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EXHIBIT 10.18
ASSET PURCHASE AGREEMENT
BETWEEN
DAY INTERNATIONAL, INC.
AND
FLINT INK CORPORATION
December 31, 1996
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TABLE OF CONTENTS
1. DEFINITIONS....................................................1
2. PURCHASE AND SALE..............................................8
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(a) PURCHASE AND SALE OF ASSETS...........................8
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(b) EXCLUDED ASSETS......................................10
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(c) ASSUMPTION OF LIABILITIES............................10
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(d) PURCHASE PRICE.......................................10
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(e) PURCHASE PRICE ADJUSTMENT............................10
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(f) THE CLOSING..........................................11
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(g) DELIVERIES AT THE CLOSING............................11
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(h) PURCHASE PRICE ALLOCATION............................11
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3. REPRESENTATIONS AND WARRANTIES OF SELLER......................11
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(a) ORGANIZATION OF SELLER...............................12
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(b) AUTHORIZATION OF TRANSACTION.........................12
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(c) NONCONTRAVENTION.....................................12
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(d) FINANCIAL STATEMENTS.................................12
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(e) RECENT EVENTS........................................13
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(f) TANGIBLE ASSETS......................................13
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(g) INTELLECTUAL PROPERTY................................14
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(h) CONTRACTS............................................16
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(i) TAX MATTERS..........................................18
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(j) LITIGATION...........................................18
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(k) PRODUCT WARRANTY.....................................18
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(l) LABOR AND EMPLOYMENT MATTERS.........................18
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(m) EMPLOYEE BENEFITS....................................19
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(n) ENVIRONMENT, HEALTH, AND SAFETY......................20
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(o) INTERNATIONAL TRADE..................................21
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(p) LEGAL COMPLIANCE.....................................21
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(q) BROKERS' FEES........................................21
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(r) FULL DISCLOSURE......................................21
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4. REPRESENTATIONS AND WARRANTIES OF BUYER.......................22
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(a) ORGANIZATION OF BUYER................................22
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(b) AUTHORIZATION OF TRANSACTION.........................22
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(c) NONCONTRAVENTION.....................................22
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(d) BROKERS' FEES........................................22
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(e) SECTION 3(g) DISCLOSURE. ...........................23
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5. COVENANTS OF THE PARTIES......................................23
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(a) GENERAL..............................................23
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(b) CLOSING DATE BALANCE SHEET...........................23
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(c) CONFIDENTIALITY......................................23
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(d) LITIGATION SUPPORT...................................23
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(e) TRANSFERRED EMPLOYEES................................23
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(f) DEFINED CONTRIBUTION PLAN............................24
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(g) ENVIRONMENTAL MATTERS................................24
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(h) PRODUCT RETURNS......................................25
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(i) COLLECTION OF ACCOUNTS...............................25
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(j) RECORD RETENTION.....................................25
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(k) GOVERNMENT CONTRACT BID..............................26
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6. CONDITIONS TO OBLIGATION TO CLOSE.............................27
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(a) CONDITIONS TO OBLIGATION OF BUYER....................27
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(b) CONDITIONS TO OBLIGATION OF SELLER...................28
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7. INDEMNIFICATION...............................................29
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(a) SURVIVAL.............................................29
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(b) INDEMNIFICATION PROVISIONS FOR BENEFIT OF BUYER......29
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(c) INDEMNIFICATION PROVISIONS FOR BENEFIT OF SELLER.....30
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(d) MATTERS INVOLVING THIRD PARTIES......................30
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(e) MATTERS INVOLVING THE PARTIES........................31
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8. MISCELLANEOUS.................................................31
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(a) PRESS RELEASES AND ANNOUNCEMENTS.....................31
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(b) NO THIRD PARTY BENEFICIARIES.........................32
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(c) ENTIRE AGREEMENT.....................................32
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(d) SUCCESSION AND ASSIGNMENT............................32
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(e) COUNTERPARTS.........................................32
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(f) HEADINGS.............................................32
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(g) NOTICES..............................................32
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(h) GOVERNING LAW........................................33
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(i) AMENDMENTS AND WAIVERS...............................33
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(j) SEVERABILITY.........................................34
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(k) EXPENSES.............................................34
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(l) CONSTRUCTION.........................................34
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(m) INCORPORATION OF EXHIBITS AND SCHEDULES..............34
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(n) SPECIFIC PERFORMANCE.................................35
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(o) CERTAIN TAXES AND COSTS..............................35
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(p) DISCLAIMER REGARDING ACQUIRED ASSETS.................35
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(q) DISCLAIMER REGARDING FORWARD-LOOKING INFORMATION.....36
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EXHIBITS
Exhibit A Financial Statements
Exhibit B Sales Representative Agreement
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Exhibit FS-1 Adjustments for determining Non-Cash Working Capital
SCHEDULES
Real Property Schedule
Equipment Schedule
Vehicles Schedule
Intellectual Property Schedule
Contract Schedule
Excluded Assets Schedule
Seller's Inventor Practices Schedule
Disclosure Schedule
Consents Schedule
Schedule of Additional Indemnified Matters
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "AGREEMENT") is entered into as of
December 31, 1996, by and between DAY INTERNATIONAL, INC., a Delaware
corporation (the "BUYER"), and FLINT INK CORPORATION, a Michigan corporation
(the "SELLER"). Buyer and Seller are referred to collectively herein as the
"PARTIES" and each individually as a "PARTY."
RECITALS:
Buyer desires to purchase from Seller, and Seller desires to sell to
Buyer, certain assets of the Seller that are used in the Business (as defined
below), and in connection with the consummation of that transaction, both the
Parties desire to enter into certain related agreements.
NOW, THEREFORE, the Parties agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms
shall have the following meanings:
"1995 STATEMENTS" has the meaning set for in Section 3(d) below.
"ACQUIRED ASSETS" has the meaning set forth in Section 2(a) below.
"ADJUSTED CLOSING NON-CASH WORKING CAPITAL" means the amount, whether
positive or negative, equal to the difference of (a) the Non-cash Current Assets
of the Division as reflected on the Closing Date Balance Sheet (as adjusted to
reflect the matters and adjustments described on EXHIBIT FS-1) minus (b) the
Current Liabilities of the Division as reflected on the Closing Date Balance
Sheet (as adjusted to reflect the matters and adjustments described on EXHIBIT
FS-1). The Servicom Receivable shall be recorded as a Current Asset at its
discounted value as of December 31, 1996, assuming payments of $7,600 per month,
using a discount rate of 8% per annum, compounding annually.
"ADJUSTED INITIAL NON-CASH WORKING CAPITAL" means the amount, whether
positive or negative, equal to the difference of (a) the Non-cash Current Assets
of the Division as reflected on the June 30, 1996 Balance Sheet (as adjusted to
reflect the matters and adjustments described on EXHIBIT FS-1) minus (b) the
Current Liabilities of the Division as reflected on the June 30, 1996 Balance
Sheet (as adjusted to reflect the matters and adjustments described on EXHIBIT
FS-1). The Servicom Receivable shall be recorded as a Current Asset at its
discounted value as of December 31, 1996, assuming payments of $7,600 per month,
using a discount rate of 8% per annum, compounding annually.
"ADVERSE CONSEQUENCES" means any and all charges, complaints, actions,
suits,
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proceedings, hearings, investigations, claims, demands, judgments, orders,
decrees, stipulations, injunctions, damages, dues, penalties, fines, costs,
amounts paid in settlement, Liabilities, obligations, Taxes, liens, losses
(including lost profits), expenses, and fees, including all reasonable
attorneys' fees and court costs (but excluding indirect, incidental and
consequential damages actually incurred by the party seeking indemnification).
"AFFILIATE" an "affiliate" or, or person "affiliated" with, a
specified person, is a Person that directly, or indirectly through one or more
intermediaries, Controls, or is Controlled by, or is Under Common Control with,
the Person specified.
"AGREEMENT" has the meaning set forth in the preface above.
"ASSUMED EMPLOYEE LIABILITIES" means liabilities for (a) accrued
overtime, (b) accrued Divisional salesman's commissions, (c) incentive pay for
E. G. Xxxxx (including retention pay liabilities under that certain agreement
dated August 21, 1996, between Seller and Xxxxx X. Xxxxx) and Xxxxxxx Xxxxxxx,
(d) accrued vacation pay, and (e) any payroll tax expense associated with
clauses (a)-(d) above, in each case incurred in the Ordinary Course of Business
in respect of employees of the Division to the extent such liabilities are on
the Closing Date Balance Sheet.
"ASSUMED LIABILITIES" means (a) all trade accounts payable of the
Division outstanding on the Closing Date, incurred in the Ordinary Course of
Business of the Division and reflected on the Closing Date Balance Sheet, (b)
the Assumed Employee Liabilities (c) the commission payable in respect of duty
drawback, not to exceed $20,000, to the extent on the Closing Date Balance
Sheet, and (d) those executory obligations of Seller under the licenses,
sublicenses, leases, subleases, contracts and other arrangements that are
included among the Acquired Assets either (i) to furnish goods, services or
other non-cash benefits to another Person after Closing, or (ii) to pay for
goods, services and other non-cash benefits that another Person will furnish to
it after Closing; PROVIDED, HOWEVER, that the Assumed Liabilities shall not
include any Excluded Liabilities.
"BASIS" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or could form the basis for
any specified consequence.
"BENEFIT PLAN" has the meaning set forth in Section 3(m)(i) below.
"BOOKS AND RECORDS" has the meaning set forth in Section 2(a)(x)
below.
"BUSINESS" means the manufacturing, sales and distribution of printing
blankets, including Quanta Lith Blue and Green sheet-fed printing blankets.
"BUSINESS EMPLOYEE" means any employee of the Division (whether
part-time or full-time, temporary or permanent, exempt or non-exempt) who is
employed by the Division and
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whose primary duties relate to, or who spends a majority of his compensable time
involved in, the operation of the Business.
"BUYER" has the meaning set forth in the preface above.
"BUYER INDEMNIFIED PARTY" or "BUYER INDEMNIFIED PARTIES" has the
meaning set forth in Section 8(b) below.
"CLAIMS" has the meaning set forth in Section 2(a)(ix) below.
"CLOSING" has the meaning set forth in Section 2(f) below.
"CLOSING DATE" has the meaning set forth in Section 2(f) below.
"CLOSING DATE BALANCE SHEET" means an audited statement of the net
assets of the Division purchased hereunder of the Division as of the Closing
Date, prepared in accordance with GAAP, applying the accounting principles used
by Seller in the preparation of the Financial Statements.
"CLOSING PAYMENT" has the meaning set forth in Section 2(d) below.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONFIDENTIAL INFORMATION" means any proprietary, confidential or
nonpublic information concerning Seller, the operation of the Division or the
conduct of the Business supplied in writing by Seller to Buyer.
"CONTRACTS" has the meaning set forth in Section 2(a)(viii) below.
"CONTROL" (including, with correlative meaning, the terms,
"CONTROLLING" "CONTROLLED BY," and UNDER COMMON CONTROL") means, with respect to
any Person, the ability of another Person to control or direct the actions and
policies of such first Person, either directly or through one or more
intermediaries, whether by ownership of voting securities, by contract or
otherwise.
