereunder. Furthermore, Purchaser shall cooperate with Sellers
and use its best efforts to cause all of the conditions to the obligations of
Purchaser and Sellers under this Agreement to be satisfied on or prior to the
Closing Date.
4.2.2 Confidentiality. Unless and until the Closing has been
consummated, Purchaser will hold, and shall cause their counsel, independent
certified public accountants, appraisers and investment bankers to hold in
confidence any confidential data or information made available to Purchaser in
connection with this Agreement with respect to the Business using the same
standard of care to protect such confidential data or information as is used to
protect Purchaser's confidential information. If the transactions contemplated
by this Agreement are not consummated, Purchaser agrees that it shall return or
cause to be returned to Sellers all written materials and all copies thereof
that were supplied to Purchaser by Sellers and that contain any such
confidential data or information.
4.3 Press Releases. The parties agree that prior to the Closing
Date, no party shall make any public announcement or press release with respect
to the contemplated purchase and sale of the Business without mutual consent,
provided, that, Purchaser acknowledges and agrees that the foregoing
restriction shall not be deemed to apply to such public disclosures, releases
and announcements as Maxco may be required to make or provide or under
applicable securities law. In any event, each party will, in any case, give
the other party a copy of such contemplated announcement or release two
business days prior to its being made public.
ARTICLE V - CONDITIONS PRECEDENT TO THE CLOSING
5.1 Conditions Precedent to Purchaser's Obligations. All obligations
of Purchaser under this Agreement are subject to the fulfillment or
satisfaction, prior to or at the Closing, of each of the following conditions
precedent:
5.1.1 Representations and Warranties True as of the Closing
Date. The representations and warranties of Sellers and Maxco contained in
this Agreement or in any schedule, certificate or document delivered by Sellers
or Maxco to Purchaser pursuant to the provisions hereof shall have been true on
the date hereof without regard to any schedule updates furnished by Sellers or
Maxco after the date hereof and shall be true on the Closing Date with the same
effect as though such
27
representations and warranties were made as of such date.
5.1.2 Compliance with this Agreement. Sellers and Maxco
shall have performed and complied with all agreements and conditions required
by this Agreement to be performed or complied with by them prior to or at the
Closing.
5.1.3 Closing Certificate. Purchaser shall have received a
certificate from Sellers dated the Closing Date, certifying in such detail as
Purchaser may reasonably request that the conditions specified in Sections
5.1.1 and 5.1.2 hereof have been fulfilled and certifying that Sellers have
obtained all consents and approvals required with respect to it or the Business
by Section 5.1.6 hereof.
5.1.4 Opinions of Counsel for Sellers. Warren, Price,
Cameron, Xxxxx & Xxxxxxxx P.C., counsel for Sellers, shall have delivered to
Purchaser a written opinion, dated the Closing Date, in such form, and
containing such opinions, as shall be in form and substance reasonably
satisfactory to the Purchaser and its counsel.
5.1.5 No Threatened or Pending Litigation. On the Closing
Date, no suit, action or other proceeding, or injunction or final judgment
relating thereto, shall be threatened or be pending before any court or
governmental or regulatory official, body or authority in which it is sought to
restrain or prohibit or to obtain damages or other relief in connection with
this Agreement or the consummation of the transactions contemplated hereby, and
no investigation that might result in any such suit, action or proceeding shall
be pending or threatened.
5.1.6 Consents and Approvals. Purchaser shall have received
such consents and approvals to the transactions contemplated hereby, in form
satisfactory to the Purchaser, from:
(a) the Lessors (as to the assignment of the Marysville Lease
to Purchaser and as to the landlord waiver agreement referred in
Section 5.1.12 below); and
(b) the holders of the Xxxx Note Obligations and those
parties to the Contracts listed on Schedule 1.1.1(g) hereto.
5.1.7 Material Adverse Changes. The business, operations,
assets, properties or prospects of the Business shall not have been and shall
not be threatened to be materially adversely affected in any way as a result of
any event or occurrence.
5.1.8 Approval of Counsel; Corporate Matters. All actions,
proceedings, resolutions, instruments and documents required to carry out this
Agreement or incidental hereto and all other related legal matters shall have
been approved on the Closing Date by Xxxxx & Xxxxxx, counsel for Purchaser, in
the exercise of their reasonable judgment. Maxco and Sellers shall also have
delivered to Purchaser such other documents, instruments, certifications and
further assurances as such counsel may reasonably require.
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5.1.9 Lien Releases. Purchaser shall be provided with
reasonable evidence that the Sellers have, at their expense, obtained the
release of all liens, claims, encumbrances and other restrictions of any
nature, not otherwise Permitted Liens, which may relate to any of the Assets,
including all related UCC filings, and such lienholder releases, if any, which
may otherwise be appropriate to evidence the release of any rights which such
lienholder may otherwise have against the Purchaser, any of the Assets or any
of the indebtedness secured by any such lien, provided, that, to the extent any
portion of the Cash Closing Payment is required for the purpose of discharging
any such lien, Sellers shall procure a payoff letter from such lienholder which
evidences the amount required to be so paid and the Purchaser shall have the
right to establish such reasonable procedures to ensure that the portion of the
Cash Closing Payment required to be paid to secure such lien release is paid
directly to the lienholder, conditional upon such lienholder's release of the
related lien.
