ASSET PURCHASE AGREEMENT
by and among
Midwest Tube Xxxxx, Inc. ("Seller")
Xxxxxxx X. Xxxxxxx, individually and Xxxxxxx X. Xxxxxxx
in his Fiduciary Capacity as Trustee of the
Xxxxxxx X. Xxxxxxx 2004 Annuity Trust
(collectively, "Shareholders")
and
MTM Acquisition Company ("Buyer")
Dated: August 30, 2005
TABLE OF CONTENTS
1. Definitions and Usage...........................................1
2. Sale and Transfer of Assets; Closing............................1
2.1 Assets to be Sold......................................1
2.2 Excluded Assets........................................2
2.3 Consideration..........................................2
2.4 Liabilities............................................3
2.5 Allocation.............................................3
2.6 Closing................................................3
2.7 Closing Obligations....................................4
2.8 Adjustment Amount and Payment..........................5
2.9 Adjustment Procedure...................................5
2.10 Consents...............................................6
3. Representations and Warranties of Seller and Shareholders.......7
3.1 Organization and Good Standing.........................7
3.2 Enforceability; Authority; No Conflict.................7
3.3 Capitalization.........................................8
3.4 Financial Statements...................................8
3.5 Books and Records......................................8
3.6 Title to and Sufficiency of Assets.....................8
3.7 Description of Leased Real Property....................9
3.8 Condition of Facilities................................9
3.9 Accounts Receivable....................................9
3.10 Inventories............................................9
3.11 No Undisclosed Liabilities.............................9
3.12 Taxes..................................................10
3.13 No Material Adverse Change.............................10
3.14 Employee Benefits......................................10
Governmental Authorizations............................11
3.16 Legal Proceedings; Orders..............................12
3.17 Absence of Certain Changes and Events..................13
3.18 Contracts; No Defaults.................................13
3.19 Insurance..............................................16
3.20 Environmental Matters..................................16
3.21 Employees..............................................18
3.22 Labor Disputes; Compliance.............................18
3.23 Intellectual Property Assets...........................18
3.24 Relationships with Related Persons.....................18
3.25 Brokers or Finders.....................................19
3.26 Disclosure.............................................19
4. Representations and Warranties of Buyer.........................19
4.1 Organization and Good Standing.........................19
4.2 Authority; No Conflict.................................19
4.3 Certain Proceedings....................................20
4.4 Brokers or Finders.....................................20
5. Covenants of Seller Prior to Closing............................20
5.1 Access and Investigation...............................20
5.2 Operation of the Business of Seller....................20
5.3 Negative Covenant......................................21
5.4 Required Approvals.....................................21
5.5 Notification...........................................21
5.6 No Negotiation.........................................21
5.7 Best Efforts...........................................21
5.8 Interim Financial Statements...........................21
5.9 Change of Name.........................................21
5.10 Payment of Liabilities.................................21
5.11 Audited Financial Statements...........................21
5.12 Environmental Work.....................................22
5.13 Bank Subordination.....................................22
6. Covenants of Buyer Prior to Closing.............................22
6.1 Best Efforts...........................................22
7. Conditions Precedent to Buyer' s Obligation to Close............22
7.1 Accuracy of Representations............................22
7.2 Seller's Performance...................................22
7.3 Consents...............................................22
7.4 Additional Documents...................................22
7.5 Audited Financial Statements...........................23
7.6 No Proceedings.........................................23
7.7 No Conflict............................................23
7.8 Environmental Report/Remediation.......................23
7.9 Employees..............................................23
7.10 Condition of Equipment and Facilities..................23
7.11 Inventory..............................................24
8. Conditions Precedent to Seller's Obligation to Close............24
8.1 Accuracy of Representations............................24
8.2 Buyer's Performance....................................24
8.3 Consents...............................................24
8.4 Additional Documents...................................24
8.5 No Injunction..........................................24
9. Termination.....................................................25
9.1 Termination Events.....................................25
9.2 Effect of Termination..................................25
10. Additional Covenants and Agreements.............................26
10.1 Employees and Employee Benefits........................26
10.2 Non-Competition, Non-Solicitation and
Non-Disparagement......................................28
10.3 Customer and Other Business Relationships..............29
10.4 Transition; Shareholders Assistance....................29
10.5 Retention of and Access to Records.....................29
10.6 Accounts Receivable Repurchase.........................29
10.7 Further Assurances.....................................29
10.8 Corporate Continuation.................................29
11. Indemnification; Remedies.......................................30
11.1 Survival...............................................30
11.2 Indemnification and Reimbursement by Seller
and Shareholders.......................................30
11.3 Indemnification and Reimbursement by
Seller-Environmental Matters...........................30
11.4 Indemnification and Reimbursement by Buyer.............31
11.5 Limitations on Amount-Seller and Shareholders..........31
11.6 Limitations on Amount-Buyer............................31
11.7 Time Limitations.......................................32
11.8 Right of Setoff........................................32
11.9 Third-Party Claims.....................................32
11.10 Other Claims...........................................34
11.11 Indemnification in Case of Strict Liability or
Indemnitee Negligence..................................34
12. Confidentiality.................................................34
12.1 Definition of Confidential Information.................34
12.2 Restricted Use of Confidential Information.............35
12.3 Exceptions.............................................35
12.4 Legal Proceedings......................................36
12.5 Return or Destruction of Confidential Information......36
12.6 Attorney-Client Privilege..............................36
13. General Provisions..............................................37
13.1 Expenses...............................................37
13.2 Public Announcements...................................37
13.3 Notices................................................37
13.4 Arbitration............................................38
13.5 Enforcement of Agreement...............................39
13.6 Waiver; Remedies Cumulative............................39
13.7 Entire Agreement and Modification......................39
13.8 Schedules..............................................39
13.9 Assignments, Successors and No Third-Party Rights......40
13.10 Severability...........................................40
13.11 Construction...........................................40
13.12 Time of Essence........................................40
13.13 Governing Law..........................................40
13.14 Execution of Agreement.................................40
13.15 Shareholders Obligations...............................40
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is dated August 30, 2005, by
and among MTM ACQUISITION COMPANY, a Michigan corporation ("Buyer"); MIDWEST
TUBE XXXXX, INC., an Indiana corporation ("Seller"); XXXXXXX X. XXXXXXX, a
resident of Indiana and XXXXXXX X. XXXXXXX in his fiduciary capacity as Trustee
of the Xxxxxxx X. Xxxxxxx 2004 Annuity Trust u/t/d August 11, 2004 (each a
"Shareholder,"together "Shareholders").
RECITALS
Shareholders own two hundred (200) shares of the common stock, of Seller,
which constitutes one hundred percent (100%) of the issued and outstanding
shares of common capital stock of Seller. Seller desires to sell, and Buyer
desires to purchase, the Assets of Seller for the consideration and on the terms
set forth in this Agreement.
The parties, intending to be legally bound, agree as follows:
1. DEFINITIONS AND USAGE. The definitions and usage applicable to this Agreement
are set forth on Exhibit 1.
2. SALE AND TRANSFER OF ASSETS; CLOSING.
2.1 Assets to be Sold. Upon the terms and subject to the conditions set
forth in this Agreement, at the Closing, but effective as of the Closing Date,
Seller shall sell, convey, assign, transfer and deliver to Buyer, and Buyer
shall purchase and acquire from Seller, free and clear of any Encumbrances other
than Permitted Encumbrances, all of Seller's right, title and interest in and to
all of Seller's property and assets, real, personal or mixed, tangible and
intangible, of every kind and description, wherever located, including the
following (but excluding the Excluded Assets):
(a) all Tangible Personal Property, including those items described in
Schedule 2.1(a);
(b) all cash, cash equivalents and short-term investments
(c) all Inventories;
(d) all Accounts Receivable;
(e) all Seller Contracts, including those listed in Schedule 3.18(a), and
all outstanding offers or solicitations made by or to Seller to enter into any
Contract;
(f) all Governmental Authorizations and all pending applications therefor
or renewals thereof, in each case to the extent transferable to Buyer, including
those listed in Schedule 3.16(b);
(g) all data and Records related to the operations of Seller, including
customer lists and Records, referral sources, research and development reports
and Records, production reports and Records, service and warranty Records,
equipment logs, operating guides and manuals, financial and accounting Records,
creative materials, advertising materials, promotional materials, studies,
reports, correspondence and other similar documents and Records and, subject to
Legal Requirements, copies of all personnel Records and other Records described
in Section 2.2(d);
(h) all of the intangible rights and property of Seller, including
Intellectual Property Assets, going concern value, Seller's name and any
derivative of Seller's name, goodwill, world wide web address and site,
telephone, telecopy and email addresses and listings;
(i) all insurance benefits, including rights and proceeds, arising from or
relating to the Assets or the Assumed Liabilities prior to the Closing Date,
unless expended in accordance with this Agreement;
(j) all claims of Seller against third parties relating to the Assets or
Assumed Liabilities, whether xxxxxx or inchoate, known or unknown, contingent or
non-contingent, including all such claims listed in Schedule 2.1(k); and
(k) all rights of Seller relating to deposits and prepaid expenses, claims
for refunds and rights to offset in respect thereof relating to the Assets or
Assumed Liabilities.
All of the property and assets to be transferred to Buyer hereunder are herein
referred to collectively as the "Assets."
Notwithstanding the foregoing, the transfer of the Assets pursuant to this
Agreement shall not include the assumption of any Liability related to the
Assets unless Buyer expressly assumes that Liability pursuant to Section
2.4(a).
2.2 Excluded Assets. Notwithstanding anything to the contrary contained in
Section 2.1 or elsewhere in this Agreement, the following assets of Seller
(collectively, the "Excluded Assets") are not part of the sale and purchase
contemplated hereunder, are excluded from the Assets and shall remain the
property of Seller after the Closing:
(a) all minute books, stock Records and corporate seals;
(b) all insurance policies and rights thereunder (except to the extent
specified in Sections 2.1(j) and 2.1(k));
(c) all personnel Records and other Records that Seller is required by law
to retain in its possession;
(d) all claims for refund of Taxes and other governmental charges of
whatever nature for periods arising prior to the Closing Date;
(e) all rights in connection with and assets of the Employee Plans;
(f) all rights of Seller under this Agreement, the Xxxx of Sale, and the
Assignment and Assumption Agreement; and
(g) the assets listed on Schedule 2.2.
2.3 Consideration. The consideration for the Assets (the "Purchase Price")
will be (a) Twenty-Seven Million Five Hundred Thousand Dollars ($27,500,000)
plus or minus the Adjustment Amount and (b) the assumption of the Assumed
Liabilities. In accordance with Section 2.7(b), at the Closing, the Purchase
Price, prior to adjustment on the account of the Adjustment Amount shall be
delivered by Buyer to Seller as follows: (a) Twenty-Five Million Dollars
($25,000,000) by wire transfer; (b) Two Million Five Hundred Thousand Dollars
($2,500,000) payable by delivery of a Promissory Note, subordinated to the
senior lender of Buyer (or Buyer's parent) in the form of Exhibit 2.3 (the
"Promissory Note"); and (c) the balance of the Purchase Price by the execution
and delivery of the Assignment and Assumption Agreement. The Adjustment Amount
shall be paid in accordance with Section 2.8.
2.4 Liabilities.
(a) Assumed Liabilities. On the Closing Date, Buyer will assume and agree
to pay, perform or otherwise discharge only the Liabilities of Seller (the
"Assumed Liabilities") as follows:
(i) any trade account payable (other than a trade account payable to
any Shareholder or a Related Person of Seller or any Shareholder) incurred
by Seller in the Ordinary Course of Business and reflected on Seller's
books that remains unpaid at and is not delinquent as of the Closing Date;
(ii) any Liability to Seller's customers incurred by Seller in the
Ordinary Course of Business for orders outstanding as of the Closing Date
reflected on Seller's customer purchase orders which are not more than
thirty (30) days past their respective due dates (other than any Liability
arising out of or relating to a Breach that occurred prior to the Closing
Date);
(iii) any Liability arising after the Closing Date under the Seller
Contracts described in Schedule 3.18(a)(other than any Liability arising
out of or relating to a Breach that occurred prior to the Closing Date);
(iv) any Liability of Seller arising after the Closing Date under any
Seller Contract included in the Assets that is entered into by Seller after
the date hereof in accordance with the provisions of this Agreement (other
than any Liability arising out of or relating to a Breach that occurred
prior to the Closing Date); and
(v) any Liability of Seller described in Schedule 2.4(a)(v).
(b) Retained Liabilities. The Retained Liabilities will remain the sole
responsibility of and will be retained, paid, performed or otherwise discharged
solely by Seller; provided, that this paragraph will not create any third party
beneficiary rights in any Person other than Buyer. "Retained Liabilities" mean
every Liability of Seller other than the Assumed Liabilities, including but not
limited to any Liability relating to the Employee Plans.
2.5 Allocation. The Purchase Price shall be allocated in accordance with an
allocation to be mutually agreed to on or prior to Closing. After the Closing,
the parties shall make consistent use of the allocation, for all Tax purposes
and in all filings, declarations and reports with the IRS in respect thereof,
including the reports required to be filed under Section 1060 of the Code.
2.6 Closing. The purchase and sale provided for in this Agreement (the
"Closing") will take place at the offices of Buyer's counsel at Xxxxxxx &
Xxxxxx, P.C., 00000 Xxxxxxxxxxxx Xxxxxxx, 0xx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000,
commencing at 10:00 a.m. (local time) five (5) Business Days after receipt by
Buyer of audited financial statements for Seller's 2002, 2003, and 2004 fiscal
years, or such other date as Buyer and Seller may mutually agree (the "Closing
Date").
2.7 Closing Obligations. In addition to any other documents to be delivered
under other provisions of this Agreement, at the Closing:
(a) Seller and Shareholders, as the case may be, shall deliver to Buyer,
together with funds sufficient to pay all Taxes necessary for the transfer,
filing or recording thereof:
(i) a xxxx of sale for all of the Assets that are Tangible Personal
Property in the form of Exhibit 2.7(a)(i)(the "Xxxx of Sale") executed by
Seller;
(ii) an assignment of all of the Assets that are intangible personal
property in the form of Exhibit 2.7(a)(ii), which assignment shall also
contain Buyer's undertaking and assumption of the Assumed Liabilities (the
"Assignment and Assumption Agreement") executed by Seller;
(iii) a lease agreement with respect to the premises located at 0000
Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxx in form and substance satisfactory to Buyer
and its counsel and executed by Xxxx Properties, LLC in the form of Exhibit
2.7(a)(iii) (the "Facility Lease");
(iv) assignments of all Intellectual Property Assets and separate
assignment of Seller's domain name executed by Seller;
(v) such other deeds, bills of sale, assignments, certificates of
title, documents and other instruments of transfer and conveyance as may
reasonably be requested by Buyer, each in form and substance satisfactory
to Buyer and its legal counsel and executed by Seller;
(vi) a certificate executed by Seller and each Shareholder as to the
accuracy of their representations and warranties as of the date of this
Agreement and as of the Closing in accordance with Section 7.1 and as to
their compliance with and performance of their covenants and obligations to
be performed or complied with at or before the Closing in accordance with
Section 7.2);
(vii) UCC termination statements for all lien filings against the
Assets including from, but not limited to, National City Bank and Home
Federal Bank;
(viii) a Non-Competition Agreement in the form of Exhibit 2.7(a)(viii)
(the "Non-Competition") executed by Xxxxxxx Xxxxxxx;
(ix) a certificate of the Secretary of Seller certifying, as complete
and accurate as of the Closing, attached copies of the Governing Documents
of Seller, certifying and attaching all requisite resolutions or actions of
Seller's board of directors and Shareholders approving the execution and
delivery of this Agreement and the consummation of the Contemplated
Transactions and the change of name contemplated by Section 5.9 and
certifying to the incumbency and signatures of the officers of Seller
executing this Agreement and any other document relating to the
Contemplated Transactions and accompanied by the requisite documents for
amending the relevant Governing Documents of Seller required to effect such
change of name in form sufficient for filing with the appropriate
Governmental Body; and
(x) an Opinion of Seller's counsel in the form of Exhibit 2.7(a)(x).
(b) Buyer shall deliver to Seller and Shareholders, as the case may be:
(i) Twenty-Five Million Dollars ($25,000,000) by wire transfer of
immediately available funds to an account specified by Seller in a writing
delivered to Buyer at least three (3) Business Days prior to the Closing
Date;
(ii) the Assignment and Assumption Agreement executed by Buyer;
(iii) the Non-Competition Agreement executed by Buyer and Xxxxxxx
Xxxxxxx;
(iv) the Lease in the form of Exhibit 2.7(a)(iii) executed by the
Buyer;
(v) a Guarantee in the form of Exhibit 2.7(b)(v) executed by Tarpon
Industries, Inc.;
(vi) a certificate executed by Buyer as to the accuracy of its
representations and warranties as of the date of this Agreement and as of
the Closing in accordance with Section 8.1 and as to its compliance with
and performance of its covenants and obligations to be performed or
complied with at or before the Closing in accordance with Section 8.2;
(vii) a certificate of the Secretary of Buyer certifying, as complete
and accurate as of the Closing, attached copies of the Governing Documents
of Buyer and certifying and attaching all requisite resolutions or actions
of Buyer's board of managers approving the execution and delivery of this
Agreement and the consummation of the Contemplated Transactions and
certifying to the incumbency and signatures of the officers of Buyer
executing this Agreement and any other document relating to the
Contemplated Transactions; and
(viii) the Promissory Note in the form of Exhibit 2.3.
2.8 Adjustment Amount and Payment. The "Adjustment Amount" (which may be a
positive or negative number) will be equal to the amount determined by
subtracting the Closing Working Capital from the Initial Working Capital. If the
Adjustment Amount is positive, the Adjustment Amount shall be paid by wire
transfer by Seller to an account specified by Buyer. If the Adjustment Amount is
negative, the difference between the Closing Working Capital and the Initial
Working Capital shall be paid by wire transfer by Buyer to an account specified
by Seller. All payments shall be made together with interest at the rate set
forth in the Promissory Note, which interest shall begin accruing on the Closing
Date and end on the date that the payment is made. Within three (3) Business
Days after the calculation of the Closing Working Capital becomes binding and
conclusive on the parties pursuant to Section 2.9, Seller or Buyer, as the case
may be, shall make the wire transfer payment provided for in this Section 2.8.
2.9 Adjustment Procedure.
(a) "Working Capital"shall mean Seller's average working capital for the
twelve calendar month period immediately preceding April 30, 2005 calculated by
subtracting, for each such month, the current liabilities of Seller included in
the Assumed Liabilities from the current assets of Seller (including any cash or
cash equivalents) included in the Assets for each such month and dividing the
sum of the foregoing by twelve. Inventory included in the Assets will be based
on a physical inventory conducted by Buyer prior to the Closing and valued at
cost. The Working Capital of Seller as of the twelve months preceding April 30,
2005 (the "Initial Working Capital") is Four Million Nine Hundred Eighty-Eight
Thousand Two Hundred Thirty-Nine Dollars ($4,988,239).
(b) Buyer shall prepare financial statements ("Closing Financial
Statements") of Seller as of the Closing Date and for the period from the date
of the Balance Sheet through the Closing Date on the same basis and applying the
same accounting principles, policies and practices that were used in preparing
the Balance Sheet, including the principles, policies and practices set forth on
Exhibit 2.9. Buyer shall then determine the Working Capital as of the Closing
Date (the "Closing Working Capital") based upon the Closing Financial Statements
and using the same methodology as was used to calculate the Initial Working
Capital. Buyer shall deliver the Closing Financial Statements and its
determination of the Closing Working Capital to Seller within sixty (60) days
following the Closing Date.
(c) If within fifteen (15) days following delivery of the Closing Financial
Statements and the Closing Working Capital calculation Seller has not given
Buyer written notice of its objection as to the Closing Working Capital
calculation (which notice shall state the basis of Seller's objection), then the
Closing Working Capital calculated by Buyer shall be binding and conclusive on
the parties and be used in computing the Adjustment Amount.
(d) If Seller duly gives Buyer such notice of objection, and if Seller and
Buyer fail to resolve the issues outstanding with respect to the Closing
Financial Statements and the calculation of the Closing Working Capital within
thirty (30) days of Buyer's receipt of Seller's objection notice, Seller and
Buyer shall submit the issues remaining in dispute to the Independent
Accountants for resolution applying the principles, policies and practices
referred to in Section 2.9(b). If issues are submitted to the Independent
Accountants for resolution, (i) Seller and Buyer shall furnish or cause to be
furnished to the Independent Accountants such work papers and other documents
and information relating to the disputed issues as the Independent Accountants
may request and are available to that party or its agents and shall be afforded
the opportunity to present to the Independent Accountants any material relating
to the disputed issues and to discuss the issues with the Independent
Accountants; (ii) the determination by the Independent Accountants, as set forth
in a notice to be delivered to both Seller and Buyer within sixty (60) days of
the submission to the Independent Accountants of the issues remaining in
dispute, shall be final, binding and conclusive on the parties and shall be used
in the calculation of the Closing Working Capital; and (iii) Seller and Buyer
will each bear fifty percent (50%) of the fees and costs of the Independent
Accountants for such determination.
2.10 Consents. If there are any Consents that have not yet been obtained
(or otherwise are not in full force and effect) as of the Closing, in the case
of each Seller Contract as to which such Consents were not obtained (or
otherwise are not in full force and effect) (the "Restricted Contracts"), Buyer
may waive the closing conditions as to any such Consent and either (a) elect to
have Seller continue its efforts to obtain the Consents; or (b) elect to have
Seller retain that Restricted Contract and all Liabilities arising therefrom or
relating thereto.
If Buyer elects to have Seller continue its efforts to obtain any Consents
and the Closing occurs, notwithstanding Sections 2.1 and 2.4, neither this
Agreement nor the Assignment and Assumption Agreement nor any other document
related to the consummation of the Contemplated Transactions shall constitute a
sale, assignment, assumption, transfer, conveyance or delivery or an attempted
sale, assignment, assumption, transfer, conveyance or delivery of the Restricted
Contracts, and following the Closing, the parties shall use Best Efforts, and
cooperate with each other, to obtain the Consent relating to each Restricted
Contract as quickly as practicable. Pending the obtaining of such Consents
relating to any Restricted Contract, the parties shall cooperate with each other
in any reasonable and lawful arrangements designed to provide to Buyer the
benefits of use of the Restricted Contract for its term (or any right or benefit
arising thereunder, including the enforcement for the benefit of Buyer of any
and all rights of Seller against a third party thereunder). Once a Consent for
the sale, assignment, assumption, transfer, conveyance and delivery of a
Restricted Contract is obtained, Seller shall promptly assign, transfer, convey
and deliver such Restricted Contract to Buyer, and Buyer shall assume the
obligations under such Restricted Contract assigned to Buyer from and after the
date of assignment to Buyer pursuant to a special-purpose assignment and
assumption agreement substantially similar in terms to those of the Assignment
and Assumption Agreement (which special-purpose agreement the parties shall
prepare, execute and deliver in good faith at the time of such transfer, all at
no additional cost to Buyer).
3. REPRESENTATIONS AND WARRANTIES OF SELLER AND SHAREHOLDERS. Seller and
Shareholders represent and warrant, jointly and severally, to Buyer as follows:
3.1 Organization and Good Standing. Schedule 3.1 contains a complete and
accurate list of Seller's jurisdiction of incorporation and any other
jurisdictions in which it is qualified to do business as a foreign corporation.
Seller is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation, with full corporate power
and authority to conduct its business as it is now being conducted, to own or
use the properties and assets that it purports to own or use, and to perform all
its obligations under the Seller Contracts. Seller is duly qualified to do
business as a foreign corporation and is in good standing under the laws of each
state or other jurisdiction in which either the ownership or use of the
properties owned or used by it, or the nature of the activities conducted by it,
requires such qualification, except those jurisdictions in which a failure to
qualify would not have a material adverse effect on the business, operations,
assets, condition or prospects of Seller or upon the Assets. Seller has
delivered to Buyer complete and accurate copies of the Governing Documents of
Seller, as currently in effect. Seller has no Subsidiary and, does not own any
shares of capital stock or other securities of any other Person.
3.2 Enforceability; Authority; No Conflict.
(a) This Agreement constitutes the legal, valid and binding obligation of
Seller and each of the Shareholders, enforceable against each of them in
accordance with its terms. Upon the execution and delivery by Seller and the
Shareholders of the other agreement to be executed or delivered by any or all of
Seller and Shareholders at the Closing (collectively, the "Seller's Closing
Documents"), each of Seller's Closing Documents will constitute the legal, valid
and binding obligation of each of Seller and each of the Shareholders,
enforceable against each of them in accordance with its terms. Seller has full
corporate power and authority to execute and deliver this Agreement and the
Seller's Closing Documents to which it is a party and to perform its obligations
under this Agreement and the Seller's Closing Documents, and such action has
been duly authorized by all necessary action by Seller's shareholders and board
of directors. Each of the Shareholders has all necessary legal capacity to enter
into this Agreement and the Seller's Closing Documents to which the Shareholders
are a party and to perform such Shareholder's obligations hereunder and
thereunder.
(b) Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the Contemplated Transactions will,
directly or indirectly (with or without notice or lapse of time):
(i) Breach (A) any provision of any of the Governing Documents of
Seller or (B) any resolution adopted by the board of directors or the
shareholders of Seller;
(ii) Breach any Legal Requirement or any Order to which Seller or
Shareholders, or any of the Assets, may be subject;
(iii) contravene, conflict with or result in a violation or Breach of
any of the terms or requirements of any Governmental Authorization that is
held by Seller or that otherwise relates to the Assets or to the business
of Seller;
(iv) cause Buyer to become subject to, or to become liable for the
payment of, any Tax;
(v) Breach any provision of, or cause an acceleration of the maturity
or performance of, or payment under, cancellation, termination or
modification of any Seller Contract; or
(vi) result in the imposition or creation of any Encumbrance upon or
with respect to any of the Assets.
(c) Except as set forth in Schedule 3.2(c), neither Seller nor Shareholders
are required to give any notice to or obtain any Consent from any Person in
connection with the execution and delivery of this Agreement or the consummation
or performance of any of the Contemplated Transactions.
3.3 Capitalization. The authorized equity securities of Seller consist of
One Thousand (1,000) shares of common stock of which Two Hundred (200) shares
are issued and outstanding. The Shareholders are and will be on the Closing Date
the record and beneficial owners and holders of Two Hundred (200) shares
representing one hundred percent (100%) of the issued and outstanding voting
securities of Seller.
3.4 Financial Statements. Seller has delivered to Buyer: (a) an unaudited
balance sheet of Seller as at December 31, 2004 (the "Balance Sheet"), and the
related unaudited statements of income for the fiscal year then ended; (b) an
unaudited balance sheet of Seller as at December 31, 2003 and December 31, 2002,
and the related unaudited statements of income for the fiscal years then ended;
(c) an unaudited balance sheet of Seller as at April 30, 2005 (the "Interim
Balance Sheet"), and the related unaudited statements of income. Such financial
statements reflect (and the financial statements delivered pursuant to Section
5.8 will reflect) the financial condition and the results of operations of
Seller as at the respective dates of and for the periods referred to in such
financial statements except for certain "Seller add-backs" previously disclosed
in writing to Buyer. The financial statements have been and will be prepared
from and are in accordance with the accounting Records of Seller. The workpapers
and other financial information that Seller delivers to Xxxxx Xxxxxxxx in
connection with the preparation of audited financial statements will be true and
correct in all material respects.