"CURRENT LIABILITIES" means the current liabilities of the Division as
reflected in the balance sheet of the Division in the Ordinary Course of
Business, consistent with past practice; provided, however that Current
Liabilities shall not include any Excluded Liabilities.
"DISCLOSURE SCHEDULE" has the meaning set forth in Section 3 below.
"DIVISION" means the Xxxxx M Company division of the Seller.
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"ENVIRONMENTAL AND SAFETY REQUIREMENTS" means all federal, state,
local and foreign statutes, regulations, ordinances and similar provisions
having the force or effect of law, all judicial and administrative orders and
determinations, all contractual obligations and all common law concerning public
health and safety, worker health and safety, and pollution or protection of the
environment, including without limitation all those relating to the presence,
use, production, generation, handling, transportation, treatment, storage,
disposal, distribution, labeling, testing, processing, discharge, release,
threatened release, control, or cleanup of any hazardous materials, substances
or wastes, chemical substances or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls, noise or radiation.
"EQUIPMENT" has the meaning set forth in Section 2(a)(iv) below.
"ERISA" has the meaning set forth in Section 3(m)(i) below.
"EXCLUDED ASSETS" has the meaning set forth in Section 2(b) below.
"EXCLUDED LIABILITIES" means (a) any liability or obligation of the
Seller not related to the Division or the Business, (b) any Liability for Taxes
(including federal, state, local and foreign income, franchise, gross receipts
taxes or other taxes based on or measured by income) of the Division (other than
Taxes (excluding taxes based on or measured by income) for which an (and only to
the extent of such) accrual is reflected on the Closing Date Balance Sheet), (c)
any Liability arising with respect to or in connection with any Benefit Plan and
any other "employee benefit plan" (as such term is defined in Section 3(3) of
ERISA) at any time maintained or contributed to by (or required to be maintained
or contributed to by) any entity that, together with Seller, is treated as a
single employer under Section 414 of the Code, (d) any Liability of the Seller
in respect of indebtedness for money borrowed or the deferred purchase price of
any property or services (other than the Assumed Liabilities), (e) except to the
extent specifically included in the definition of Assumed Liabilities, payroll
(or payroll related expenses), profit sharing, bonuses, commissions, vacation,
savings, pension, health or post-retirement benefits provided by Seller to
Business Employees, (f) Liability arising out of the death or injury of any
person or damage to property as a result of the ownership, possession or use by
any Person of any product manufactured or sold by the Business prior to Closing,
(g) any intercompany liability of the Division to the Seller or its Affiliates
and (h) any liability or obligation of the Seller arising prior to Closing (or
the Basis for which arose prior to Closing) for: (i) any breach of contract,
breach of warranty, tort, infringement, or violation of law, (ii) any charge,
complaint, action, suit, proceeding, hearing, investigation, claim or demand,
(iii) all employment-related liabilities and claims with respect to the Business
Employees and former Business Employees (including any Transferred Employees),
(iv) any Liability (including any liability for response costs, corrective
action costs, personal injury, property damage, natural resources damages, and
attorneys' fees) arising under any Environmental and Safety Requirements
relating to the Real Property or the conduct of the Business, (v) the currency
risk sharing arrangement contained in Article IV, Section A.4. of the Amended
and Restated
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Converter Distributor Agreement between Seller and Xxxxxxx Xxxxxxxx
and Sons, Ltd, dated September 1992 with respect to sales made prior to Closing,
(vi) Liabilities relating to international trade matters including U.S. export
controls, embargos and antibribery provisions, and (vii) Liabilities relating to
the European joint venture proposed in the letter dated September 14, 1992 to
Xxxxxxx Xxxxxxxx and Sons, Ltd. Notwithstanding the foregoing, the Assumed
Employee Liabilities shall not constitute Excluded Liabilities.
"FACILITIES" means the facilities of the Division located at 000
Xxxxxxxxx Xxx, Xxxxxxxx, Xxxxxxx 00000.
"FINANCIAL STATEMENTS" has the meaning set forth in Section 3(d)
below.
"FISCAL YEAR" means, with respect to any Person, the annual accounting
period adopted by such Person for financial reporting purposes.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"GOVERNMENT CONTRACT BID" means the bid for a government contract
dated April 26, 1996 (identified as Requisition/Purchase Request No. 96SK-0026 &
96SK-0037) in the name of the Division, as contractor, to supply
Elastomeric-Coated Fabric (Drawsheet) to the Department of the Treasury, Bureau
of Engraving & Printing.
"HAZARDOUS MATERIAL" shall mean anything that is a "hazardous
substance" pursuant to the federal Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 ("CERCLA"), any substance that is a
"solid waste" or "hazardous waste" pursuant to the federal Resource Conservation
and Recovery Act, any pesticide, pollutant, contaminant, toxic chemical,
petroleum product or byproduct, asbestos, polychlorinated biphenyl or any
radioactive substance the use, transportation, storage or disposal of which is
regulated by any Federal, state or local law, rule or regulation.
"INDEMNIFIED PARTY" has, with respect to each of Section 7(d) and
Section 7(e), the meaning set forth in such Section.
"INDEMNIFYING PARTY" has, with respect to each of Section 7(d) and
Section 7(e), the meaning set forth in such Section.
"INTELLECTUAL PROPERTY" means all (a) patents, patent applications,
patent and invention disclosures, and improvements thereto, (b) trademarks,
service marks, trade dress, logos, trade names, and corporate names and
registrations and applications for registration thereof, (c) copyrights and
registrations and applications for registration thereof, (d) mask works and
registrations and applications for registration thereof, (e) proprietary
computer software, data, and documentation, (f) trade secrets and confidential
business information (including ideas,
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formulas, compositions, inventions (whether patentable or unpatentable and
whether or not reduced to practice), know-how, manufacturing and production
processes and techniques, research and development information, drawings,
specifications, designs, plans, proposals, technical data, copyrightable works,
financial, marketing, and business data, pricing and cost information, business
and marketing plans, and customer and supplier lists and information), (g) other
proprietary rights, and (h) copies and tangible embodiments thereof (in whatever
form or medium).
"INVENTORY" has the meaning set forth in Section 2(a)(iii) below.
"IRS" means the Internal Revenue Service.
"JUNE 30, 1996 BALANCE SHEET" has the meaning set forth in Section
3(d) below.
"KNOWLEDGE" means actual knowledge after reasonable investigation.
"LIABILITY" means any liability (whether known or unknown, whether
absolute or contingent, whether liquidated or unliquidated, and whether due or
to become due), including any liability for Taxes.
"LIEN" means any mortgage, pledge, security interest, encumbrance,
charge, or other lien.
"NON-CASH CURRENT ASSETS" means all inventory, Receivables, duty
receivables, xxxxx cash, employee advances, and deposits of the Division
reflected on the balance sheet of the Division as a current asset in the
Ordinary Course of Business, consistent with past practice.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"OTHER AGREEMENT" means the Sales Representative Agreement.
"PARTY" or "PARTIES" has the meaning set forth in the preface above.
"PERMITS" has the meaning set forth in Section 2(a)(vi) below.
"PERSON" means an individual, a partnership, a joint venture, a
corporation, an association, a joint stock company, a limited liability company,
a trust, an unincorporated organization or a government or any department or
agency or political subdivision thereof.
"PURCHASE PRICE" has the meaning set forth in Section 2(d) below.
"PURCHASE PRICE ADJUSTMENT" has the meaning set forth in Section 2(e)
below.
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"RECEIVABLES" has the meaning set forth in Section 2(a)(ii) below.
"REAL PROPERTY" has the meaning set forth in Section 2(a)(i) below.
"RELEASE" shall have the meaning set forth in the federal
Comprehensive Environmental Response, Compensation, and Liability Act of 1980.
"RETURNED PRODUCT" means any product of the Division manufactured and
sold by the Division (including intracompany sales to Seller or its Affiliates
by the Division and sales to distributors, dealers and converters) prior to the
Closing that is returned to Buyer by any customer, dealer, distributor or
converter after the Closing for refund, credit or replacement (or which is
returnable but which is not returned to Buyer on account of a concession, credit
or refund granted to such customer) under the terms of any warranty issued (or
guaranteed) by the Seller in connection therewith or due to defect, failure to
meet specifications or other quality problems with such product.
"RETURNED PRODUCT COST" means, with respect to any Returned Product,
an amount equal to (a) the aggregate amount refunded or credited by Buyer to its
customer in respect of such Returned Product in the case of Returned Product not
replaced by Buyer, or (b) the aggregate price that would otherwise be charged by
Buyer to its customers for product which is delivered by Buyer to its customer
in replacement of such Returned Products (less any amount paid by such customer
in respect of such Returned Product). Any refunds or credits which exceed the
cost to the customer of such product or which do not bear a reasonably direct
relationship to the loss suffered by the customer on account of such defect
shall not constitute Returned Product Cost.
"SALES REPRESENTATIVE AGREEMENT" means the Sales Representative
Agreement to be entered into between Buyer and Seller on the Closing Date, the
form of which is attached hereto as EXHIBIT B.
"SECTION 5(i) PAYMENTS" has the meaning set forth in Section 5(l)
below.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.
"SELLER" has the meaning set forth in the preface above.
"SELLER INDEMNIFIED PARTY" or "SELLER INDEMNIFIED PARTIES" has the
meaning set forth in Section 8(c) below.
"SEPTEMBER 30, 1996 STATEMENTS" has the meaning set forth in Section
3(d) below.
"SERVICOM RECEIVABLE" means the indebtedness evidenced by a letter
from the
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Division to Servicom Pacific, dated November 23, 1996.
"SUBSIDIARY" means any corporation with respect to which another
specified corporation has the power to vote or direct the voting of sufficient
securities to elect directors having a majority of the voting power of the board
of directors of such corporation.
"SWDA" has the meaning set forth in Section 3(o)(v) below.
"TAX" means any federal, state, local, or foreign license, payroll,
employment, excise, severance, stamp, occupation, premium, environmental,
customs duties, capital stock, franchise, profits, withholding, social security,
unemployment, disability, real property, personal property, sales, use,
transfer, value added, alternative or add-on minimum, estimated, or other tax,
including any interest, penalty, or addition thereto, whether disputed or not.
"TAX RETURN" means any return, declaration, report, claim or refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"TITLE COMPANY" has the meaning set forth in Section 6(a)(viii) below.
"TRANSFERRED EMPLOYEE" has the meaning set forth in Section 5(e)
below.
"TRANSFER TAXES" has the meaning set forth in Section 8(o) below.
"TRANSFER TAX RETURNS" has the meaning set forth in Section 8(o)
below.
"VEHICLES" has the meaning set forth in Section 2(a)(v) below.
"WARN ACT" means the Worker Adjustment Retraining and Notification Act
of 1988, as amended.