5.1.10 Non-Disclosure Agreement. Maxco and Sellers will
execute a Non-Disclosure Agreement substantially in the form attached as
EXHIBIT C.
5.1.11 Delivery of MESC Form 1027. At least two days prior
to the Closing Date, Purchaser shall have been furnished with the MESC Form
1027.
5.1.12 Financing Arrangements. Sellers, and such other
parties as Purchaser's lender shall deem necessary, shall have executed all
such agreements, instruments or other documents as may be reasonably required
by the Purchaser's lender as a condition to its financing, including, without
limitation, all such agreements, certificates, consents and the like as such
lender may require in connection with the subordination of the Subordinated
Note and the Xxxx Note Obligations and the assignment of Purchaser's rights to
sums due under this Agreement. Purchaser's lender shall otherwise be
satisfied, and have received such reasonable evidence, that all liens, security
interests, restrictions, claims and other encumbrances of any nature in or upon
the Assets, other than Permitted Liens, have been fully released and, in
respect of the Leased Real Property, such lender shall have received a
landlord's waiver, executed by the Lessor, waiving any and all claims, liens or
rights of levy and distraint which such Lessor may have in respect of any of
the Assets located at such Real Property and otherwise containing such
agreements as the lender may reasonably require.
5.1.13 Title Insurance. Title to the Owned Real Property
shall be insurable by Ticor Title Insurance Company, at such company's regular
rates pursuant to an ALTA 1987 owner's form of policy, free of all exceptions,
including the so-called standard exceptions and survey exceptions, except the
Permitted Real Estate Exceptions.
5.1.14 Surveys. Purchaser shall have obtained an ALTA survey
of the Owned Real Property sufficient in detail to delete the so-called survey
exceptions to the title insurance policy and otherwise satisfactory to
Purchaser's lender.
5.1.15 Transfer of IBM Mainframe Computer. Purchaser
shall have received a xxxx of sale, executed by Maxco, together with such
releases or other lien terminations, as Purchaser may reasonably require to
evidence the to transfer to Purchaser, free and clear of all liens, claims and
encumbrances of any nature, the mainframe computer system (IBM Application
System AS400, Model 9404 currently used by WPP in its business operations.
5.2 Conditions Precedent to the Obligations of Sellers. All
obligations of Sellers under this Agreement are subject to the fulfillment or
satisfaction, prior to or at the Closing, of each of the following conditions
precedent:
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5.2.1 Representations and Warranties True as of the Closing
Date. The representations and warranties of Purchaser contained in this
Agreement or in any list, certificate or document delivered by Purchaser to
Sellers pursuant to the provisions hereof shall be true on the Closing Date
with the same effect as though such representations and warranties were made as
of such date.
5.2.2 Compliance with this Agreement. Purchaser shall have
performed and complied with all agreements and conditions required by this
Agreement to be performed or complied with by them prior to or at the Closing.
5.2.3 Closing Certificates. Sellers shall have received a
certificate from Purchaser dated the Closing Date certifying in such detail as
Sellers may reasonably request that the conditions specified in Sections 5.2.1
and 5.2.2 hereof have been fulfilled.
5.2.4 Opinion of Counsel for Purchaser. Xxxxx & Xxxxxx,
counsel to Purchaser, shall have delivered to Sellers a written opinion, dated
the Closing Date, in such form, and containing such opinions, as shall be in
form and substance reasonably satisfactory to Sellers and its counsel.
5.2.5 No Threatened or Pending Litigation. On the Closing
Date, no suit, action or other proceeding, or injunction or final judgment
relating thereto, shall be threatened or be pending before any court or
governmental or regulatory official, body or authority in which it is sought to
restrain or prohibit or to obtain damages or other relief in connection with
this Agreement or the consummation of the transactions contemplated hereby, and
no investigation that might result in any such suit, action or proceeding shall
be pending or threatened.
5.2.6 Maxco Board Approval. The execution of this Agreement
and each of the other Seller Documents to which Maxco will be a party, and the
consummation of the transactions contemplated hereby, shall have been approved
by the Board of Directors of Maxco.
5.2.7 Backstop Guaranty/Indemnity. Sellers and Maxco shall
have received a guaranty, executed and delivered by such members of the
Purchaser or other persons, and including such terms and conditions, as shall
be satisfactory to Maxco in its sole discretion, whereby such members or other
persons agree to guaranty the payment of the Xxxx Note Obligations and
otherwise indemnify Sellers and Maxco from and against any liability, loss or
other claims in respect thereof.
5.2.8 Approval of Counsel; Corporate Matters. All actions,
proceedings, resolutions, instruments and documents required to carry out this
Agreement or incidental hereto and all other related legal matters shall have
been approved on the Closing Date by Warren, Price, Cameron, Xxxxx & Xxxxxxxx
P.C., counsel for Sellers, in the exercise of their reasonable judgment.
Purchaser shall also have delivered to Sellers and Maxco such other documents,
instruments, certifications and further assurances as such counsel for Sellers
may reasonably require.