3.5 Books and Records. The books of account and other financial Records of
Seller, all of which have been made available to Buyer, are complete and correct
in all material respects and represent actual, bona fide transactions.
3.6 Title to and Sufficiency of Assets. Seller owns good and transferable
title to all the Assets free and clear of any Encumbrances other than those
identified on Schedule 3.6 as acceptable to Buyer (the "Permitted
Encumbrances"). Seller warrants to Buyer that, at the time of Closing, all of
the Assets will be free and clear of any Encumbrances except for the Permitted
Encumbrances. Except as set forth in Schedule 3.6, the Assets (a) constitute
all of the assets, tangible and intangible, of any nature whatsoever, necessary
to operate Seller's business in the manner presently operated by Seller and (b)
include all of the operating assets of Seller.
3.7 Description of Leased Real Property. Schedule 3.7 contains a correct
legal description, street address and tax parcel identification number of real
property in which Seller has a leasehold interest and an accurate description of
all Real Property Leases.
3.8 Condition of Facilities.
(a) Use of the Real Property for the various purposes for which it is
presently being used is permitted as of right under all applicable zoning legal
requirements and is not subject to "permitted non-conforming"use or structure
classifications. All Improvements are in compliance with all applicable Legal
Requirements, including those pertaining to zoning, building and the disabled,
are in good repair and in good condition, ordinary wear and tear excepted, and
are free from latent and patent defects.
(b) Each item of Tangible Personal Property is in good repair and good
operating condition, ordinary wear and tear excepted, is suitable for immediate
use in the Ordinary Course of Business of Seller and is free from latent and
patent defects. No item of Tangible Personal Property is in need of repair or
replacement other than as part of routine maintenance in the Ordinary Course of
Business of Seller. Except as disclosed in Schedule 3.8(b), all Tangible
Personal Property used in Seller's business is in the possession of Seller.
3.9 Accounts Receivable. All Accounts Receivable that are reflected on the
Balance Sheet or the Interim Balance Sheet or on the accounting Records of
Seller as of the Closing Date represent or will represent valid obligations
arising from sales actually made or services actually performed by Seller in the
Ordinary Course of Business. Except to the extent paid prior to the Closing
Date, such Accounts Receivable are or will be as of the Closing Date current and
collectible. Each of such Accounts Receivable either has been or will be
collected in full, without any setoff, within ninety (90) days after the day on
which it first becomes due and payable except as set forth on Schedule 3.9.
There is no contest, claim, defense or right of setoff, other than returns in
the Ordinary Course of Business of Seller, under any Contract with any account
debtor of an Account Receivable relating to the amount or validity of such
Account Receivable, except as set forth on Schedule 3.9.
3.10 Inventories. All items included in the Inventories consist of a
quality and quantity usable and, with respect to finished goods, saleable, in
the Ordinary Course of Business of Seller except for obsolete items and items of
below-standard quality, all of which have been written off or written down to
net realizable value in the Balance Sheet or on the accounting Records of Seller
as of the Closing Date, as the case may be. Seller is not in possession of any
inventory not owned by Seller, including goods already sold. All of the
Inventories have been valued at (i) actual cost in the case of raw materials,
and (ii) eighty-five (85%) percent of anticipated sale price in the case of
finished goods.
3.11 No Undisclosed Liabilities. Except as set forth in Schedule 3.11,
Seller has no Liability except for Liabilities reflected or reserved against in
the Balance Sheet or the Interim Balance Sheet and current liabilities incurred
in the Ordinary Course of Business of Seller since the date of the Interim
Balance Sheet.
3.12 Taxes.
(a) Seller has filed or caused to be filed on a timely basis all Tax
Returns and all reports with respect to Taxes that are or were required to be
filed pursuant to applicable Legal Requirements to the best of Seller and
Shareholder's Knowledge. Seller has paid, or made provision for the payment of,
all Taxes shown to be due and owing by such Tax Returns. No claim has ever been
made or is expected to be made by any Governmental Body in a jurisdiction where
Seller does not file Tax Returns that it is or may be subject to taxation by
that jurisdiction. There are no Encumbrances on any of the Assets that arose in
connection with any failure (or alleged failure) to pay any Tax, and Seller has
no Knowledge of any basis for assertion of any claims attributable to Taxes,
which if adversely determined, would result in any such Encumbrance.
(b) Seller has delivered or made available to Buyer copies of, and Schedule
3.12(b) contains a complete and accurate list of, all Tax Returns filed since
January 1, 1996. None of Seller's Tax Returns filed since January 1, 1996 have
been audited or are currently under audit. All Taxes that Seller is or was
required by Legal Requirements to withhold, deduct or collect have been duly
withheld, deducted and collected and, to the extent required, have been paid to
the proper Governmental Body or other Person.
3.13 No Material Adverse Change. Except as set forth on Schedule 3.13,
since December 31, 2004, there has not been any material adverse change in the
business, operations, prospects, assets, results of operations or condition
(financial or other) of Seller, and to the Knowledge of Seller, without regard
to general economic conditions or fluctuating steel prices, no event has
occurred or circumstance exists that may result in such a material adverse
change.
3.14 Employee Benefits.
(a) Set forth in Schedule 3.14(a) is a complete and correct list of all
"employee benefit plans"as defined by Section 3(3) of ERISA, all specified
fringe benefit plans as defined in Section 6039D of the Code, and all other
plans and trusts for the benefit of Seller's employees (the "Employee Plans").
Schedule 3.14(a) identifies as such any Employee Plan that is (i) a "Define
Benefit Plan"(as defined in Section 414(l) of the Code), (ii) a plan intended to
meet the requirements of Section 401(a) of the Code, (iii) a "Multiemployer
Plan"(as defined in Section 3(37) of ERISA), or (iv) a plan which is subject to
Title IV of ERISA, other than a Multiemployer Plan. Also set forth on Schedule
3.14(a) is a complete and correct list of all ERISA Affiliates of Seller during
the last six (6) years.
(b) Seller has delivered to Buyer true, accurate and complete copies of the
documents comprising each Employee Plan.
(c) Except as disclosed in Schedule 3.14(c), full payment has been made of
all amounts which are required under the terms of each Employee Plan to be paid
as contributions with respect to the last day of the most recent fiscal year of
such Employee Plan ended on or before the date of this Agreement.
(d) Except as disclosed in Schedule 3.14(d), Seller and its ERISA
Affiliates have complied with the continuation coverage provisions of the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), as amended,
with respect to all current employees and former employees and "qualified
beneficiaries" [as defined in Code Section 4980B(g)(1) and ERISA Section
607(3)]. All current and former Employee Plans that are "group health plans,"as
defined in Section 5000(b) of the Code, have been operated in conformance with
the Medicare as Secondary Payer provisions of the Social Security Act, and no
person is subject to liability under Section 5000(a) of the Code with respect to
any such Employee Plan.
(e) The form of all Employee Plans is in compliance or exempt with the
applicable terms of ERISA, the Code, and any other applicable laws, including
the Americans with Disabilities Act, the Family Medical Leave Act and the Health
Insurance Portability and Accountability Act, and such plans have been operated
in compliance with such laws and the written Employee Plan documents. To the
best of Seller's Knowledge, Seller is not aware of any facts nor has it been
notified of any violations of the Americans with Disabilities Act, the Family
medical Leave Act, and the Health Insurance Portability an Accountability Act.
(f) There is no material pending or to Seller's Knowledge threatened
Proceeding relating to any Employee Plan, nor is there, to Seller's Knowledge,
any basis for any such Proceeding. Neither Seller nor any fiduciary of an
Employee Plan has engaged in a transaction with respect to any Employee Plan
that, assuming the taxable period of such transaction expired as of the date
hereof, could subject Seller or Buyer to a tax or penalty imposed by either
Section 4975 of the Code or Section 502(l) of ERISA or a violation of Section
406 of ERISA.
(g) Seller has maintained workers' compensation coverage as required by
applicable state law through purchase of insurance and not by self-insurance or
otherwise except as disclosed to Buyer on Schedule 3.14(g) and has properly
reported and paid all amounts in connection therewith.
(h) Except as required by Legal Requirements, the consummation of the
Contemplated Transactions will not accelerate the time of vesting or the time of
payment, or increase the amount, of compensation due to any director, employee,
officer, former employee or former officer of Seller.
(i) Except for the continuation coverage requirements of COBRA, Seller has
no obligations or potential liability for benefits to employees, former
employees or their respective dependents following termination of employment or
retirement under any of the Employee Plans that are Employee Welfare Benefit
Plans.
(j) No provision of any Employee Plan provides that such Employee Plan will
automatically be amended, modified or terminated as a result of the Contemplated
Transactions. No written or oral representations have been made by Seller to any
employee or former employee of Seller concerning the employee benefits of Buyer.
3.15 Compliance With Legal Requirements; Governmental Authorizations.
Except as set forth in Schedule 3.15:
(a) Seller is, and at all times has been, in full compliance with each
material Legal Requirement that is or was applicable to it or to the conduct or
operation of its business or the ownership or use of any of its assets;
(b) to the Knowledge of Seller, no event has occurred or circumstance
exists that (with or without notice or lapse of time) (i) constitutes or will
result in a violation by Seller of, or a failure on the part of Seller to comply
with, any material Legal Requirement or (ii) gives rise to any obligation on the
part of Seller to undertake, or to bear all or any portion of the cost of, any
remedial action of any nature;
(c) Seller has not received any notice or other communication (whether oral
or written) from any Governmental Body or any other Person regarding (i) any
actual or alleged violation of, or failure to comply with, any Legal Requirement
or (ii) any actual or alleged obligation on the part of Seller to undertake, or
to bear all or any portion of the cost of, any remedial action of any nature;
and
(d) Schedule 3.15(d) contains a complete and accurate list of each
Governmental Authorization that is held by Seller or that otherwise relates to
Seller's business or the Assets. Each Governmental Authorization listed or
required to be listed in Schedule 3.15(d) is valid and in full force and effect.
Except as set forth in Schedule 3.15(d):
(i) Seller is, and at all times has been, in full compliance with all
of the material terms and requirements of each Governmental Authorization
identified or required to be identified in Schedule 3.15(d);
(ii) to the Knowledge of Seller, no event has occurred or circumstance
exists that (with or without notice or lapse of time) (A) constitutes or
will result directly or indirectly in a material violation of or a failure
to comply with any term or requirement of any Governmental Authorization
listed or required to be listed in Schedule 3.15(d) or (B) will result
directly or indirectly in the revocation, withdrawal, suspension,
cancellation or termination of, or any modification to, any Governmental
Authorization listed or required to be listed in Schedule 3.15(d); and
(iii) Seller has not received, at any time any notice or other
communication (whether oral or written) from any Governmental Body or any
other Person regarding (A) any actual or alleged violation of or failure to
comply with any material term or requirement of any Governmental
Authorization or (B) any actual or proposed revocation, withdrawal,
suspension, cancellation, termination of or modification to any
Governmental Authorization.
The Governmental Authorizations listed in Schedule 3.15(d) collectively
constitute all of the Governmental Authorizations necessary to permit Seller to
lawfully conduct and operate its business in the manner in which it currently
conducts and operates such business and to permit Seller to own and use its
assets in the manner in which it currently owns and uses such assets.
3.16 Legal Proceedings; Orders.
(a) Except as set forth in Schedule 3.16(a), there is no pending or, to
Seller's Knowledge, threatened Proceeding:
(i) by or against Seller or that otherwise relates to or may affect
the business of, or any of the assets owned or used by Seller; or
(ii) that challenges, or that may have the effect of preventing,
delaying, making illegal or otherwise interfering with, any of the
Contemplated Transactions.
Seller has delivered to Buyer copies of all pleadings, correspondence and
other documents relating to each Proceeding listed in Schedule 3.16(a). Except
as set forth on Schedule 3.16(a), there are no Proceedings listed or required to
be listed in Schedule 3.16(a) that could have a material adverse effect on the
business, operations, assets, condition or prospects of Seller or upon the
Assets.
(b) Except as set forth in Schedule 3.16(b), there is no Order to which
Seller, its business or any of the Assets is subject.
3.17 Absence of Certain Changes and Events. Except as set forth in Schedule
3.17, since April 30, 2005, Seller has conducted its business only in the
Ordinary Course of Business and there has not been any:
(a) change in Seller's authorized or issued capital stock, grant of any
stock option or right to purchase shares of capital stock of Seller or issuance
of any security convertible into such capital stock;
(b) amendment to the Governing Documents of Seller;
(c) payment (except in the Ordinary Course of Business) or increase by
Seller of any bonuses, salaries or other compensation to any shareholder,
director, officer or employee or entry into any employment, severance or similar
Contract with any director, officer or employee;
(d) adoption of, amendment to or increase in the payments to or benefits
under, any Employee Plan;
(e) damage to or destruction or loss of any Asset, whether or not covered
by insurance;
(f) entry into, termination of or receipt of notice of termination of any
Material Contract to which Seller is a party, or (ii) any Contract or
transaction involving a total remaining commitment by Seller of at least Ten
Thousand Dollars ($10,000);
(g) sale (other than sales of Inventories in the Ordinary Course of
Business), lease or other disposition of any Asset or property of Seller
(including the Intellectual Property Assets) or the creation of any Encumbrance
on any Asset;
(h) cancellation or waiver of any claims or rights with a value to Seller
in excess of Ten Thousand Dollars ($10,000);
(i) indication by any customer or supplier of an intention to discontinue
or change the terms of its relationship with Seller;
(j) material change in the accounting methods used by Seller; or
(k) Contract by Seller to do any of the foregoing.
3.18 Contracts; No Defaults.
(a) Schedule 3.18(a) contains an accurate and complete list, and Seller has
delivered to Buyer accurate and complete copies, of:
(i) each Seller Contract that involves performance of services or
delivery of goods or materials by Seller of an amount or value in excess of
Twenty-Five Thousand Dollars ($25,000);
(ii) each Seller Contract that involves performance of services or
delivery of goods or materials to Seller of an amount or value in excess of
Twenty-Five Thousand Dollars ($25,000);
(iii) each Seller Contract that was not entered into in the Ordinary
Course of Business and that involves expenditures or receipts of Seller in
excess of Fifty Thousand Dollars ($50,000)
(iv) each Seller Contract affecting the ownership of, leasing of,
title to, use of or any leasehold or other interest in any real or personal
property (except personal property leases and installment and conditional
sales agreements having a value per item or aggregate payments of less than
Ten Thousand Dollars ($10,000) and with a term of less than one (1) year);
(v) each Seller Contract with any labor union or other employee
representative of a group of employees relating to wages, hours and other
conditions of employment;
(vi) each Seller Contract (however named) involving a sharing of
profits, losses, costs or liabilities by Seller with any other Person;
(vii) each Seller Contract containing covenants that in any way
purport to restrict Seller's business activity or limit the freedom of
Seller to engage in any line of business or to compete with any Person;
(viii) each Seller Contract providing for payments to or by any Person
based on sales, purchases or profits, other than direct payments for goods;
(ix) each power of attorney of Seller that is currently effective and
outstanding;
(x) each Seller Contract entered into other than in the Ordinary Course of
Business that contains or provides for an express undertaking by Seller to be
responsible for consequential damages;
(xi) each Seller Contract for capital expenditures in excess of
Twenty-Five Thousand Dollars ($25,000);
(xii) each Seller Contract not denominated in U.S. dollars;
(xiii) each written warranty, guaranty and/or other similar
undertaking with respect to contractual performance extended by Seller
other than in the Ordinary Course of Business; and
(xiv) each amendment, supplement and modification (whether oral or
written) in respect of any of the foregoing.
Schedule 3.18(a) sets forth the parties to the Contracts and the amount of
the remaining commitment of Seller under the Contracts.
(b) Except as set forth in Schedule 3.18(b), no shareholder of Seller has
or may acquire any rights under, and no shareholder has or may become subject to
any obligation or liability under, any Contract that relates to the business of
Seller or any of the Assets.
(c) Except as set forth in Schedule 3.18(c):
(i) each Contract identified or required to be identified in Schedule
3.18(a) and which is to be assigned to or assumed by Buyer under this
Agreement is in full force and effect and is valid and enforceable in
accordance with its terms;
(ii) each Contract identified or required to be identified in Schedule
3.18(a) and which is being assigned to or assumed by Buyer is assignable by
Seller to Buyer without the consent of any other Person; and
(iii)to the Knowledge of Seller, no Contract identified or required to
be identified in Schedule 3.18(a) and which is to be assigned to or assumed
by Buyer under this Agreement will upon completion or performance thereof
have a material adverse affect on the business, assets or condition of
Seller or the business to be conducted by Buyer with the Assets.
(d) Except as set forth in Schedule 3.18(d):
(i) Seller is, and at all times has been, in compliance with all
applicable terms and requirements of each Seller Contract which is being
assumed by Buyer;
(ii) to Seller's Knowledge, each other Person that has or had any
obligation or liability under any Seller Contract which is being assigned
to Buyer is, and at all times has been, in full compliance with all
applicable terms and requirements of such Contract;
(iii) to Seller's Knowledge, no event has occurred or circumstance
exists that (with or without notice or lapse of time) contravenes,
conflicts with or will result in a Breach of, or accelerates the maturity
or performance of, or payment under, or cancels, terminates or modifies,
any Seller Contract that is being assigned to or assumed by Buyer;
(iv) to Seller's Knowledge no event has occurred or circumstance
exists under or by virtue of any Contract that (with or without notice or
lapse of time) would cause the creation of any Encumbrance affecting any of
the Assets; and
(v) Seller has not given to or received from any other Person any
notice or other communication (whether oral or written) regarding any
actual or alleged Breach of, or default under, any Contract which is being
assigned to or assumed by Buyer.
(e) There are no renegotiations of, attempts to renegotiate or outstanding
rights to renegotiate any material amounts paid or payable to Seller under
current or completed Contracts with any Person having the contractual or
statutory right to demand or require such renegotiation and no such Person has
made written demand for such renegotiation.
(f) Each Contract relating to the sale, design, manufacture or provision of
products or services by Seller has been entered into in the Ordinary Course of
Business of Seller and has been entered into without the commission of any act
alone or in concert with any other Person, or any consideration having been paid
or promised, that is or would be in violation of any Legal Requirement.
3.19 Insurance.
(a) Seller has delivered to Buyer:
(i) accurate and complete copies of all policies of insurance (and
correspondence relating to coverage thereunder) to which Seller is a party
or under which Seller is or has been covered at any time since January 1,
2003, a list of which is included in Schedule 3.19(a);
(ii) accurate and complete copies of all pending applications by
Seller for policies of insurance; and
(iii) any statement by the auditor of Seller's financial statements or
any consultant or risk management advisor with regard to the adequacy of
Seller's coverage or of the reserves for claims.
(b) Schedule 3.19(b) describes:
(i) any self-insurance arrangement by or affecting Seller, including
any reserves established thereunder;
(ii) any Contract or arrangement, other than a policy of insurance,
for the transfer or sharing of any risk to which Seller is a party or which
involves the business of Seller; and
(iii) all obligations of Seller to provide insurance coverage to Third
Parties (for example, under Leases or service agreements) and identifies
the policy under which such coverage is provided.
(c) Except as set forth in Schedule 3.19(c):
(i) all policies of insurance to which Seller is a party or that
provide coverage to Seller are valid, outstanding and enforceable in
accordance with their respective terms;
(ii) Seller has paid all premiums due, and has otherwise performed all
of its obligations, under each policy of insurance to which it is a party
or that provides coverage to Seller; and
(iii) Seller has given notice to the insurer of all claims for which
Seller has asserted coverage that may be insured thereby.
3.20 Environmental Matters. Except as disclosed in Schedule 3.20:
(a) Seller is in full compliance with all Environmental Laws applicable to
Seller's business as they relate to the conduct of Seller's business. Seller has
no Knowledge of any non-compliance with such laws by others. Neither Seller nor
either Shareholder has received, any actual or threatened order, notice or other
communication from (i) any Governmental Body or private citizen acting in the
public interest or (ii) the current or prior owner or operator of any
Facilities, of any actual or potential violation or failure to comply with any
Environmental Law, or of any actual or threatened obligation to undertake or
bear the cost of any Environmental, Health and Safety Liabilities with respect
to any Facility or other property or asset (whether real, personal or mixed) in
which Seller has or had an interest, or with respect to any property or Facility
at or to which Hazardous Materials were generated, manufactured, refined,
transferred, imported, used or processed by Seller or any other Person for whose
conduct it is or may be held responsible, or from which Hazardous Materials have
been transported, treated, stored, handled, transferred, disposed, recycled or
received.
(b) There are no pending or, to the Knowledge of Seller, threatened claims,
Encumbrances, or other restrictions of any nature resulting from any
Environmental, Health and Safety Liabilities or arising under or pursuant to any
Environmental Law with respect to or affecting any Facility or any other
property or asset (whether real, personal or mixed) in which Seller has or had
an interest.
(c) Neither Seller nor either Shareholder has received any citation,
directive, inquiry, notice, Order, summons, warning or other communication that
relates to Hazardous Activity, Hazardous Materials, or any alleged, actual, or
potential violation or failure to comply with any Environmental Law, or of any
alleged, actual, or potential obligation to undertake or bear the cost of any
Environmental, Health and Safety Liabilities with respect to any Facility or
property or asset (whether real, personal or mixed) in which Seller has or had
an interest, or with respect to any property or facility to which Hazardous
Materials generated, manufactured, refined, transferred, imported, used or
processed by Seller or any other Person for whose conduct it is or may be held
responsible, have been transported, treated, stored, handled, transferred,
disposed, recycled or received.
(d) There are no Hazardous Materials present on or in the Environment at
any Facility or at any geologically or hydrologically adjoining property
resulting from Seller's operations and neither Seller nor any Shareholder has
any Knowledge of the presence of any other Hazardous Materials, including any
Hazardous Materials contained in barrels, aboveground or underground storage
tanks, landfills, land deposits, dumps, equipment (whether movable or fixed) or
other containers, either temporary or permanent, and deposited or located in
land, water, sumps, or any other part of the Facility or such adjoining
property, or incorporated into any structure therein or thereon. Neither Seller
nor any Person for whose conduct it is or may be held responsible, or to the
Knowledge of Seller, any other Person, has permitted or conducted, or is aware
of, any Hazardous Activity conducted with respect to any Facility or any other
property or assets (whether real, personal or mixed) in which Seller has or had
an interest except in full compliance with all applicable Environmental Laws.
(e) There has been, as a result of Seller's operations, no Release or, to
the Knowledge of Seller, Threat of Release, of any Hazardous Materials at or
from any Facility or at any other location where any Hazardous Materials were
generated, manufactured, refined, transferred, produced, imported, used, or
processed from or by any Facility, or from any other property or asset (whether
real, personal or mixed) in which Seller has or had an interest, or to the
Knowledge of Seller, as a result of the operations of others or from any
geologically or hydrologically adjoining property, whether by Seller or any
other Person.
(f) Seller has delivered to Buyer true and complete copies and results of
any reports, studies, analyses, tests, or monitoring possessed or initiated by
Seller pertaining to Hazardous Materials or Hazardous Activities in, on, or
under the Facilities, or concerning compliance, by Seller or any other Person
for whose conduct it is or may be held responsible, with Environmental Laws.
3.21 Employees.
(a) Schedule 3.21(a) contains a complete and accurate list of the following
information for each employee and independent contractor of Seller, including
each employee on leave of absence or layoff status: employer; name; job title;
date of hiring or engagement; date of commencement of employment or engagement;
current compensation paid or payable and any change in compensation since
January 1, 2004; sick and vacation leave that is accrued but unused; and service
credited for purposes of vesting and eligibility to participate under any
Employee Plan, or any other employee or director benefit plan.
(b) Seller does not provide any benefits for any retired employees or
their dependents.
(c) Seller warrants that it is not subject to the Worker Adjustment and
Retraining Notification Act (the "WARN Act") or any similar state or local Legal
Requirement.
(d) No former or current employee of Seller is a party to, or is otherwise
bound by, any Contract that in any way adversely affected, affects, or will
affect the ability of Seller or Buyer to conduct the business as heretofore
carried on by Seller.
3.22 Labor Disputes; Compliance.
(a) Seller has complied in all respects with all Legal Requirements
relating to employment practices, terms and conditions of employment, equal
employment opportunity, non-discrimination, immigration, wages, hours, benefits,
and other requirements the payment of social security and similar Taxes and
occupational safety and health.
(b) Except as disclosed in Schedule 3.22(b), (i) since January 1, 2004,
there has not been, there is not presently pending or existing, and to Seller's
Knowledge there is not threatened, any strike, slowdown, picketing, work
stoppage or employee grievance process involving Seller; (ii) to Seller's
Knowledge no event has occurred or circumstance exists that could provide the
basis for any work stoppage or other labor dispute; (iii) there is not pending
or, to Seller's Knowledge, threatened against or affecting Seller any Proceeding
relating to the alleged violation of any Legal Requirement pertaining to labor
relations or employment matters, and there is no organizational activity or
other labor dispute against or affecting Seller or the Facilities; (iv) no
application or petition for an election of or for certification of a collective
bargaining agent is pending; (v) no grievance or arbitration Proceeding exists
that might have an adverse effect upon Seller or the conduct of its business;
(vi) there is no lockout of any employees by Seller, and no such action is
contemplated by Seller; and (vii) to Seller's Knowledge there has been no charge
of discrimination filed against or threatened against Seller with the Equal
Employment Opportunity Commission or similar Governmental Body.
3.23 Intellectual Property Assets. Except as shown in Schedule 3.23, the
Seller has no Intellectual Property Assets owned or used by it in its business
or computer software licenses the cost of which is over Five Hundred Dollars
($500) each. With respect to such software licenses, Seller has fully paid for
the licenses and not otherwise in Breach. Neither Seller nor Shareholders nor
any Related Person owns any Patent, Xxxx or Copyright which is used in Seller's
Business.
3.24 Relationships with Related Persons. Except as disclosed in Schedule
3.24, neither Seller nor Shareholders nor any Related Person of any of them has,
or since January 1, 2004 has had, any interest in any property (whether real,
personal or mixed and whether tangible or intangible) used in or pertaining to
Seller's business. Neither Seller nor Shareholders nor any Related Person of any
of them owns, or since January 1, 2004, [the first day of the next to last
completed fiscal year of Seller] has owned, of record or as a beneficial owner,
an equity interest or any other financial or profit interest in any Person that
has (a) had business dealings or a material financial interest in any
transaction with Seller other than business dealings or transactions disclosed
in Schedule 3.24 or (b) engaged in competition with Seller with respect to any
line of the products or services of Seller (a "Competing Business") in any
market presently served by Seller, except for ownership of less than one percent
(1%) of the outstanding capital stock of any Competing Business that is publicly
traded on any recognized exchange or in the over-the-counter market. Except as
set forth in Schedule 3.24, neither Seller nor Shareholders nor any Related
Person of any of them is a party to any Contract with, or has any claim or right
against, Seller.
3.25 Brokers or Finders. Neither Seller nor any of its Representatives have
incurred any obligation or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or other similar payments in connection
with the sale of Seller's business or the Assets or the Contemplated
Transactions.
3.26 Disclosure.
(a) No representation or warranty or other statement made by Seller or
Shareholders in this Agreement, the Schedules, any supplement to the Schedules,
or the certificates delivered pursuant to Section 2.7(a) contains any untrue
statement of material fact or omits to state a material fact necessary to make
any of them, in light of the circumstances in which it was made, not misleading.
(b) Seller does not have Knowledge of any fact that has specific
application to Seller (other than general economic or industry conditions) and
that may materially adversely affect the assets, business, prospects, financial
condition or results of operations of Seller that has not been set forth in this
Agreement or the Schedules.
4. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants to
Seller and Shareholders as follows:
(a) Organization and Good Standing. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Michigan,
with full corporate power and authority to conduct its business as it is now
conducted.
(b) Authority; No Conflict.
(a) This Agreement constitutes the legal, valid and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms. Upon the
execution and delivery by Buyer of the Assignment and Assumption Agreement, the
Promissory Note and each other agreement to be executed or delivered by Buyer at
Closing (collectively, the "Buyer's Closing Documents"), each of the Buyer's
Closing Documents will constitute the legal, valid and binding obligation of
Buyer, enforceable against Buyer in accordance with its respective terms. Buyer
has full corporate power and authority to execute and deliver this Agreement and
the Buyer's Closing Documents and to perform its obligations under this
Agreement and the Buyer's Closing Documents, and such action has been duly
authorized by all necessary corporate action.
(b) Neither the execution and delivery of this Agreement by Buyer nor the
consummation or performance of any of the Contemplated Transactions by Buyer
will give any Person the right to prevent, delay or otherwise interfere with any
of the Contemplated Transactions pursuant to:
(i) any provision of Buyer's Governing Documents;
(ii) any resolution adopted by the board of directors or the
shareholder of Buyer;
(iii) any Legal Requirement or Order to which Buyer may be subject; or
(iv) any Contract to which Buyer is a party or by which Buyer may be
bound.
Buyer is not and will not be required to obtain any Consent from any Person in
connection with the execution and delivery of this Agreement or the consummation
or performance of any of the Contemplated Transactions.
4.3 Certain Proceedings. There is no pending Proceeding that has been
commenced against Buyer and that challenges, or may have the effect of
preventing, delaying, making illegal or otherwise interfering with, any of the
Contemplated Transactions. To Buyer's Knowledge, no such Proceeding has been
threatened.
4.4 Brokers or Finders. Other than an obligation to pay a consulting fee to
Bainbridge Advisors, Inc. (which Buyer acknowledges is its sole responsibility)
neither Buyer nor any of its Representatives have incurred any obligation or
liability, contingent or otherwise, for brokerage or finders' fees or agents'
commissions or other similar payment in connection with the Contemplated
Transactions.
5. COVENANTS OF SELLER PRIOR TO CLOSING.
5.1 Access and Investigation. Between the date of this Agreement and the
Closing Date, and upon reasonable advance notice received from Buyer, Seller
shall (and Shareholders shall cause Seller to) (a) afford Buyer and its
Representatives and prospective lenders and their Representatives (collectively,
"Buyer Group") full access, during regular business hours, to Seller's
personnel, properties (including subsurface testing), Contracts, Governmental
Authorizations, books and Records and other documents and data, such rights of
access to be exercised in a manner that does not unreasonably interfere with the
operations of Seller, and upon prior notice to and consent of Xxxxxxx X. Xxxxxxx
which consent will not be unreasonably withheld; (b) furnish Buyer Group with
copies of all such Contracts, Governmental Authorizations, books and Records and
other existing documents and data as Buyer may reasonably request; (c) furnish
Buyer Group with such additional financial, operating and other relevant data
and information as Buyer may reasonably request; and (d) otherwise cooperate and
assist, to the extent reasonably requested by Buyer, with Buyer's investigation
of the properties, assets and financial condition related to Seller. In
addition, Buyer shall have the right to have the Real Property and Tangible
Personal Property inspected by Buyer Group for purposes of determining the
physical condition and legal characteristics of the Real Property and Tangible
Personal Property. In the event subsurface or other destructive testing is
recommended by any of Buyer Group, Buyer shall be permitted to have the same
performed.
5.2 Operation of the Business of Seller. Between the date of this Agreement
and the Closing, Seller shall (and Shareholders shall cause Seller to) conduct
its business only in the Ordinary Course of Business.
5.3 Negative Covenant. Except as otherwise expressly permitted herein,
between the date of this Agreement and the Closing Date, Seller shall not, and
Shareholders shall not permit Seller to, without the prior written Consent of
Buyer, allow the levels of raw materials, supplies or other materials included
in the Inventories to vary materially from the levels customarily maintained by
Seller.
5.4 Required Approvals. Seller and Shareholders shall cooperate with Buyer
and its Representatives in attempting to obtain all Consents identified in
Schedule 7.3.
5.5 Notification. Between the date of this Agreement and the Closing,
Seller and Shareholders shall promptly notify Buyer in writing if either of them
becomes aware of any fact or condition that causes or constitutes a Breach of
any of Seller's representations and warranties made as of the date of this
Agreement. Should any such fact or condition require any change to the
Schedules, Seller shall deliver to Buyer a supplement to the Schedules
specifying such change at least five (5) Business Days prior to Closing. During
the same period, Seller and Shareholders also shall promptly notify Buyer of the
occurrence of any Breach of any covenant of Seller or Shareholders in this
Section 5 or of the occurrence of any event that may make the satisfaction of
the conditions in Section 7 impossible or unlikely.
5.6 No Negotiation. Until such time as this Agreement shall be terminated
pursuant to Section 9.1, neither Seller nor Shareholders shall directly or
indirectly solicit, initiate, encourage or entertain any inquiries or proposals
from, discuss or negotiate with, provide any non-public information to or
consider the merits of any inquiries or proposals from any Person (other than
Buyer) relating to any business combination transaction involving Seller,
including the sale by Shareholders of Seller's stock, the merger or
consolidation of Seller or the sale of Seller's business or any of the Assets
(other than in the Ordinary Course of Business). Seller and Shareholders shall
notify Buyer of any such inquiry or proposal within twenty-four (24) hours of
receipt or awareness of the same by Seller or Shareholders.
5.7 Best Efforts. Seller and Shareholders will cooperate with Buyer in
attempting to cause the conditions in Section 7 and Section 8.3 to be satisfied.
5.8 Interim Financial Statements. Until the Closing Date, Seller shall
deliver to Buyer within fifteen (15) days after the end of each month a copy of
Seller's balance sheet, profit and loss statement, working capital report and
aged list of accounts receivable for such month prepared in a manner and
containing information consistent with Seller's current practices.
5.9 Change of Name. On or before the Closing Date, Seller shall (a) amend
its Governing Documents and take all other actions necessary to change its name
to one sufficiently dissimilar to Seller's present name, in Buyer's judgment, to
avoid confusion and (b) take all actions requested by Buyer to enable Buyer to
change its name to Seller's present name.
5.10 Payment of Liabilities. Seller shall pay or otherwise satisfy in the
Ordinary Course of Business all of its Liabilities and obligations arising prior
to Closing. Buyer and Seller hereby waive compliance with the bulk-transfer
provisions of the Uniform Commercial Code (or any similar law) ("Bulk Sales
Laws") in connection with the Contemplated Transactions.
5.11 Audited Financial Statements. As soon as reasonably possible, and in
no event later than September 30, 2005, Seller will, at Seller's expense,
prepare or cause to be prepared financial statements which Seller will deliver
to Xxxxx Xxxxxxxx along with all necessary work papers and any other
information, records or documents as reasonably requested by Buyer and Xxxxx
Xxxxxxxx to assist Xxxxx Xxxxxxxx in preparing an audited balance sheet of
Seller as of December 31, 2004, December 31, 2003 and December 31, 2002 and the
related audited statements of income, changes in shareholder's equity and cash
flows for the fiscal year then ended, including in each case the notes thereto.
5.12 Environmental Work. Seller will on or before September 30, 2005,
complete the ESA and the Phase II ESA described in Section 7.8.
5.13 Bank Subordination. Seller and Shareholders will cooperate with
Buyer's lenders in negotiating a subordination agreement with respect to the
Promissory Note and Seller and Shareholders will not unreasonably withhold their
consent to the request of commercially reasonable requests by such lenders.
6. COVENANTS OF BUYER PRIOR TO CLOSING.
6.1 Best Efforts. Buyer shall use its Best Efforts to cause the conditions
in Section 8 and Section 7.3 to be satisfied.
7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE. Buyer's obligation to
purchase the Assets and to take the other actions required to be taken by Buyer
at the Closing is subject to the satisfaction, at or prior to the Closing, of
each of the following conditions (any of which may be waived by Buyer, in whole
or in part):
7.1 Accuracy of Representations.
(a) All of Seller's and Shareholders' representations and warranties in
this Agreement (considered collectively), and each of these representations and
warranties (considered individually), shall have been accurate in all material
respects as of the date of this Agreement, and shall be accurate in all material
respects as of the time of the Closing as if then made, without giving effect to
any supplement to the Schedules.
(b) Each of the representations and warranties in Sections 3.2(a) and 3.4,
and each of the representations and warranties in this Agreement that contains
an express materiality qualification, shall have been accurate in all respects
as of the date of this Agreement, and shall be accurate in all respects as of
the time of the Closing as if then made, without giving effect to any supplement
to the Schedules.
7.2 Seller's Performance. All of the covenants and obligations that Seller
and Shareholders are required to perform or to comply with pursuant to this
Agreement at or prior to the Closing (considered collectively), and each of
these covenants and obligations (considered individually), shall have been duly
performed and complied with in all material respects.
7.3 Consents. Each of the Consents identified in Schedule 7.3 (the
"Consents") shall have been obtained and shall be in full force and effect.
7.4 Additional Documents. Seller and Shareholders shall have caused the
documents and instruments required by Section 2.7(a) and the following documents
to be delivered (or tendered subject only to Closing) to Buyer:
(a) The articles of incorporation and all amendments thereto of Seller,
duly certified as of a recent date by the Secretary of State of the jurisdiction
of Seller's incorporation;
(b) Releases of all Encumbrances on the Assets except for the Permitted
Encumbrances;
(c) An opinion of C. Xxxxxxxxxxx Xxxxxx, dated the Closing Date, in the
form of Exhibit 2.7(a)(x);
(d) Evidence that Seller has amended its Articles of Incorporation to a
name which is substantially dissimilar from Midwest Tube Xxxxx;
(e) Certificates dated as of a date not earlier than the third (3rd)
Business Day prior to the Closing as to the good standing of Seller and payment
of all applicable state Taxes by Seller, executed by the appropriate officials
of the State of Indiana and each jurisdiction in which Seller is licensed or
qualified to do business as a foreign corporation; and
(f) Such other documents as Buyer may reasonably request for the purpose of
facilitating the consummation or performance of any of the Contemplated
Transactions.
7.5 Audited Financial Statements. Buyer shall have received and be
reasonably satisfied with the audited balance sheets of Seller as of December
31, 2004, December 31, 2003 and December 31, 2002 (including notes thereto) and
the related audited statements of income, changes in shareholder's equity and
cash flows for the fiscal years then together with the report thereon of Xxxxx
Xxxxxxxx.
7.6 No Proceedings. Since the date of this Agreement, there shall not have
been commenced or threatened against Buyer, or against any Related Person of
Buyer, any Proceeding (a) involving any challenge to, or seeking Damages or
other relief in connection with, any of the Contemplated Transactions or (b)
that may have the effect of preventing, delaying, making illegal, imposing
limitations or conditions on or otherwise interfering with any of the
Contemplated Transactions.
7.7 No Conflict. Neither the consummation nor the performance of any of the
Contemplated Transactions will, directly or indirectly (with or without notice
or lapse of time), contravene or conflict with or result in a violation of or
cause Buyer or any Related Person of Buyer to suffer any adverse consequence
under (a) any applicable Legal Requirement or Order or (b) any Legal Requirement
or Order that has been published, introduced or otherwise proposed by or before
any Governmental Body, excluding Bulk Sales Laws.
7.8 Environmental Report/Remediation. At Seller's sole cost and expense,
Buyer shall have received an environmental site assessment ("ESA") report and a
Phase II environmental site assessment ("Phase II ESA") with respect to Seller's
Facilities, which report shall be acceptable in form and substance to Buyer in
its sole discretion. In addition, Seller shall have caused the clean up or
removal of any existing contamination caused by the adjoining property owners
unless Seller delivers to Buyer a report, addressed to Buyer and Tarpon
Industries, Inc., from a reputable environmental engineering firm, that the
level of contamination with respect to Seller's Facilities does not meet levels
necessary to require remediation.
7.9 Employees. Buyer shall have entered into employment or other agreements
with those employees and/or independent contractors of Seller identified in
Schedule 7.9.
7.10 Condition of Equipment and Facilities. At Buyer's expense, Buyer will
engage one (1) or more independent experts, who are acceptable to Seller, to
inspect and evaluate the condition of:
(a) the Assets, including but not limited to, the slitter, operating xxxxx
and related equipment to determine that they are in good working order, ordinary
wear and tear excepted, are suitable for immediate use in the Ordinary Course of
Business and are free from any latent or patent defects; and
(b) the Facilities to determine that they are in good repair and condition,
ordinary wear and tear excepted and free from latent and patent defects.
The independent experts will provide a report to Buyer identifying any defects
and Buyer will provide a copy of the report to Seller. For a period of fifteen
(15) days after receipt of an inspection report, Buyer and Seller will negotiate
in good faith with respect to the payment of the cost to repair the defects
identified in the independent expert's report. If Buyer and Seller are unable to
reach an agreement with respect to the payment of such repairs within such
fifteen (15) day period, or any extension agreed to by the parties, Buyer shall
have the right to either waive this condition and proceed to closing or
terminate this Agreement.
7.11 Inventory. At the Closing, Seller shall have adequate inventory,
including but not limited to raw materials, slit coil and finished goods,
satisfactory to supply current levels of customer requirements consistent with
Seller's past business practices. At Closing, the level of inventory will be
sufficient to provide for the smooth and orderly transition of the Business to
Buyer and to meet the current and ongoing needs of the Business. The inventory
necessary to meet this condition shall not include obsolete or distressed
inventory. Buyer shall have the right to conduct a physical inventory prior to
Closing.
8. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE. Seller's obligation to
sell the Assets and to take the other actions required to be taken by Seller at
the Closing is subject to the satisfaction, at or prior to the Closing, of each
of the following conditions (any of which may be waived by Seller in whole or in
part):
8.1 Accuracy of Representations. All of Buyer's representations and
warranties in this Agreement (considered collectively), and each of these
representations and warranties (considered individually), shall have been
accurate in all material respects as of the date of this Agreement and shall be
accurate in all material respects as of the time of the Closing as if then made.
8.2 Buyer's Performance. All of the covenants and obligations that Buyer is
required to perform or to comply with pursuant to this Agreement at or prior to
the Closing (considered collectively), and each of these covenants and
obligations (considered individually), shall have been performed and complied
with in all material respects.
8.3 Consents. Each of the Consents identified in Schedule 8.3 shall have
been obtained and shall be in full force and effect.
8.4 Additional Documents. Buyer will have caused the documents and
instruments required by Section 2.7(b) and such other documents as Seller and
Shareholders may reasonably request for the purpose of facilitating the
consummation or performance of any of the Contemplated Transactions.
8.5 No Injunction. There shall not be in effect any Legal Requirement or
any injunction or other Order that (a) prohibits the consummation of the
Contemplated Transactions and (b) has been adopted or issued, or has otherwise
become effective, since the date of this Agreement.
9. TERMINATION.
9.1 Termination Events. By notice given prior to or at the Closing, subject
to Section 9.2, this Agreement may be terminated as follows:
(a) by Buyer if a material Breach of any provision of this Agreement has
been committed by Seller or Shareholders and such Breach has not been waived by
Buyer;
(b) by Seller if a material Breach of any provision of this Agreement has
been committed by Buyer and such Breach has not been waived by Seller;
(c) by Buyer if any condition in Section 7 has not been satisfied as of the
date specified for Closing in the first sentence of Section 2.6 or if
satisfaction of such a condition by such date is or becomes impossible (other
than through the failure of Buyer to comply with its obligations under this
Agreement), and Buyer has not waived such condition on or before such date;
(d) by Seller if any condition in Section 8 has not been satisfied as of
the date specified for Closing in the first sentence of Section 2.6 or if
satisfaction of such a condition by such date is or becomes impossible (other
than through the failure of Seller or the Shareholders to comply with their
obligations under this Agreement), and Seller has not waived such condition on
or before such date;
(e) by mutual consent of Buyer and Seller;
(f) by Buyer if (i) Seller fails or refuses to Close five Business Days
after Xxxxx Xxxxxxxx has delivered to Buyer audited financial statements of
Seller for the fiscal years ended December 31, 2002, 2003, and 2004, or (ii)
five Business Days after Xxxxx Xxxxxxxx notifies the parties that it is unable
to prepare audited financial statements of Seller for the fiscal years ended
December 31, 2002, 2003, and/or 2004, or (iii) such later date as the parties
may agree upon, unless the Buyer is in material Breach of this Agreement; or
(g) by Seller if (i) Buyer fails or refuses to Close five Business Days
after Xxxxx Xxxxxxxx has delivered to Buyer audited financial statements of
Seller for the fiscal years ended December 31, 2002, 2003, and 2004, or (ii) )
five Business Days after Xxxxx Xxxxxxxx notifies the parties that it is unable
to prepare audited financial statements of Seller for the fiscal years ended
December 31, 2002, 2003, and/or 2004, or such later date as the parties may
agree upon, unless the Seller or Shareholders are in material Breach of this
Agreement.
9.2 Effect of Termination. Except for their indemnification rights under
Section 11, each party's right of termination under Section 9.1 is its exclusive
remedy with respect to breaches of representations and warranties of the other
above. For purposes of clarification, however Buyer may waive any breaches by
Seller or the Shareholders and require Seller to close. Notwithstanding the
foregoing, if Seller and Shareholders breach a pre-closing covenant under
Section 5, Buyer may seek specific performance of such covenant or terminate
this Agreement. If this Agreement is terminated pursuant to Section 9.1, all
obligations of the parties under this Agreement will terminate, except that the
obligations of the parties in Sections 12 and 13 (except for those in Section
13.5) will survive.
10. ADDITIONAL COVENANTS AND AGREEMENTS.
10.1 Employees and Employee Benefits.
(a) Information on Active Employees. For the purpose of this Agreement, the
term "Active Employees" shall mean all employees employed on the Closing Date by
Seller for its business who are employed exclusively in Seller's business as
currently conducted, including employees on temporary leave of absence,
including family medical leave, military leave, temporary disability or sick
leave, but excluding employees on long-term disability leave.
(b) Employment of Active Employees by Buyer.
(i) Buyer is not obligated to hire any Active Employee but may
interview all Active Employees. Buyer will provide Seller with a list of
Active Employees to whom Buyer has made an offer of employment that has
been accepted to be effective on the Closing Date (the "Hired Active
Employees"). Subject to Legal Requirements, Buyer will have reasonable
access to the Facilities and personnel Records (including performance
appraisals, disciplinary actions, grievances and medical Records) of Seller
for the purpose of preparing for and conducting employment interviews with
all Active Employees and will conduct the interviews as expeditiously as
possible prior to the Closing Date. Access will be provided by Seller upon
reasonable prior notice during normal business hours. Effective immediately
before the Closing, Seller will terminate the employment of all of its
Hired Active Employees.
(ii) Neither Seller nor Shareholders nor their Related Persons shall
solicit the continued employment of any Active Employee (unless and until
Buyer has informed Seller in writing that the particular Active Employee
will not receive any employment offer from Buyer) or the employment of any
Hired Active Employee after the Closing. Buyer shall inform Seller promptly
of the identities of those Active Employees to whom it will not make
employment offers, and Seller shall assist Buyer in complying with the WARN
Act as to those Active Employees.
(iii) It is understood and agreed that (A) Buyer's expressed intention
to extend offers of employment as set forth in this section shall not
constitute any commitment, Contract or understanding (expressed or implied)
of any obligation on the part of Buyer to a post-Closing employment
relationship of any fixed term or duration or upon any terms or conditions
other than those that Buyer may establish pursuant to individual offers of
employment, and (B) employment offered by Buyer is "at will"and may be
terminated by Buyer or by an employee at any time for any reason (subject
to any written commitments to the contrary made by Buyer or an employee and
Legal Requirements). Nothing in this Agreement shall be deemed to prevent
or restrict in any way the right of Buyer to terminate, reassign, promote
or demote any of the Hired Active Employees after the Closing or to change
adversely or favorably the title, powers, duties, responsibilities,
functions, locations, salaries, other compensation or terms or conditions
of employment of such employees.
(c) Salaries and Benefits.
(i) Seller shall be responsible for (A) the payment of all wages and
other remuneration due to Active Employees with respect to their services
as employees of Seller through the close of business on the Closing Date,
including pro rata bonus payments and all vacation pay earned prior to the
Closing Date; and (B) the payment of any termination or severance payments
and the provision of health plan continuation coverage in accordance with
the requirements of COBRA and Sections 601 through 608 of ERISA.
(ii) Seller shall be liable for any claims made or incurred by Active
Employees and their beneficiaries through the Closing Date under the
Employee Plans. For purposes of the immediately preceding sentence, a
charge will be deemed incurred, in the case of hospital, medical or dental
benefits, when the services that are the subject of the charge are
performed and, in the case of other benefits (such as disability or life
insurance), when an event has occurred or when a condition has been
diagnosed that entitles the employee to the benefit.
(d) Seller's Retirement and Savings Plans.
(i) All Hired Active Employees who are participants in Seller's
retirement plans shall retain their accrued benefits under Seller's
retirement plans as of the Closing Date, and Seller (or Seller's retirement
plans) shall retain sole liability for the payment of such benefits as and
when such Hired Active Employees become eligible therefor under such plans.
All Hired Active Employees shall become fully vested in their accrued
benefits under Seller's retirement plans as of the Closing Date, and Seller
will so amend such plans if necessary to achieve this result. Seller shall
cause the assets of each Employee Plan to equal or exceed the benefit
liabilities of such Employee Plan on a plan-termination basis as of the
Closing Date.
(ii) Seller will cause its savings plan to be amended in order to
provide that the Hired Active Employees shall be fully vested in their
accounts under such plan as of the Closing Date and all payments thereafter
shall be made from such plan as provided in the plan.
(e) Neither Seller nor Shareholders nor their respective Related Persons
will make any transfer of pension or other employee benefit plan assets to
Buyer.
(f) General Employee Provisions.
(i) Seller and Buyer shall give any notices required by Legal
Requirements and take whatever other actions with respect to the plans,
programs and policies described in this Section 10.1 as may be necessary to
carry out the arrangements described in this Section 10.1.
(ii) Seller and Buyer shall provide each other with such plan
documents and summary plan descriptions, employee data or other information
as may be reasonably required to carry out the arrangements described in
this Section 10.1.
(iii) If any of the arrangements described in this Section 10.1 are
determined by the IRS or other Governmental Body to be prohibited by law,
Seller and Buyer shall modify such arrangements to as closely as possible
reflect their expressed intent and retain the allocation of economic
benefits and burdens to the parties contemplated herein in a manner that is
not prohibited by law.
(iv) Seller shall provide Buyer with completed I-9 forms and
attachments with respect to all Hired Active Employees, except for such
employees as Seller certifies in writing to Buyer are exempt from such
requirement.
(v) Buyer shall not have any responsibility, liability or obligation,
whether to Active Employees, former employees, their beneficiaries or to
any other Person, with respect to any employee benefit plans, practices,
programs or arrangements (including the establishment, operation or
termination thereof and the notification and provision of COBRA coverage
extension) maintained by Seller.
10.2 Non-Competition, Non-Solicitation and Non-Disparagement.
(a) For a period of five (5) years after the Closing Date, Seller shall not
directly or indirectly invest in, own, manage, operate, finance, control,
advise, render services to or guarantee the obligations of any Person (i)
engaged in or planning to become engaged in the steel tube manufacturing
business, (ii) who is or was, at any time, a customer or supplier of Seller
("Competing Business"), provided, however, that Seller may purchase or otherwise
acquire up to (but not more than) five percent (5%) of any class of the
securities of any Person (but may not otherwise participate in the activities of
such Person) if such securities are listed on any national or regional
securities exchange or have been registered under Section 12(g) of the Exchange
Act.
(b) For a period of five (5) years after the Closing Date, Seller shall
not, directly or indirectly:
(i) solicit the business of any Person who is a customer of Buyer;
(ii) cause, induce or attempt to cause or induce any customer,
supplier, licensee, licensor, franchisee, employee, consultant or other
business relation of Buyer to cease doing business with Buyer, to deal with
any competitor of Buyer or in any way interfere with its relationship with
Buyer;
(iii) cause, induce or attempt to cause or induce any customer,
supplier, licensee, licensor, franchisee, employee, consultant or other
business relation of Seller on the Closing Date or within the year
preceding the Closing Date to cease doing business with Buyer, to deal with
any competitor of Buyer or in any way interfere with its relationship with
Buyer; or
(iv) hire, retain or attempt to hire or retain any employee or
independent contractor of Buyer or in any way interfere with the
relationship between Buyer and any of its employees or independent
contractors.
(c) After the Closing Date, Seller will not disparage Buyer or any of
Buyer's shareholders, directors, officers, employees or agents.
(d) If a final judgment of a court or tribunal of competent jurisdiction
determines that any term or provision contained in Sections 10.2(a) through
10.2(c) is invalid or unenforceable, then the parties agree that the court or
tribunal will have the power to reduce the scope, duration or geographic 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. This Section 10.2 will be
enforceable as so modified after the expiration of the time within which the
judgment may be appealed. This Section 10.2 is reasonable and necessary to
protect and preserve Buyer's legitimate business interests and the value of the
Assets and to prevent any unfair advantage conferred on Seller.
10.3 Customer and Other Business Relationships. After the Closing, Seller
will cooperate with Buyer in its efforts to continue and maintain for the
benefit of Buyer those business relationships of Seller existing prior to the
Closing and relating to the business to be operated by Buyer after the Closing,
including relationships with lessors, employees, regulatory authorities,
licensors, customers, suppliers and others. Seller will refer to Buyer all
inquiries relating to such business.
10.4 Transition; Shareholders Assistance. For a period of six (6) months
following the Closing Date, Xxxxxxx X. Xxxxxxx ("Xxxxxxx") will be available to
Buyer at the Buyer's request to assist Buyer in the day-to-day operations of the
business to be operated by Buyer after the Closing (the "Transitional
Services"). Xxxxxxx will provide the Transitional Services at no additional
compensation. Xxxxxxx will not be required to spend more than six (6) hours per
week in connection with his performance of the Transitional Services.
10.5 Retention of and Access to Records. After the Closing Date, Buyer
shall retain for a period consistent with Buyer's record-retention policies and
practices those Records of Seller delivered to Buyer. Buyer also shall provide
Seller and Shareholders and their Representatives reasonable access thereto,
during normal business hours and on at least three (3) days' prior written
notice, to enable them to prepare financial statements or tax returns or deal
with tax audits. After the Closing Date, Seller shall provide Buyer and its
Representatives reasonable access to Records that are Excluded Assets, during
normal business hours and on at least three (3) days' prior written notice, for
any reasonable business purpose specified by Buyer in such notice.
10.6 Accounts Receivable Repurchase. Buyer shall have the right, by written
notice (the "Receivables Notice") to Seller given on or after one hundred eighty
(181) days following the Closing Date (the "Repurchase Date"), to require Seller
to repurchase for cash and without recourse, within five (5) days of the date of
the Receivables Notice, all of the Accounts Receivable of Seller reflected on
the books and records of the Seller on the Closing Date that are at the
Repurchase Date uncollected. Seller shall repurchase uncollected Accounts
Receivable for a purchase price equal to their aggregate face value, and Seller
shall purchase and immediately pay by wire transfer to Buyer the uncollected
Accounts Receivable. When a payment (including payments received by affiliates
of Buyer for shipments to customers of Seller subsequent to Closing) is received
from a customer subsequent to Closing, the payment will be applied by Buyer to
the oldest outstanding receivable for that customer unless the customer has
notified Buyer in writing of a dispute regarding the products or services
covered by the receivable.