2 PURCHASE AND SALE.AND SALE
(a) PURCHASE AND SALE OF ASSETS. On and subject to the terms and
conditions of this Agreement, at the Closing, Seller shall convey, sell,
transfer, assign and deliver to Buyer, and Buyer shall purchase from Seller all
right, title and interest of Seller on the Closing Date in and to all of the
assets, properties and rights, tangible or intangible, of Seller (other than the
Excluded Assets) that are located at the Facilities, are used primarily by the
Business or are otherwise listed or described on any Schedule referred to in
this Section 2(a) (collectively, the "ACQUIRED ASSETS"), including the
following:
(i) all real property, leaseholds and subleaseholds therein,
buildings, improvements, fixtures and fittings thereon, and easements,
licenses, rights-of-way and
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other appurtenances thereto that are listed or described on the REAL
PROPERTY SCHEDULE (collectively, the "REAL PROPERTY");
(ii) all accounts receivable and notes receivable of the Seller
that arise with respect to the Division or the conduct of the Business
including the Servicom Receivable (collectively, the "RECEIVABLES");
(iii) Seller's inventory of supplies and service parts, raw
materials, component parts, work in process, scrap and finished goods
which constitute, or are used primarily in the manufacture, assembly,
service or repair of, the products of the Business, whether
manufactured by Seller or purchased from a third party, and whether
located at the Facilities, at another of the Seller's facilities, at
any warehouse or storage facility, in the custody of any customer,
supplier, fabricator or other Person, or in transit (collectively, the
"INVENTORY");
(iv) all machinery, equipment, spare parts, patterns, racking,
pallets, pallet jacks, forklift and other material-handling equipment,
office furniture, furnishings, fixtures, business machines,
laboratory, data processing, office and telephone equipment, office
and administrative supplies, environmental control equipment,
maintenance and janitorial equipment and all other tangible personal
property that is located at the Facilities or is used primarily by the
Business, including the property listed or described on the EQUIPMENT
SCHEDULE (collectively, the "EQUIPMENT");
(v) the motor vehicles, railroad cars and other rolling stock
listed or described on the VEHICLES SCHEDULE (collectively, the
"VEHICLES");
(vi) all franchises (if any), licenses, permits, consents and
certificates of any regulatory, administrative or other government
agency or body issued to or held by Seller that are necessary to the
conduct of the Business (to the extent the same may be transferred to
Buyer) (collectively, the "PERMITS");
(vii) all Intellectual Property used primarily in the conduct of
the Business, goodwill associated therewith, licenses, sublicenses,
agreements and permissions granted and obtained with respect thereto,
and rights thereunder, remedies against infringement thereof, and
rights to protection of interests therein under the laws of all
jurisdictions, including all Intellectual Property listed on the
INTELLECTUAL PROPERTY SCHEDULE;
(viii) all contracts, leases, agreements, contract rights,
license agreements, franchise rights and agreements (if any), policies
(if any), purchase and sales orders, quotations and other executory
commitments of Seller related substantially exclusively to the
operation of the Business that are listed on the CONTRACTS SCHEDULE
(collectively, the "CONTRACTS");
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(ix) all deposits, prepaid expenses, employee advances, claims,
causes of action, choses in action, rights of recovery and rights of
recoupment or set-off of whatever kind or description of Seller to or
against any Person arising out of or relating to the Business or the
Acquired Assets (collectively, the "CLAIMS"); and
(x) all books, records, ledgers, files, documents,
correspondence, lists, drawings, plans, papers, briefs, creative
materials, advertising and promotional materials, instructional
manuals, studies, reports and other written materials in existence on
the Closing Date and relating substantially exclusively to the
Business, the Business Employees or the Acquired Assets (collectively,
the "BOOKS AND RECORDS"); PROVIDED, that Seller may retain originals
of accounting and tax records and provide copies thereof to Buyer.
Notwithstanding the foregoing, to the extent that the assignment hereunder of
any permit, lease, license, sublease, sublicense, right, claim, cause of action
or other asset shall require the consent of any third party or parties (or in
the event that any of the same shall be nonassignable), neither this Agreement
nor any action taken pursuant hereto shall constitute an assignment or an
agreement to assign if such assignment or attempted assignment would constitute
a breach thereof or result in the loss or diminution thereof.
(b) EXCLUDED ASSETS. Notwithstanding Section 2(a), the following
assets, properties and rights, tangible or intangible, of Seller (collectively,
the "EXCLUDED ASSETS") are expressly excluded from this purchase and sale and
are not included in the Acquired Assets:
(i) all cash (other than xxxxx cash), cash equivalents, marketable
securities, short-term investments and accounts receivable and notes
receivable (other than the Receivables);
(ii) Seller's corporate charter, qualifications to conduct business as
a foreign corporation, arrangements with registered agents relating to
foreign qualifications, taxpayer and other identification numbers, seals,
minute books, stock transfer books, blank stock certificates, and other
documents relating to the organization, maintenance and existence of Seller
as a corporation;
(iii) any capital stock or securities of any Subsidiary of Seller;
(iv) Seller's rights under or pursuant to this Agreement;
(v) intercompany receivables from Seller or its Affiliates to the
Division; and
(vi) any of Seller's assets listed on the EXCLUDED ASSETS SCHEDULE.
(c) ASSUMPTION OF LIABILITIES. On and subject to the terms and
conditions of
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this Agreement, at the Closing, Buyer shall assume and become responsible for
all of the Assumed Liabilities as of the Closing Date.
(d) PURCHASE PRICE. In consideration for its purchase of the
Acquired Assets, Buyer agrees to (i) assume the Assumed Liabilities and (ii) pay
to Seller an aggregate amount (the "PURCHASE PRICE") equal to $11,218,000 (the
"CLOSING PAYMENT"), as adjusted after the Closing Date pursuant to the
provisions of Section 2(e). On the Closing Date, Buyer shall assume the Assumed
Liabilities and pay to Seller the Closing Payment. The Closing Payment shall be
paid on the Closing Date by a wire transfer of immediately available funds
(denominated in U.S. dollars) to The Northern Trust Company, Chicago, Illinois,
ABA# 000000000, Account # 90050.
(e) PURCHASE PRICE ADJUSTMENT. Within sixty (60) days after the
Closing Date, Buyer shall deliver to Seller (i) the Closing Date Balance Sheet
and (ii) Buyer's calculation of the Adjusted Initial Non-Cash Working Capital
and the Adjusted Closing Non-Cash Working Capital. For purposes of this Section,
inventory will be valued using Seller's standard practices and procedures
including specifically those procedures related to obsolete, slow moving and off
standard inventory. Such practices and procedures are described in the SELLER'S
INVENTORY PRACTICES SCHEDULE. Seller may object to Buyer's calculations and
Buyer and Seller shall cooperate in good faith and shall use reasonable efforts
to resolve any such objections, but if they do not obtain a final resolution
within sixty (60) days after Buyer has delivered the items described in clauses
(i) and (ii) above, Buyer and Seller will select an accounting firm mutually
acceptable to them to resolve any remaining objections. If Buyer and Seller are
unable to agree on the choice of an accounting firm, they will select a
so-called "big six" accounting firm by lot (after excluding Deloitte & Touche).
The fees and expenses of such accounting firm shall be borne equally by the
Parties, and the determination of such accounting firm will be conclusive and
binding upon the Parties. If the Adjusted Closing Non-Cash Working Capital is
greater than the Adjusted Initial Non-Cash Working Capital, then the Buyer shall
remit to Seller the amount of such excess, and if the Adjusted Closing Non-Cash
Working Capital is less than the Adjusted Initial Non-Cash Working Capital, then
the Seller shall remit to Buyer the amount of such deficiency, in each case by a
wire transfer of immediately available funds (denominated in U.S. dollars) to
the recipient's account within three business days after such amounts are
finally determined pursuant to this Section 2(e), with interest on such amount
from and after the Closing Date through but excluding the date of payment at 8%
per annum. Any payments to Buyer pursuant to this Section 2(e) shall be paid
Provident Bank, Cincinnati, Ohio, ABA# 000000000, credit Day International,
Inc., Account# 0847-965.
(f) THE CLOSING. The closing of the transactions contemplated by
this Agreement (the "CLOSING") shall take place at the offices of Xxxxxxxx &
Xxxxx, 000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000, Xxxxxxxxxx, X.X. 00000,
commencing at 10:00 a.m. local time on the date of this Agreement (the
"CLOSING DATE").
(g) DELIVERIES AT THE CLOSING. At the Closing, (i) Seller will
deliver to Buyer
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the various certificates, instruments, and documents referred to in Section 7(a)
below; (ii) Buyer will deliver to Seller the various certificates, instruments,
and documents referred to in Section 7(b) below; (iii) Seller will execute,
acknowledge (if appropriate), and deliver to Buyer any deed, assignments, and
bills of sale (in recordable form where appropriate and accompanied by any
necessary third party consents) and such other instruments of sale, transfer,
conveyance, and assignment as Buyer and its counsel may reasonably request; (iv)
Buyer will execute and deliver to Seller an assumption of the Assumed
Liabilities; and (v) Buyer will deliver to Seller the Closing Payment.
(h) PURCHASE PRICE ALLOCATION. The Parties agree to cooperate in the
preparation and filing of an asset acquisition statement (Form 8594) and
supplements thereto as applicable and to allocate the Purchase Price among the
Acquired Assets for all purposes (including financial accounting and tax
purposes) in accordance with such allocation.
3. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller represents and warrants to Buyer that the statements contained
in this Section 3 are correct and complete as of the date of this Agreement and
will be correct and complete as of the Closing Date (as though then made and as
though the Closing Date were substituted for the date of this Agreement
throughout this Section 3), except as set forth in the disclosure schedule
attached to this Agreement and initialed by the Parties as of the date hereof
(the "DISCLOSURE SCHEDULE").
(a) ORGANIZATION OF SELLER. Seller is a corporation validly existing
and in good standing under the laws of the State of Michigan. Seller has full
power and authority to own or lease the properties and assets used in the
operation of the Division and the conduct of the Business as currently
conducted. Seller is duly qualified to transact business as a foreign or alien
corporation in each jurisdiction where the ownership of assets of the Business,
the operation of the Division or the conduct of the Business requires Seller to
so qualify.
(b) AUTHORIZATION OF TRANSACTION. Seller has full corporate power and
authority to execute and deliver this Agreement and the Other Agreements and to
perform its obligations hereunder and thereunder. The execution, delivery and
performance of this Agreement and the Other Agreements by Seller have been duly
authorized by all necessary corporate action on behalf of Seller (including
approval by the board of directors of Seller). This Agreement constitutes a
valid and legally binding obligation of Seller, enforceable against Seller in
accordance with its terms and conditions. Each of the Other Agreements will,
upon its execution and delivery by all the parties thereto, constitute a valid
and legally binding obligation of Seller, enforceable against Seller in
accordance with its terms and conditions.
(c) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement and the Other Agreements by Seller, nor the consummation of the
transactions contemplated hereby and thereby, will (i) violate any statute,
regulation, rule, judgment, order,
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decree, stipulation, injunction, charge, or other restriction of any government,
governmental agency, or court to which Seller is subject or any provision of the
certificate of incorporation or bylaws of Seller, (ii) conflict with, result in
a breach of, constitute a default under, result in the acceleration of, create
in any party the right to accelerate, terminate, modify, or cancel, or require
any notice under any contract, lease, sublease, license, sublicense, franchise,
permit, indenture, agreement or mortgage for borrowed money, instrument of
indebtedness, or other agreement, instrument or arrangement to which Seller is a
party or by which it is bound or to which any of the Acquired Assets is subject
or (iii) result in the imposition of any Lien upon any of the Acquired Assets.