ARTICLE VI - INDEMNIFICATION
6.1 General Indemnification Obligation of Sellers and Maxco. From
and after the Closing, each of Sellers and Maxco, jointly and severally, will
reimburse, indemnify and hold harmless Purchaser and its successors and assigns
(an "Indemnified Purchaser Party") against and in respect of:
(a) any and all damages, losses, deficiencies, liabilities,
costs and expenses incurred or suffered by any Indemnified Purchaser Party that
result from, relate to or arise out of:
30
(i) any and all Excluded Liabilities;
(ii) any misrepresentation, breach of warranty or
nonfulfillment of any agreement or covenant on the part of Sellers or
Maxco under this Agreement, or from any misrepresentation in or
omission from any certificate, schedule, statement, document or
instrument furnished to Purchaser pursuant hereto or in connection
with the negotiation, execution or performance of this Agreement; or
(iii) any loss or liability incurred by the
Purchaser by reason of the denial, by any applicable governmental
authority, of approval of the transfer of any industrial tax exemption
certificate currently held by WPP to the Purchaser, it being
acknowledged that, following closing, Purchaser will apply for the
transfer of such tax exemption certificates pursuant to the provisions
of applicable law; and
(b) any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments, costs and other
expenses (including, without limitation, reasonable legal fees and expenses)
incident to any of the foregoing or to the enforcement of this Section 6.1.
6.2 General Indemnification Obligation of Purchaser. From and after
the Closing, Purchaser will reimburse, indemnify and hold harmless Sellers and
Maxco and their successors or assigns (an "Indemnified Sellers Party") against
and in respect of:
(a) Any and all damages, losses, deficiencies, liabilities,
costs and expenses incurred or suffered by any Indemnified Sellers Party that
result from, relate to or arise out of:
(i) any and all Assumed Liabilities;
(ii) any misrepresentation, breach of warranty or
non-fulfillment of any agreement or covenant on the part of Purchaser
under this Agreement, or from any misrepresentation in or omission
from any certificate, schedule, statement, document or instrument
furnished to Sellers pursuant hereto or in connection with the
negotiation, execution or performance of this Agreement; and
(iii) any and all loss, claims or damages incurred by,
or asserted against, any Indemnified Sellers Party by reason of any
claim relating to the condition of any Property Held as Bailee, to the
extent such claim arises by reason of any failure of the Purchaser to
properly maintain any such property after the Closing Date or the loss
or destruction of any such property after the Closing Date; and
(b) any and all actions, suits, claims, proceeding,
investigations, demands, assessments, audits, fines, judgments, costs and other
expenses (including, without limitation, reasonable legal fees and expenses)
incident to any of the foregoing or to the enforcement of this Section 6.2.
6.3 Method of Asserting Claims, Etc. In the event that any claim or
demand for which Sellers or Maxco would be liable to an Indemnified Purchaser
Party hereunder is asserted against or sought to be collected from an
Indemnified Purchaser Party by a third party, the Indemnified Purchaser Party
shall promptly notify Sellers and Maxco of such claim or demand, specifying the
nature of such claim or demand and the amount or the estimated amount thereof
to the extent then feasible (which estimate
31
shall not be conclusive of the final amount of such claim and demand) (the
"Claim Notice"). Sellers and Maxco shall have ten days from the personal
delivery or mailing of the Claim Notice (the "Notice Period") to notify the
Indemnified Purchaser Party of (i) whether or not they dispute their liability
to the Indemnified Purchaser Party hereunder with respect to such claim or
demand and (ii) whether or not, notwithstanding any such dispute, they desire,
at their sole cost and expense, to defend the Indemnified Purchaser Party
against such claim or demand.
(a) If Sellers or Maxco disputes its liability with respect
to such claim or demand or the amount thereof (whether or not Sellers or Maxco
desires to defend the Indemnified Purchaser Party against such claim or demand
as provided in paragraphs (b) and (c) below), such dispute shall be resolved in
accordance with Section 6.5 hereof. Pending the resolution of any dispute by
Sellers or Maxco of its liability with respect to any claim or demand, such
claim or demand shall not be settled without the prior written consent of the
Indemnified Purchaser Party.
(b) In the event that Sellers or Maxco notifies the
Indemnified Purchaser Parties within the Notice Period that they desire to
defend the Indemnified Purchaser Party against such claim or demand then,
except as hereinafter provided, Sellers or Maxco, respectively, shall have the
right to defend the Indemnified Purchaser Party by appropriate proceedings,
which proceedings shall be promptly settled or prosecuted by them to a final
conclusion in such a manner as to avoid any risk of Indemnified Purchaser Party
becoming subject to liability for any other matter; provided, however, Sellers
and Maxco shall not, without the prior written consent of the Indemnified
Purchaser Party, consent to the entry of any judgment against the Indemnified
Purchaser Party or enter into any settlement or compromise which does not
include, as an unconditional term thereof, the giving by the claimant or
plaintiff to the Indemnified Purchaser Party of a release, in form and
substance satisfactory to the Indemnified Purchaser Party, as the case may be,
from all liability in respect of such claim or litigation. If any Indemnified
Purchaser Party desires to participate in, but not control, any such defense or
settlement, it may do so at its sole cost and expense. If, in the reasonable
opinion of the Indemnified Purchaser Party, any such claim or demand or the
litigation or resolution of any such claim or demand involves an issue or
matter which could have a materially adverse effect on the business,
operations, assets, properties or prospects of the Indemnified Purchaser Party,
including without limitation the administration of the tax returns and
responsibilities under the tax laws of any Indemnified Purchaser Party, then
the Indemnified Purchaser Party shall have the right to control the defense or
settlement of any such claim or demand and its reasonable costs and expenses
shall be included as part of the indemnification obligation of Sellers and
Maxco hereunder; provided, however, that the Indemnified Purchaser Party shall
not settle any such claim or demand without the prior written consent of
Sellers or Maxco, which consent shall not be unreasonably withheld. If the
Indemnified Purchaser Party should elect to exercise such right, Sellers or
Maxco shall have the right to participate in, but not control, the defense or
settlement of such claim or demand at its sole cost and expense.