10.7 Further Assurances. The parties shall cooperate reasonably with each
other and with their respective Representatives in connection with any steps
required to be taken as part of their respective obligations under this
Agreement, and shall (a) furnish upon request to each other such further
information; (b) execute and deliver to each other such other documents; and (c)
do such other acts and things, all as the other party may reasonably request for
the purpose of carrying out the intent of this Agreement and the Contemplated
Transactions.
10.8 Corporate Continuation. Until the date which is five (5) years after
the Closing, Seller and the Shareholders will continue Seller's corporate
existence.
11. INDEMNIFICATION; REMEDIES.
11.1 Survival. All representations, warranties and covenants set forth in
this Agreement, the Schedules, the supplements to the Schedules, the
certificates delivered pursuant to Section 2.7 and any other certificate or
document delivered pursuant to this Agreement shall survive the Closing and the
consummation of the Contemplated Transactions, as provided by Section 11.7. The
right to indemnification, reimbursement or other remedy based upon such
representations, warranties, covenants and obligations shall not be affected by
any investigation (including any environmental investigation or assessment)
conducted with respect to, or any Knowledge acquired (or capable of being
acquired) at any time, whether before or after the execution and delivery of
this Agreement or the Closing Date, with respect to the accuracy or inaccuracy
of or compliance with any such representation, warranty, covenant or obligation.
The waiver of any condition based upon the accuracy of any representation or
warranty, or on the performance of or compliance with any covenant or
obligation, will not affect the right to indemnification, reimbursement or other
remedy based upon such representations, warranties, covenants and obligations.
11.2 Indemnification and Reimbursement by Seller and Shareholders. Seller
and Shareholders, jointly and severally, will indemnify and hold harmless Buyer,
and its Representatives, shareholders, subsidiaries and Related Persons
(collectively, the "Buyer Indemnified Persons"), and will reimburse the Buyer
Indemnified Persons for any loss, liability, claim, damage, expense (including
costs of investigation and defense and reasonable attorneys' fees and expenses)
or diminution of value, whether or not involving a Third-Party Claim
(collectively, "Damages"), arising from or in connection with:
(a) any Breach of any representation or warranty made by Seller or
Shareholders in (i) this Agreement, (ii) the certificates delivered pursuant to
Section 2.7 (for this purpose, each such certificate will be deemed to have
stated that Seller's and Shareholders' representations and warranties in this
Agreement fulfill the requirements of Section 7.1 as of the Closing Date as if
made on the Closing Date, (iii) any transfer instrument or (iv) any other
certificate, document, writing or instrument delivered by Seller or Shareholders
pursuant to this Agreement;
(b) any Breach of any covenant or obligation of Seller or Shareholders in
this Agreement or in any other certificate, document, writing or instrument
delivered by Seller or Shareholders pursuant to this Agreement;
(c) any Liability arising out of the ownership or operation of the Assets
prior to the Closing Date other than the Assumed Liabilities;
(d) any brokerage or finder's fees or commissions or similar payments based
upon any agreement or understanding made, or alleged to have been made, by any
Person with Seller or Shareholders (or any Person acting on their behalf) in
connection with any of the Contemplated Transactions; or
(e) any Retained Liabilities.
11.3 Indemnification and Reimbursement by Seller-Environmental Matters.
Buyer's sole and exclusive remedy for any breach of the environmental
representations and warranties of Section 3.20 is as follows: Seller and
Shareholders, jointly and severally, will indemnify and hold harmless Buyer and
the other Buyer Indemnified Persons, and will reimburse Buyer and the other
Buyer Indemnified Persons, for any Damages (including costs of cleanup,
containment or other remediation) arising from or in connection with any
Environmental, Health and Safety Liabilities arising out of: (a) Seller's
operation of any of the Facilities, Assets or the business of Seller, (b) any
Environmental, Health and Safety Liabilities arising out of Hazardous Materials
or other contaminants that (i) to the Knowledge of Seller were present on the
Facilities or Assets at any time on or prior to the Closing Date and (ii) were
not disclosed or otherwise identified in the ESA or the Phase II ESA and did not
arise out of Seller's operation of any of the Facilities, Assets or the business
of Seller.
Buyer will be entitled to control any Remedial Action, any Proceeding relating
to an Environmental Claim and, except as provided in the following sentence, any
other Proceeding with respect to which indemnity may be sought under this
Section 11.3. The procedure described in Section 11.9 will apply to any claim
solely for monetary Damages relating to a matter covered by this Section 11.3.
11.4 Indemnification and Reimbursement by Buyer. Buyer will indemnify and
hold harmless Seller, and will reimburse Seller, for any Damages arising from or
in connection with:
(a) any Breach of any representation or warranty made by Buyer in this
Agreement or in any certificate, document, writing or instrument delivered by
Buyer pursuant to this Agreement;
(b) any Breach of any covenant or obligation of Buyer in this Agreement or
in any other certificate, document, writing or instrument delivered by Buyer
pursuant to this Agreement;
(c) any claim by any Person for brokerage or finder's fees or commissions
or similar payments based upon any agreement or understanding alleged to have
been made by such Person with Buyer (or any Person acting on Buyer's behalf) in
connection with any of the Contemplated Transactions; or
(d) any Assumed Liabilities.
11.5 Limitations on Amount-Seller and Shareholders. Seller and Shareholders
shall have no liability (for indemnification or otherwise) with respect to
claims under Section 11.2(a) until the total of all Damages with respect to such
matters exceeds Two Hundred Thousand Dollars ($200,000) and then only for the
amount by which such Damages exceed Two Hundred Thousand Dollars ($200,000) up
to a maximum amount equal to the Purchase Price. Seller and Shareholders will
have no obligations of indemnification with respect to a breach of
representations and warranties which terminate at the Closing except that (i)
the termination of any representation or warranty will not diminish or eliminate
Buyer's right to seek indemnification under Section 11.2(c), and (ii) with
respect to the representations and warranties contained in Sections 3.5, 3.13,
3.14, 3.17, 3.18, and 3.22 such representation and warranty will survive for a
period of one (1) year after Closing to the extent that Seller or any
Shareholder had Knowledge that the representation or warranty was false at the
time made or at the Closing. Buyer's only remedy with respect to a Breach of the
representation and warranties contained in Section 3.9 is set forth in Section
10.6. Buyer's only remedy for any breach of the representation and warranties
contained in Section 3.20 will be a claim for indemnification arising under
Section 11.3.
11.6 Limitations on Amount-Buyer. Buyer will have no liability (for
indemnification or otherwise) with respect to claims under Section 11.4(a) until
the total of all Damages with respect to such matters exceeds Two Hundred
Thousand Dollars ($200,000) and then only for the amount by which such Damages
exceed Two Hundred Thousand Dollars ($200,000). However, this Section 11.6 will
not apply to claims under Sections 11.4(b) through 11.4(d) or matters arising in
respect of Section 4.4 or to any Breach of any of Buyer's representations and
warranties of which Buyer had Knowledge at any time prior to the date on which
such representation and warranty is made or any intentional Breach by Buyer of
any covenant or obligation, and Buyer will be liable for all Damages with
respect to such Breaches.
11.7 Time Limitations. The representations and warranties of the parties in
this Agreement will survive the Closing as follows: the representations and
warranties contained in Sections 3.1, 3.2, 3.3, 3.6, 3.7, 3.9, 3.20, 3.23, 3.24
and 3.25 will continue indefinitely. The representations and warranties
contained in Section 3.12 will continue until the expiration of the applicable
statute of limitations period plus ninety (90) days, taking into account all
extensions. All other representations and warranties namely those
representations and warranties contained in Sections 3.4, 3.8, 3.10, 3.11, 3.14,
3.15, 3.19 and 3.21 will expire at Closing. All covenants set forth in Section 5
will expire at Closing except for the covenant contained in Section 5.2 which
will survive for one year after Closing. Claims based on any misrepresentation
or breach of a warranty of Sections 3.5, 3.13, 3.14, 3.17, 3.18, and 3.22, which
was actually known to be untrue by the indemnifying party when made will survive
for one (1) year after Closing. Any party making a claim must, on or prior to
the expiration of the period of survival, give written notice to the other party
specifying the factual basis of the claim in reasonable detail to the extent
then known by the party making the claim.
11.8 Right of Setoff. Upon the reasonable determination by Buyer that it or
any of the Indemnified Persons are entitled to indemnification for Damages
hereunder from Seller, Buyer may offset any indemnification amounts to which
Buyer reasonably believes it or any of the Indemnified Persons are entitled
against any payment due to Seller under the Promissory Note. Buyer's obligation
to make payments under the Promissory Note shall not be suspended or otherwise
affected by the assertion of an indemnification claim or by any right of setoff.
Notwithstanding the foregoing, prior to Buyer seeking an offset against the
Promissory Note, Buyer shall promptly notify Seller in writing specifying the
details of such claim of offset. If Seller disputes such claim in writing to
Buyer within ten (10) days of receipt of the claim of offset and the parties are
unable to resolve the dispute within twenty (20) days thereafter, Buyer may
exercise a right of offset by delivering the payment due to Seller pursuant to
the Promissory Note to an escrow agent agreed to by the parties, with the amount
of such payment to be remitted to Seller or Buyer upon the resolution of the
claim. Buyer shall first offset damages to which it is entitled against the
Promissory Note balance before seeking recovery directly from Seller or any
Shareholder.
11.9 Third-Party Claims.
(a) Promptly after receipt by a Person entitled to indemnity under Section
11.2, 11.3 (to the extent provided in the last sentence of Section 11.3) or 11.4
(an "Indemnified Person") of notice of the assertion of a Third-Party Claim
against it, such Indemnified Person shall give notice to the Person obligated to
indemnify under such Section (an "Indemnifying Person") of the assertion of such
Third-Party Claim, provided that the failure to notify the Indemnifying Person
will not relieve the Indemnifying Person of any liability that it may have to
any Indemnified Person, except to the extent that the Indemnifying Person
demonstrates that the defense of such Third-Party Claim is prejudiced by the
Indemnified Person's failure to give such notice.
(b) If an Indemnified Person gives notice to the Indemnifying Person
pursuant to Section 11.9(a) of the assertion of a Third-Party Claim, the
Indemnifying Person shall be entitled to participate in the defense of such
Third-Party Claim and, to the extent that it wishes (unless (i) the Indemnifying
Person is also a Person against whom the Third-Party Claim is made and the
Indemnified Person determines in good faith that joint representation would be
inappropriate or (ii) the Indemnifying Person fails to provide reasonable
assurance to the Indemnified Person of its financial capacity to defend such
Third-Party Claim and provide indemnification with respect to such Third-Party
Claim), to assume the defense of such Third-Party Claim with counsel
satisfactory to the Indemnified Person. After notice from the Indemnifying
Person to the Indemnified Person of its election to assume the defense of such
Third-Party Claim, the Indemnifying Person shall not, so long as it diligently
conducts such defense, be liable to the Indemnified Person under this Section 11
for any fees of other counsel or any other expenses with respect to the defense
of such Third-Party Claim, in each case subsequently incurred by the Indemnified
Person in connection with the defense of such Third-Party Claim, other than
reasonable costs of investigation. If the Indemnifying Person assumes the
defense of a Third-Party Claim, (i) such assumption will conclusively establish
for purposes of this Agreement that the claims made in that Third-Party Claim
are within the scope of and subject to indemnification, and (ii) no compromise
or settlement of such Third-Party Claims may be effected by the Indemnifying
Person without the Indemnified Person's Consent unless (A) there is no finding
or admission of any violation of Legal Requirement or any violation of the
rights of any Person; (B) the sole relief provided is monetary Damages that are
paid in full by the Indemnifying Person; and (C) the Indemnified Person shall
have no liability with respect to any compromise or settlement of such
Third-Party Claims effected without its Consent. If notice is given to an
Indemnifying Person of the assertion of any Third-Party Claim and the
Indemnifying Person does not, within ten (10) days after the Indemnified
Person's notice is given, give notice to the Indemnified Person of its election
to assume the defense of such Third-Party Claim, the Indemnifying Person will be
bound by any determination made in such Third-Party Claim or any compromise or
settlement effected by the Indemnified Person.
(c) Notwithstanding the foregoing, if an Indemnified Person determines in
good faith that there is a reasonable probability that a Third-Party Claim may
adversely affect it or its Related Persons other than as a result of monetary
Damages for which it would be entitled to indemnification under this Agreement,
the Indemnified Person may, by notice to the Indemnifying Person, assume the
exclusive right to defend, compromise or settle such Third-Party Claim, but the
Indemnifying Person will not be bound by any determination of any Third-Party
Claim so defended for the purposes of this Agreement or any compromise or
settlement effected without its Consent (which may not be unreasonably
withheld).
(d) Notwithstanding the provisions of Section 13.4, Seller and Shareholders
hereby consent to the non-exclusive jurisdiction of any court in which a
Proceeding in respect of a Third-Party Claim is brought against any Buyer
Indemnified Person for purposes of any claim that a Buyer Indemnified Person may
have under this Agreement with respect to such Proceeding or the matters alleged
therein and agree that process may be served on Seller and Shareholders with
respect to such a claim anywhere in the world.
(e) With respect to any Third-Party Claim subject to indemnification under
this Section 11: (i) both the Indemnified Person and the Indemnifying Person, as
the case may be, shall keep the other Person fully informed of the status of
such Third-Party Claim and any related Proceedings at all stages thereof where
such Person is not represented by its own counsel, and (ii) the parties agree
(each at its own expense) to render to each other such assistance as they may
reasonably require of each other and to cooperate in good faith with each other
in order to ensure the proper and adequate defense of any Third-Party Claim.
(f) With respect to any Third-Party Claim subject to indemnification under
this Section 11, the parties agree to cooperate in such a manner as to preserve
in full (to the extent possible) the confidentiality of all Confidential
Information and the attorney-client and work-product privileges. In connection
therewith, each party agrees that: (i) it will use its Best Efforts, in respect
of any Third-Party Claim in which it has assumed or participated in the defense,
to avoid production of Confidential Information (consistent with applicable law
and rules of procedure), and (ii) all communications between any party hereto
and counsel responsible for or participating in the defense of any Third-Party
Claim shall, to the extent possible, be made so as to preserve any applicable
attorney-client or work-product privilege.
11.10 Other Claims. A claim for indemnification for any matter not
involving a Third-Party Claim may be asserted by notice to the party from whom
indemnification is sought and shall be paid promptly after such notice.
11.11 Indemnification in Case of Strict Liability or Indemnitee Negligence.
THE INDEMNIFICATION PROVISIONS IN THIS SECTION 11 SHALL BE ENFORCEABLE
REGARDLESS OF WHETHER THE LIABILITY IS BASED UPON PAST, PRESENT OR FUTURE ACTS,
CLAIMS OR LEGAL REQUIREMENTS (INCLUDING ANY PAST, PRESENT OR FUTURE BULK SALES
LAW, ENVIRONMENTAL LAW, FRAUDULENT TRANSFER ACT, OCCUPATIONAL SAFETY AND HEALTH
LAW OR PRODUCTS LIABILITY, SECURITIES OR OTHER LEGAL REQUIREMENT) AND REGARDLESS
OF WHETHER ANY PERSON (INCLUDING THE PERSON FROM WHOM INDEMNIFICATION IS SOUGHT)
ALLEGES OR PROVES THE SOLE, CONCURRENT, CONTRIBUTORY OR COMPARATIVE NEGLIGENCE
OF THE PERSON SEEKING INDEMNIFICATION OR THE SOLE OR CONCURRENT STRICT LIABILITY
IMPOSED UPON THE PERSON SEEKING INDEMNIFICATION.
12. CONFIDENTIALITY.
12.1 Definition of Confidential Information.
(a) As used in this Section 12, the term "Confidential Information"
includes any and all of the following information of Seller, Buyer or
Shareholders that has been or may hereafter be disclosed in any form, whether in
writing, orally, electronically or otherwise, or otherwise made available by
observation, inspection or otherwise by either party (Buyer on the one hand or
Seller and Shareholders, collectively, on the other hand) or its Representatives
(collectively, a "Disclosing Party") to the other party or its Representatives
(collectively, a "Receiving Party"):
(i) all information that is a trade secret under applicable trade
secret or other law;
(ii) all information concerning product specifications, data,
know-how, formulae, compositions, processes, designs, sketches,
photographs, graphs, drawings, samples, inventions and ideas, past, current
and planned research and development, current and planned manufacturing or
distribution methods and processes, customer lists, current and anticipated
customer requirements, price lists, market studies, business plans,
computer hardware, Software and computer software and database
technologies, systems, structures and architectures;
(iii) all information concerning the business and affairs of the
Disclosing Party (which includes historical and current financial
statements, financial projections and budgets, tax returns and accountants'
materials, historical, current and projected sales, capital spending
budgets and plans, business plans, strategic plans, marketing and
advertising plans, publications, client and customer lists and files,
contracts, the names and backgrounds of key personnel and personnel
training techniques and materials, however documented), and all information
obtained from review of the Disclosing Party's documents or property or
discussions with the Disclosing Party regardless of the form of the
communication; and
(iv) all notes, analyses, compilations, studies, summaries and other
material prepared by the Receiving Party to the extent containing or based,
in whole or in part, upon any information included in the foregoing.
(b) Any trade secrets of a Disclosing Party shall also be entitled to all
of the protections and benefits under applicable trade secret law and any other
applicable law. If any information that a Disclosing Party deems to be a trade
secret is found by a court of competent jurisdiction not to be a trade secret
for purposes of this Section 12, such information shall still be considered
Confidential Information of that Disclosing Party for purposes of this Section
12 to the extent included within the definition. In the case of trade secrets,
each of Buyer, Seller and Shareholders hereby waives any requirement that the
other party submit proof of the economic value of any trade secret or post a
bond or other security.
12.2 Restricted Use of Confidential Information.
(a) Each Receiving Party acknowledges the confidential and proprietary
nature of the Confidential Information of the Disclosing Party and agrees that
such Confidential Information (i) shall be kept confidential by the Receiving
Party; (ii) shall not be used for any reason or purpose other than to evaluate
and consummate the Contemplated Transactions; and (iii) without limiting the
foregoing, shall not be disclosed by the Receiving Party to any Person, except
in each case as otherwise expressly permitted by the terms of this Agreement or
with the prior written consent of an authorized representative of Seller with
respect to Confidential Information of Seller or Shareholders (each, a "Seller
Contact") or an authorized representative of Buyer with respect to Confidential
Information of Buyer (each, a "Buyer Contact"). Each of Buyer and Seller and
Shareholders shall disclose the Confidential Information of the other party only
to its Representatives who require such material for the purpose of evaluating
the Contemplated Transactions and are informed by Buyer, Seller or Shareholders,
as the case may be, of the obligations of this Section 12 with respect to such
information. Each of Buyer, Seller and Shareholders shall (iv) enforce the terms
of this Section 12 as to its respective Representatives; (v) take such action to
the extent necessary to cause its Representatives to comply with the terms and
conditions of this Section 12; and (vi) be responsible and liable for any Breach
of the provisions of this Section 12 by it or its Representatives.
(b) Unless and until this Agreement is terminated, Seller and Shareholders
shall maintain as confidential any Confidential Information (including for this
purpose any information of Seller or Shareholders of the type referred to in
Sections 12.1(a)(i), 12.1(a)(ii) and 12.1(a)iii), whether or not disclosed to
Buyer) of the Seller or Shareholders relating to any of the Assets or the
Assumed Liabilities. Notwithstanding the preceding sentence, Seller may use any
Confidential Information of Seller before the Closing in the Ordinary Course of
Business in connection with the transactions permitted by Section 5.2.
(c) From and after the Closing, the provisions of Section 12.2(a) above
shall not apply to or restrict in any manner Buyer's use of any Confidential
Information of the Seller or Shareholders relating to any of the Assets or the
Assumed Liabilities.
12.3 Exceptions. Sections 12.2(a) and 12.2(b) do not apply to that part of
the Confidential Information of a Disclosing Party that a Receiving Party
demonstrates (a) was, is or becomes generally available to the public other than
as a result of a Breach of this Section 12 or the Confidentiality Agreement by
the Receiving Party or its Representatives; (b) was or is developed by the
Receiving Party independently of and without reference to any Confidential
Information of the Disclosing Party; or (c) was, is or becomes available to the
Receiving Party on a non-confidential basis from a Third Party not bound by a
confidentiality agreement or any legal, fiduciary or other obligation
restricting disclosure. Neither Seller nor Shareholders shall disclose any
Confidential Information of Seller or Shareholders relating to any of the Assets
or the Assumed Liabilities in reliance on the exceptions in clauses (b) or (c)
above.
12.4 Legal Proceedings. If a Receiving Party becomes compelled in any
Proceeding or is requested by a Governmental Body having regulatory jurisdiction
over the Contemplated Transactions to make any disclosure that is prohibited or
otherwise constrained by this Section 12, that Receiving Party shall provide the
Disclosing Party with prompt notice of such compulsion or request so that it may
seek an appropriate protective order or other appropriate remedy or waive
compliance with the provisions of this Section 12. In the absence of a
protective order or other remedy, the Receiving Party may disclose that portion
(and only that portion) of the Confidential Information of the Disclosing Party
that, based upon advice of the Receiving Party's counsel, the Receiving Party is
legally compelled to disclose or that has been requested by such Governmental
Body, provided, however, that the Receiving Party shall use reasonable efforts
to obtain reliable assurance that confidential treatment will be accorded by any
Person to whom any Confidential Information is so disclosed. The provisions of
this Section 12.4 do not apply to any Proceedings between the parties to this
Agreement.
12.5 Return or Destruction of Confidential Information. If this Agreement
is terminated, each Receiving Party shall (a) destroy all Confidential
Information of the Disclosing Party prepared or generated by the Receiving Party
without retaining a copy of any such material; (b) promptly deliver to the
Disclosing Party all other Confidential Information of the Disclosing Party,
together with all copies thereof, in the possession, custody or control of the
Receiving Party or, alternatively, with the written consent of a Seller Contact
or a Buyer Contact (whichever represents the Disclosing Party) destroy all such
Confidential Information; and (c) certify all such destruction in writing to the
Disclosing Party, provided, however, that the Receiving Party may retain a list
that contains general descriptions of the information it has returned or
destroyed to facilitate the resolution of any controversies after the Disclosing
Party's Confidential Information is returned.
12.6 Attorney-Client Privilege. The Disclosing Party is not waiving, and
will not be deemed to have waived or diminished, any of its attorney work
product protections, attorney-client privileges or similar protections and
privileges as a result of disclosing its Confidential Information (including
Confidential Information related to pending or threatened litigation) to the
Receiving Party, regardless of whether the Disclosing Party has asserted, or is
or may be entitled to assert, such privileges and protections. The parties (a)
share a common legal and commercial interest in all of the Disclosing Party's
Confidential Information that is subject to such privileges and protections; (b)
are or may become joint defendants in Proceedings to which the Disclosing
Party's Confidential Information covered by such protections and privileges
relates; (c) intend that such privileges and protections remain intact should
either party become subject to any actual or threatened Proceeding to which the
Disclosing Party's Confidential Information covered by such protections and
privileges relates; and (d) intend that after the Closing the Receiving Party
shall have the right to assert such protections and privileges. No Receiving
Party shall admit, claim or contend, in Proceedings involving either party or
otherwise, that any Disclosing Party waived any of its attorney work-product
protections, attorney-client privileges or similar protections and privileges
with respect to any information, documents or other material not disclosed to a
Receiving Party due to the Disclosing Party disclosing its Confidential
Information (including Confidential Information related to pending or threatened
litigation) to the Receiving Party.
13. GENERAL PROVISIONS.
13.1 Expenses. Except as otherwise provided in this Agreement, each party
to this Agreement will bear its respective fees and expenses incurred in
connection with the preparation, negotiation, execution and performance of this
Agreement and the Contemplated Transactions, including all fees and expense of
its Representatives. Seller will pay all amounts payable in connection with the
Phase I environmental study referenced in Section 7.8, the preparation of
information required for the Audited Financial Statements as required by Section
5.11, and Seller will pay the fees of Xxxxx Xxxxxxxx in connection with the
audit of Seller's financial statements for the year ended December 31, 2004.
Buyer will pay the fees of Xxxxx Xxxxxxxx in connection with the audit of
Seller's financial statement for the years ended December 31, 2003 and December
31, 2002.
13.2 Public Announcements. Any public announcement, press release or
similar publicity with respect to this Agreement or the Contemplated
Transactions will be issued, if at all, at such time and in such manner as Buyer
determines. Except with the prior consent of Buyer or as permitted by this
Agreement, neither Seller, Shareholders nor any of their Representatives shall
disclose to any Person (a) the fact that any Confidential Information of Seller
or Shareholders has been disclosed to Buyer or its Representatives, that Buyer
or its Representatives have inspected any portion of the Confidential
Information of Seller or Shareholders, that any Confidential Information of
Buyer has been disclosed to Seller, Shareholders or their Representatives or
that Seller, Shareholders or their Representatives have inspected any portion of
the Confidential Information of Buyer or (b) any information about the
Contemplated Transactions, including the status of such discussions or
negotiations, the execution of any documents (including this Agreement) or any
of the terms of the Contemplated Transactions or the related documents
(including this Agreement). Seller and Buyer will consult with each other
concerning the means by which Seller's employees, customers, suppliers and
others having dealings with Seller will be informed of the Contemplated
Transactions, and Buyer will have the right to be present for any such
communication.
13.3 Notices. All notices, Consents, waivers and other communications
required or permitted by this Agreement shall be in writing and shall be deemed
given to a party when (a) delivered to the appropriate address by hand or by
nationally recognized overnight courier service (costs prepaid); (b) sent by
facsimile or email with confirmation of transmission by the transmitting
equipment; or (c) received or rejected by the addressee, if sent by certified
mail, return receipt requested, in each case to the following addresses,
facsimile numbers or email addresses and marked to the attention of the person
(by name or title) designated below (or to such other address, facsimile number,
email address or person as a party may designate by notice to the other
parties):
Seller (before the Closing): Midwest Tube Xxxxx, Inc.
0000 Xxxxxxxx Xx.
Xxxxxxx, XX 00000-0000
Attn: Xxxxxxx Xxxxxxx
Fax no.: 000-000-0000
with a mandatory copy to: C. Xxxxxxxxxxx Xxxxxx
0000 Xxxxxx Xx., X.X.
Xxxxxxx, XX 00000-0000
Fax no.: 000-000-0000
Seller (after the Closing): [To be provided by Seller]
Attn:________________________
Fax no.:_____________________
Shareholders: Xxxxxxx X. Xxxxxxx, Individually
and as Trustee of the Xxxxxxx
X.Xxxxxxx 2004 Annuity Trust
0000 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000-0000
Fax no.: 000-000-0000
Buyer: MTM Acquisition Company
0000 Xxxxx Xx.
Xxxxxxxxxx, XX 00000-0000
Attn: J. Xxxxx Xxxxxxxx,
Chief Executive Officer
Fax no.: 000-000-0000
with a mandatory copy to: Xxxxxxx & Xxxxxx, P.C.