Seller is not obligated to give any notice to, make any filing with, or obtain
any authorization, consent, or approval of any government or governmental agency
in order for the Parties to consummate the transactions contemplated by this
Agreement and the Other Agreements.
(d) FINANCIAL STATEMENTS. Attached hereto as EXHIBIT A are the
following financial statements for the Division (collectively, the "FINANCIAL
STATEMENTS"): (i) a reviewed, unaudited balance sheet as at, and reviewed,
unaudited statements of income for the twelve months ended December 31, 1995
(the "1995 STATEMENTS"), (ii) a reviewed balance sheet as at June 30, 1996 (the
"JUNE 30, 1996 BALANCE SHEET"), and (iii) an audited balance sheet as at, and
audited statements of income and cash flows for, the nine months ended September
30, 1996 (the "SEPTEMBER 30, 1996 STATEMENTS"). The Financial Statements have
been prepared in accordance with GAAP and Seller's accounting procedures (which
are consistent with GAAP) applied on a consistent basis throughout the periods
covered thereby, and fairly present the financial condition and the operating
results of the Division at the dates and for the periods covered thereby (in
each case, applying a materiality standard determined by reference to the
Division and the Business rather than the Seller and its consolidated
operations), and are consistent with the books and records of Seller with
respect to the Division (which books and records are correct and complete);
PROVIDED, HOWEVER, that the unaudited Financial Statements may lack footnotes
and other presentation items.
(e) RECENT EVENTS. Since December 31, 1995 there has not been any
material adverse change in the business, assets, liabilities, financial
condition, operations, results of operations, or, to the Seller's Knowledge,
prospects of the Business. Without limiting the generality of the foregoing,
since that date, except as consented to by Buyer in writing pursuant to Section
5(d) hereto:
(i) Seller has not sold, leased, transferred, or assigned any of its
assets, tangible or intangible, used principally in the operation of the
Division or the conduct of the Business (other than sales from inventory
for fair consideration in the Ordinary Course of Business);
(ii) Seller has not experienced any damage, destruction, or loss
(whether or not covered by insurance) to any of the Acquired Assets;
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(iii) Seller has not made any loan to, or entered into any other
transaction with, any of the Business Employees outside the Ordinary Course
of Business giving rise to any claim or right on its part against the
individual or on the part of the individual against it;
(iv) Seller has not granted any increase outside the Ordinary Course
of Business in the base compensation of any of the Business Employees;
(v) Seller has not adopted any (A) bonus, (B) profit-sharing, (C)
incentive compensation, (D) pension, (E) retirement, (F) medical,
hospitalization, life, or other insurance, (G) severance, or (H) other
plan, contract, or commitment for any of the Business Employees, or
modified or terminated any existing such plan, contract, or commitment;
(vi) Seller has not made any other change in employment terms for
any of the Business Employees;
(vii) there has not been any other occurrence, event, incident,
action, failure to act, or transaction outside the Ordinary Course of
Business involving the Business or the Acquired Assets; and
(viii) Seller has not committed to any of the foregoing.
(f) TANGIBLE ASSETS. Seller owns, or has good and valid leasehold
interest, license or right in each of the Acquired Assets, free and clear of all
Liens, encroachments, defects in title or restrictions on transfer. Except for
the carbon bed replacement for the solvent recovery unit, to the Knowledge of
Seller (which shall be limited to the Knowledge of the corporate executives of
Seller other than E.G. Xxxxx), the machinery, equipment, vehicles, furniture,
fixtures and other similar tangible assets included among the Acquired Assets
are in good condition and repair, ordinary wear and tear excepted. Section 3(f)
of the Disclosure Schedule sets forth a legal description of each parcel of the
Real Property. Seller is not a party to any lease, sublease, occupancy agreement
or similar agreement or arrangement covering any real property (other than
leases of real property that are not included among the Acquired Assets). To the
Knowledge of Seller (which shall be limited to the Knowledge of the corporate
executives of Seller other than E.G. Xxxxx), the buildings, improvements,
fixtures and fittings located at the Real Property are in good condition and
repair, ordinary wear and tear excepted. The Real Property and all buildings,
improvements, fixtures and fittings located thereon conform in all material
respects to all applicable building, zoning and other laws, ordinances, rules,
and regulations. All permits, licenses and other approvals necessary to the
current occupancy and use of the Real Property have been obtained or applied
for, are in full force and effect, and, to Seller's Knowledge, have not been
violated in any material respect. Section 3(f) of the Disclosure Schedule sets
forth a list of all such permits, licenses and other approvals. Seller has not
received any notice, report or other information regarding any actual or alleged
violation of any
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permit, license or other approval necessary to the current occupancy and use of
the Real Property. There exists no material violation of any covenant,
condition, restriction, easement, agreement or order affecting any portion of
the Real Property. All improvements located on the Real Property have direct
access to a public road adjoining such Real Property. No such improvements or
accessways encroach on land not included in the Real Property and no such
improvement is dependent for its access, operation or utility on any land,
building or other improvement not included in the Real Property. There is no
pending or, to the Seller's Knowledge, any threatened condemnation proceeding
affecting any portion of the Real Property.
(g) INTELLECTUAL PROPERTY.
(i) Seller owns, or has the right to use pursuant to license,
sublicense, agreement or permission, all Intellectual Property necessary
for the operation of the Business as presently conducted and, with respect
to the printing blanket products listed on Section 3(g) of the Disclosure
Schedule, as presently proposed to be conducted. Each such item of
Intellectual Property owned or used by Seller immediately prior to the
Closing hereunder will be owned or available for use by Buyer on identical
terms and conditions immediately after the Closing. Seller has taken all
necessary and appropriate action to protect each item of Intellectual
Property that it owns or uses in connection with the Business.
(ii) Seller has not, in connection with the operation of the Business,
interfered with, infringed upon, misappropriated, or otherwise come into
conflict with, any Intellectual Property rights of third parties, and
Seller has not received any charge, complaint, claim, or notice alleging
any such interference, infringement, misappropriation, or violation. To
Seller's Knowledge, no third party has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with, any Intellectual
Property rights of Seller with respect to the Intellectual Property used
primarily in the operation of the Business.
(iii) Section 3(g) of the Disclosure Schedule identifies each patent
or registration which has been issued to Seller with respect to any of its
Intellectual Property used primarily in the Business, identifies each
pending patent application or application for registration which Seller has
made with respect to any of its Intellectual Property used primarily in the
Business, and identifies each license, sublicense, agreement, or other
permission which Seller has granted to any third party with respect to any
of its Intellectual Property used primarily in the Business (together with
any exceptions). Seller has made available to Buyer correct and complete
copies of all such patents, registrations, applications, licenses,
sublicenses, agreements, and permissions (as amended to date) and has made
available to Buyer correct and complete copies of all other written
documentation evidencing ownership and prosecution (if applicable) of each
such item. With respect to each item of Intellectual Property used
primarily in the Business that Seller owns:
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(A) Seller possesses all right, title, and interest in and
to the item;
(B) the item is not subject to any outstanding judgment,
order, decree, stipulation, injunction, or charge;
(C) no charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand is pending or, to the Seller's
Knowledge, is threatened, which challenges the legality, validity,
enforceability, use, or ownership of the item; and
(D) Seller has not agreed to indemnify any person or entity
for or against any interference, infringement, misappropriation, or
other conflict with respect to the item.
(iv) Section 3(g) of the Disclosure Schedule also identifies each item
of Intellectual Property used by Seller primarily in the Business that any third
party owns and that Seller has a right to use pursuant to license, sublicense,
agreement, or permission. Seller has supplied Buyer with correct and complete
copies of all material licenses, sublicenses, agreements, and permissions (as
amended to date). With respect to each such item of used Intellectual Property:
(A) the license, sublicense, agreement, or permission
covering the item is valid and in full force and effect;
(B) the license, sublicense, agreement, or permission will
continue to be valid and in full force and effect on identical terms
immediately following the Closing;
(C) neither Seller, nor, to Seller's Knowledge, any other
party to the license, sublicense, agreement, or permission is in
breach or default thereof, no event has occurred which with notice or
lapse of time would constitute a breach or default thereof by Seller,
or, to the Seller's Knowledge, constitute a breach or a default
thereof by any other party thereto, and no event has occurred that
would permit termination, modification, or acceleration thereunder by
any other party thereto;
(D) Seller has not repudiated, and to the Seller's
Knowledge, no other party to the license, sublicense, agreement, or
permission has repudiated any provision thereof;
(E) with respect to each sublicense, the representations and
warranties set forth in subsections (A) through (D) above are true and
correct with
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respect to the underlying license;
(F) to the Seller's Knowledge, the underlying item of
Intellectual Property is not subject to any outstanding judgment,
order, decree, stipulation, injunction, or charge;
(G) no charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand is pending to which Seller is a party,
or, to the Seller's Knowledge, is pending against any other Person or
is threatened, which challenges the legality, validity, or
enforceability of the underlying item of Intellectual Property; and
(H) Seller has not granted any sublicense or similar right
with respect to the license, sublicense, agreement, or permission.
(h) CONTRACTS. Section 3(h) of the Disclosure Schedule lists the
following contracts, agreements, and other written arrangements to which Seller
is a party:
(i) agreements or instruments imposing a Lien on any of the Acquired
Assets;
(ii) any letters of credit or similar arrangements relating to the
Division;
(iii) guaranties of any obligation for borrowed money or otherwise,
other than endorsements made for collection, and any other similar or
related type of agreement relating to the Division;
(iv) any bonus, pension, profit sharing, retirement and other forms of
deferred compensation plans for any Business Employees;
(v) any health and welfare, insurance and other employee benefit plans
(including retiree health plans) for any Business Employees;
(vi) any employment agreements with any Business Employee or other
person on a full-time or consulting basis providing for an annual
compensation in excess of $25,000 or providing for the payment of any cash
or other compensation upon the sale of the Division or any collective
bargaining agreement relating to any of the Business Employees with any
union or other employee representatives;
(vii) any management, consulting or advisory agreements, severance
plans or arrangements for any present or former Business Employees;
(viii) any non-disclosure agreements and non-compete agreements
binding present and former Business Employees;
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(ix) any agreement under which the Division (or the Seller on behalf
of the Division) is lessee of or holds or operates any real property or any
personal property for which the annual rental exceeds $25,000;
(x) any agreement under which the Division (or the Seller on behalf of
the Division) is lessor of or permits any third party to hold or operate
any property, real or personal, for which the annual rental exceeds
$25,000;
(xi) any agreement or group of related agreements between the Division
(or the Seller on behalf of the Division) and the same party for the sale
or purchase of products or services under which the undelivered balance of
such products and services exceeds $25,000 as of 12:00 p.m. on December 30,
1996;
(xii) any other agreement or group of related agreements between the
Division (or the Seller on behalf of the Division) and the same party
continuing over a period of more than six months from the date or dates
thereof, not terminable by it on 30 days' or less notice without penalty or
involving more than $25,000;
(xiii) any agreement relating to ownership of or investments in any
business or enterprise (including investments in joint ventures and
minority equity investments) by the Division (or the Seller on behalf of
the Division);
(xiv) any powers of attorney granted by or on behalf of the Division
(including those granted to customs brokers) and other agency agreements;
(xv) any agreement which prevents the Division (or the Seller on
behalf of the Division) from disclosing confidential information or which
prohibits the Division (or the Seller on behalf of the Division) from
freely engaging in business anywhere in the world;
(xvi) any sales distribution agreements, franchise agreements and
advertising agreements relating to the Division;
(xvii) any indemnity agreement against or in favor of the Seller
relating to the Division; and
(xviii) (A) any other written agreement material to the Business or
the Division and (B) any oral agreements which in the aggregate involve
amounts of more than $100,000, require the delivery of goods or services
with aggregate values exceeding $100,000, or which otherwise imposes
limitations or burdens on the operation of the Business that could
reasonably be expected to cause a loss or damage to the Buyer of more than
$100,000.