(c) (i) If Sellers or Maxco elect not to defend the
Indemnified Purchaser Party against such claim or demand, whether by not giving
the Indemnified Purchaser Party timely notice as provided above or otherwise,
then the amount of any such claim or demand, or if the same be defended by
Sellers or Maxco or by the Indemnified Purchaser Party (but none of the
Indemnified Purchaser Party shall have any obligation to defend any such claim
or demand), then that portion thereof as to which such defense is unsuccessful,
in each case shall be conclusively deemed to be a liability of Sellers and
Maxco hereunder, unless Sellers and Maxco shall have disputed their liability
to the Indemnified Purchaser Party hereunder, as provided in (a) above, in
which event such dispute shall be resolved as provided in section 6.5 hereof.
(ii) In the event an Indemnified Purchaser Party should
have a claim against
32
Sellers or Maxco hereunder that does not involve a claim or demand being
asserted against or sought to be collected from it by a third party, the
Indemnified Purchaser Party shall promptly send a Claim Notice with respect to
such claim to Sellers and Maxco. If Sellers or Maxco dispute its liability
with respect to such claim or demand, such dispute shall be resolved in
accordance with Section 6.5 hereof; if Sellers or Maxco do not notify the
Indemnified Purchaser Party within the Notice Period that it disputes such
claim, the amount of such claim shall be conclusively deemed a liability of
Sellers or Maxco, respectively, hereunder.
(d) All claims for indemnification by an Indemnified Sellers
Party under this Agreement shall be asserted and resolved under the procedures
set forth above substituting in the appropriate place "Indemnified Sellers
Party" for "Indemnified Purchaser Party" and variations thereof and "Purchaser"
for "Sellers and Maxco".
6.4 Payment. Upon the determination of the liability under Section
6.3 or 6.5 hereof, the appropriate party shall pay to the other, as the case
may be, within ten days after such determination, the amount of any claim for
indemnification made hereunder. In the event that the indemnified party is not
paid in full for any such claim pursuant to the foregoing provisions promptly
after the other party's obligation to indemnify has been determined in
accordance herewith, it shall have the right, notwithstanding any other rights
that it may have against any other person, firm or corporation, to setoff the
unpaid amount of any such claim against any amounts owed by it under any
agreements entered into pursuant to this Agreement, the Sellers' Documents or
the Purchaser's Documents. Upon the payment in full of any claim, either by
setoff or otherwise, the entity making payment shall be subrogated to the
rights of the indemnified party against any person, firm or corporation with
respect to the subject matter of such claim.
6.5 Arbitration. (a) All disputes under this Article VI shall be
settled by arbitration in Detroit, Michigan, before a single arbitrator
pursuant to the rules of the American Arbitration Association. Arbitration may
be commenced at any time by any party hereto giving written notice to each
other party to a dispute that such dispute has been referred to arbitration
under this Section 6.5. The arbitrator shall be selected by the joint
agreement of Sellers and Purchaser, but if they do not so agree within 20 days
after the date of the notice referred to above, the selection shall be made
pursuant to the rules from the panels of arbitrators maintained by such
Association. Any award rendered by the arbitrator shall be conclusive and
binding upon the parties hereto; provided, however, that any such award shall
be accompanied by a written opinion of the arbitrator giving the reasons for
the award. This provision for arbitration shall be specifically enforceable by
the parties and the decision of the arbitrator in accordance herewith shall be
final and binding and there shall be no right of appeal therefrom. Each party
shall pay its own expenses of arbitration and the expenses of the arbitrator
shall be equally shared; provided, however, that if in the opinion of the
arbitrator any claim for indemnification or any defense or objection thereto
was unreasonable, the arbitrator may assess, as part of his award, all or any
part of the arbitration expenses of the other party (including reasonable
attorneys' fees) and of the arbitrator against the party raising such
unreasonable claim, defense or objection.
(b) To the extent that arbitration may not be legally
permitted hereunder and the parties to any dispute hereunder may not at the
time of such dispute mutually agree to submit such dispute to arbitration, any
party may commence a civil action in a court of appropriate jurisdiction to
solve disputes hereunder. Nothing contained in this Section 6.5 shall prevent
the parties from settling any dispute by mutual agreement at any time.