P.O. Box 5058
00000 Xxxxxxxxxxxx Xxx.,0xx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxx-Xxxxxx
Fax no.: 000-000-0000
13.4 Arbitration
(a) Disputes. Any controversy or claim arising out of either party's rights
of indemnification under Sections 11.2, 11.3, and 11.4 will be subject to
arbitration administered by the American Arbitration Association. However, any
controversy or claim arising under Section 11.9 will not be subject to
arbitration and may be brought in any court of competent jurisdiction. The forum
for the arbitration will be Indianapolis, Indiana. There shall be three (3)
arbitrators, unless the parties are able to agree on a single arbitrator. In the
absence of such agreement within ten (10) days after the initiation of an
arbitration proceeding, Seller shall select one arbitrator and Buyer shall
select one (1) arbitrator, and those two (2) arbitrators shall then select,
within ten (10) days, a third (3rd) arbitrator. If those two (2) arbitrators are
unable to select a third (3rd) arbitrator within such ten (10)-day period, a
third (3rd) arbitrator shall be appointed by the commercial panel of the
American Arbitration Association. The decision in writing of at least two (2) of
the three (3) arbitrators shall be final and binding upon the parties.
(b) Rules. The rules of arbitration shall be the Commercial Arbitration
Rules of the American Arbitration Association, as modified by any other
instructions that the parties may agree upon at the time, except that each party
shall have the right to conduct discovery in any manner and to the extent
authorized by the Federal Rules of Civil Procedure as interpreted by the federal
courts. If there is any conflict between those Rules and the provisions of this
section, the provisions of this section shall prevail.
(c) Substantive Law. The arbitrators shall be bound by and shall strictly
enforce the terms of this Agreement and may not limit, expand or otherwise
modify its terms. The arbitrators shall make a good faith effort to apply
substantive applicable law, but an arbitration decision shall not be subject to
review because of errors of law. The arbitrators shall be bound to honor claims
of privilege or work-product doctrine recognized at law, but the arbitrators
shall have the discretion to determine whether any such claim of privilege or
work product doctrine applies.
(d) Decision. The arbitrators' decision shall provide a reasoned basis for
the resolution of each dispute and for any award. The arbitrators shall not have
power to award damages in connection with any dispute in excess of actual
compensatory damages and shall not multiply actual damages or award
consequential or punitive damages or award any other damages that are excluded
under the provisions of this Agreement.
(e) Expenses. Each party shall bear its own fees and expenses with respect
to the arbitration and any proceeding related thereto and the parties shall
share equally the fees and expenses of the American Arbitration Association and
the arbitrators.
(f) Award. The award rendered by arbitration shall be final and binding
upon the parties, and judgment upon the award may be entered in any court of
competent jurisdiction in the United States.
13.5 Enforcement of Agreement. Seller and Shareholders acknowledge and
agree that Buyer would be irreparably damaged if any of the provisions of this
Agreement are not performed in accordance with their specific terms and that any
Breach of this Agreement by Seller or Shareholders could not be adequately
compensated in all cases by monetary Damages alone. Accordingly, in addition to
any other right or remedy to which Buyer may be entitled, at law or in equity,
it shall be entitled to enforce any provision of this Agreement by a decree of
specific performance and to temporary, preliminary and permanent injunctive
relief to prevent Breaches or threatened Breaches of any of the provisions of
this Agreement, without posting any bond or other undertaking.
13.6 Waiver; Remedies Cumulative. The rights and remedies of the parties to
this Agreement are cumulative and not alternative. Neither any failure nor any
delay by any party in exercising any right, power or privilege under this
Agreement or any of the documents referred to in this Agreement will operate as
a waiver of such right, power or privilege, and no single or partial exercise of
any such right, power or privilege will preclude any other or further exercise
of such right, power or privilege or the exercise of any other right, power or
privilege. To the maximum extent permitted by applicable law, (a) no claim or
right arising out of this Agreement or any of the documents referred to in this
Agreement can be discharged by one party, in whole or in part, by a waiver or
renunciation of the claim or right unless in writing signed by the other party;
(b) no waiver that may be given by a party will be applicable except in the
specific instance for which it is given; and (c) no notice to or demand on one
party will be deemed to be a waiver of any obligation of that party or of the
right of the party giving such notice or demand to take further action without
notice or demand as provided in this Agreement or the documents referred to in
this Agreement.
13.7 Entire Agreement and Modification. This Agreement supersedes all prior
agreements, whether written or oral, between the parties with respect to its
subject matter (including any letter of intent and any confidentiality agreement
between Buyer and Seller) and constitutes (along with the Schedules, Exhibits
and other documents delivered pursuant to this Agreement) a complete and
exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended, supplemented,
or otherwise modified except by a written agreement executed by the party to be
charged with the amendment.
13.8 Schedules.
(a) The information in the Schedules constitutes (i) exceptions to
particular representations, warranties, covenants and obligations of Seller and
Shareholders as set forth in this Agreement or (ii) descriptions or lists of
assets and liabilities and other items referred to in this Agreement. If there
is any inconsistency between the statements in this Agreement and those in the
Schedules (other than an exception expressly set forth as such in the Schedules
with respect to a specifically identified representation or warranty), the
statements in this Agreement will control.
(b) The statements in the Schedules, and those in any supplement thereto,
relate only to the provisions in the Section of this Agreement to which they
expressly relate and not to any other provision in this Agreement.
13.9 Assignments, Successors and No Third-Party Rights. No party may assign
any of its rights or delegate any of its obligations under this Agreement
without the prior written consent of the other parties, except that Buyer may
collaterally assign its rights hereunder to any financial institution providing
financing in connection with the Contemplated Transactions. Subject to the
preceding sentence, this Agreement will apply to, be binding in all respects
upon and inure to the benefit of the successors and permitted assigns of the
parties. Nothing expressed or referred to in this Agreement will be construed to
give any Person other than the parties to this Agreement any legal or equitable
right, remedy or claim under or with respect to this Agreement or any provision
of this Agreement, except such rights as shall inure to a successor or permitted
assignee pursuant to this Section 13.9.
13.10 Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
13.11 Construction. The headings of Sections in this Agreement are provided
for convenience only and will not affect its construction or interpretation. All
references to "Schedules" and "Sections" refer to the corresponding Schedules
and Sections of this Agreement.
13.12 Time of Essence. With regard to all dates and time periods set forth
or referred to in this Agreement, time is of the essence.
13.13 Governing Law. This Agreement will be governed by and construed under
the laws of the State of Michigan without regard to conflicts-of-laws principles
that would require the application of any other law.
13.14 Execution of Agreement. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement. The exchange of copies of this Agreement and of
signature pages by facsimile transmission shall constitute effective execution
and delivery of this Agreement as to the parties and may be used in lieu of the
original Agreement for all purposes. Signatures of the parties transmitted by
facsimile shall be deemed to be their original signatures for all purposes.
13.15 Shareholders Obligations. The liability of the Shareholders hereunder
shall be joint and several with Seller. Where in this Agreement provision is
made for any action to be taken or not taken by Seller, Shareholders jointly and
severally undertake to cause Seller to take or not take such action, as the case
may be. Without limiting the generality of the foregoing, Shareholders shall be
jointly and severally liable with Seller for the indemnities set forth in
Section 11.
[Remainder of Page Left Blank Intentionally]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
BUYER: SHAREHOLDERS:
MTM Acquisition Company
By:_____________________________ ___________________________________
J. Xxxxx Xxxxxxxx Xxxxxxx X. Xxxxxxx, Individually and in
Its: Chief Executive Officer his Fiduciary Capacity as Trustee of
the Xxxxxxx X. Xxxxxxx 2004 Annuity
Trust
SELLER:
Midwest Tube Xxxxx, Inc.
By:_________________________________
Xxxxxxx X. Xxxxxxx
Its: President
LIST OF EXHIBITS
Exhibit 1 - Definitions and Usage
Exhibit 2.3 - Promissory Note
Exhibit 2.7(a)(i) - Xxxx of Sale
Exhibit 2.7(a)(ii) - Assignment and Assumption Agreement
Exhibit 2.7(a)(iii) - Facility Lease
Exhibit 2.7(a)(viii) - Non-Competition Agreement
Exhibit 2.7(a)(x) - Opinion of Seller's Counsel
Exhibit 2.7(b)(v) - Guarantee
Exhibit 2.9 - Accounting Principles Policies and Practices
LIST OF SCHEDULES
Schedule 2.1(a) Tangible Personal Propert
Schedule 2.1(k) - Seller Claims Against Third Parties
Schedule 2.2 - Excluded Assets
Schedule 2.4(a)(v) - Additional Seller Liability
Schedule 3.1 - Jurisdiction of Organization and Operation
Schedule 3.2(c) - Required Third Party Notices and Consents
Schedule 3.6 - Permitted Encumbrances
Schedule 3.7 - Description of Leased Real Property
Schedule 3.8(b) - Tangible Personal Property Not in Seller's Possession
Schedule 3.9 - Accounts Receivable
Schedule 3.11 - Undisclosed Liabilities
Schedule 3.12(b) - Audited Tax Returns
Schedule 3.13 - Material Adverse Change
Schedule 3.14(a) - Employee Plans and ERISA Affiliates
Schedule 3.14(c) - Non-Payment, Finding Deficiencies, Liquidating Shortfalls of
Employee Plans
Schedule 3.14(d) - Code, Social Security Act and COBRA Non-Compliance
Schedule 3.14(g) - Workers' Compensation Coverage Maintenance
Schedule 3.15 - Non-Compliance with Legal Requirements and Governmental
Authorizations
Schedule 3.15(d) - Governmental Authorizations
Schedule 3.16(a) - Pending or Threatened Proceedings
Schedule 3.16(b) - Controlling Orders
Schedule 3.17 - Conduct Not in Ordinary Course of Business
Schedule 3.18(a) - Seller's Contracts
Schedule 3.18(b) - Rights and Obligations of Seller Shareholders under Seller
Contracts
Schedule 3.18(c) - Seller Contracts Subject to Invalidity, Unenforceability,
Third Party Consents or Having Adverse Effect
Schedule 3.18(d) - Non-Compliance with Seller Contracts
Schedule 3.19(a) Seller Insurance Policies
Schedule 3.19(b) - Seller's Self-Insurance, Risk-Sharing, Risk Transfer and
Obligations as Insurer
Schedule 3.19(c) - Cancellation of Unenforceability of Invalidity of, Inadequacy
of and Non-Compliance with Seller's Insurance Policies
Schedule 3.20 - Environmental Matters
Schedule 3.21(a) - Employees, Directors, Contractors, Consultants and Agents
Schedule 3.22(b) - Threatened, Pending or Existing Labor and Employment Matters
Schedule 3.23 - Seller's Intellectual Property Assets
Schedule 3.24 - Seller's Relationships with Related Persons
Schedule 7.3 - Consents Required by Buyer
Schedule 7.9 - Seller's Employees and Independent Contractors Entering Agreement
with Buyer
Schedule 8.3 - Consents Required by Seller
EXHIBIT 1
DEFINITIONS AND USAGE
---------------------
1. Definitions. For purposes of this Agreement, the following terms and
variations thereof have the meanings specified or referred to in this Section
1.1:
"Accounts Receivable"--(a) all trade accounts receivable and other rights
to payment from customers of Seller and the full benefit of all security for
such accounts or rights to payment, including all trade accounts receivable
representing amounts receivable in respect of goods shipped or products sold or
services rendered to customers of Seller, (b) all other accounts or notes
receivable of Seller and the full benefit of all security for such accounts or
notes and (c) any claim, remedy or other right related to any of the foregoing.
"Appurtenances"--all privileges, rights, easements, hereditaments and
appurtenances belonging to or for the benefit of the Land, including all
easements appurtenant to and for the benefit of any Land (a "Dominant Parcel")
for, and as the primary means of access between, the Dominant Parcel and a
public way, or for any other use upon which lawful use of the Dominant Parcel
for the purposes for which it is presently being used is dependent, and all
rights existing in and to any streets, alleys, passages and other rights-of-way
included thereon or adjacent thereto (before or after vacation thereof) and
vaults beneath any such streets.
"Assets"--as defined in Section 2.1.
"Assignment and Assumption Agreement"--as defined in Section 2.7(a)(ii).
"Assumed Liabilities"--as defined in Section 2.4(a).
"Balance Sheet"--as defined in Section 3.4.
"Best Efforts"--the efforts that a prudent Person desirous of achieving a
result would use in similar circumstances to achieve that result as
expeditiously as possible, provided, however, that a Person required to use Best
Efforts under this Agreement will not be thereby required to take actions that
would result in a material adverse change in the benefits to such Person of this
Agreement and the Contemplated Transactions or to dispose of or make any change
to its business, expend any material funds or incur any other material burden.
"Xxxx of Sale"--as defined in Section 2.7(a)(i).
"Breach"--any breach of, or any inaccuracy in, any representation or
warranty or any breach of, or failure to perform or comply with, any covenant or
obligation, in or of this Agreement or any other Contract, or any event which
with the passing of time or the giving of notice, or both, would constitute such
a breach, inaccuracy or failure.
"Bulk Sales Laws"--as defined in Section 5.10.
"Business Day"--any day other than (a) Saturday or Sunday or (b) any other
day on which federally chartered banks are permitted or required to be closed.
"Buyer"--as defined in the first paragraph of this Agreement.
"Buyer Indemnified Persons"--as defined in Section 11.2.
< "Closing"--as defined in Section 2.6.
"Closing Date"--the date on which the Closing actually takes place.
"Closing Financial Statements"--as defined in Section 2.9(b).
"Closing Working Capital"--as defined in Section 2.9(b).
"COBRA"--as defined in Section 3.14(d).
"Code"--the Internal Revenue Code of 1986.
"Confidential Information"--as defined in Section 12.1.
"Consent"--any approval, consent, ratification, waiver or other
authorization, including but not limited to the Consents identified on Schedule
7.3.
"Contemplated Transactions"--all of the transactions contemplated by this
Agreement.
"Contract"--any agreement, contract, Lease, consensual obligation, promise
or undertaking (whether written or oral and whether express or implied), whether
or not legally binding.
"Damages"--as defined in Section 11.2.
"Employee Plans"--as defined in Section 3.14(a).
"Encumbrance"--any charge, claim, community or other marital property
interest, condition, equitable interest, lien, option, pledge, security
interest, mortgage, right of way, easement, encroachment, servitude, right of
first option, right of first refusal or similar restriction, including any
restriction on use, voting (in the case of any security or equity interest),
transfer, receipt of income or exercise of any other attribute of ownership.
"Environment"--soil, land surface or subsurface strata, surface waters
(including navigable waters and ocean waters), groundwaters, drinking water
supply, stream sediments, ambient air (including indoor air), plant and animal
life and any other environmental medium or natural resource.
"Environmental, Health and Safety Liabilities"--any cost, damages, expense,
liability, obligation or other responsibility arising from or under any
Environmental Law or Occupational Safety and Health Law, including those
consisting of or relating to:
(a) any environmental, health or safety matter or condition (including
on-site or off-site contamination, occupational safety and health and regulation
of any chemical substance or product);
(b) any fine, penalty, judgment, award, settlement, legal or administrative
proceeding, damages, loss, claim, demand or response, remedial or inspection
cost or expense arising under any Environmental Law or Occupational Safety and
Health Law;
(c) financial responsibility under any Environmental Law or Occupational
Safety and Health Law for cleanup costs or corrective action, including any
cleanup, removal, containment or other remediation or response actions
("Cleanup") required by any Environmental Law or Occupational Safety and Health
Law (whether or not such Cleanup has been required or requested by any
Governmental Body or any other Person) and for any natural resource damages; or
(d) any other compliance, corrective or remedial measure required under any
Environmental Law or Occupational Safety and Health Law.
The terms "removal," "remedial" and "response action" include the types of
activities covered by the United States Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (CERCLA).
"Environmental Law"--any Legal Requirement that requires or relates to:
(a) advising appropriate authorities, employees or the public of intended
or actual Releases of pollutants or hazardous substances or materials,
violations of discharge limits or other prohibitions and the commencement of
activities, such as resource extraction or construction, that could have
significant impact on the Environment;
(b) preventing or reducing to acceptable levels the Release of pollutants
or hazardous substances or materials into the Environment;
(c) reducing the quantities, preventing the Release or minimizing the
hazardous characteristics of wastes that are generated;
(d) assuring that products are designed, formulated, packaged and used so
that they do not present unreasonable risks to human health or the Environment
when used or disposed of;
(e) protecting resources, species or ecological amenities;
(f) reducing to acceptable levels the risks inherent in the transportation
of hazardous substances, pollutants, oil or other potentially harmful
substances;
(g) cleaning up pollutants that have been Released, preventing the Threat
of Release or paying the costs of such clean up or prevention; or
(h) making responsible parties pay private parties, or groups of them, for
damages done to their health or the Environment or permitting self-appointed
representatives of the public interest to recover for injuries done to public
assets.
"ERISA"--the Employee Retirement Income Security Act of 1974.
"Estimated Purchase Price"--as defined in Section 2.3.
"Exchange Act"--the Securities Exchange Act of 1934.
"Excluded Assets"--as defined in Section 2.2.
"Facilities"--any real property, leasehold or other interest in real
property currently owned or operated by Seller, including the Tangible Personal
Property used or operated by Seller at the respective locations of the Real
Property specified in Section 3.7. Notwithstanding the foregoing, for purposes
of the definitions of "Hazardous Activity"and "Remedial Action"and Sections 3.20
and 11.3, "Facilities" shall mean any real property, leasehold or other interest
in real property currently or formerly owned or operated by Seller, including
the Tangible Personal Property used or operated by Seller at the respective
locations of the Real Property specified in Section 3.7.
"Facility Lease"-as defined in Section 2.7(a)(iii).
"GAAP"--generally accepted accounting principles for financial reporting in
the United States.
"Governing Documents"--with respect to any particular entity, (a) if a
corporation, the articles or certificate of incorporation and the bylaws; (b) if
a general partnership, the partnership agreement and any statement of
partnership; (c) if a limited partnership, the limited partnership agreement and
the certificate of limited partnership; (d) if a limited liability company, the
articles of organization and operating agreement; (e) if another type of Person,
any other charter or similar document adopted or filed in connection with the
creation, formation or organization of the Person; (f) all equityholders'
agreements, voting agreements, voting trust agreements, joint venture
agreements, registration rights agreements or other agreements or documents
relating to the organization, management or operation of any Person or relating
to the rights, duties and obligations of the equityholders of any Person; and
(g) any amendment or supplement to any of the foregoing.
"Governmental Authorization"--any Consent, license, registration or permit
issued, granted, given or otherwise made available by or under the authority of
any Governmental Body or pursuant to any Legal Requirement.
"Governmental Body"--any:
(a) nation, state, county, city, town, borough, village, district or other
jurisdiction;
(b) federal, state, local, municipal, foreign or other government;
(c) governmental or quasi-governmental authority of any nature (including
any agency, branch, department, board, commission, court, tribunal or other
entity exercising governmental or quasi-governmental powers);
(d) multinational organization or body;
(e) body exercising, or entitled or purporting to exercise, any
administrative, executive, judicial, legislative, police, regulatory or taxing
authority or power; or
(f) official of any of the foregoing.
"Ground Lease"--any long-term lease of land in which most of the rights and
benefits comprising ownership of the land and the improvements thereon or to be
constructed thereon, if any, are transferred to the tenant for the term thereof.
"Ground Lease Property"--any land, improvements and Appurtenances subject
to a Ground Lease in favor of Seller.
"Hazardous Activity"--the distribution, generation, handling, importing,
management, manufacturing, processing, production, refinement, Release, storage,
transfer, transportation, treatment or use (including any withdrawal or other
use of groundwater) of Hazardous Material in, on, under, about or from any of
the Facilities or any part thereof into the Environment and any other act,
business, operation or thing that increases the danger, or risk of danger, or
poses an unreasonable risk of harm, to persons or property on or off the
Facilities.
"Hazardous Material"--any substance, material or waste which is or will
foreseeably be regulated by any Governmental Body, including any material,
substance or waste which is defined as a "hazardous waste," "hazardous
material," "hazardous substance," "extremely hazardous waste,""restricted
hazardous waste," "contaminant," "toxic waste"or "toxic substance"under any
provision of Environmental Law, and including petroleum, petroleum products,
asbestos, presumed asbestos-containing material or asbestos-containing material,
urea formaldehyde and polychlorinated biphenyls.
"Improvements"--all buildings, structures, fixtures and improvements
located on the Land or included in the Assets, including those under
construction.
"Indemnified Person"--as defined in Section 11.9.
"Indemnifying Person"--as defined in Section 11.9.
"Initial Working Capital"--as defined in Section 2.9(a).
"Intellectual Property Assets"-- means all intellectual property owned or
licensed (as licensor or licensee) by Seller in which Seller has a proprietary
interest, including:
(a) Seller's name, all assumed fictional business names, trade names,
registered and unregistered trademarks, service marks and applications
(collectively, "Marks");
(b) all patents, patent applications and inventions and discoveries that
may be patentable (collectively, "Patents");
(c) all registered and unregistered copyrights in both published works and
unpublished works (collectively, "Copyrights");
(d) all know-how, trade secrets, confidential or proprietary information,
customer lists, Software, technical information, data, process technology,
plans, drawings and blue prints (collectively, "Trade Secrets"); and
(e) all rights in internet web sites and internet domain names presently
used by Seller (collectively "Net Names").
"Independent Accountants"-means Deloitte & Touche US, LLP.
"Interim Balance Sheet"--as defined in Section 3.4.
"Inventories"--all inventories of Seller, wherever located, including all
finished goods, work in process, raw materials, spare parts and all other
materials and supplies to be used or consumed by Seller in the production of
finished goods.
"IRS"--the United States Internal Revenue Service and, to the extent
relevant, the United States Department of the Treasury.
"Knowledge"--an individual will be deemed to have Knowledge of a particular
fact or other matter if: that individual is actually aware of that fact or
matter.
A Person (other than an individual) will be deemed to have Knowledge of a
particular fact or other matter if any individual who is serving, or who has at
any time served, as a director, officer, partner, executor or trustee of that
Person (or in any similar capacity) has, or at any time had, Knowledge of that
fact or other matter.
"Land"--all parcels and tracts of land in which Seller has an ownership
interest.
"Lease"--any Real Property Lease or any lease or rental agreement, license,
right to use or installment and conditional sale agreement to which Seller is a
party and any other Seller Contract pertaining to the leasing or use of any
Tangible Personal Property.
"Legal Requirement"--any federal, state, local, municipal, foreign,
international, multinational or other constitution, law, ordinance, principle of
common law, code, regulation, statute or treaty.
"Liability"--with respect to any Person, any liability or obligation of
such Person of any kind, character or description, whether known or unknown,
absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated
or unliquidated, secured or unsecured, joint or several, due or to become due,
vested or unvested, executory, determined, determinable or otherwise, and
whether or not the same is required to be accrued on the financial statements of
such Person.
"Non-Competition Agreement"- as defined in Section 2.7(a)(viii).
"Occupational Safety and Health Law"--any Legal Requirement designed to
provide safe and healthful working conditions and to reduce occupational safety
and health hazards, including the Occupational Safety and Health Act, and any
program, whether governmental or private (such as those promulgated or sponsored
by industry associations and insurance companies), designed to provide safe and
healthful working conditions.
"Order"--any order, injunction, judgment, decree, ruling, assessment or
arbitration award of any Governmental Body or arbitrator.
"Ordinary Course of Business"--an action taken by a Person will be deemed
to have been taken in the Ordinary Course of Business only if that action:
(a) is consistent in nature, scope and magnitude with the past practices of
such Person and is taken in the ordinary course of the normal, day-to-day
operations of such Person; and
(b) does not require authorization by the board of directors or
shareholders of such Person (or by any Person or group of Persons exercising
similar authority) and does not require any other separate or special
authorization of any nature.
"Person"--an individual, partnership, corporation, business trust, limited
liability company, limited liability partnership, joint stock company, trust,
unincorporated association, joint venture or other entity or a Governmental
Body.
"Proceeding"--any action, arbitration, audit, hearing, investigation,
litigation or suit (whether civil, criminal, administrative, judicial or
investigative, whether formal or informal, whether public or private) commenced,
brought, conducted or heard by or before, or otherwise involving, any
Governmental Body or arbitrator.
"Purchase Price"--as defined in Section 2.3.
"Real Property"--the Land and Improvements and all Appurtenances thereto
and any Ground Lease Property.
"Real Property Lease"--any Ground Lease or Space Lease.
"Record"--information that is inscribed on a tangible medium or that is
stored in an electronic or other medium and is retrievable in perceivable form.
"Related Person"--with respect to a particular individual:
(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly controlled by any one or more
members of such individual's Family;
(c) any Person in which members of such individual's Family hold
(individually or in the aggregate) a Material Interest; and
(d) any Person with respect to which one or more members of such
individual's Family serves as a director, officer, partner, executor or trustee
(or in a similar capaity).
With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly controls, is directly or
indirectly controlled by or is directly or indirectly under common control with
such specified Person;
(b) any Person that holds a Material Interest in such specified Person;
(c) each Person that serves as a director, officer, partner, executor or
trustee of such specified Person (or in a similar capacity);
(d) any Person in which such specified Person holds a Material Interest;
and
(e) any Person with respect to which such specified Person serves as a
general partner or a trustee (or in a similar capacity).
For purposes of this definition, (a) "control"(including "controlling,"
"controlled by,"and "under common control with") means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise, and shall be construed as such term is used in the rules
promulgated under the Securities Act; (b) the "Family"of an individual includes
(i) the individual, (ii) the individual's spouse, (iii) any other natural person
who is related to the individual or the individual's spouse within the second
degree and (iv) any other natural person who resides with such individual; and
(c) "Material Interest"means direct or indirect beneficial ownership (as defined
in Rule 13d-3 under the Exchange Act) of voting securities or other voting
interests representing at least ten percent (10%) of the outstanding voting
power of a Person or equity securities or other equity interests representing at
least ten percent (10%) of the outstanding equity securities or equity interests
in a Person.
"Release"--any release, spill, emission, leaking, pumping, pouring,
dumping, emptying, injection, deposit, disposal, discharge, dispersal, leaching
or migration on or into the Environment or into or out of any property.
"Remedial Action"--all actions, including any capital expenditures,
required or voluntarily undertaken (a) to clean up, remove, treat or in any
other way address any Hazardous Material or other substance; (b) to prevent the
Release or Threat of Release or to minimize the further Release of any Hazardous
Material or other substance so it does not migrate or endanger or threaten to
endanger public health or welfare or the Environment; (c) to perform
pre-remedial studies and investigations or post-remedial monitoring and care; or
(d) to bring all Facilities and the operations conducted thereon into compliance
with Environmental Laws and environmental Governmental Authorizations.
"Representative"--with respect to a particular Person, any director,
officer, manager, employee, agent, consultant, advisor, accountant, financial
advisor, legal counsel or other representative of that Person.
"Retained Liabilities"--as defined in Section 2.4(b).
"SEC"--the United States Securities and Exchange Commission.
"Securities Act"--the Securities Act of 1933, as amended.
"Seller"--as defined in the first paragraph of this Agreement.
"Seller Contract"--any Contract (a) under which Seller has or may acquire
any rights or benefits; (b) under which Seller has or may become subject to any
obligation or liability; or (c) by which Seller or any of the assets owned or
used by Seller is or may become bound.
"Shareholders"--as defined in the first paragraph of this Agreement.
"Software"--all computer software and subsequent versions thereof,
including source code, object, executable or binary code, objects, comments,
screens, user interfaces, report formats, templates, menus, buttons and icons
and all files, data, materials, manuals, design notes and other items and
documentation related thereto or associated therewith.
"Space Lease"--any lease or rental agreement pertaining to the occupancy of
any improved space on any Land.
"Promissory Note"--as defined in Section 2.3.