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Seller has delivered to Buyer a true and complete copy of each written
arrangement listed in Section 3(h) of the Disclosure Schedule (as amended to
date), PROVIDED that each item listed in Section 3(h) of the Disclosure Schedule
shall be deemed delivered if it is located on the Real Property, has been made
available to Buyer and is not inconsistent with copies of such documents
actually delivered to the Buyer or its representatives. With respect to each
written arrangement so listed: (A) the written arrangement is valid and in full
force and effect; (B) Seller is not, and to the Seller's Knowledge, no other
party thereto is, in breach or default of a material term thereof; (C) no event
has occurred which, with notice, or lapse of time or both, would constitute a
breach or default thereof by Seller, or to the Seller's Knowledge, constitute a
breach or default thereof by any other party thereto; (D) no event has occurred
that would permit termination, modification, or acceleration thereof by any
other party thereto; and (E) Seller has not repudiated, and to the Seller's
Knowledge, no other party thereto has repudiated any provision thereof. Seller
is not a party to any verbal contract, agreement, or other arrangement which, if
reduced to written form, would be required to be listed in Section 3(h) of the
Disclosure Schedule under the terms of this Section 3(h).
(i) TAX MATTERS. The Division has (or the Seller, with respect to
the Division has) filed all Tax Returns that it was required to file. All such
Tax Returns were correct and complete in all respects. All Taxes owed by the
Division (whether or not shown on any Tax Return) have been or will be paid as
due. There are no Liens on any of the assets of the Division that arose in
connection with any failure (or alleged failure) to pay any Tax. The Seller has,
with respect to the Division, withheld and paid all Taxes required to have been
withheld and paid in connection with amounts paid or owing to any Business
Employee, independent contractor, creditor, stockholder, or other third party
that has performed services for the Division.
(j) LITIGATION. Section 3(j) of the Disclosure Schedule sets
forth each instance in which, with respect to the operation of the Division, the
conduct, acts, omissions or status of any Business Employees, the conduct of the
Business or the ownership or use of the Acquired Assets, Seller (i) is subject
to any unsatisfied judgement, order, decree, stipulation, injunction, or charge
or (ii) is a party or, to the Seller's Knowledge, is threatened to be made a
party to any charge, complaint, action, suit, proceeding, hearing, or
investigation of or in any court or quasi-judicial or administrative agency of
any federal, state, local, or foreign jurisdiction or before any arbitrator.
(k) PRODUCT WARRANTY. No product manufactured, sold, leased, or
delivered by the Business is subject to any guaranty, warranty, or other
indemnity beyond the applicable standard terms and conditions of sale or lease
or the standard terms of Seller's extended product warranty. Section 3(k) of the
Disclosure Schedule includes copies of the standard terms and conditions of sale
or lease for each of the products sold by the Business (containing applicable
guaranty, warranty, and indemnity provisions).
(l) LABOR AND EMPLOYMENT MATTERS. None of the Business Employees
are represented by and Seller is not with respect to the Division, party to any
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collective bargaining agreement with any labor organization. With respect to the
Division, to Seller's Knowledge, (i) no labor organization or group of employees
has filed any representation petition or made any written or oral demand for
recognition; (ii) no union organizing campaigns are underway and no other
question concerning representation exists; and (iii) no labor strike, work
stoppage or slowdown, or other material labor dispute is underway or to Seller's
Knowledge threatened. With respect to the Division, Seller has not implemented
any plant closing or layoff of employees that could implicate the WARN Act, or
any similar state or local law or regulation, and no such layoffs will be
implemented before Closing without advance notification to Purchaser. With
respect to the Division, Seller has complied with all foreign, federal, state or
local laws and regulations regulating employers or the terms and conditions of
its employees' employment, including laws regulating employee wages and hours,
employment discrimination, employee civil rights, equal employment opportunity
and employment of foreign nationals.
(m) EMPLOYEE BENEFITS.
(i) With respect to current and former Business Employees,
their spouses and dependents, Section 3(m) of the Disclosure Schedule
contains an accurate and complete list of (A) each "employee benefit
plan" (as such term is defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"))
contributed to, maintained or sponsored by Seller since January 1,
1991, or with respect to which Seller has any liability or potential
liability; and (B) each other retirement, deferred compensation,
severance, stock, bonus, incentive, fringe benefit, welfare benefit or
other employee benefit plan or arrangement of any kind, contributed
to, maintained or sponsored by Seller since January 1, 1991, or with
respect to which Seller has any liability or potential liability. Each
item listed on Section 3(m) of the Disclosure Schedule is referred to
herein as a "Benefit Plan."
(ii) Each Benefit Plan that is intended to be qualified
within the meaning of Section 401(a) of the Code has received a
determination from the IRS that such Benefit Plan is qualified under
Section 401(a) of the Code, and nothing has occurred since the date of
such determination that could reasonably be expected to adversely
affect the qualification of such Benefit Plan.
(iii) Except as set forth on Section 3(m) of the Disclosure
Schedule, (i) there has been no application for or waiver of the
minimum funding standards imposed by Section 412 of the Code with
respect to any Benefit Plan; (ii) no asset of Seller that is to be
acquired by Buyer pursuant to this Agreement is or could be subject to
any Lien under ERISA or the Code; (iii) Seller has not incurred any
liability under Title IV of ERISA (other than for contributions not
yet due) or to the Pension Benefit Guaranty Corporation (other than
for payment of premiums not yet due); and (iv) Seller has not incurred
any liability on account of a "partial withdrawal" or a "complete
withdrawal" (within the meaning of Sections 4205 and 4203,
respectively, of ERISA) from any "multiemployer plan" (as such term is
defined in Section 3(37) of ERISA), no such
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liability has been asserted, and, to the Seller's Knowledge, there are
no events or circumstances which could result in any such liability
being asserted.
(iv) Seller does not have any liability with respect to any
"employee benefit plan" (as defined in section 3(3) of ERISA) solely
by reason of being treated as a single employer under section 414 of
the Code with any trade, business or entity other than Seller.
(n) ENVIRONMENT, HEALTH, AND SAFETY.
(i) Seller is in compliance in all material respects with
all Environmental and Safety Requirements applicable to the Real
Property or the Facilities, the operation of the Division or the
conduct of the Business, including Environmental and Safety
Requirements established under that certain Developer's Commitment
Agreement between the Seller and Seminole County, dated August 25,
1993 relating to the Real Property.
(ii) Seller has applied for or obtained and complied with,
and is in compliance in all material respects with, all permits,
licenses and other authorizations that may be required pursuant to
Environmental and Safety Requirements for the occupation and use of
the Facilities, the operation of the Division or the conduct of the
Business. Section 3(n) of the Disclosure Schedule sets forth a list of
all such permits, licenses and other authorizations.
(iii) As applicable to the Real Property or the Facilities,
the operation of the Division or the conduct of the Business, since
January 1, 1991, Seller has not received any notice, report or other
information regarding any actual or alleged violation of Environmental
and Safety Requirements, or any Liabilities or any investigatory,
remedial or corrective obligations arising under Environmental and
Safety Requirements.
(iv) To the Seller's Knowledge, there are no underground
storage tanks, asbestos-containing materials in any form or condition,
materials or equipment containing polychlorinated biphenyls, or
landfills, surface impoundments, or disposal areas located on the Real
Property or at any of the Facilities.
(v) To the Seller's Knowledge, neither this Agreement nor
the consummation of the transaction that is the subject of this
Agreement will result in any obligations for site investigation or
cleanup, or notification to or consent of government agencies or third
parties, pursuant to any of the so-called "transaction-triggered" or
"responsible property transfer" Environmental and Safety Requirements.
(vi) As applicable to the Real Property or the Facilities, the
operation of the
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Division or the conduct of the Business, Seller has not, either
expressly or by operation of law, assumed or undertaken any Liability,
including any obligation for corrective or remedial action, of any
other Person relating to Environmental and Safety Requirements.
(o) INTERNATIONAL TRADE. With respect to the operation of the
Division and the conduct of the Business, Seller (i) has complied with and is in
compliance in all material respects with, all federal, state, local and foreign
statutes, Executive Orders, regulations, rules, directives, decrees, ordinances
and similar provisions having the force or effect of law, all judicial and
administrative orders and determinations, and all common law concerning the
importation of merchandise, the exportation of products and technology, the
terms and conduct of international transactions, making or receiving
international payments, including the Tariff Act of 1930 as amended and other
laws administered by the United States Customs Service, regulations issued or
enforced by the United States Customs Service, the Export Administration Act of
1979 as amended, the Export Administration Regulations, the International
Emergency Economic Powers Act, the Arms Export Control Act, the International
Traffic in Arms Regulations, any other export controls administered by an agency
of the United States government, Executive Orders of the President regarding
embargoes and restrictions on trade with designated countries and persons, the
embargoes and restrictions administered by the U.S. Office of Foreign Assets
Control, the Foreign Corrupt Practices Act, the antiboycott regulations
administered by the United States Department of Commerce, the antiboycott
regulations administered by the United States Department of the Treasury,
legislation and regulations of other countries implementing the North American
Free Trade Agreement, antidumping and countervailing duty laws and regulations,
restrictions by other countries on holding foreign currency and repatriating
funds, and other laws and regulations adopted by the governments or agencies of
other countries relating to the same subject matter as the United States
statutes and regulations described above; (ii) holds, and has maintained in
satisfactory condition, all of the permits, licenses, bonds, approvals,
certificates, registrations and other authorizations required by United States,
foreign and international authorities for the conduct of its Business in, and
its import and export activities with, the United States and foreign
jurisdictions, and (iii) has not received any notice, whether in the form of
claims, reports, notices, assessments, letters, forms or written requests for
additional information, alleging a violation of or asserting any Liability under
any laws, treaties, ordinances, rules, permits, licenses, tariffs, rulings,
requirements, directives, regulations or other provisions pertaining to the
importation into, or the direct or indirect export from, the United States or
any foreign jurisdiction of goods or technology.
(p) LEGAL COMPLIANCE. As applicable to the Real Property or the
Facilities, the operation of the Division or the conduct of the Business, Seller
is in compliance in all material respects with all laws (including rules and
regulations thereunder) of federal, state, local, and foreign governments (and
all agencies thereof), and no charge, complaint, action, suit, proceeding,
hearing, investigation, claim, demand, or notice has been filed or commenced
against Seller alleging any failure to comply with any such law or regulation.
(q) BROKERS' FEES. Seller has no obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for
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which Buyer could become liable or obligated.