6.6 Compliance with Bulk Sales Laws. Purchaser and Sellers hereby
waive compliance by
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Purchaser and Sellers with the bulk sales law and any other similar laws in any
applicable jurisdiction in respect of the transactions contemplated by this
Agreement. Sellers and Maxco shall indemnify Purchaser from, and hold it
harmless against, any liabilities, damages, costs and expenses resulting from
or arising out of (i) the parties' failure to comply with any of such laws in
respect of the transactions contemplated by this Agreement, or (ii) any action
brought or levy made as a result thereof, other than those liabilities which
have been expressly assumed, on such terms as expressly assumed, by Purchaser
pursuant to this Agreement.
6.7 Other Rights and Remedies Not Affected. The indemnification
rights of the parties under this Article VI are independent of and in addition
to such rights and remedies as the parties may have at law or in equity or
otherwise for any misrepresentation, breach of warranty or failure to fulfill
any agreement or covenant hereunder on the part of any party hereto, including
without limitation the right to seek specific performance, rescission or
restitution, none of which rights or remedies shall be affected or diminished
hereby.
6.8 Indemnity Basket. Purchaser agrees that it shall have no right
to indemnity under the provisions of this Article VI until such time, and only
to such extent, that the aggregate amount of its indemnity claims exceeds One
Hundred Thousand Dollars ($100,000), provided, that, the foregoing limitation
shall not apply to:
(a) any claim for indemnity made by the Purchaser arising out
of (i) the failure of the Sellers to pay and discharge any Excluded
Liabilities or (ii) the failure of Sellers to discharge any lien,
security interest, claim or other encumbrance required to be released
as a condition to this Agreement;
(b) any claim for indemnity made by the Purchaser in respect
of loss, liability, cost or expense incurred by Purchaser arising out
of the breach or innacuracy of the representations and warranties made
by the Sellers under the provisions of Sections 3.1.2 and 3.1.12
hereof; and
(c) the breach by Sellers of their obligations under the terms
of Sections 7.8 or 7.9 of this Agreement.
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ARTICLE VII - POST CLOSING MATTERS
7.1 Employee Benefits. Except for such benefits or other amounts as
may be accrued in the Closing Assumed Operating Liabilities, Sellers shall pay
directly to each employee of the Business that portion of all benefits
(including such benefits under the Employee Benefit Plans) which have been
accrued on behalf of that employee (or is attributable to expenses properly
incurred by that employee) as of the Closing Date, and Purchaser shall assume
no liability therefor. No portion of the assets of any Employee Benefit Plan
or other plan, fund, program or arrangement, written or unwritten, heretofore
sponsored or maintained by Sellers (and no amount attributable to any such
Employee Benefit Plan or other plan, fund, program or arrangement) shall be
transferred to Purchaser, and Purchaser shall not be required to continue any
such Employee Benefit Plan or other plan, fund, program or arrangement after
the Closing Date. The amounts payable on account of all benefit arrangements
shall be determined with reference to the date of the event by reason of which
such amounts become payable, without regard to conditions subsequent, and
Purchaser shall not be liable for any claim for insurance, reimbursement or
other benefits payable by reason of any event which occurs prior to the Closing
Date. All amounts payable directly to employees, or to any Employee Benefit
Plan or other fund, program, arrangement or plan maintained by Sellers therefor
shall be paid by Sellers within 30 days after the Closing Date to the extent
that such payment is not inconsistent with the terms of such Employee Benefit
Plan or other fund, program, arrangement or plan. All employees of Sellers who
are employed by Purchaser on or after the Closing Date shall be new employees
of Purchaser and any prior employment by Sellers of such employees shall not
affect entitlement to, or the amount of, salary or other cash compensation,
current or deferred, which Purchaser may make available to its employees.
7.1A Purchaser 401(k) Plan. Notwithstanding the foregoing provisions
of Section 7.1 above, the Purchaser agrees to adopt and sponsor a 401(k) plan
which will allow employees of the Sellers who become employees of the Purchaser
("carryover employees") to rollover amounts which are otherwise held for the
account of such employees under the 401(k) plan currently sponsored by Maxco
(the "Maxco 401(k) Plan") and, in connection therewith, Purchaser agrees that
it will provide bridge loans, up to an aggregate amount of $60,000, to
carryover employees who currently have loans outstanding from the Maxco 401(k)
Plan for the purpose of repaying such loans to the Maxco 401(k) Plan, provided,
that, (a) the entire account balance of such carryover employees held under the
Maxco 401(k) Plan is rolled-over to the Purchaser's 401(k) plan and (b)
promptly following such roll-over, such bridge loans are repaid to the
Purchaser by such carryover employees from the proceeds of new loans made to
such employees from the Purchaser's 401(k) plan. The parties acknowledge that
the obligation of the Purchaser to make the bridge loans referred to in this
Section 7.1A is subject otherwise to Purchaser's receipt, at the time of making
such bridge loan, of satisafctory evidence of the existance and amount of any
such outstanding loan obligation of the carryover employee and adequate
assurances that the conditions set forth in clauses (a) and (b) above will be
satisfied.