"Subsidiary"--with respect to any Person (the "Owner"), any corporation or
other Person of which securities or other interests having the power to elect a
majority of that corporation's or other Person's board of directors or similar
governing body, or otherwise having the power to direct the business and
policies of that corporation or other Person (other than securities or other
interests having such power only upon the happening of a contingency that has
not occurred), are held by the Owner or one or more of its Subsidiaries.
"Tangible Personal Property"--all machinery, equipment, tools, furniture,
office equipment, computer hardware, supplies, materials, vehicles and other
items of tangible personal property (other than Inventories) of every kind owned
or leased by Seller (wherever located and whether or not carried on Seller's
books), together with any express or implied warranty by the manufacturers or
sellers or lessors of any item or component part thereof and all maintenance
records and other documents relating thereto.
"Tax"--any income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, property, environmental, windfall profit,
customs, vehicle, airplane, boat, vessel or other title or registration, capital
stock, franchise, employees' income withholding, foreign or domestic
withholding, social security, unemployment, disability, real property, personal
property, sales, use, transfer, value added, alternative, add-on minimum and
other tax, fee, assessment, levy, tariff, charge or duty of any kind whatsoever
and any interest, penalty, addition or additional amount thereon imposed,
assessed or collected by or under the authority of any Governmental Body or
payable under any tax-sharing agreement or any other Contract.
"Tax Return"--any return (including any information return), report,
statement, schedule, notice, form, declaration, claim for refund or other
document or information filed with or submitted to, or required to be filed with
or submitted to, any Governmental Body in connection with the determination,
assessment, collection or payment of any Tax or in connection with the
administration, implementation or enforcement of or compliance with any Legal
Requirement relating to any Tax.
"Third Party"--a Person that is not a party to this Agreement.
"Third-Party Claim"--any claim against any Indemnified Person by a Third
Party, whether or not involving a Proceeding, for which Buyer claims
indemnification under Sections 11.2 or 11.3 or Seller claims indemnification
under Section 11.4.
"Threat of Release"--a reasonable likelihood of a Release that may require
action in order to prevent or mitigate damage to the Environment that may result
from such Release.
"WARN Act"--as defined in Section 3.21(c).
2. Usage.
(a) Interpretation. In this Agreement, unless a clear contrary intention
appears:
(i) the singular number includes the plural number and vice versa;
(ii) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are not
prohibited by this Agreement, and reference to a Person in a particular
capacity excludes such Person in any other capacity or individually;
(iii) reference to any gender includes each other gender;
(iv) reference to any agreement, document or instrument means such
agreement, document or instrument as amended or modified and in effect from
time to time in accordance with the terms thereof;
(v) reference to any Legal Requirement means such Legal Requirement as
amended, modified, codified, replaced or reenacted, in whole or in part,
and in effect from time to time, including rules and regulations
promulgated thereunder, and reference to any section or other provision of
any Legal Requirement means that provision of such Legal Requirement from
time to time in effect and constituting the substantive amendment,
modification, codification, replacement or reenactment of such section or
other provision;
(vi) "hereunder," "hereof," "hereto,"and words of similar import shall
be deemed references to this Agreement as a whole and not to any particular
section or other provision hereof;
(vii) "including" (and with correlative meaning "include") means
including without limiting the generality of any description preceding such
term;
(viii) "or"is used in the inclusive sense of "and/or";
(ix) with respect to the determination of any period of time, "from"
means "from and including" and "to" means "to but excluding"; and
(x) references to documents, instruments or agreements shall be deemed
to refer as well to all addenda, exhibits, schedules or amendments thereto.
(b) Accounting Terms and Determinations. Unless otherwise specified herein,
all accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP.
(c) Legal Representation of the Parties. This Agreement was negotiated by
the parties with the benefit of legal representation, and any rule of
construction or interpretation otherwise requiring this Agreement to be
construed or interpreted against any party shall not apply to any construction
or interpretation hereof.
EXHIBIT 2.3
SUBORDINATED PROMISSORY NOTE
----------------------------
$2,500,000.00 ________________, 0000
Xxxxxxxxxx, Xxxxxxxx
1. Maker's Promise to Pay. For value received, MTM ACQUISITION COMPANY, a
Michigan corporation ("Maker") promises to pay to the order of the MIDWEST TUBE
XXXXX, Inc., an Indiana corporation ("Payee"), the principal sum of Two Million
Five Hundred Thousand and 00/100 ($2,500,000.00) Dollars together with interest
as set forth herein. This Note is issued pursuant to the Asset Purchase
Agreement dated August__, 2005 by and among Maker, Payee, and Xxxxxxx X.
Xxxxxxx, individually and Xxxxxxx X. Xxxxxxx in his fiduciary capacity as
Trustee of the Xxxxxxx X. Xxxxxxx 2004 Annuity Trust u/t/d August 11, 2004 (the
"Asset Purchase Agreement").
2. Interest. Interest will accrue and shall be paid by Maker in lawful
money of the United States of America at the rate of nine and one-quarter (9
1/4%) percent per annum (the "Base Rate") from the date hereof upon the unpaid
principal until fully paid, payable on the last day of each month beginning on
_____________________, 2005 [the first full month after the Closing Date]. In
the event any payment of principal or interest is not paid when due, interest on
the then due and outstanding principal balance shall accrue from the due date of
said payment until actual payment is made at two (2%) percent per annum in
excess of the Base Rate (the "Default Interest Rate"). In no event will the
interest rate charged or received hereunder at any time exceed the maximum
interest rate permitted by applicable law. Payments received by Payee hereunder
which would otherwise cause the interest rate to exceed such maximum interest
rate will, to the extent of such excess, hereby be deemed to be prepayments of
principal and applied as such as herein provided.
3. Payments. The principal outstanding and accrued and unpaid interest
under this Note shall be paid annually as follows:
(a) Semi-annual principal payments each in the amount of Two Hundred Fifty
Thousand and 00/100 ($250,000.00) Dollars shall be paid on [month] [day] and
[month] [day] of each year beginning on ______________, 200___ and continuing
through ____________, 20__ [date of the 10th payment].
(b) Notwithstanding anything herein to the contrary, the entire principal
and the accrued interest shall be paid by the undersigned in lawful money of the
United States of America on or before [month] [day], 200___, [date of the 10th
payment].
(c) Payments under this Note shall first apply to accrued interest and then
to principal except that upon default, payments will be applied first to costs
and expenses incurred in the collection of this debt, then to accrued interest
and finally to principal.
Both principal and interest of this Note are payable at the Payee's
principal place of business or such other place as Payee shall from time to time
designate in writing to Maker. Payments of principal will be made by wire
transfer to an account designated by Payee at least five (5) business days
before the payment is due.
4. Maker's right to prepay. Maker shall have the right to prepay any or all
of this Note at any time without prepayment penalty; provided, said prepayment
shall be applied first to accrued interest, then to principal.
5. Maker's Default. The following events shall constitute a "Default"by
maker under the Note:
(a) A default in the payment of any installment due hereunder, which
default is not cured within ten (10) days after written notice by Payee.
(b) A default under the Guarantee (as defined below).
(c) The filing of a voluntary petition in bankruptcy by Maker.
(d) The filing of any involuntary petition under any bankruptcy or
insolvency law by the Maker's creditors, which petition shall not have been
dismissed within sixty (60) days of the petition.
If there is an event, which constitutes a Default, at the Payee's option,
without notice, the entire indebtedness evidenced hereby shall become
immediately due and payable. Acceptance by Payee of any payment in an amount
less than the amount then due will be deemed an acceptance on account only, and
the failure to pay the entire amount then due will be and continue to be a
Default. Upon any Default, neither the failure of Payee promptly to exercise his
or her right to declare the outstanding principal and accrued unpaid interest
hereunder to be immediately due and payable, nor the failure of Payee to demand
strict performance of any other obligation of Maker will constitute a waiver of
any such rights of Payee, nor a waiver of such rights in connection with any
future Default by Maker. Maker waives presentment for payment, demand and notice
of nonpayment of this Note and agrees that the maturity of this Note, or any
payment under this Note, may be extended from time to time without in any way
affecting Maker's liability.
6. Right of offset. Payee acknowledges that Maker has certain rights of
offset against this Note as specifically provided under Section 11.8 of the
Asset Purchase Agreement.
7. Guarantee. This Note and all obligations of Maker under this Note are
guaranteed by Tarpon Industries, Inc. pursuant to that Guarantee dated the date
of this Note (the "Guarantee").
8. Payment of Payee's Costs and Expenses. The Maker agrees to reimburse the
Payee for any and all costs and expenses, including reasonable attorneys' fees,
incurred by Payee in collecting or attempting to collect this note.
9. Subordination. [to be inserted after negotiation of the subordination
agreement.]
10. Waiver. Any delay on the part of payee in exercising any rights
hereunder will not operate as a waiver of said rights. Acceptance of any payment
after Payee has declared the entire indebtedness due and payable will not cure
any default of Maker or operate as a waiver of any rights of Payee hereunder.
11. Severability. If any provision of this Note is held illegal or invalid,
such illegality or invalidity will not affect any other provision hereof. Such
provision and the remainder of this Note will, in such circumstances, be deemed
modified to the extent necessary to render enforceable the remaining provisions
hereof.
12. Assignment. Neither this Note, nor any rights or obligations under this
Note, may be assigned by Maker.
13. Applicable law. This Note shall be construed and interpreted under the
laws of the State of Michigan irrespective of any conflict of law statute.
Nothing herein shall limit any right granted to Payee by law.
14. Section headings. The Section headings contained in this Note are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Note.
Dated: _______________, 2005 MTM ACQUISITION COMPANY, a
Michigan corporation
By: ___________________________
J. Xxxxx Xxxxxxxx
Its: Chief Executive Officer
EXHIBIT 2.7(a)(i)
XXXX OF SALE
------------
This Xxxx of Sale is dated _____________, 2005 by and between MTM
ACQUISITION COMPANY, a Michigan corporation ("Buyer") and MIDWEST TUBE XXXXX,
INC., an Indiana corporation ("Seller").
RECITALS:
A. Buyer, Seller and the Shareholders have entered into an Asset Purchase
Agreement dated August 30, 2005 (the "Asset Purchase Agreement") pursuant to
which Buyer will purchase from Seller substantially all of the assets of Seller;
B. The Asset Purchase Agreement provided that Seller shall execute and
deliver this Xxxx of Sale to Buyer to consummate the transactions contemplated
by the Asset Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties consent and agree as follows:
AGREEMENT
1. All capitalized terms not otherwise defined in this Xxxx of Sale have
the same meanings as in the asset purchase agreement.
2. Seller transfers, assigns and conveys, free and clear of any
Encumbrances other than Permitted Encumbrances, all of Seller's right, title and
interest in and to all Tangible Personal Property of every kind and description,
wherever located, including but not limited to, Inventories and those items
described in Schedule 2.1(a) of the Asset Purchase Agreement, and excepting only
the Excluded Assets (the "Transferred Property"). Notwithstanding the foregoing,
the transfer of the Transferred Property pursuant to this Xxxx of Sale shall not
include the assumption of any Liability in respect thereof unless the Buyer
expressly assumed such liability pursuant to Section 2.4(a) of the Asset
Purchase Agreement.
3. Seller warrants that it is the owner of and has good and marketable
title to the Transferred Property, free from all security interests and other
encumbrances, other than the Permitted Encumbrances and Assumed Liabilities, and
that Seller will defend Buyer against every person or persons whatsoever
regarding the Transferred Property.
4. Nothing express or implied in this Xxxx of Sale is intended to confer
upon any person, other than Buyer and Seller and their respective successors and
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Xxxx of Sale.
5. This Xxxx of Sale shall be governed by, and construed in accordance
with, the laws of the State of Michigan applicable to contracts executed in and
to be performed entirely in that state.
MIDWEST TUBE XXXXX, INC.,
an Indiana corporation
By:____________________________
Xxxxxxx X. Xxxxxxx
Its: President
EXHIBIT 2.7(a)(ii)
ASSIGNMENT AND ASSUMPTION AGREEMENT
-----------------------------------
This Assignment and Assumption Agreement ("Agreement") is dated as of
__________________, 2005 by and among MTM ACQUISITION COMPANY, a Michigan
corporation ("Buyer"); and MIDWEST TUBE XXXXX, INC., an Indiana corporation
("Seller").
RECITALS:
A. Buyer, Seller and the Shareholders have entered into an Asset Purchase
Agreement dated August 30, 2005 (the "Asset Purchase Agreement") pursuant to
which Buyer will purchase from Seller substantially all of the assets of Seller;
B. The Asset Purchase Agreement provides that Seller shall execute and
deliver this Assignment and Assumption Agreement to Buyer to consummate the
transactions contemplated by the Asset Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties consent and agree as follows:
AGREEMENT
1. Definitions. All capitalized terms not otherwise defined in this
Agreement have the same meanings as in the Asset Purchase Agreement.
2. Assignment. Seller transfers, assigns and conveys, free and clear of any
Encumbrances other than Permitted Encumbrances, all of Seller's right, title and
interest in and to all of Seller's intangible personal property, of every kind
and description, wherever located, including the following (but excluding the
Excluded Assets):
(a) all cash, cash equivalents and short-term investments;
(b) all Accounts Receivable;
(c) all Seller Contracts, including those listed in Schedule 3.18(a) to the
Asset Purchase Agreement, and all outstanding offers or solicitations made by or
to Seller to enter into any Contract;
(d) all Governmental Authorizations and all pending applications therefor
or renewals thereof, in each case to the extent transferable to Buyer, including
those listed in Schedule 3.16(b) to the Asset Purchase Agreement;
(e) all data and Records related to the operations of Seller, including
customer lists and Records, referral sources, research and development reports
and Records, production reports and Records, service and warranty Records,
equipment logs, operating guides and manuals, financial and accounting Records,
creative materials, advertising materials, promotional materials, studies,
reports, correspondence and other similar documents and Records and, subject to
Legal Requirements, copies of all personnel Records and other Records described
in Section 2.2(d) of the Asset Purchase Agreement;
(f) all of the intangible rights and property of Seller, including
Intellectual Property Assets, going concern value, Seller's name and any
derivative of Seller's name, goodwill, world wide web address and site,
telephone, telecopy and email addresses and listings;
(g) all insurance benefits, including rights and proceeds, arising from or
relating to the Assets or the Assumed Liabilities prior to the Closing Date,
unless expended in accordance with this Agreement;
(h) all claims of Seller against third parties relating to the Assets,
whether xxxxxx or inchoate, known or unknown, contingent or non-contingent,
including all such claims listed in Schedule 2.1(k) to the Asset Purchase
Agreement; and
(i) all rights of Seller relating to deposits and prepaid expenses, claims
for refunds and rights to offset in respect thereof.
All of the foregoing property and assets are herein referred to
collectively as the "Intangible Personal Property."
Notwithstanding the foregoing, the transfer of the Intangible Personal
Property pursuant to this Agreement shall not include the assumption of any
Liability in respect thereof unless the Buyer expressly assumes such Liability
pursuant to Section 2.4(a) of the Asset Purchase Agreement.
Seller hereby constitutes and appoints Buyer, its successors and assigns,
the true and lawful attorney and attorneys of Seller, with full power of
substitution, in the name of Buyer or in the name instead of Seller, but on
behalf of or for the benefit of Buyer, its successors and assigns:
(i) To collect, demand and receive any and all Intangible Personal
Property transferred hereunder and to give receipts and releases for and in
respect of the same;
(ii) To institute and prosecute in the name of Seller, or otherwise,
at the expense and for the benefit of Buyer any and all actions, suits or
proceedings, at law, in equity or otherwise, which Buyer may deem proper in
order to collect, assert or enforce any claim, right or title of any kind
in or to the Intangible Personal Property, to defend or compromise any and
all such actions, suits or proceedings in respect of any of the Intangible
Personal Property, and to do all such acts and things in relation thereto
as Buyer shall deem advisable for collection or reduction to possession of
any of the Intangible Personal Property;
(iii) Take any and all other reasonable actions designed to vest more
fully in Buyer the Intangible Personal Property in order to provide for
Buyer the benefit, use, enjoyment and possession of such Intangible
Personal Property; and
(iv) To do all reasonable acts and things in relation to the
Intangible Personal Property sold and assigned hereunder.
Seller acknowledges that the foregoing powers are coupled with an interest
and shall be irrevocable by it or upon its subsequent dissolution or in any
manner or for any reason. Buyer shall be entitled to retain for its own account
any amounts collected pursuant to the foregoing powers, including any amounts
payable as interest with respect thereto. Seller shall from time to time pay to
Buyer, when received, any amounts that shall be received directly or indirectly
by Seller (including amounts received as interest) in respect of any Intangible
Personal Property.
3. Assumption. Buyer assumes and agrees to discharge only the following
specifically enumerated obligations and liabilities of seller (the "Assumed
Liabilities"):
(a) any trade account payable (other than a trade account payable to any
Shareholder or a Related Person of Seller or any Shareholder) incurred by Seller
in the Ordinary Course of Business and reflected on Seller's books that remains
unpaid at and is not delinquent as of the Closing Date;
(b) any Liability to Seller's customers incurred by Seller in the Ordinary
Course of Business for non-delinquent orders outstanding as of the Closing Date
reflected on Seller's purchase orders (other than any Liability arising out of
or relating to a Breach that occurred prior to the Closing Date);
(c) any Liability arising after the Closing Date under the Seller Contracts
described in Schedule 3.18(a) of the Asset Purchase Agreement (other than any
Liability arising out of or relating to a Breach that occurred prior to the
Closing Date);
(d) any Liability of Seller arising after the Closing Date under any Seller
Contract included in the Assets that is entered into by Seller after the date
hereof in accordance with the provisions of the Asset Purchase Agreement (other
than any Liability arising out of or relating to a Breach that occurred prior to
the Closing Date); and
(e) any Liability of Seller described in Schedule 2.4(a)(v) of the Asset
Purchase Agreement.
4. Compliance with Other Agreements. The Seller represents and warrants
that the execution of this Agreement and the performance of the obligations to
be performed by it hereunder will not conflict with, result in the breach of any
provision of or the termination of or constitute a default under any Agreement
to which the seller is a party or by which the seller is or may be bound.
5. Binding effect; assignment. The rights and obligations of Buyer under
this Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of Buyer. The rights, obligations and interests of seller
hereunder may not be sold, assigned, transferred, pledged or hypothecated.
6. Modification. This Agreement may be changed only by an agreement in
writing signed by the party against whom any waiver, change, amendment,
modification or discharge is sought.
7. Construction and Interpretation.
(a) This Agreement shall be construed pursuant to and governed by the
substantive laws of the State of Michigan (but any provision of Michigan law
shall not apply if the application of such provision would result in the
application of the law of a state or jurisdiction other than Michigan).
(b) The headings of the various sections in this Agreement are inserted for
the convenience of the parties and shall not affect the meaning, construction or
interpretation of this Agreement.
(c) Any provision of this Agreement which is determined by a court of
competent jurisdiction to be prohibited, unenforceable or not authorized in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition, unenforceability or non-authorization without invalidating the
remaining provisions hereof or affecting the validity, enforceability or
legality of such provision in any other jurisdiction. In any such case, such
determination shall not affect any other provision of this Agreement, and the
remaining provisions of this Agreement shall remain in full force and effect. If
any provision or term of this Agreement is susceptible to two or more
constructions or interpretations, one or more of which would render the
provision or term void or unenforceable, the parties agree that a construction
or interpretation which renders the term or provision valid shall be favored.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
WITNESSES: BUYER:
MTM ACQUISITION COMPANY,
a Michigan corporation
By:____________________________
J.Xxxxx Xxxxxxxx
Its: Chief Executive Officer
[Signatures Continued on Following Page]
SELLER:
MIDWEST TUBE XXXXX, INC.,
an Indiana corporation
By:_________________________
Xxxxxxx X. Xxxxxxx
Its: President
EXHIBIT 2.7(a)(iii)
LEASE
-----
Xxxx Properties, L.L.C., an Indiana limited liability company ("Landlord"),
and MTM Acquisition Company, a Michigan corporation ("Tenant") agree as follows,
effective as of the 1st day of ________________, 2005:
1. Demised Premises.
1.1 Landlord hereby demises and leases to Tenant, and Tenant hereby leases
from Landlord, that certain building containing approximately 000,000 xxxxxx
xxxx xx xxxxx xxxx and related improvements, including a parking lot and storage
building containing approximately 2,400 square feet of gross area located to the
southwest (collectively, the "Building") located on real estate in Jefferson
County, Indiana, commonly known as 0000 Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxx,
comprising 15.00 acres more or less, and more particularly described on
Exhibit A attached hereto (the "Premises"), subject to the provisions of this
Lease.
1.2 Prior to the Commencement Date, Landlord has given or will give Tenant
full access to the Premises to conduct any inspections or investigations
regarding the Premises that Tenant deems necessary or appropriate. If Tenant
takes occupancy of the Premises pursuant to this Lease, Tenant will be deemed to
have examined the Premises and acknowledged that the Premises are satisfactory
for occupancy as of the date of occupancy.
1.3 Tenant hereby acknowledges that the Premises are subject to (i) a 60
foot utilities easement described on Exhibit A, and (ii) a two-lane road
easement for the purposes of ingress, egress, and construction, from any
entrance to the Premises from Michigan Road on the eastern boundary of the
Premises, across the parking lot of the Premises, to certain property consisting
of approximately 16 acres situated on the western boundary of the Premises,
generally paralleling the southern boundary of the Premises.
2. Term of Lease.
2.1 Tenant will have and hold the Premises for a term of five (5) years
commencing ____________ 1, 2005 (the "Commencement Date"), and ending on
______________, 2010 (the "Initial Term").
2.2 Provided Tenant is not then in default, Tenant will have the option to
extend the term of this Lease for two (2) separate periods of five (5) years
each. The Initial Term and any exercised extensions will be referred to
collectively as the "Term." To exercise either such option, Tenant must deliver
a notice to Landlord evidencing such exercise not later than one hundred eighty
(180) days before the end of the then existing Term. Tenant's failure to
exercise either such option as so provided will cause such option, and any
remaining option to extend, to automatically lapse and be of no further effect
without further action by the parties.
3. Base Rent.
3.1 Tenant covenants to pay to Landlord at its notice address, or at such
place or to such person as Landlord time may designate in writing from time to,
base rent for the Premises ("Base Rent") as follows: (i) from the Commencement
Date through ________________, 2010, Base Rent will be $50,000.00 per month,
(ii) from ______________, 2010 through __________, 2015, Base Rent will be
$60,000.00 per month, and (iii) from ___________, 2015 through the end of the
Term, Base Rent will be $70,000.00 per month, payable in advance on the first
day of each calendar month.
3.2 Tenant also covenants to pay and discharge during the Term, when the
same will become due, any and all other amounts, liabilities and obligations
which Tenant assumes or agrees to pay or discharge pursuant to this Lease,
together with every fine, penalty, interest and cost which may be added for
non-payment or late payment thereof (collectively, "Additional Rent"), and in
the event of any failure on the part of Tenant to pay or discharge any of the
same, Landlord will have all rights, powers and remedies provided herein or by
law or equity or otherwise in the case of non-payment of the Base Rent.
4. Taxes and Other Charges.
4.1 Tenant agrees to pay and discharge as punctually as and when the same
will become due and payable without penalty, all real estate taxes, personal
property taxes, assessments (including, but not limited to, assessments for
public improvements or benefits), costs and expenses which are due or accrue
pursuant to any easement, declaration or other agreement of record, and all
other governmental taxes, impositions and charges of every kind and nature,
extraordinary or ordinary, general or special, unforeseen or foreseen, whether
similar or dissimilar to any of the foregoing, which at any time during the Term
will become due and payable by Landlord or Tenant and which are levied, assessed
or imposed upon or with respect to or will become a lien upon, the Premises or
any portion thereof, or any interest of Landlord or Tenant therein, under or by
virtue of any present or future law, statute, charter, ordinance, regulation or
other requirement of any governmental authority, whether federal, state, county,
city, municipal or otherwise. Landlord agrees to pay and discharge all taxes,
assessments, costs and expenses, impositions and charges of the kind above which
are due and payable and which remain unpaid as of the date of this Lease,
irrespective of when the same may have been levied, imposed or assessed, and to
discharge all liens which may be asserted against the Premises. It is the
intention of the parties hereto that, insofar as the same may be lawfully done,
except as otherwise provided herein, Landlord will be free from all costs,
expenses and obligations and all such taxes, assessments, costs and expenses,
impositions and charges, and that this Lease will yield net to Landlord not less
than Base Rent reserved hereunder throughout the Term; except as specifically
provided in this Lease.
4.2 It is expressly understood and agreed that Tenant will not be required
to pay, or reimburse Landlord for (i) any local, state or federal capital levy,
franchise tax, revenue tax, income tax, profits tax or single business tax of
Landlord or any tax or impost charged or levied upon or with respect to the Base
Rent or other payments hereunder, unless such levy, tax or impost is in lieu of
or a substitute for any other tax or impost upon or with respect to the Premises
which, if such other tax or impost were in effect, would be payable by Tenant
under the provisions hereof, or (ii) any estate, inheritance, devolution,
succession or transfer tax which may be imposed upon or with respect to any
transfer (other than taxes in connection with a conveyance by Landlord to
Tenant) of Landlord's interest in the Premises.
4.3 Upon expiration or earlier termination of this Lease (except for the
termination hereof pursuant to the provisions of Section 14), all taxes,
assessments, costs and expenses, impositions and charges of the kind above which
will be levied, assessed or become due upon the Premises or any portion thereof
will be prorated to the date of such expiration or earlier termination. With
respect to assessments levied for public improvements, if such assessments may
be paid in installments, Tenant will be obligated to pay only such installments
thereof which will become due and payable during the term of this Lease.
4.4 Tenant may contest any such tax, assessment, cost or expense,
imposition or charge in any manner permitted by law, in Tenant's name, and
whenever necessary, in Landlord's name, provided such tax or assessment is only
levied against the Premises. Tenant will indemnify and hold Landlord harmless
from any and all expenses, costs, and liabilities in connection with any such
contest. Landlord will cooperate with Tenant and execute any documents or
pleadings required for such purpose. Such contest may include appeals from any
and all judgments, decrees or orders until a final determination is made by a
court or governmental department or authority having final jurisdiction in the
matter. However, notwithstanding such contest, Tenant will pay the contested
tax, assessment, cost or expense, imposition or charge in the manner and on the
dates provided for in this Section, unless enforcement of any tax, assessment,
cost or expense, imposition or charge may be stayed by Tenant during such
contest by the filing of a bond or the payment of a monetary deposit made in
court in connection therewith or any other similar action permitted by the local
authority having jurisdiction in connection with the foregoing. Any tax refund
with respect to any tax, assessment, cost or expense, imposition or charge paid
by Tenant will be the property of Tenant.
5. Use of Premises.
5.1 Tenant (and its subtenants) will use the Premises for the operation of
a steel pipe, manufacturing facility, warehouse, distribution facility, or light
manufacturing facilities, along with related offices, and for any other legal
purpose, in a manner consistent with the limitations prescribed in this Section.
Tenant and its subtenants may not use the Premises for the storage,
distribution, or manufacture of "Hazardous Substances", as that term is defined
in such Section. Tenant may not install an underground storage tank or tanks to
contain Hazardous Substances on the Premises without the Landlord's prior
written consent, which consent the Landlord may withhold in its sole discretion.
Tenant will not use, or permit any person to use, the Premises for any use or
purpose in violation of any applicable (i) governmental law, rule or regulation,
or (ii) easement, restriction, agreement or declaration of record as of the date
hereof.