(r) FULL DISCLOSURE. None of the statements made in this Section
3, the Financial Statements, any Schedule, Exhibit or certificate prepared or
delivered by Seller in accordance with the terms hereof or any document or
statement in writing that has been supplied to Buyer by or on behalf of Seller
in connection with the transactions contemplated hereby contains any untrue
statement of a material fact or omits to state any material fact necessary in
order to make the statements and information contained herein or therein not
misleading.
4. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents and warrants to Seller that the statements
contained in this Section 4 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
then made and as though the Closing Date were substituted for the date of this
Agreement throughout this Section 4), except as set forth in the Disclosure
Schedule.
(a) ORGANIZATION OF BUYER. Buyer is a corporation validly
existing and in good standing under the laws of the State of Delaware.
(b) AUTHORIZATION OF TRANSACTION. Buyer has full corporate power
and authority to execute and deliver this Agreement and the Other Agreements and
to perform its obligations hereunder and thereunder. The execution, delivery and
performance of this Agreement and the Other Agreements by Buyer has been duly
authorized by all necessary corporate action on behalf of Buyer (including
approval by the board of directors of Buyer). This Agreement constitutes the
valid and legally binding obligation of Buyer, enforceable against Buyer in
accordance with its terms and conditions. Each of the Other Agreements will be,
upon its execution and delivery by all the parties hereto, a valid and legally
binding obligation of Buyer, enforceable against Buyer in accordance with its
terms and conditions.
(c) NONCONTRAVENTION. Neither the execution and the delivery of
this Agreement and the Other Agreements by Buyer, nor the consummation of the
transactions contemplated hereby and thereby, will (i) violate any statute,
regulation, rule, judgment, order, decree, stipulation, injunction, charge, or
other restriction of any government, governmental agency, or court to which
Buyer is subject or any provision of the certificate of incorporation or bylaws
of Buyer, (ii) conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any contract, lease,
sublease, license, sublicense, franchise, permit, indenture, agreement or
mortgage for borrowed money, instrument of indebtedness, or other agreement,
instrument or arrangement to which Buyer is a party or by which it is bound or
to which any of its assets is subject, or (iii) result in the imposition of any
lien upon any of the Acquired Assets (except for Liens imposed by Buyers
lender's in connection with the transactions contemplated by this Agreement).
Buyer is not obligated to give any notice to, make any filing with, or obtain
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any authorization, consent, or approval of any government or governmental agency
in order for the Parties to consummate the transactions contemplated by this
Agreement and the Other Agreements.
(d) BROKERS' FEES. Buyer has no obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which Seller could become liable or
obligated.
(e) SECTION 3(g) DISCLOSURE. Based solely on its conversations
with Mr. E.G. Xxxxx, Buyer has no actual knowledge that the representation of
Seller in Section 3(g)(i), as it pertains to the three new products listed on
Section 3(g)(i), of the Disclosure Schedule is inaccurate.
5. COVENANTS OF THE PARTIES.
The Parties agree as follows:
(a) GENERAL. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this Agreement,
each of the Parties will take such further action (including the execution and
delivery of such further instruments and documents) as the other Party
reasonably may request, all at the sole cost and expense of the requesting Party
(unless the requesting Party is entitled to indemnification therefor under
Section 7 below).
(b) CLOSING DATE BALANCE SHEET. Each party hereto will provide
the other party and its representatives reasonable access at all reasonable
times, and in a manner so as not to materially interfere with the normal
business operations of the party providing access to all facilities, books,
records and personnel of such party necessary for preparation and review of the
Closing Date Balance Sheet.
(c) CONFIDENTIALITY. Seller agrees that, except as may be
required by law, for a period of five years, it will not disclose or use, and it
will cause its officers, directors, employees, representatives, agents, and
their advisers not to disclose or use any proprietary, confidential or
non-public information within its control that in any way relates to operation
of the Division or the conduct of the Business.
(d) LITIGATION SUPPORT. In the event and for so long as any Party
actively is contesting or defending against any charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand in connection with (i) any
transaction contemplated by this Agreement or (ii) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction on or prior to the Closing Date
involving the Division, the Business or the Acquired Assets or any matter
described in Section 7(b), 7(c) or 7(d), the other Party will cooperate with the
contesting or defending Party and its
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counsel in the contest or defense, make available reasonable access to its
personnel, and provide such testimony and reasonable access to its books and
records as shall be necessary in connection with the contest or defense, all at
the sole cost and expense of the contesting or defending Party (unless the
contesting or defending Party is entitled to indemnification therefor under
Section 7 below).
(e) TRANSFERRED EMPLOYEES. As of the Closing Date, Buyer shall
offer employment to Business Employees constituting at least ninety percent
(90%) of the Business Employees who, as of the Closing Date, are actively
employed on a full-time basis by Seller, at wages or salaries and with employee
benefits substantially similar to those afforded to other similarly-situated
employees of Buyer. Those employees who accept such offers of employment as of
the Closing Date shall be referred to herein as "TRANSFERRED EMPLOYEES." Nothing
in this Agreement shall limit Buyer's ability at its cost and risk to terminate
the employment of any Transferred Employee at any time and for any reason,
including without cause or be construed to modify any "at-will" employment
policy of Buyer. With respect to the Transferred Employees, Buyer shall
recognize all service with Seller or predecessor companies for periods prior to
Closing for all employment and benefit purposes including, but not limited to,
length of continuous service benefits, eligibility, vesting and termination.
Buyer may require each Business Employee to pass its standard drug test for
controlled substance use before hiring. Any person rejected for failing such
test shall count towards Buyer's employment obligation hereunder.
(f) DEFINED CONTRIBUTION PLAN.
(i) Effective as of the Closing Date, the Transferred Employees
shall cease participation in the "Flint Ink Corporation Profit-Sharing
and Benefit Plan" (the "SELLER'S 401(K) PLAN"), and Seller shall cause
the Transferred Employees to be fully vested in their account balances
thereunder.
(ii) Seller shall make a contribution to the Seller's 401(k) Plan
of the amounts of any salary reduction contributions, employee
after-tax contributions and profit sharing contributions attributable
to or payable on account of any Transferred Employee under the terms
of the Seller's 401(k) Plan for any time period ending on the Closing
Date, in accordance with the terms of the Seller's 401(k) Plan.
(g) ENVIRONMENTAL MATTERS. (i) Seller shall, at its sole cost and
expense and as required by Environmental and Safety Requirements
prepare and implement a Spill Control and Countermeasures Plan for
Facilities. If Seller breaches the foregoing covenant and fails to
cure such breach after thirty (30) days written notice, or if in order
to avoid material adverse consequences attributable to any delays by
Seller in honoring the foregoing covenant, Buyer reasonably elects to
take any of the actions set forth in the preceding sentence in order
to cure such default or to avoid such adverse consequences, Seller
shall reimburse Buyer for all reasonable expenses incurred by Buyer in
connection
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therewith.
(ii) In the event any disclosure made by Seller hereunder or any
investigation conducted by Buyer before or within eighteen months
after Closing reveals the presence as of the Closing Date on, about or
under (including in the groundwater) any real property included within
the Acquired Assets of any Hazardous Material which is required to be
removed or remediated by any Environmental and Safety Requirement in
effect as of the Closing Date, Seller shall, at its cost and expense,
remove or remediate, or otherwise address, such contamination as
required by such law or regulation or as may otherwise be approved in
writing by the applicable governmental authorities. Solely to the
extent that any remediation of such Hazardous Material will result in
the imposition of a deed or other restriction on the facility which
would have a significant adverse impact on Buyer's continued use of
the facility as an industrial site, for the use substantially as
conducted as of Closing, Seller agrees to seek Buyer's approval of
such remediation. Buyer's approval shall not be unreasonably withheld.
To the extent Seller is responsible for remediation in accordance with
this Section 5(g), Seller will remain liable for such remediation
until such time as the appropriate governmental agencies approve all
required remediation efforts at the site and Seller completes said
remediation efforts, at which xxxx Xxxxxx'x liability for such
remediation shall cease. Buyer agrees to cooperate with Seller during
Seller's remediation efforts, if any is required hereunder, including
providing Seller and its contractors/subcontractors with reasonable
access to the site. If the appropriate governmental authorities
determine no remediation is required with respect to any environmental
condition identified in accordance with this Section, Seller's
liability for remediation shall cease with respect to such condition.
(iii) Seller will label all hazardous waste on the site as of
the date of Closing and shall remove such waste, using Seller's
appropriate identification numbers, as soon as practicable after
Closing. Seller shall bear all costs and expenses arising out of the
generation, transportation or disposal of any such hazardous waste and
any off-site disposal of Hazardous Material prior to Closing.
(h) PRODUCT RETURNS. Seller shall pay Buyer the Returned
Product Cost in respect of Buyer's repurchasing, replacing or issuing credits to
customers in respect of, Returned Products to the extent that aggregate Returned
Product Cost in respect of Returned Products during the first 6 months after the
Closing Date exceed the amount of the reserve for product returns, and related
reserves for allowances and concessions due to Returned Products, reflected on
the Closing Date Balance Sheet. From and after the Closing Date until June 30,
1997, Buyer will provide Seller with a monthly notice of all such returns (which
shall state the amount of the Returned Product Cost therefor and shall set forth
in reasonable detail the basis for such amount) and will retain samples of all
Returned Products returned to Buyer (other than those returned by Seller) for
Seller's inspection. Seller shall pay Buyer the amount of the Returned Product
Cost in immediately available funds promptly after receiving Buyer's notice
thereof. Seller shall be entitled (i) to all such Returned Products which are
actually returned to the Buyer or (ii) to a
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refund for the scrap or resale value of such Returned Products which are
returned to the Buyer.
(i) COLLECTION OF ACCOUNTS. Seller will promptly remit any
payments it receives in respect of Receivables in the form received (excepting
any necessary indorsement which may be without warranty or recourse) to Buyer.
(j) RECORD RETENTION. Each Party retaining custody of any
original records or materials pursuant to Section 2(a)(x) hereof shall, prior to
destroying or disposing of any such records or materials, notify the other Party
of its intention to destroy or dispose of such materials and, at the written
request and cost of such other Party, shall deliver such materials to the other
Party; PROVIDED, HOWEVER, that Buyer shall have no obligation under this Section
5(j) to provide Seller with (i) any materials for which Seller cannot establish
a legitimate need to obtain such materials and (ii) any material which is
Buyer's good faith judgment is proprietary to its business or is otherwise
sensitive or confidential in nature. Notwithstanding the foregoing, Seller shall
be entitled to access to records or materials of the Division in the possession
of Buyer that it reasonably requests in connection with Section 7 hereof,
subject to reasonable confidentiality provisions; provided, that Buyer shall not
be required to provide access to material protected by the attorney-client
privilege.
(k) GOVERNMENT CONTRACT BID. Seller will act diligently in
providing information or materials requested by the United States government
pertaining to the Government Contract Bid, and diligently will take all other
such action as may reasonably be required to effect the assignment of the
Government Contract Bid to Buyer.