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7.2 Non-Solicitation. As of the Closing Date, Purchaser shall offer
employment to, and Sellers shall use its best efforts to assist Purchaser in
employing as new employees of Purchaser, all persons presently engaged in the
Business who are identified by Purchaser prior to the Closing Date (the
"Employees"). Sellers shall terminate, effective as of the Closing Date, all
employment agreements it has with any of the Employees. Until the third
anniversary of the Closing Date, Sellers will not directly or indirectly
solicit or offer employment to any Employee (i) who elected not to accept
employment from Purchaser, (ii) who is then an employee of Purchaser, or (iii)
who has terminated such employment without the consent of Purchaser within 180
days of such solicitation or offer, and Purchaser will not directly or
indirectly solicit or offer employment to any person who, after the Closing
Date is then an employee of Sellers or who has terminated such employment
without the consent of Sellers within 180 days of such solicitation or offer.
7.3 Discharge of Business Obligations. From and after the Closing
Date, Sellers shall pay and discharge all Excluded Liabilities in accordance
with past practice, but not less than on a timely basis.
7.4 Maintenance of Books and Records. Purchaser shall preserve until
the tenth anniversary of the Closing Date all records possessed or to be
possessed by Purchaser relating to any of the assets, liabilities or business
of the Business prior to the Closing Date. After the Closing Date, where there
is a legitimate purpose, such party shall provide the other parties with
access, upon prior reasonable written request specifying the need therefor,
during regular business hours, to (i) the officers and employees of such party
and (ii) the books of account and records of such party, but, in each case,
only to the extent relating to the assets, liabilities or business of the
Business prior to the Closing Date, and the other parties and their
representatives shall have the right to make copies of such books and records;
provided, however, that the foregoing right of access shall not be exercisable
in such a manner as to interfere unreasonably with the normal operations and
business of such party; and further, provided, that, as to so much of such
information as constitutes trade secrets or confidential business information
of such party, the requesting party and its officers, directors and
representatives will use due care to not disclose such information except (i)
as required by law, (ii) with the prior written consent of such party, which
consent shall not be unreasonably withheld, or (iii) where such information
becomes available to the public generally, or becomes generally known to
competitors of such party, through sources other than the requesting party, its
affiliates or its officers, directors or representatives. Such records may
nevertheless be destroyed by a party if such party sends to the other parties
written notice of its intent to destroy records, specifying with particularity
the contents of the records to be destroyed. Such records may then be
destroyed after the 30th day after such notice is given unless another party
objects to the destruction in which case the party seeking to destroy the
records shall deliver such records to the objecting party.
7.5 Payments Received. Sellers and Purchaser each agree that after
the Closing they will hold and will promptly transfer and deliver to the other,
from time to time as and when received by them, any cash, checks with
appropriate endorsements (using their best efforts not to convert such checks
into cash), or other property that they may receive on or after the Closing
which properly belongs to the other party, including without limitation any
insurance proceeds, and will account to the other for all such receipts. From
and after the Closing, Purchaser shall have the right and authority to endorse
without recourse the name of Sellers on any check or any other evidences of
indebtedness received by Purchaser on account of the Business and the Assets
transferred to Purchaser hereunder.
7.6 Use of Name. From and after the Closing Date, Sellers will cease
using the Operating Names in the conduct of any business or for any other
purpose, unless expressly permitted by the Purchaser.
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7.7 UCC Matters. From and after the Closing Date, Sellers will
promptly refer all inquiries with respect to ownership of the Assets or the
Business to Purchaser. In addition, Sellers will execute such documents as
Purchaser may reasonably request from time to time to evidence transfer of the
Assets to Purchaser, including any necessary assignments of financing
statements.
7.8 Covenant Not to Compete. Maxco and each of the Sellers agree
that for a period of five years after the Closing Date, neither it nor any of
the other Maxco Corporate Affiliates now or hereafter existing, will, directly
or indirectly, own, manage, operate, join, control or participate in the
ownership, management, operation or control of, any business whether in
corporate, proprietorship or partnership form or otherwise as more than a five
percent owner in such business where such business is competitive with the
Business. The parties hereto specifically acknowledge and agree that the
remedy at law for any breach of the foregoing will be inadequate and that the
Purchaser, in addition to any other relief available to it, shall be entitled
to temporary and permanent injunctive relief without the necessity of proving
actual damage. In the event that the provisions of this Section 7.8 should
ever be deemed to exceed the limitation provided by applicable law, then the
parties hereto agree that such provisions shall be reformed to set forth the
maximum limitations permitted.