5.2 "Environmental Laws" means any local, state or federal law, rule,
regulation, or ordinance, whether now in existence or enacted after the date of
this Lease, which pertains to health or safety or environmental regulation,
contamination or clean-up, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 [42 U.S.C.
Sections 9601 et seq.], as amended, the Resource Conservation and Recovery Act
[42 U.S.C. Sections 6901 et seq.], as amended, or state superlien or
environmental clean-up statutes. As used herein, "Hazardous Substances" means
and includes all hazardous and toxic substances, wastes or materials, any
pollutants or contaminants, or other similar substances, or materials which are
included under or regulated by Environmental Laws.
5.3 Tenant agrees, at its sole cost and expense, to comply with all
Environmental Laws and all governmental notices, orders and requirements
pursuant to Environmental Laws. Tenant will not permit or cause any Hazardous
Substances to be brought upon, placed, held, stored, located, or disposed of on,
under, from or at the Premises, other than in compliance with all Environmental
Laws. Tenant will (i) provide Landlord with copies of all communications between
Tenant and any governmental agencies or other authorities related to Hazardous
Substances brought upon, placed, held, located, stored or disposed of on, under,
from or at the Premises or related to the violation or alleged violation of any
Environmental Laws with respect to Tenant's use or occupancy of the Premises,
(ii) permit Landlord, at Landlord's discretion, to participate in any proceeding
brought by a government agency or authority, or a third party, with respect to
Hazardous Substances brought upon, placed, held, located, stored or disposed of
on, under, from or at the Premises with respect to Tenant's use or occupancy of
the Premises or the violation or alleged violation of any Environmental Laws
with respect to Tenant's use or occupancy of the Premises, and (iii) permit
Landlord, from time to time at Landlord's discretion, to conduct tests, analyses
and investigations of the environmental conditions relative to Tenant's use or
occupancy of the Premises. The expense of tests, analyses and investigations
conducted pursuant to the foregoing clause (iii) will be borne by Landlord.
5.4 In addition to the foregoing, Tenant agrees, at its sole cost and
expense, to (i) materially comply with all laws, orders, rules, regulations and
requirements of all applicable governmental or other authorities having
jurisdiction over the Premises (collectively, "Laws"), and (ii) cause the
Premises to materially comply with all applicable Laws.
5.5 Tenant shall keep the Premises clean and free of rubbish and trash at
all times and shall store all trash and garbage in leak-proof containers and
arrange for the regular pickup of such trash and garbage at Tenant's expense.
Tenant shall not burn or bury any trash or garbage of any kind on or about the
Premises.
6. Maintenance and Charges.
6.1 Tenant covenants that throughout the Term it will, at its sole cost and
expense, maintain the Premises, including but not limited to the Building, all
improvements thereto, all Building fixtures, all of the mechanical, electrical,
plumbing, heating, ventilating and air conditioning and other building systems
(collectively, the "Systems"), parking area and driveways whether now or
hereafter erected or located thereon, and will keep the same in good working
order and condition and will promptly, and at Tenant's own cost and expense,
make all necessary repairs, whether exterior or interior, structural or
nonstructural, to all parts of the same. Landlord will be responsible for
payment for all repairs and maintenance to the roof during the entire term of
this Lease, including extensions. When used in this Lease, the term "repairs"
will include replacements or removals when necessary. All such repairs will be
equal in quality to the original work. Tenant will obtain and maintain at all
times during the Term a maintenance contract with a contractor approved or
selected by Landlord on the heating, ventilating and air conditioning system
which provides for regular cleaning, oiling and filter changes and for seasonal
"start-ups". Notwithstanding the foregoing provisions, during the first twelve
(12) months of this Lease, Landlord shall be responsible for payment for repair
and replacement of the four (4) outer walls.
6.2 Tenant will pay when due all charges for fuel, water, gas, electricity,
power, refrigeration, and other utilities and services, and all other charges of
every kind and nature, extraordinary or ordinary, general or special, unforeseen
or foreseen, whether similar or dissimilar to any of the foregoing, incurred in
the use, occupation, maintenance, operation or possession of the Premises
throughout the Term, and will indemnify, protect and save harmless Landlord from
any liability therefor.
7. Net Lease.
7.1 This Lease is a net lease. The Base Rent and all Additional Rent will
be paid without notice or demand, and without any setoff, counterclaim,
abatement, suspension, deduction or defense whatsoever.
7.2 Except as otherwise expressly provided in Sections 11 and 12 herein,
this Lease will not terminate, nor will Tenant have any right to terminate this
Lease, nor will the obligations hereunder of Tenant be otherwise affected.
7.3 Tenant covenants and agrees that it will remain obligated under this
Lease in accordance with its terms, and that Tenant will not take any action to
terminate, rescind or avoid this Lease, notwithstanding any bankruptcy,
insolvency, reorganization, composition, readjustment, liquidation, dissolution,
winding-up or other proceedings affecting Landlord or any assignee of Landlord
in any such proceeding and notwithstanding any action with respect to this Lease
which may be taken by any trustee or receiver of Landlord or of any assignee of
Landlord in any such proceeding or by any court in any such proceeding.
8. Construction and Alteration.
8.1 All improvements and alterations to the Premises will require the prior
written consent of Landlord, and Tenant will submit plans and specifications for
each intended improvement or alteration to Landlord for review and approval
before commencing construction. Landlord's review and approval of plans may not
be construed as a statement by Landlord that such plans and specifications are
sufficient for their intended purpose or in compliance with applicable laws,
rules, or regulations, and Landlord assumes no liability or obligation
whatsoever related to any plans and specifications it may approve. Landlord
agrees to not unreasonably withhold its consent to non-structural improvements
and alterations.
8.2 Title to any approved improvements or alterations made by Tenant will
vest in Landlord at the end of the Term, and Tenant will deliver such documents
of conveyance thereof as Landlord may reasonably request (including without
limitation assignments of any outstanding warranties), and Landlord agrees to
accept the Premises with any approved improvements and alterations. Tenant may
place such trade fixtures, personal property, machinery, furniture, equipment
and the like on the Premises as it may desire at its own expense. All
improvements, appurtenances, fixtures, and equipment or machinery used in the
operation of the Systems will automatically become the property of Landlord at
the moment of construction or installation. Tenant may remove all or any items
of personal property prior to or at the expiration or termination of this Lease.
9. Liens.
Tenant will not cause or permit to stand, through any action taken by it,
any mechanics', laborer's, materialman's or other lien against the Premises or
building or improvement thereon in connection with work of any character
performed or material furnished to said Premises. Nothing in this Lease may be
construed as creating an agency relationship between Landlord and Tenant for
purposes of performing alterations, improvements, or repairs. If Tenant in good
faith desires to contest the validity or amount of any such lien, Landlord
agrees to cooperate in the institution, defense and maintenance of any such
action or proceeding, provided that Tenant will indemnify and hold Landlord
harmless from any and all expenses, costs and liabilities in connection with any
such contest. Any such action or proceeding may be instituted and maintained by
Tenant only if and so long as the enforcement of any such lien, by sale or
otherwise, will be stayed by reason of such action or proceeding or by bond
filed or a monetary deposit paid into court as a part of such action or
proceeding. Promptly after the determination of any such contest adverse to the
Tenant and prior to the enforcement of any such lien, Tenant will pay and
discharge the amount of any such lien, together with any related interest, costs
and penalties.
10. Insurance.
10.1 Tenant shall obtain and keep in full force at the sole cost and
expense of Tenant policies of insurance to:
10.1.1 keep the Premises insured against loss or damage by fire and
all risks of direct physical loss except the normal exclusions contained in
an "all risks" policy for not less than one hundred percent (100%) of the
replacement cost thereof, evidenced by "replacement cost" and "agreed
amount" endorsements in the policy. The amount of direct physical loss
insurance shall be adjusted as required by the insurance carrier in order
to obtain the required level of coverage and to maintain the appropriate
"agreed amount" endorsement coverage;
10.1.2 maintain commercial general liability insurance covering the
legal liability of Tenant against claims for bodily injury, death and/or
property damage arising out of the use, maintenance and/or operation of the
Premises and all areas appurtenant thereto and/or the conduct of Tenant's
business, and also Tenant's contractual liability in such amounts as
Landlord may require, but in no event less than $2,000,000 for personal
injury or death to one person, $2,000,000 for personal injury or death in
one accident and $2,000,000 for property damage in one accident [discuss
coverage with Tenant];
10.1.3 keep the Premises insured with business and rental interruption
insurance covering risk of loss due to the occurrence of any hazards
insured against under the required "all risks" insurance, with an "agreed
amount" endorsement provision, in an amount at least adequate to cover
twelve (12) months of Base Rent, taxes and insurance on the Premises;
10.1.4 satisfy all applicable requirements under Indiana worker's
compensation law;
10.1.5 maintain broad form boiler and machinery insurance for all
pressure fired vessels or apparatus situated on the Premises with full
repair and replacement cost coverage; and
10.1.6 maintain builder's risk insurance coverage in the event that
any construction activity is undertaken on the Premises.
10.2 All such insurance shall be written by a company or companies
reasonably acceptable to Landlord; shall name Landlord as a named insured; shall
contain a loss payable clause which provides that all losses to the Premises
(but excluding losses to Tenant's assets and business) will be adjusted with and
payable to Landlord; in the case of liability coverage will provide that it is
primary insurance as regards any other insurance carried by Landlord; shall be
satisfactory to Landlord as to form, substance and amount; shall provide for
thirty (30) days' prior written notice of cancellation or non-renewal to
Landlord; shall contain endorsements that no act or negligence of the insured or
any occupant, and no occupancy or use of the Premises for purposes more
hazardous than permitted by the terms of the policy, nor any breach of any
warranty, declaration or condition by the insured, will affect the validity or
enforceability of such insurance as against Landlord; shall contain the
agreement of the insurer waiving all rights of set-off, counterclaim or
deductions against Landlord, and shall be in full force and effect on the date
of this Lease with proof of premiums paid for the current policy year. All such
insurance policies shall be written in amounts sufficient to prevent Tenant or
other insured from becoming a co-insurer under the applicable policies, or shall
contain an "agreed amount" endorsement as evidence that the coverage is
sufficient. Tenant shall furnish Landlord with an original policy of all
required policies of insurance.
10.3 If Tenant has a blanket "all risk" insurance policy covering the
Premises as well as its own personal property and trade fixtures, in the event
of a casualty loss Tenant shall have the right to adjust all losses to its
personal property and trade fixtures and to be paid any insurance proceeds
relating to loss or damage to such personal property and trade fixtures
provided, however, that Landlord shall have the sole right to adjust all losses
to the Premises and any amount paid to Tenant for loss to its personal property
and trade fixtures shall not reduce the amount that would otherwise be paid to
Landlord for the loss to the Premises.
10.4 Tenant further covenants (i) not to terminate or materially change any
policy of insurance without giving Landlord thirty (30) days prior written
notice of such termination or change, and (ii) at least thirty (30) days prior
to the expiration date of a policy, to deliver to Landlord a binder and/or
renewal policy in form satisfactory to Landlord, and to promptly furnish
Landlord all receipts for paid premiums.
10.5 In case Tenant will at any time fail, neglect or refuse to insure the
Premises and buildings and improvements thereon and to keep the same insured as
hereinabove provided, then Landlord may at its election, procure or renew such
insurance, and any amounts paid therefor by Landlord together with interest
thereon at a rate of ten percent (10%) per annum will be included together with
any other Base Rent, if any, due on the first day of the next calendar month
after any such payment.
11. Fire or Other Casualty.
11.1 Tenant covenants and agrees, except as provided herein, that in the
event of damage to any building or improvement on the Premises, or destruction
of the whole or any part thereof, by any cause whatsoever, Tenant will, entirely
at its own expense and without cost to the Landlord, proceed promptly and
diligently to restore the building, improvements and Premises to the equivalent
condition or status that they were required to be kept before such destruction
or damage, and that this Lease will not terminate; provided, however, that
Tenant shall be entitled to an abatement of all monthly Base Rent and/or
applicable Additional Rent to the extent of interference with Tenant's use of
the Premises occasioned thereby.
11.2 All insurance proceeds from perils insured against will be paid to or
for the account of Tenant provided Tenant will have caused the damaged or
destroyed building to be repaired or rebuilt as provided for in this Section and
Section 8 of this Lease. Except as otherwise provided, however, and except to
the extent Tenant will have caused or provided for a damaged or destroyed
building to be fully repaired or reconstructed, all insurance proceeds in the
hands of the Landlord at the time of the termination of this Lease and all
insurance proceeds thereafter received by the Landlord under any policy of
casualty insurance, will be the sole and exclusive property of the Landlord.
11.3 Landlord will not be liable for (i) any damages to the Premises or any
part thereof or (ii) for any damage to fixtures or personal property of Tenant
if either is caused by fire or other casualty, except for damages caused by
Landlord's negligence or misconduct, and Tenant does hereby expressly release
Landlord of and from all liability for such damages. Tenant agrees that all
insurance policies will include a clause waiving all rights of subrogation
against Landlord.
12. Eminent Domain.
In the event the Premises, or any part thereof or interest therein, or any
building or improvement thereon, is taken or condemned for a public or
quasi-public use, or is conveyed in lieu thereof (herein referred to as a
"condemnation"), the rights of the Landlord and Tenant in respect of the
condemnation proceeding and the condemnation proceeds and the effect of such
condemnation proceeds on the terms of this Lease will be as follows:
12.1 Any condemnation allowance or award or judgment relating thereto,
allowed or awarded to the Landlord or Tenant and any interest thereon
("condemnation proceeds") will be paid to the Landlord to the held and dealt
with as provided in paragraphs (b) through (e) of this Section, excluding any
special award for, or portion of award allowable and allocated to, the Tenant
for the taking of the Tenant's personal property on the Premises including trade
fixtures (and not for Tenant's interest in the Premises or in the building and
improvements located on the Premises) or as special damages to the Tenant for
disturbance of use, injury to business, relocation, storage or the like.
12.2 If the condemnation results in a taking of all of the Premises, the
condemnation proceeds will be applied in the following order:
12.2.1 In satisfaction and discharge of all special assessments, if
any, including both principal and interest, levied on the Premises or any
part thereof for benefits resulting from the improvements for which or in
conjunction with which the condemnation was effected.
12.2.2 In reimbursement to Tenant of any amounts paid by it for real
estate taxes or special assessments and which are included in the award,
plus a pro rata portion of the interest, if any, constituting part of the
award.
12.2.3 The balance, if any, to the Landlord as and for its own
property.
12.3 In the event more than 25% of the Premises is taken in condemnation
proceedings, Tenant may either terminate this Lease by notice to Landlord within
15 days after the effective date of such taking, or, at its option, retain the
Premises. In the event Tenant fails to notify Landlord of such termination
within such 15 day period, Tenant will be deemed to have elected to retain the
Premises. In the event (i) less than 25% of the Premises is taken or (ii) more
than 25% of the Premises is taken and Tenant does not elect to terminate this
Lease, Tenant will restore the Premises to proper rentable condition forthwith,
without abatement of rent. If the Lease is terminated pursuant to this
subsection, all condemnation proceeds will be payable to Landlord. If the Lease
is not terminated, the condemnation proceeds for the partial taking will be
payable to Tenant to the extent needed to restore the Premises, with the
balance, if any, payable to Landlord upon completion of construction. Any award
for taking of and/or damage to any part of the Premises which is not spent for
restoration will be for the account of Landlord.
12.4 If the condemnation will result in a taking of all the Premises, this
Lease will terminate when the condemnor will take possession of the Premises,
and the rent hereunder will thereupon cease to accrue, but without affecting the
enforceability of any rights under this Section 12 or any other accrued or
contingent rights and obligations of the parties under this Lease.
12.5 The foregoing provisions of this Section 12 will not be construed so
as to deny either the Tenant or the Landlord the right to appeal or defend an
appeal of the award allowed or covering its interest in the Premises to the
district court or any other court having jurisdiction, whether or not the effect
of the appeal will be to delay the taking or the final determination of
allocation of the award. The amount of the award, as used in this Section 12,
refers to the award as finally determined in the condemnation proceedings or as
accepted by the Landlord, provided that the Landlord will not accept an award
which includes the Tenant's interest without the written consent of Tenant.
13. Assignment and Subletting.
13.1 Tenant may not assign this Lease or sublet the Premises without
Landlord's prior written consent, which consent may be withheld in Landlord's
sole discretion; provided that Tenant may assign this Lease to an affiliate or
subsidiary of Tenant without Landlord's consent. Tenant will deliver an executed
or photocopy of any assignment to Landlord within ten (10) business days after
its execution and delivery. Tenant will reimburse Landlord within twenty (20)
days of demand, as Additional Rent, for Landlord's reasonable attorneys' fees
and related expenses incurred in the review of any assignment or sublease, not
to exceed $1,000.
13.2 No assignment or sublease will affect or reduce any of the obligations
of Tenant hereunder and all obligations of Tenant hereunder will continue in
full force and effect to the same extent as if no assignment or sublease had
been made and as the obligations of a principal and not as the obligations of a
guarantor or surety.
14. [Reserved].
15. Default by Tenant.
15.1 If one or more of the following events (sometimes called "events of
default") will happen and be continuing:
15.1.1 Tenant defaults (i) in the payment of any Base Rent, or (ii) in
the payment of any Additional Rent or any other sums provided to be paid
hereunder and such default under this clause (ii) continues for ten (10)
days after Landlord has given Tenant written notice thereof; or
15.1.2 Tenant defaults in the observance or performance of any other
covenant, condition, agreement or provision hereof and Tenant fails to
remedy such default within thirty (30) days after notice thereof from
Landlord to Tenant specifying the nature of the default (or, in the event
the default cannot be cured within such period, Tenant fails to initiate
action to remedy such default within said period and to prosecute the same
to completion with due diligence); or
15.1.3 Tenant admits insolvency or bankruptcy or its inability to pay
its debts as they may mature, or makes an assignment for the benefit of
creditors or applies for or consents to the appointment of a trustee or
receiver for Tenant, or for the major part of its property; or
15.1.4 a trustee or receiver is appointed for Tenant or for the major
part of its property without Tenant's consent or acquiescence and such
appointment is not discharged within sixty (60) days after such
appointment; or
15.1.5 bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings for relief under any state or
federal bankruptcy law or similar law for the relief of debtors generally,
are instituted by or against Tenant, and if instituted against Tenant are
consented to by Tenant or are not dismissed, stayed or otherwise nullified
within sixty (60) days after such institution;
then in any such case, Landlord may at its option exercise any one or more
of the following remedies:
15.1.5.1 Landlord may terminate this Lease by giving to
Tenant notice of Landlord's intention so to do, in which event
the term of this Lease or any renewal thereof will end, and all
right, title and interest of Tenant hereunder will expire on the
date stated in such notice, which will not be less than ten days
after the date of the notice by Landlord of its intention so to
terminate;
15.1.5.2 Landlord may enforce the provisions of this Lease
and enforce and protect the right of Landlord hereunder by a suit
or suits in equity or at law for the specific performance of any
covenant or agreement contained herein or for the enforcement of
any other appropriate legal or equitable remedy.
15.2 If Landlord exercises its remedy provided for in
subparagraph Section 15.1.5.1, Landlord may then or at any time thereafter
re-enter and take complete and peaceful possession of the Premises, with or
without process of law, and may remove all persons therefrom, and Tenant
covenants in any such event peacefully and quietly to yield up and surrender the
Premises to Landlord.
15.3 In the event of the termination of this Lease, Landlord will be
entitled to recover from Tenant all the Base Rent accrued and unpaid for the
period up to and including such termination date, as well as Additional Rent and
other sums payable by Tenant, or for which Tenant is liable or in respect of
which Tenant under any of the provisions hereof has agreed to indemnify
Landlord, which may be then owing and unpaid, and all costs and expenses,
including court costs and reasonable attorneys' fees incurred by Landlord in the
enforcement of its rights and remedies hereunder, and in addition Landlord will
be entitled to recover any and all other amounts by way of damages or otherwise
permitted by applicable law arising from the termination of this Lease. In
addition, in the event Landlord terminates this Lease, Landlord may elect to
recover from Tenant an amount equal to the then present value of all Base Rent
and Additional Rent which were to accrue under this Lease from the date of
termination through the end of the Term, less the present value of the fair
market rental value of the Premises over the same period of time. The prime rate
of interest as specified by the Wall Street Journal as of the date of
termination shall be used for purposes of computing present value.
Notwithstanding the foregoing provisions, Landlord will use reasonable efforts
to re-lease the Premises and otherwise mitigate its damages following a Tenant
default.
15.4 No remedy herein conferred will be considered exclusive of any other
remedy conferred by this Lease or by law, but all such remedies will be
cumulative. Every power and remedy given by this Lease may be exercised from
time to time and as often as the occasion may arise. No delay or omission of
either party to exercise any power, right or remedy will impair any such power,
right or remedy. No waiver of any breach or any covenant, agreement or provision
of this Lease will be construed or held to be a waiver of any other breach,
covenant, agreement or provision by either party.
16. Indemnification.
Tenant will indemnify, hold harmless and defend Landlord, its members,
managers, directors, officers, employees, agents, attorneys, and assigns from
and against any and all suits, claims, demands, causes of action, damages,
consequential damages, losses, liability, costs and expenses of any kind,
including fines, penalties, reasonable attorneys' fees, and other expenses of
litigation ("Damages"), on account of any claim either (i) for injury (including
death) or damage, either to person or to property, sustained by Tenant or by any
other person which arises out of the use or occupancy of the Premises by Tenant
at any time during the Term unless the Damages result from Landlord's negligence
or misconduct, or (ii) which results from any breach by Tenant of any provision
of this Lease.
17. Quiet Possession.
Tenant, upon paying the specified rental and performing the other covenants
herein agreed by it to be performed, will peacefully and quietly have, hold and
enjoy the Premises for the Term without any let, hindrance, or molestation by
Landlord or any persons lawfully claiming under Landlord, subject only to the
other provisions of this Lease.
18. Holding Over.
If the Tenant remains in the Premises beyond the Term such holding over in
itself will not constitute a renewal or extension of this Lease or an exercise
of any option to renew, extend or purchase, but in such event a tenancy from
month to month will arise upon the covenants and conditions herein set forth,
subject to payment of the same Base Rent by the Tenant each month as that Base
Rent that would be payable under Section 3.1 during the Initial Term or any
optional extension beyond the Initial Term and payment of all Additional Rent,
but nothing herein contained will be deemed to give Tenant the right to hold
over and Tenant covenants that on the last day of the Term it will peaceably
leave and quietly surrender the Premises.
19. Condition of Premises Upon Surrender.
At the expiration of the Term Tenant will quit and surrender the Premises
in good condition, reasonable wear and tear excepted, and remove all of its
personal property and trade fixtures. In the event Tenant builds upon, alters,
adds to or improves the Premises in accordance with its rights hereinbefore
granted, it will not, at the expiration of said Term, be required to restore the
same, but Tenant will surrender the same in its improved or altered condition
without any further liability.
20. Sale or Assignment By Landlord.
Landlord will have the right in its sole and unfettered discretion to sell,
assign, mortgage, convey, or otherwise dispose of the Premises and Landlord's
rights in and interest under this Lease, but only subject to all the terms and
conditions of this Lease.
21. Signs.
Tenant will have the right to install exterior signage on the building to
be designed by Tenant and installed by Tenant at its sole cost and expense. The
design and installations of any such signage will be subject to both the prior
approval of Landlord (which will not be unreasonably withheld), and the
requirements, permits, approvals and consents of any governmental entity or
agency with jurisdiction over the Premises.
22. Notices.
All notices, requests and other communications hereunder will be in writing
and will be sent by (a) personal delivery, (b) overnight courier service that
regularly maintains a record of its deliveries, charges prepaid or (c) certified
U.S. mail, postage prepaid, return receipt requested, and addressed to the
following addresses, or to such other address of which Landlord or Tenant will
have given notice to the other as herein provided:
If to Landlord, to: Xxxx Properties, L.L.C.
c/o Xx. Xxxxxxx X. Xxxxxxx
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
With a copy to: C. Xxxxxxxxxxx Xxxxxx
0000 Xxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
If to Tenant, to: MTM Acquisition Company
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
With a copy to: Xxxxx Xxxxxxx-Xxxxxx, Esq.
Xxxxxxx & Xxxxxx, P.C.
26300 Northwestern Xxx.
0xx Xxxxx, X.X. Xxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
All such notices, requests and other communications will be deemed to have
been sufficiently given for all purposes hereof on the date of delivery, if sent
by personal delivery, the day after deposit with the carrier, if sent by
overnight courier service, or upon receipt or rejection, if sent by certified
U.S. mail, return receipt requested.
23. Lease Subordination and Tenant Attornment.
If an existing or prospective mortgagee or ground lessor of the Premises or
a part thereof requests this Lease to be subject and subordinate to the lien of
its mortgage, ground lease, or its equivalent, this Lease will be subject and
subordinate to such mortgage or ground lease and to all renewals, modifications,
replacements, consolidations and extensions thereof and to any and all advances
made thereunder and the interest thereon. Tenant will, within twenty (20) days
of receipt of a request from Landlord, execute, acknowledge and deliver any and
all documents reasonably required by the mortgagee or ground lessor to effect
the subordination of this Lease as contemplated. Tenant further agrees to attorn
to any purchaser of the Premises at any foreclosure sale or to the ground lessor
in event of a termination of the ground lease as if such purchaser or ground
lessor were the original landlord under this Lease. Notwithstanding the
foregoing, Tenant will not be required to execute any of the documents that may
be required by a mortgagee or ground lessor of Landlord as contemplated above
unless that mortgagee or ground lessor agrees for itself and its successors and
assigns that, in the event of a foreclosure or a termination of the ground
lease, Tenant's rights to quiet enjoyment of the Premises will not be disturbed
or impaired on account of such foreclosure or termination provided that at the
time of the foreclosure or termination Tenant is not in continuing/uncured
default in its obligation to pay the Base Rent or Additional Rent or any other
payments required hereunder or in the performance of other covenants on its part
required to be performed.
24. Estoppel Certificates.
Tenant will, without charge and within 10 days after written request,
furnish to Landlord and to any proposed mortgagee, ground lessor, or purchaser
of the Premises, an estoppel certificate in the form and substance reasonably
required by the requesting party.
25. Execution.
This Lease will not be binding and effective until a counterpart hereof has
been executed and delivered by the parties each to the other. This Lease may not
be modified except by instrument in writing.
26. Interpretation.
This Lease will bind and inure to the benefit of the parties hereto and
their respective successors or assigns. Except when the context otherwise
requires, the terms "Tenant" and "Landlord" as used herein will include any
successor or assign of the original party so designated. It is understood and
agreed that this Lease has been made following negotiation and revision by the
parties and is, therefore, not to be construed against either party because of
draftsmanship. It is the intention of the parties that this Lease will be
construed as a net lease. In the event of any dispute as to the proper
construction of any of the provisions of this Lease, the provisions will be
construed in accordance with the laws of the State of Indiana.
27. Warranties and Permits.
Upon expiration or earlier termination of this Lease, Tenant will assign to
Landlord all warranties, including all contractor warranties, and any and all
guaranties with respect to the use, occupancy, possession and operation of the
Premises, including but not limited to the Building Systems.
28. Brokerage.
Landlord and Tenant warrant, each to the other, that they have dealt with
no broker who would be entitled to a commission or fee by reason of the
execution of this Lease. Landlord and Tenant will indemnify each other from and
against any and all claims for commissions or fees by brokers claiming through
them.