(l) OTHER TRANSITION ARRANGEMENTS
(a) Seller shall pay all trade payables reflected on the
Closing Date Balance Sheet in accordance with their terms unless Buyer provides
notice to Seller that the amount payable is disputed by Buyer, in which case the
disputed amount shall not be paid until Seller is directed to make such payment
by Buyer. Buyer shall reimburse Seller for all such payments. Seller shall be
entitled to offset against the amounts owed hereunder by Buyer any amounts
collected by Seller which Seller is obligated to remit to Buyer under section
5(i) of this Agreement (the "Section 5(i) Payments"). Seller shall provide Buyer
with a monthly report detailing the amounts paid hereunder, the amounts offset
by Section 5(i) Payments and reasonable detail identifying the specific accounts
payable paid during the reporting period aging of accounts payable. Buyer shall
reimburse Seller for amounts due to Seller under this Section 5(a) within 5
business days of receiving such report. Seller shall also provide Buyer with any
information regarding such accounts payable which Buyer reasonably requests.
(b) Seller shall maintain the accounts receivable ledger for the
Division, in respect of accounts receivable reflected on the Closing Date
Balance Sheet, on its present accounting system until the 90th day following the
Closing at which time all information regarding any accounts receivable shall be
transferred to Buyer in a manner reasonably
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satisfactory to Buyer. Prior to said date Buyer shall be entitled to reports of
the accounts receivable, aging information and other pertinent information
whenever reasonably requested to the extent that such information is maintained
by Seller under its current ledger system for the accounts receivable of the
Division.
(c) In the event that (1) Buyer receives an invoice in respect of
services or goods which were delivered or provided to Seller prior to the
Closing and (2) such invoice was not reflected as an account payable or as a
Current Liability on the Closing Date Balance Sheet, Seller shall pay such
invoice or reimburse Buyer if Buyer pays such invoice promptly after notice by
Buyer of the invoice or the payment by Buyer.
(d) Buyer shall provide office space, secretarial services,
telephone and routine supplies for Xxxxxx Xxxxx (who will not be a Transferred
Employee) for up to three months from the Closing or for such shorter period
that Xx. Xxxxx remains an employee of Seller. During such period, Xx. Xxxxx will
be available to answer questions relating to the financial operations of the
Division by Seller. Xx. Xxxxx shall not be an employee of Buyer and Seller shall
continue to be responsible for all liabilities resulting from Xx. Xxxxx'x
employment.
6. CONDITIONS TO OBLIGATION TO CLOSE.
(a) CONDITIONS TO OBLIGATION OF BUYER. The obligation of Buyer to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 3 above
shall be true and correct in all material respects at and as of the Closing
Date;
(ii) Seller shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) Seller shall have obtained and delivered to Buyer all consents,
authorizations, approvals of governmental agencies or third parties listed
on the CONSENTS SCHEDULE;
(iv) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction wherein an unfavorable judgment,
order, decree, stipulation, injunction, or charge would (A) prevent
consummation of any of the transactions contemplated by this Agreement, (B)
cause any of the transactions contemplated by this Agreement to be
rescinded following consummation, or (C) affect adversely the right of
Buyer to own, operate, or control the Acquired Assets or conduct the
Business in the manner in which it has heretofore been conducted (and no
such judgment, order, decree, stipulation, injunction, or charge shall be
in effect);
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(v) the Seller shall have entered into the Other Agreement, and the
same shall be in full force and effect;
(vi) since December 31, 1995, there shall not have been any material
adverse change in the assets, liabilities, financial condition, operating
results, business or prospects of the Division or the Business;
(vii) Seller shall have delivered to Buyer a certificate to the effect
that each of the conditions specified above in Section 6(a)(i)-(vi) is
satisfied in all respects;
(viii) Buyer shall have obtained title insurance (or a binding
commitment to provide title insurance) from a title insurance company
selected by Buyer (the "TITLE COMPANY") insuring the marketable title in
and to the Real Property in fee simple free and clear of all liens,
defects, claims, leases, rights of possession or other encumbrances
including such endorsements and affirmative coverages as Buyer shall
reasonably require, subject to title exceptions and defects which when
taken together do not in any material way interfere with the existing use
of the Real Property and do not adversely affect the merchantability of
title thereto. Seller shall provide all such affidavits and indemnities as
the Title Company reasonably shall require in order to afford such
coverages and shall bear 50% of the cost of obtaining such title insurance.
(ix) Buyer at its cost shall order and shall have received a current
survey of the Real Property conforming to the Minimum Standard Detail
Requirements jointly established and approved in 1992 by ALTA and ACSM
certified to the Buyer and other Persons it may designate, disclosing the
location of all improvements, easements, party walls, sidewalks, roadways,
utility lines, showing access to public streets and roads directly or by
means of easements or licenses, and showing no encroachments or
encumbrances;
(x) Buyer shall have obtained on terms and conditions satisfactory to
it all of the financing it needs in order to consummate the transactions
contemplated hereby and fund the working capital requirements of Buyer
after the Closing; and
(xi) all actions to be taken by Seller in connection with consummation
of the transactions contemplated hereby and all certificates, opinions,
instruments, and other documents required to effect the transactions
contemplated hereby are satisfactory in form and substance to Buyer.
Buyer may waive any condition specified in this Section 6(a) if it executes a
writing so stating at or prior to the Closing.
(b) CONDITIONS TO OBLIGATION OF SELLER. The obligation of Seller to
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consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 4
above shall be true and correct in all material respects at and as of
the Closing Date;
(ii) Buyer shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local, or foreign jurisdiction wherein an
unfavorable judgment, order, decree, stipulation, injunction, or
charge would (A) prevent consummation of any of the transactions
contemplated by this Agreement or (B) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation
(and no such judgment, order, decree, stipulation, injunction, or
charge shall be in effect);
(iv) Buyer shall have delivered to Seller a certificate to the
effect that each of the conditions specified above in Section
6(b)(i)-(iii) is satisfied in all respects;
(v) Buyer shall have provided Seller with a Florida resale
exemption certificate with respect to the inventory included among the
Acquired Assets;
(vi) Buyer shall have entered into the Other Agreement, and the
same shall be in full force and effect; and
(vii) All actions to be taken by Buyer in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby are satisfactory in form
and substance to Seller.
Seller may waive any condition specified in this Section 6(b) if it executes a
writing so stating at or prior to the Closing.
7. INDEMNIFICATION.
(a) SURVIVAL. All representations and warranties of Buyer and
Seller contained in this Agreement shall survive the Closing, regardless of any
investigation made by or on behalf of the other Party or the Knowledge of any of
its officers, directors, controlling persons, employees, agents or
representatives and shall continue thereafter in full force and effect for the
following periods: (i) the representations and warranties of the Seller
contained is Sections 3(a), (b), (c) and (q) and by the Buyer in Sections 4(a),
(b), (c) and (d) shall survive the Closing and continue in full force and effect
indefinitely; (ii) the representations and warranties of Seller
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contained in Section 3(n) shall survive the Closing and continue in full force
and effect for a period of five years; (iii) the representations and
warranties of Seller contained in Section 3(i) shall survive until the
expiration of all applicable statutes of limitations (or any waiver or
extension thereof); and (iv) all of the other representations and warranties,
of Buyer and Seller contained in this Agreement shall survive the Closing and
continue in full force and effect for a period of two years thereafter.
(b) INDEMNIFICATION PROVISIONS FOR BENEFIT OF BUYER. Seller agrees to
indemnify Buyer and its officers, directors, stockholders, successors and
assigns (each, a "BUYER INDEMNIFIED PARTY"; collectively, the "BUYER INDEMNIFIED
PARTIES") from and against the entirety of any Adverse Consequences that any
Buyer Indemnified Party may suffer resulting from, arising out of, relating to,
in the nature of, or caused by: (i) any breach of any of Seller's
representations and warranties contained in this Agreement (so long as the Buyer
Indemnified Party makes a written claim for indemnification therefor within the
applicable survival period); (ii) any breach of any of Seller's covenants
contained in this Agreement; (iii) the Excluded Liabilities; (iv) any
Liabilities arising pursuant to the WARN Act other than Liabilities that arise
as a result of Buyer's breach of its obligations under Section 5(e) hereof; (v)
any Liabilities arising as a result of the parties' non-compliance with any bulk
transfer laws applicable to the transactions contemplated hereby (except to the
extent arising out of Buyer's failure to discharge any Assumed Liabilities);
(vi) the violation of Environmental and Safety Requirements by the Seller or in
connection with the Business prior to the Closing; (vii) the presence or Release
of Hazardous Material at or on the Acquired Assets prior to Closing, to the
extent such Adverse Consequences arise under Environmental and Safety
Requirements; (viii) the Release of Hazardous Material at, on or from any
property other than the Acquired Assets, to the extent such Hazardous Material
has been used, generated, treated, stored, disposed of or transported by or on
behalf of the Seller or in connection with the Business prior to Closing and
such Adverse Consequences arise under Environmental and Safety Requirements; and
(ix) the matters listed on the SCHEDULE OF ADDITIONAL INDEMNIFIED MATTERS;
provided, however, that Seller shall not have any obligation to indemnify Buyer
under Section 7(b)(i) for any breach of a representation or warranty hereunder
unless and only to the extent that Buyer has suffered Adverse Consequences by
reason of all breaches of Seller's representations and warranties contained in
this Agreement which in the aggregate exceed $50,000; and, PROVIDED, FURTHER,
that except as specifically provided in Section 5(g) above or on the SCHEDULE OF
ADDITIONAL INDEMNIFIED MATTERS, Seller shall have no obligation to take, pay
for, reimburse or indemnify Buyer with respect to any action or Adverse
Consequence that may be necessary now or in the future (i) to remediate or
otherwise bring the real property included within the Acquired Assets into
compliance with any Environmental and Safety Requirement adopted after or
otherwise not in effect on the Closing Date, (ii) to bring any Acquired Asset
other than real property into compliance with any applicable Environmental and
Safety Requirement in effect on the Closing Date or becoming effective
thereafter or (iii) to permit Buyer to comply with any Environmental and Safety
Requirement with respect to operation of the Business after Closing.
(c) INDEMNIFICATION PROVISIONS FOR BENEFIT OF SELLER. Buyer agrees to
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indemnify Seller and its officers, directors, stockholders, successors and
assigns (each, a "SELLER INDEMNIFIED PARTY", collectively, the "SELLER
INDEMNIFIED PARTIES") from and against the entirety of any Adverse Consequences
that any Seller Indemnified Party may suffer resulting from, arising out of,
relating to, in the nature of, or caused by: (i) the breach of any of Buyer's
representations and warranties contained in this Agreement (so long as the
Seller Indemnified Party makes a written claim for indemnification therefor
within the applicable survival period); (ii) the breach of any of Buyer's
covenants contained in this Agreement; (iii) any Assumed Liability, (iv) any
misuse or wrongful release of any information contained in records related to
any Business Employee provided to Buyer pursuant to Section 2(a)(x) or (v) any
violation of any Environmental and Safety Requirements, to the extent the Basis
for which arises after the Closing.