7.9 Trade Accounts Receivable. Sellers warrant the full
collection of the trade receivables of the Business, outstanding at Closing, as
set forth on the Consolidated Closing Balance Sheet (the "Closing Receivables")
within a period ending one hundred twenty days after the Closing Date (such one
hundred twenty-day period being the "Collection Period"). On and after the
Closing Date, Sellers shall promptly (within one business day after the date
received) forward to Purchaser any Closing Receivables payments that Sellers
receive. During the Collection Period, Purchaser shall use reasonable efforts
consistent with prudent business practices to collect the full amount of the
Closing Receivables, provided such efforts shall not require the institution of
any litigation or other proceeding for purposes of collection, and Sellers
shall cooperate with Purchaser in all reasonable respects in assisting
Purchaser, by way of testimony or otherwise, in the collection of all Closing
Receivables. Collections received in respect of the Closing Receivables during
the Collection Period shall, unless otherwise specifically designated by the
account debtor thereof, be applied in chronological order starting with the
oldest receivable owing by such account debtor. Within ten days after the end
of the Collection Period, to the extent there remains any uncollected Closing
Receivables, and provided such uncollected amount exceeds the collection
reserve, if any, set forth on the Consolidated Closing Balance Sheet, Sellers
shall wire transfer an amount equal to such excess uncollected balance of the
Closing Receivables to Purchaser and Purchaser shall assign such uncollected
Closing Receivables to Sellers.
ARTICLE VIII - MISCELLANEOUS
8.1 Termination. (a) Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated by written notice of
termination at any time before November 1, 1996 only as follows:
(i) by mutual consent of Sellers and Purchaser;
(ii) by Purchaser, (x) at any time if the representations and
warranties of Sellers contained in Section 3.1 hereof were incorrect
in any material respect when made or at any time thereafter, or (y)
upon written notice to Sellers given at any time after (or such later
date as shall have been specified in a writing authorized on behalf of
Sellers and Purchaser) if all of the conditions precedent set forth in
Section 5.1 hereof have not been met or (z) if, between the date of
this Agreement and Closing, (A) the Real Property or any portion
thereof or interest
37
therein shall be taken or condemned as a result of the exercise of the
power of eminent domain, or if a governmental body having the power of
eminent domain informs Sellers or the Purchaser that it intends to
take or condemn all or part of the Real Property or (B) any material
portion of the Fixed Assets are destroyed or damaged by any casualty,
whether or not insured; or
(iii) by Sellers, (x) at any time if the representations and
warranties of Purchaser contained in Section 3.2 hereof were incorrect
in any material respect when made or at any time thereafter, or (y)
upon written notice to Purchaser given at any time after (or such
later date as shall have been specified in a writing authorized on
behalf of Sellers and Purchaser) if all of the conditions precedent
set forth in Section 5.2 hereof have not been met.
(iv) by either party, (x) if Purchaser is unable to obtain a
financing commitment from an institutional lender on terms and
conditions satisfactory to Purchaser within four weeks of the
execution of this Agreement or (y) if the proposed purchase and sale
is not closed prior to November 1, 1996, provided, that, no such party
shall be permitted to exercise such right to the extent it is then in
default of any of its obligations hereunder or otherwise in breach in
any of its' representations or warranties hereunder as of such date.
(b) In the event of the termination and abandonment hereof
pursuant to the provisions of this Section 8.1, this Agreement (except for
Section 4.2.2 which shall continue) shall become void and have no effect,
without any liability on the part of any of the parties or their directors or
officers or stockholders in respect of this Agreement, unless the termination
was the result of the representations and warranties of a party being
materially incorrect when made or the material breach by such party of a
covenant hereunder in which event the party whose representations and
warranties were incorrect or who breached such covenant shall be liable to the
other party for all costs and expenses of the other party in connection with
the preparation, negotiation, execution and performance of this Agreement.
(c) In the event of the occurrence of any event described in
paragraph (b)(ii)(z) above, and provided the Purchaser does not elect to
terminate this Agreement (i) the Purchaser shall have the sole right, in the
name of Sellers, if the Purchaser so elects, to negotiate for, claim, contest
and receive all damages on account thereof, (ii) Sellers shall be relieved of
its obligation to convey to the Purchaser the Real Property taken or condemned
(and such Real Property shall be deemed an Excluded Asset), (iii) at Closing,
Sellers shall assign to the Purchaser all of Sellers' rights to all damages
payable for such taking or injury of the Real Property and shall pay to the
Purchaser all damages theretofore paid to Sellers by reason thereof, and (iv)
following Closing, Sellers shall give the Purchaser such further assurances of
such rights and assignment as the Purchaser may from time to time reasonably
request; or
8.2 Brokers' and Finders' Fees.
(a) Sellers represent and warrant to Purchaser that all
negotiations relative to this Agreement have been carried on by it with the
help of P&M Corporate Finance, LLC ("P&M"), who may be entitled to a brokerage
or finder's fee or other commission in respect of this Agreement or the
consummation of the transactions contemplated hereby, and Sellers agree to
indemnify and hold harmless Purchaser against any and all claims, losses,
liabilities and expenses which may be asserted against or incurred by it as a
result of Sellers' dealings, arrangements or agreements with P&M or any other
such person.
(b) Purchaser represents and warrants that all negotiations
relative to this Agreement have been carried on by it directly without the
intervention of any person who may be entitled to any
38
brokerage or finder's fee or other commission in respect of this Agreement or
the consummation of the transactions contemplated hereby, and Purchaser agrees
to indemnify and hold harmless Sellers and Maxco against any and all claims,
losses, liabilities and expenses which may be asserted against or incurred by
it as a result of Purchaser's dealings, arrangements or agreements with or any
such person.