29. Memorandum.
The parties will execute and cause to be recorded a Memorandum of this
Lease upon the written request of the other party, which memorandum will contain
only the minimum information required by law.
30. Access to Premises.
Landlord and its agents will have the right to enter the Premises after 24
hours notice to Tenant to examine the condition of same or to show the Premises
to prospective purchasers, lessees, ground lessors, or mortgagees.
31. Limitation of Liability.
Tenant acknowledges and agrees that the liability of Landlord under this
Lease will be limited to its interest in the Premises and any judgment rendered
against Landlord will be satisfied solely out of the proceeds of the sale of the
Landlord's interest in the Premises. No personal judgment will lie against
Landlord or any of its officers, directors, partners, or employees upon
extinguishment of its rights in the Premises and any judgment so rendered will
not give rise to any right of execution or levy against Landlord's other assets.
In the event of any sale or exchange of the Premises, the seller will be
relieved of all liability which may arise under this Lease, whether occurring
prior or subsequent to such sale or transfer, and Tenant will look solely to the
successor Landlord and its interest in the Premises for any then outstanding
claims.
32. Financial Statements.
Within 20 days of written request by Landlord, Tenant will provide Landlord
with its most recent financial statement, certified to be true and correct by
either Tenant's chief financial officer or an independent certified public
accountant; provided, however, Landlord may only share such statements with its
mortgagee, ground lessor, prospective mortgagees and ground lessors, purchasers
and partners, and attorneys, accountants, and other advisors of Landlord and
each of the foregoing.
33. No Joint Venture.
This Lease may not be deemed or construed to create or establish any
relationship of partnership, agency, or joint venture (or any other similar
relationship or arrangement) between Landlord and Tenant.
34. Waiver.
No waiver of any of the covenants and agreements herein contained or of any
breach thereof will be taken to constitute a waiver of any other subsequent
breach of such covenants and agreements or to justify or authorize the
non-observance at any other time of the same or of any other covenants and
agreements hereof.
35. Severability.
If any clause or provision of this Lease is illegal, invalid or
unenforceable, then and in that event, it is the intention of the parties hereto
that the remainder of this Lease will not be affected thereby, and it is also
the intention of the parties to this Lease that in lieu of each clause or
provision of this Lease that is illegal, invalid or unenforceable, there be
added as a part of this Lease a clause or provision as similar in terms to such
illegal, invalid or unenforceable clause or provision as may be possible and be
legal, valid and enforceable.
36. Entire Agreement.
This Agreement constitutes the entire understanding between the parties and
supersedes all prior agreements. No waiver, modifications, or additions to this
Lease agreement will be valid unless in writing and signed by both the Landlord
and the Tenant.
37. Right of First Refusal.
37.1 Effective as of the date of this First Amendment and for so long as
this Lease remains in force and effect (including continuation via extensions
and renewals), in the event Landlord proposes to sell the Premises (or any
portion thereof) pursuant to a bona fide written offer from a third party (the
"Bona Fide Offer"), then Landlord will first offer the Premises (or applicable
portion thereof) for sale to Tenant under the exact same terms and conditions as
those contained in the Bona Fide Offer, except that the date of the Bona Fide
Offer will be deemed to be the date of Tenant's Notice to Exercise its right of
first refusal hereunder as referenced below. Landlord will offer this right of
first refusal to Tenant in a written Notice of Right of First Refusal that will
include the terms, conditions, and a copy of the Bona Fide Offer. Tenant may
exercise its Right of First Refusal by providing written notice of exercise to
Landlord (the "Notice of Exercise") on or before the thirtieth (30th) day
following receipt of the Notice of Right of First Refusal. The date Tenant
provides the Notice of Exercise to Landlord will be the "Notice of Exercise
Date".
37.2 Within seven (7) days following the Notice of Exercise Date, Landlord
will order for delivery to Tenant a commitment for a policy of title insurance
without standard exceptions issued by a title insurance company acceptable to
Tenant dated concurrently or after the Notice of Exercise Date, in the amount of
the purchase price, committing to insure Tenant as the holder of marketable
title to the Premises free and clear of all liens, claims and subject only to
encumbrances of record and, current easements, zoning regulations and building
and use restrictions and such items set forth in the commitment to which Tenant
has approved in writing ("Permitted Exceptions"). If the title commitment fails
to indicate marketable title to the Premises in the condition set forth above,
Tenant will so notify Landlord in writing within fifteen (15) days after receipt
of such title commitment specifying the defects claimed and desired remedy.
Landlord will have thirty (30) days from and after the date such notice is
delivered to Landlord to cure any defects and, having done so, will cause the
title commitment to be modified to reflect the same and will deliver the revised
title commitment to Tenant. If Landlord fails or refuses to cure any defects set
forth in such notice and furnish the revised commitment within the thirty
(30)-day period, then Tenant may, at its sole option, upon written notice to
Landlord, either (i) waive such defects and proceed with the purchase as herein
provided, or (ii) cure such defects, whereupon Landlord will promptly reimburse
Tenant for any and all reasonable costs, including reasonable attorneys' fees,
costs of collection and will defend, indemnify and hold Tenant harmless from and
against any and all such defects and liabilities, and the purchase price will be
reduced by the reasonable costs incurred by Tenant in curing such defects, or
(iii) terminate the sale and purchase transaction; provided that upon Tenant's
election to so terminate the right of first refusal, the purchase transaction
contemplated hereby will be terminated, and Tenant will continue to lease the
Premises pursuant to the provisions of this Lease, which will remain in force
and effect.
37.3 Within seven (7) days following the Notice of Exercise Date, Landlord
will forward to Tenant any documents in Landlord's possession or available to
Landlord that relate to the physical structure and/or condition of the Premises,
including but not limited to engineering and architectural drawings and reports,
environmental reports and studies and surveys (the "Premises Information").
Tenant or its agents (including but not limited to its consultants, engineers
and the local building inspector) will have a period of thirty (30) days from
and after the date Tenant receives the Premises Information, to conduct
investigations and to inspect the Property (at Tenant's expense) in whatever
manner Tenant deems necessary, including without limitation, to conduct
investigations with respect to the land and the condition thereof, including
environmental conditions. At any time prior to the expiration of such inspection
period, Tenant, in its sole and absolute discretion if it is dissatisfied with
the results of such inspection and investigations for any reason whatsoever, may
elect to rescind, cancel and terminate its right of first refusal by sending a
written notice to such effect to the Landlord during such period. Upon Tenant's
election to so rescind, cancel and terminate the right of first refusal, the
purchase transaction contemplated hereby will be terminated, and Tenant will
continue to lease the Premises pursuant to the provisions of this Lease, which
will remain in force and effect.
37.4 The closing will be consummated within one hundred twenty (120) days
following the Notice of Exercise Date. In the event Tenant does not elect to
exercise the Option, Landlord may then sell the Property (or applicable portion
thereof) to the third party pursuant to the Bona Fide Offer, but only upon the
precise terms and conditions as stated in the Bona Fide Offer. In the event of
any change in the terms and conditions of the Bona Fide Offer or in the event
such transaction is not consummated within such 120 day period, then the
Property will be offered again to Tenant under the same terms and conditions as
set forth in the revised Bona Fide Offer.
37.5 If Tenant does not timely exercise its right of first refusal or
otherwise does not purchase the Property (or applicable portion thereof)
pursuant to this Section 37, Tenant will continue to lease the Leased Premises
pursuant to the provisions of this Lease, which will remain in force and effect
Executed as of the 1st day of _____________, 2005.
XXXX PROPERTIES, L.L.C. MTM ACQUISITION COMPANY
"LANDLORD" "TENANT"
By:_______________________________ By: __________________________________
Print Name: ______________________ Print Name: __________________________
Title: ___________________________ Title: _______________________________
EXHIBIT A TO LEASE
Description of Premises and Easements
A part of Section 22, Township 4 North, Range 10 East, Madison Township,
Jefferson County, Indiana, described as follows: Beginning at a P.K. nail found
in Michigan Road at the Xxxxxxxxx Xxxxxx xx Xxxxxxx 00,X0X, X00X; thence South
87 degrees 51 minutes 53 seconds West 1151.03 feet to a rebar set; thence South
00 degrees 03 minutes 22 seconds East 566.78 feet to a rebar set; thence North
87 degrees 59 minutes 13 seconds East 115.103 feet to Michigan Road; thence
along said road North 00 degrees 03 minutes 53 seconds West 569.25 feet to the
point of beginning, consisting of 15.00 acres more or less.
ALSO, subject to a sixty foot (60') wide easement for the purpose of
ingress, egress, and utilities the centerline of which is described as follows:
Commencing at a P.K. nail found in Michigan Road at the Northeast Xxxxxx xx
Xxxxxxx 00, Xxxxxxxx 0 Xxxxx, Xxxxx 00 East; thence along Michigan Road South 00
degrees 03 minutes 53 seconds East 441.77 feet to the point of beginning; thence
South 88 degrees 48 minutes 31 seconds West 1150.57 feet to the point of
termination.
ALSO, subject to a two-lane road easement in favor of Landlord and
Landlord's assignees for the purposes of ingress and egress, and construction,
from any entrance to the Premises from Michigan Road on the eastern boundary of
the Premises, across the parking lot of the Premises, to certain property
consisting of approximately 16 acres situated on the western boundary of the
Premises, either directly across the parking lot of the Premises, or in the case
of road construction generally paralleling the southern boundary of the
Premises. Provided, that the costs of any such construction shall be borne
exclusively by Landlord of Landlord's assignees, and Tenant shall have no
obligation or responsibility to maintain such road.
* * * * * * *
EXHIBIT 2.7(a)(viii)
NON-COMPETITION AGREEMENT
-------------------------
THIS NON-COMPETITION AGREEMENT ("Agreement") is made and executed as of the
____ day of ______________, 2005, by and between XXXXXXX X. XXXXXXX ("Xxxxxxx")
and MTM ACQUISITION COMPANY, a Michigan corporation ("Buyer").
RECITALS:
A. Midwest Tube Xxxxx, Inc., an Indiana corporation ("Seller"), Xxxxxxx,
individually and in his fiduciary capacity as Trustee of the Xxxxxxx X. Xxxxxxx
2004 Annuity Trust and Buyer are parties to an Asset Purchase Agreement (the
"Asset Purchase Agreement") dated August ____, 2005 (the "Closing Date")
pursuant to which Buyer will purchase from Seller substantially all of the
assets of Seller.
B. The Asset Purchase Agreement provides that Xxxxxxx will execute and that
Seller and Xxxxxxx will deliver this Agreement to Buyer.
C. Terms not defined in this Agreement will have the meanings ascribed to
them in the Asset Purchase Agreement.
THEREFORE IT IS AGREED:
1. Non-competition. For a period of five (5) years after the Closing Date,
Xxxxxxx shall not directly or indirectly invest in, own, manage, operate,
finance, control, advise, render services to or guarantee the obligations of any
Person (i) engaged in or planning to become engaged in the steel tube
manufacturing business, or (ii) who is or was, at any time, a customer or
supplier of Seller ("Competing Business"), provided, however, that Xxxxxxx may
purchase or otherwise acquire up to (but not more than) five percent (5%) of any
class of the securities of any Person (but may not otherwise participate in the
activities of such Person) if such securities are listed on any national or
regional securities exchange or have been registered under Section 12(g) of the
Exchange Act.
2. Non-solicitation. For a period of five (5) years after the Closing Date,
Xxxxxxx shall not, directly or indirectly:
(a) Solicit the purchase of steel tube from any Person who was a customer
of Seller;
(b) Cause, induce or attempt to cause or induce any Person who is or was a
customer, supplier, licensee, licensor, franchisee, employee, consultant or
other business relation of Seller on the Closing Date or within the year
preceding the Closing Date to cease doing business with Buyer, to deal with any
competitor of Buyer or in any way interfere with its relationship with Buyer; or
(c) Hire, retain or attempt to hire or retain any employee or independent
contractor of Buyer or in any way interfere with the relationship between Buyer
and any of its employees or independent contractors.
3. Non-disparagement. After the Closing Date, Xxxxxxx will not disparage
Buyer or any of Buyer's shareholders, directors, officers, employees or agents.
4. Permitted Competition. Notwithstanding anything to the contrary, Xxxxxxx
will be permitted to, directly or indirectly, acquire the assets or business of
FENCEmaster. Provided, that during the term of this Agreement, if such entity
requires steel tube products to be purchased from third parties for use in its
kennel assembly business, Xxxxxxx will cause such entity to purchase its steel
tube products requirements from Buyer, up to the dollar volume of products
purchased by FENCEmaster from Buyer, including any affiliates of Buyer, and
Seller in the twelve (12) months prior to Xxxxxxx'x acquisition (subject to
adjustment if necessitated by a downturn in business). Buyer will sell such
steel tube products to Xxxxxxx'x entity at the then prevailing market prices and
service terms, and the products will be of the quality consistent with the
quality of products historically provided to FENCEmaster. This requirements
provision shall not be construed as requiring such entity to purchase any
specific volume of steel tube products from Buyer unless such products are
required or needed in such entity's business following Xxxxxxx'x acquisition.
Xxxxxxx agrees that he will not produce steel tube in connection with the
acquisition FENCEmaster or the operation of its business thereafter.
5. Enforceability. If a final judgment of a court or tribunal of competent
jurisdiction determines that any term or provision contained in Sections 1
through 3 of this Agreement is invalid or unenforceable, then the parties agree
that the court or tribunal will have the power to reduce the scope, duration or
geographic 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. Sections 1 through
3 of this Agreement will be enforceable as so modified after the expiration of
the time within which the judgment may be appealed. Sections 1 through 3 of this
Agreement are reasonable and necessary to protect and preserve Buyer's
legitimate business interests and the value of the Assets and to prevent any
unfair advantage conferred on Xxxxxxx.
6. Equitable relief. Xxxxxxx agrees that the injury to Buyer and from a
breach by Xxxxxxx of the covenants and restrictions set forth in Sections 1
through 3 would be extremely difficult, if not impossible to adequately measure
and limiting Buyer's remedies to actions at law would be inadequate.
Accordingly, Buyer will be entitled, in addition to other remedies, to institute
actions for injunctive and other equitable relief.
7. Governing law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan, without regard to any
conflict of law provisions.
8. Captions. The section titles or captions contained in this Agreement are
provided for the sake of convenience only and shall not be deemed part of the
context of this Agreement.
9. Assignability. This Agreement may not be assigned by Xxxxxxx. This
Agreement may be assigned by Buyer in connection with a sale of substantially
all of its assets.
IN WITNESS WHEREOF, the parties have executed this Agreement.
Buyer Company,
a Michigan corporation
By:_______________________________
J. Xxxxx Xxxxxxxx
Its: President
Address:
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Fax: 000-000-0000
__________________________________
Xxxxxxx X. Xxxxxxx
Address:
__________________________________
__________________________________
__________________________________
EXHIBIT 2.7(a)(x)
OPINION OF SELLER'S COUNSEL
---------------------------
________, 2005
MTM Acquisition Company
0000 Xxxxx Xx.
Xxxxxxxxxx, XX 00000
Re: Acquisition of Midwest Tube Xxxxx, Inc.
Gentlemen:
I have served as counsel to Midwest Tube Xxxxx, Inc., an Indiana
corporation ("Midwest"), and Xxxxxxx X. Xxxxxxx, a resident of Indiana
individually and Xxxxxxx X. Xxxxxxx in his Fiduciary Capacity as Trustee of the
Xxxxxxx X. Xxxxxxx 2004 Annuity Trust u/t/d August 11, 2004 (together the
"Shareholders") in connection with the transactions contemplated by that certain
Asset Purchase Agreement dated August __, 2005 (the "Agreement"), among the
Shareholders, Midwest, and MTM Acquisition Company, a Michigan corporation ("MTM
Acquisition"). This is the opinion of Midwest's legal counsel as contemplated by
Section 2.7(a)(xi) of the Agreement. Capitalized terms used but not elsewhere
defined herein shall have the respective meanings ascribed to such terms in the
Agreement.
DOCUMENTS
In connection with this opinion, I have examined originals or copies,
certified or otherwise identified to my satisfaction, of the following documents
(the "Documents"):
1. the Agreement, including all Schedules thereto;
2. the Promissory Note;
3. the Xxxx of Sale;
4. the Assignment and Assumption Agreement;
5. the Non-Competition Agreement; and
6. the Guarantee;
In connection with this opinion, I have also examined originals or copies,
certified or otherwise identified to my satisfaction, of the following documents
(the "Corporate Documents").
1. Articles of Incorporation, Bylaws and corporate resolutions of Midwest;
2. A Certificate of Existence regarding Midwest issued by the Indiana
Secretary of State's Office, Business Services Division;
3. Resolutions of the Board of Directors of Midwest, authorizing Xxxxxxx X.
Xxxxxxx to execute the Documents on behalf of Midwest (the "Resolutions"); and
4. Such other documents and records pertaining to Midwest and Shareholders
as in my judgment are necessary or appropriate to enable me to render the
opinions expressed below.
ASSUMPTIONS
For purposes of this opinion, I have assumed that:
1. The execution and delivery of the Documents and other documents that I
have reviewed, and the entry into and performance of the transactions
contemplated by the Documents, by all parties other than Shareholders and
Midwest, have been duly authorized by all necessary actions.
2. The execution and delivery of each of the documents referred to herein
were free from fraud, misrepresentation, duress or criminal activity.
3. All documents submitted to me as originals are authentic and accurate in
all respects.
OPINION
Based upon the foregoing, but subject to the assumptions, limitations and
qualifications set forth below, I am of the opinion that:
1. Midwest is a corporation duly organized and validly existing and in good
standing under the laws of the State of Indiana, has all necessary corporate
power and authority to own its properties and assets as now owned and to operate
its business as now operated, and is qualified to do business in Indiana.
2. The Documents have been duly and validly authorized and, when executed
and delivered by Midwest and the Shareholders, will be valid and binding on each
of them and enforceable in accordance with their terms, except as limited by
bankruptcy and insolvency laws and by other laws affecting the rights of
creditors generally.
3. Neither the execution and delivery of the Documents nor compliance with
the terms thereof, nor the consummation of the transactions therein
contemplated, has, nor will, conflict with, result in a breach of, or constitute
a default under the Articles of Incorporation or Bylaws of Midwest.
4. No consent, approval or authorization of, or declaration, filing or
registration with, any governmental body is required in connection with the
execution, delivery and performance of the Documents by Midwest, except as
otherwise disclosed in the Agreement.
QUALIFICATIONS
The opinions expressed above are subject to the following qualifications:
1. The opinions set forth above are subject to the effect of bankruptcy,
insolvency, reorganization, arrangement, moratorium or other similar laws
relating to or affecting creditors' rights (including, without limitation,
preference and fraudulent conveyances or transfer laws) and any limitations
imposed by federal or state law or public policy with respect to any rights to
indemnification and contribution under the Documents.
2. The enforceability of the Documents and the availability of injunctive
relief or other equitable remedies thereunder are subject to the effect of
general principles of equity (regardless of whether enforcement is considered in
proceedings at law or in equity).
3. I express no opinion as to, or the effect or applicability of, any laws
other than the laws of the State of Indiana and political subdivisions thereof,
and the federal laws of the United States of America, in each case as such laws
presently apply.
This letter is furnished solely for your benefit in connection with the
transactions contemplated by the Documents. This opinion is not to be used,
circulated, quoted or otherwise relied upon by any other person or entity or,
for any other purpose, without my prior written consent. This opinion is limited
to the matters set forth herein. No opinion may be inferred or implied beyond
the matters expressly contained herein.
Very truly yours,
EXHIBIT 2.7(b)(vi)
GUARANTEE
---------
FOR VALUABLE CONSIDERATION, the receipt and adequacy of which is hereby
acknowledged, and to induce the Noteholder (as defined below) to accept the Note
(as defined below) from MTM ACQUISITION COMPANY, a Michigan corporation
("Debtor"), TARPON INDUSTRIES, INC., a Michigan corporation ("Guarantor"), does
hereby covenant and agree with the Noteholder as follows:
1. Definitions. In this Guarantee, unless the context otherwise requires:
(a) "Indebtedness" is used in its most comprehensive form and means all
Indebtedness, whether direct or indirect, absolute or contingent, now due and
owing or which may hereafter, from time-to-time, be or become due and owing
under or with respect to the following: (i) the Note; (ii) renewals, extensions,
modifications or substitutions of the Note; and (iii) interest and costs,
including attorney fees and disbursements, on the foregoing or relating to the
collection thereof.
(b) "Note"means the Subordinated Promissory Note dated as of
______________, 2005 in which Debtor is the maker and Midwest Tube Xxxxx, Inc.,
an Indiana corporation, is the payee (and shall be referred to as "Noteholder"
in this Guarantee), in the original amount of Two Million Five Hundred Thousand
and 00/100 Dollars ($2,500,000.00).
2. Statement of guarantee. Guarantor hereby unconditionally and absolutely
guarantees to the Noteholder the full and prompt payment when due, or declared
due of all Indebtedness. The Noteholder will have immediate recourse against
Guarantor for full and immediate payment of the Indebtedness at any time after
the Indebtedness, or any part thereof, has not been paid in full as and when
due, whether at fixed maturity or by acceleration under the terms of the Note.
3. Guarantee of payment. This is a continuing and an unconditional
Guarantee of payment, and not of collection. The Noteholder shall not be
obligated, prior to or after seeking recourse against or receiving payment from
Guarantor, to do any of the following (although the Noteholder may do so, in
whole or in part, at its sole option), the performance of which are hereby
unconditionally waived by Guarantor:
(a) Take any steps whatsoever to collect from Debtor or to file any claim
of any kind against Debtor; or
(b) Take any steps whatsoever to accept, perfect the Noteholder's interest
in or foreclose or realize upon collateral security, if any, for the payment of
the Indebtedness, or any other guarantee of the Indebtedness; or
(c) In any other respect exercise any diligence whatsoever in collecting or
attempting to collect the Indebtedness from Debtor by any means.
4. No impairment. Guarantor's liability for payment of the Indebtedness
shall be absolute and unconditional, and nothing whatsoever except actual full
payment to the Noteholder of the Indebtedness shall operate to discharge
Guarantor's liability hereunder except as otherwise provided herein. Guarantor
unconditionally and irrevocably waives each and every defense, which under
principles of guarantee or suretyship law or equity, would otherwise operate to
impair or diminish the liability of Guarantor for the Indebtedness. Without
limiting the generality of the foregoing waiver, none of the following acts,
omissions or occurrences shall diminish or impair the liability of Guarantor in
any respect (any and all of which acts, omissions or occurrences shall not
require notice of any kind by the Noteholder to Guarantor):
(a) Any extension, modification, indulgence, compromise, settlement or
variation of any of the terms of the Indebtedness;
(b) The discharge or release of any obligations of Debtor by reason of the
operation of bankruptcy or insolvency laws or otherwise;
(c) The acceptance or release by the Noteholder of any collateral security
or other guarantee, or compromise, settlement or extension with respect to any
collateral security or guarantee;
(d) The creation of any new indebtedness by Debtor; and
(e) The making of a demand, or absence of demand, for payment of the
Indebtedness, or giving or failing to give any notice of dishonor or protest or
any other notice, except as required by the terms of the Note.
5. Waiver of Defenses. Guarantor unconditionally waives:
(a) Any subrogation to the rights of the Noteholder against Debtor until
the Indebtedness has been paid in full;
(b) Any notice of acceptance of this Guarantee or the Noteholder's present
or future action or intention to act in reliance on this Guarantee; and
(c) Notice of default by Debtor, any guarantor or any surety, pledgor or
any party granting Debtor security under any security document.
6. Events of default. The occurrence of any one of the following events
shall, at the election of the Noteholder, be deemed a default by a Guarantor
("Event of Default") under this Guarantee:
(a) Any breach by the Guarantor of any of its representations, warranties,
covenants or agreements under this Guarantee which continues uncured for thirty
(30) days after receipt of notice by the Guarantor;
(b) The occurrence of any event of default under the Note; or
(c) The bankruptcy or insolvency of a Guarantor or the appointment of a
conservator for all or any portion of Guarantor's assets.
7. Election of remedies. Upon the occurrence of an Event of Default under
this Guarantee, the Noteholder has such rights and remedies as are provided by
law or in equity or under this Guarantee including, without limitation, the
right to proceed to suit against Guarantor regardless of whether suit has been
commenced against Debtor, and in any such suit Debtor may be joined (but need
not be joined) as a party with Guarantor. The Noteholder shall not be required
to proceed against any other party, or against any other security or collateral,
or to pursue any right or remedy under this Guarantee or under any other
instrument. No right, power or remedy conferred by this Guarantee upon the
Noteholder shall be exclusive of any other right available at law, in equity, by
statute or otherwise, and all such rights, powers and remedies shall be
cumulative and in addition to all others. No failure or delay on the part of the
Noteholder in exercising any right, power or remedy shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude a later or
further exercise thereof or the exercise of any right, power or remedy. No
course of dealing on behalf of the Noteholder shall operate as a waiver of any
right, power, privilege or remedy.
8. Consideration. Guarantor acknowledges receipt of good and valuable
consideration for this Guarantee, the benefit conferred on debtor by the giving
of this Guarantee and the reliance by the Noteholder on the existence and
enforceability of this Guarantee.
9. Notices. Any notice, demand or request by the Noteholder, or their
successors or assigns, to Guarantor shall be in writing, and shall be deemed to
have been received upon: (i) personal delivery; (ii) or by mail, certified mail
return receipt requested at the following address:
ATTN: J. XXXXX XXXXXXXX
TARPON INDUSTRIES, INC.
0000 XXXXX XXXXXX
Xxxxxxxxxx, XX 00000
10. Assignment. This Guarantee shall inure to the benefit of the Noteholder
and its successors and assigns. If there shall be more than one such holder or
owner, this Guarantee shall be deemed a separate contract with each such holder
and owner. If any person other than the Noteholder shall become a holder or
owner of any of the indebtedness, each reference to the Noteholder hereunder
shall be construed as if it referred to each such other holder or owner.
11. Information. Guarantor shall have the responsibility of keeping advised
of Debtor's dealings and all matters, which are or may become subject to, or
covered by, this Guarantee. The Noteholder shall have no obligation or liability
to Guarantor whatsoever in connection therewith.
12. Choice of laws. The laws of the State of Michigan shall govern this
Guarantee and all rights and obligations hereunder, including matters of
construction, validity and performance.
13. Severability. If any provision or clause of this Guarantee or the
application hereof is to be held invalid, that invalidity shall not affect other
provisions or applications of this Guarantee which can be given effect without
the invalid provision or application, and to this end the provisions of this
Guarantee are declared to be severable.
14. Captions. Captions to Sections of this Guarantee are inserted for
convenience only and are not a part of this Guarantee. In interpreting this
Guarantee, they shall not be deemed in any manner to modify, explain, enlarge or
restrict any of the provisions of this Guarantee.
15. Guarantee freely delivered. This Guarantee has been freely and
voluntarily given to the Noteholder by Guarantor, without any duress or coercion
and after Guarantor has either consulted with counsel or been given an
opportunity to do so. Guarantor has carefully and completely read all of the
terms and provisions of this Guarantee.
16. Successors and Assigns. This Guarantee shall be binding upon Guarantor
and its successors and assigns.
THIS GUARANTEE has been executed on this _________________, 2005.
GUARANTOR:
TARPON INDUSTRIES, INC.,
a Michigan corporation
_______________________
By: J. Xxxxx Xxxxxxxx
Its: Chief Executive Officer
EXHIBIT 2.9
ACCOUNTING PRINCIPLES POLICIES AND PRACTICES
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[To be mutually agreed upon by parties.]