(d) MATTERS INVOLVING THIRD PARTIES. Subject to Section 7(a), if any
third party shall notify any Party with respect to any matter which may give
rise to a claim for indemnification under this Section 7 by such Party (the
"INDEMNIFIED PARTY") against the other Party (the "INDEMNIFYING PARTY"), then
the Indemnified Party shall notify the Indemnifying Party thereof promptly;
PROVIDED, HOWEVER, that no delay on the part of the Indemnified Party in
notifying the Indemnifying Party shall relieve the Indemnifying Party from any
liability or obligation hereunder unless (and then solely to the extent that)
the Indemnifying Party can demonstrate that it was damaged by such delay. If,
within 15 days after the Indemnified Party has given notice pursuant to the
preceding sentence, the Indemnifying Party gives written notice to the
Indemnified Party acknowledging that the Indemnified Party is entitled to
indemnification hereunder with respect to such matter and stating that the
Indemnifying Party is assuming the defense thereof, (A) the Indemnifying Party
will defend the Indemnified Party against the matter with counsel (and, with
respect to environmental matters, consultants and contractors) chosen by the
Indemnifying Party (and reasonably satisfactory to the Indemnified Party), (B)
the Indemnified Party may retain separate co-counsel at its sole cost and
expense (except that the Indemnifying Party will be responsible for the fees and
expenses of the separate co-counsel to the extent that the counsel the
Indemnifying Party has selected has a preexisting conflict of interest and the
Indemnified Party provides notice of such conflict promptly after it is
discovered), (C) the Indemnified Party will not consent to the entry of any
judgment or enter into any settlement with respect to the matter without the
written consent of the Indemnifying Party, and (D) the Indemnifying Party will
not consent to the entry of any judgment with respect to the matter, or enter
into any settlement which does not include a provision whereby the plaintiff or
claimant in the matter releases the Indemnified Party from all Liability with
respect thereto, without the written consent of the Indemnified Party. If, by 15
days after the Indemnified Party has given notice pursuant to the first sentence
of this Section 7(d), the Indemnifying Party has failed to give written notice
to the Indemnified Party acknowledging the Indemnified Party's right to
indemnification hereunder with respect thereto and assuming the defense thereof,
the Indemnified Party may defend against, or enter into any settlement with
respect to, the matter in any manner it reasonably may deem appropriate without
prejudice to the Indemnified Party's right to indemnity from the Indemnifying
Party.
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(e) MATTERS INVOLVING THE PARTIES. In the event that any Party hereto
(the "INDEMNIFIED PARTY") asserts a claim for indemnification hereunder (but
excluding claims arising under Section 7(d) hereof) against the other Party
hereto (the "INDEMNIFYING PARTY"), the Indemnified Party shall give written
notice to the Indemnifying Party specifying, in reasonable detail, the Basis for
the assertion of the claim and the amount of the claim asserted. Such assertion
of liability shall be deemed accepted by the Indemnifying Party and the amount
of such claim shall be deemed a valid claim, conclusive and binding on the
Indemnifying Party, unless, within twenty (20) days after the Indemnified Party
gives written notice to the Indemnifying Party of such claim, the Indemnifying
Party gives written notice to the Indemnified Party contesting the Basis for, or
the amount of, such claim. If such notice is given by the Indemnifying Party,
then the Parties shall use reasonable efforts to reach agreement with respect to
such claim. If the Parties cannot reach agreement with respect to such claim
within twenty (20) days after the Indemnifying Party gives notice of its
objections as provided above, the contested assertion of the claim may be
referred by either Party to arbitration in Cleveland, Ohio, in accordance with
the rules of the American Arbitration Association then in effect. The
determination made in accordance with such rules shall be delivered in writing
to the parties thereto and shall be conclusive and binding upon the Parties, and
the amount of the claim (if any) determined to exist shall be a valid claim.
8. MISCELLANEOUS.
(a) PRESS RELEASES AND ANNOUNCEMENTS. Except for any disclosures Buyer
or Seller reasonably determines to be required by law, Buyer and Seller will
agree in advance upon the timing and content of all announcements regarding any
aspect of the transaction contemplated by this Agreement, whether to the public
or to the Business Employees.
(b) NO THIRD PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any person other than the Parties and their respective
successors and permitted assigns. No statement or agreement contained herein is
intended as, and no such statement or agreement should be construed as, an offer
of employment by Buyer to any employee of Seller.
(c) ENTIRE AGREEMENT. This Agreement (including the documents referred
to herein) constitutes the entire agreement between the Parties and supersedes
any prior understandings, agreements, or representations by or between the
Parties, written or oral, that may have related in any way to the subject matter
hereof.
(d) SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. This Agreement shall not be assignable by
either Party without the prior written consent of the other Party hereto;
PROVIDED, HOWEVER, that Buyer may assign its rights hereunder (i) to any
Affiliate (provided such Affiliate agrees in writing to be bound by the
provisions hereof), (ii) to any Person in connection with a sale of all or
substantially all of the business, capital stock or
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assets of Buyer (or substantially all of the assets of Buyer engaged in the
Business); provided, that such Person assumes the Assumed Liabilities, and (iii)
to any Person providing financing to Buyer or its Affiliates.
(e) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
IF TO SELLER:
-------------
Flint Ink Corporation
00000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xx. Xxxxxxx X. Xxxxxxxx
President and
Chief Operating Officer
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IF TO BUYER:
------------
Day International, Inc.
000 Xxxx Xxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, XX 00000-0000
Fax: (000) 000-0000
Attention: Xx. Xxxxxx X. Xxxxxxx
President and CEO
WITH A COPY TO:
---------------
(which shall not constitute notice to Buyer)
American Industrial Partners
Xxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxxxx X. Xxxx, Xx.
Any Party may give any notice, request, demand, claim, or other communication
hereunder using any other means (including personal delivery, expedited courier,
messenger service, telecopy, telex, ordinary mail, or electronic mail), but no
such notice, request, demand, claim, or other communication shall be deemed to
have been duly given unless and until it actually is received by the individual
for whom it is intended. Any Party may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other Party notice in the manner herein set forth.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF OHIO (WITHOUT REGARD TO
THE CONFLICTS OF LAW PRINCIPLES THEREOF).
(i) AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by Buyer
and Seller. No waiver by any Party of any condition, default, misrepresentation,
or breach of warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent condition, default,
misrepresentation, or breach of warranty or covenant hereunder or affect in any
way any rights arising by virtue of any prior or subsequent such occurrence.
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(j) SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
(k) EXPENSES. Except as otherwise expressly provided herein, in any of
the Other Agreements, or in paragraph 5 of the Letter of Intent dated as of
October 16, 1996, each of Buyer and Seller will bear its own costs and expenses
(including accounting, investment banking, brokerage and legal fees and
expenses) incurred in connection with this Agreement and the transactions
contemplated hereby. Seller will bear the costs (including accountants' fees and
expenses) of the review of the 1995 Statements and the June 30, 1996 Balance
Sheet and the audit of the September 30, 1996 Statements.
(l) CONSTRUCTION. The language used in this Agreement will be deemed
to be the language chosen by the Parties to express their mutual intent, and no
rule of strict construction shall be applied against any Party. Any reference to
any federal, state, local, or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless the context
requires otherwise. Nothing in the Disclosure Schedule shall be deemed adequate
to disclose an exception to a representation or warranty made herein unless the
Disclosure Schedule identifies the exception with reasonable particularity and
describes the relevant facts in reasonable detail. The listing of a document or
other item on the Disclosure Schedule shall be deemed adequate to disclose an
exception to a representation or warranty made herein provided that such item or
document is either listed or specifically referred to in the Section of the
Disclosure Schedule pertaining to that representation or warranty. The Parties
intend that each representation, warranty and covenant contained herein shall
have independent significance. If any Party has breached any representation,
warranty or covenant contained herein in any respect, the fact that there exists
another representation, warranty or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which the Party has not
breached shall not detract from or mitigate the fact that the Party is in breach
of the first representation, warranty or covenant.
(m) INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
(n) SPECIFIC PERFORMANCE. Each of the Parties acknowledges and agrees
that the other Party would be damaged irreparably in the event any of the
provisions of this
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Agreement are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each of the Parties agrees that the
other Party shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
Parties and the matter, in addition to any other remedy to which it may be
entitled, at law or in equity.
(o) CERTAIN TAXES AND COSTS. Buyer shall pay (i) all
recording or registration fees relating to placing a mortgage on the Real
Property, (ii) except as otherwise provided herein (or in any schedule hereto),
all costs and expenses associated with transferring any existing permits to, or
issuing any new permits to, Buyer in connection with the consummation of the
purchase and sale contemplated hereby, (iii) the cost of obtaining an ALTA loan
policy covering the Real Property, if required, and (iv) the fees and expenses
of surveyors, title agents, environmental consultants and other representatives
conducting investigations of the facility prior to Closing on behalf of Buyer
or its lenders. Buyer and Seller shall each bear one-half of the cost of
recording and registering the deed (and any related documents) effecting or
evidencing the transfer of the Real Property from Seller to Buyer pursuant to
this Agreement. Seller shall be responsible for all transfer, documentary,
sales, use, stamp, registration and other such taxes and fees, including any
penalties and interest ("TRANSFER TAXES") incurred in connection with this
Agreement and for the expenses of filing all necessary Tax Returns and other
documentation ("TRANSFER TAX RETURNS") with respect to all such Transfer Taxes.
Transfer Tax Returns shall be filed and Transfer Taxes shall be paid when due
by the Party normally required by law to file such returns and pay such taxes.
If required by Applicable Law, the Parties will and will cause their Affiliates
to, join in the execution of any such Transfer Tax Returns. If the Closing does
not occur on December 31, 1996, real and personal property taxes or other
similar taxes assessed upon the Acquired Assets shall be prorated as of the
Closing Date between the Parties based upon their respective period of
ownership; provided, that the amount allocated to Buyer shall not exceed the
amount accrued in respect of such taxes on the Closing Date Balance Sheet.
(p) DISCLAIMER REGARDING ACQUIRED ASSETS. Except for the
representations and warranties made by Buyer in this Agreement, or in any
certificate delivered pursuant hereto, Buyer acknowledges that Seller has not
made, and Seller hereby expressly disclaims and negates, any representation or
warranty, express or implied, relating to the condition of any of the Acquired
Assets, including (i) any implied or express warranty of merchantability, (ii)
any implied or express warranty of fitness for a particular purpose, (iii) any
implied or express warranty of conformity to models or samples of materials,
(iv) any implied or express warranty of freedom from defects, whether known or
unknown, and (v) any and all implied warranties existing under applicable law,
it being the express intention of Buyer and Seller that, except as otherwise
stated in any of the representations and warranties made by Buyer in this
Agreement or in any certificate delivered pursuant hereto, the Acquired Assets
shall be acquired by or conveyed to Buyer as is and in their present condition
and state of repair.
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(q) DISCLAIMER REGARDING FORWARD-LOOKING INFORMATION. Seller
hereby expressly negates and disclaims, and Buyer hereby waives and
acknowledges that Seller has not made any representation or warranty, express
or implied, relating to the earning power of the Business, the accuracy,
completeness, or materiality of any projections, forecasts, (pro forma)
financial information relating to the operation of the Business after the
Closing or any other forward-looking information (written or oral), now,
heretofore, or hereafter furnished to Buyer by or on behalf of Seller,
including any such information contained in any Information Memorandum
regarding the Business.
[END OF PAGE]
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the date first above written.
DAY INTERNATIONAL, INC.
a Delaware corporation
By:___________________________
Xxxxxx X. Xxxxxxx
President
FLINT INK CORPORATION
a Michigan corporation
By:___________________________
Title:________________________