8.3 Sales, Transfer and Documentary Taxes, etc. Sellers shall pay
all federal, state and local sales, documentary and other transfer taxes, if
any, due as a result of the purchase, sale or transfer of the Assets in
accordance herewith whether imposed by law on Sellers or Purchaser and Sellers
shall indemnify, reimburse and hold harmless Purchaser in respect of the
liability for payment of or failure to pay any such taxes or the filing of or
failure to file any reports required in connection therewith.
8.4 Expenses. Except as otherwise provided in this Agreement, each
party hereto shall pay its own expenses incidental to the preparation of this
Agreement, the carrying out of the provisions of this Agreement and the
consummation of the transactions contemplated hereby.
8.5 Contents of Agreement; Parties in Interest; etc. This Agreement
sets forth the entire understanding of the parties hereto with respect to the
transactions contemplated hereby. It shall not be amended or modified except
by written instrument duly executed by each of the parties hereto. Any and all
previous agreements and understandings between or among the parties regarding
the subject matter hereof, whether written or oral, are superseded by this
Agreement.
8.6 Assignment and Binding Effect. This Agreement may not be
assigned prior to the Closing by any party hereto without the prior written
consent of the other parties. Subject to the foregoing, all of the terms and
provisions of this Agreement shall be binding upon and inure to the benefit of
and be enforceable by the successors and assigns of Maxco, Sellers and
Purchaser.
8.7 Waiver. Any term or provision of this Agreement may be waived at
any time by the party entitled to the benefit thereof by a written instrument
duly executed by such party.
8.8 Notices. Any notice, request, demand, waiver, consent, approval
or other communication which is required or permitted hereunder shall be in
writing and shall be deemed given only if delivered personally or sent by
telegram or by registered or certified mail, postage prepaid, as follows:
If to Purchaser, to:
Plastics Acquisition Co., LLC
0000 Xxxxxx Xxxxxx
0xx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxx 00000-0000
Attention: Xxxxxx X. Xxxx
With a required copy to:
Xxxxx & Xxxxxx
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esquire
If to Sellers or Maxco, to:
39
Maxco, Inc.
0000 Xxxxxxxxxx Xxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Vice President-Finance
With a required copy to:
Warren, Price, Cameron, Xxxxx & Xxxxxxxx, P.C.
X.X. Xxx 00000
Xxxxxxx, Xxxxxxxx 00000
Attention: J. Xxxxxxx Xxxxxx, Esquire
or to such other address as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver,
consent, approval or other communication will be deemed to have been given as
of the date so delivered, telegraphed or mailed.
8.9 Governing Law. This Agreement shall be governed by and
interpreted and enforced in accordance with the laws of the State of Michigan.
8.10 No Benefit to Others. The representations, warranties, covenants
and agreements contained in this Agreement are for the sole benefit of the
parties hereto and, in the case of Article VI hereof, the other Indemnified
Parties, and their heirs, executors, administrators, legal representatives,
successors and assigns, and they shall not be construed as conferring any
rights on any other persons except that Purchaser may, if required, assign
Purchaser's rights and benefits hereunder, including indemnification rights, to
its institutional lender.
8.11 Headings, Gender and "Person". All section headings contained in
this Agreement are for convenience of reference only, do not form a part of
this Agreement and shall not affect in any way the meaning or interpretation of
this Agreement. Words used herein, regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine, or neuter, as
the context requires. Any reference to a "person" herein shall include an
individual, firm, corporation, partnership, trust, governmental authority or
body, association, unincorporated organization or any other entity.
8.12 Schedules and Exhibits. All Exhibits and Schedules referred to
herein are intended to be and hereby are specifically made a part of this
Agreement. An item listed in any Schedule or otherwise referred to therein in
response to one Section of this Agreement shall not be deemed disclosed in
response to any other Section unless otherwise specifically provided in this
Agreement.
8.13 Severability. Any provision of this Agreement which is invalid
or unenforceable in any applicable jurisdiction shall be ineffective to the
extent of such invalidity or unenforceability without invalidating or
rendering unenforceable the remaining provisions hereof, and any such
invalidity or unenforceability in any applicable jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
8.14 Counterparts. This Agreement may be executed in any number of
counterparts and any party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one and the
40
same instrument. This Agreement shall become binding when one or more
counterparts taken together shall have been executed and delivered by the
parties. It shall not be necessary in making proof of this Agreement or any
counterpart hereof to produce or account for any of the other counterparts.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the date first written.
PACER TOOL & MOLD, INC. PLASTICS ACQUISITION CO. LLC
By /s/ Xxxxxxx Xxxxxxx By /s/ Xxxxxx X. Xxxx
--------------------------- --------------------------
Name Xxxxxxx Xxxxxxx Name Xxxxxx X. Xxxx
------------------------- ------------------------
Title Secretary Title President
------------------------ -----------------------
MAXCO, INC. XXXXXX PLASTIC PRODUCTS, INC.
By /s/ Xxxxxxx Xxxxxxx By /s/ Xxxxxxx Xxxxxxx
--------------------------- --------------------------
Name Xxxxxxx Xxxxxxx Name Xxxxxxx Xxxxxxx
------------------------- ------------------------
Title Vice President Title Secretary
------------------------ -----------------------
