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EXHIBIT 10.1
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ASSET PURCHASE AGREEMENT
AMONG
MASCOTECH AUTOMOTIVE SYSTEMS GROUP, INC.,
MASCOTECH ACCESSORIES, INC.,
AND
ADVANCED ACCESSORY SYSTEMS, LLC
Dated as of September 28, 1995
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TABLE OF CONTENTS
Page
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ARTICLE I TRANSFER OF PURCHASED ASSETS, ASSUMPTION OF
LIABILITIES AND RELATED MATTERS......................................1
1.1 Transfer of Assets...................................................1
1.2 Assets Not Being Transferred.........................................4
1.3 Liabilities Being Assumed............................................5
1.4 Liabilities Not Being Assumed........................................6
1.5 Instruments of Conveyance and Transfer, Etc..........................7
1.6 Further Assurances, Etc..............................................7
1.7 Assignment of Contracts, Rights, Etc.................................8
1.8 Right of Endorsement, Etc............................................8
1.9 Subscription Agreement...............................................8
ARTICLE II PURCHASE PRICE; ALLOCATION..........................................8
2.1 Purchase Price.......................................................8
2.2 Payments at Closing..................................................9
2.3 Purchase Price Adjustment............................................9
2.4 Allocation of Purchase Price........................................11
ARTICLE III REPRESENTATIONS AND WARRANTIES....................................11
3.1 Representations and Warranties of the Sellers.......................11
3.2 Representations and Warranties of the Buyer.........................25
ARTICLE IV CLOSING............................................................26
ARTICLE V INDEMNIFICATION.....................................................26
5.1 Definitions.........................................................26
5.2 Indemnification Generally...........................................29
5.3 Notice and Defense of Third Party Claims............................30
5.4 Survival of Representations, Warranties, Agreements and Covenants...32
5.5 Remedies Cumulative.................................................32
5.6 Remediation.........................................................32
5.7 Product Distinguishment.............................................33
5.8 Stand-alone Costs...................................................33
ARTICLE VI ADDITIONAL POST-CLOSING AGREEMENTS.................................34
6.1 Access..............................................................34
6.2 Bulk Sales Laws.....................................................35
6.3 Brokers, Finders and Investment Bankers.............................35
6.4 Certain Employee Matters............................................35
6.5 Guaranties..........................................................36
6.6 Audited Financials..................................................37
ARTICLE VII MISCELLANEOUS.....................................................37
7.1 Expenses; Transfer Taxes, Etc.......................................37
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7.2 Entire Agreement....................................................37
7.3 Related Documents...................................................37
7.4 Notices.............................................................37
7.5 Counterparts........................................................39
7.6 Governing Law; Consent to Jurisdiction..............................39
7.7 Benefits of Agreement; Assignment...................................39
7.8 Construction........................................................39
7.9 Pronouns............................................................39
7.10 Descriptive Headings................................................39
7.11 Severability........................................................39
7.12 Amendment...........................................................40
7.13 No Third Party Beneficiaries........................................40
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LIST OF EXHIBITS
LIST OF SCHEDULES
Schedule 1.3(c) - Customer And Purchase Orders Note Being Assumed
Schedule 1.3(f) - Liabilities And Obligations
Schedule 3.1(c) - Corporate Action; No Conflict
Schedule 3.1(d) - Financial Information
Schedule 3.1(e) - Undisclosed Liabilities
Schedule 3.1(f) - Changes
Schedule 3.1(g) - Real Property
Schedule 3.1(h) - Title To Assets, Etc.
Schedule 3.1(i) - Intellectual Property Rights
Schedule 3.1(j) - Environmental Matters
Schedule 3.1(k) - Contracts
Schedule 3.1(l) - Litigation
Schedule 3.1(m) - Compliance With Law
Schedule 3.1(o) - Inventories
Schedule 3.1(p) - Labor Relations; Employees
Schedule 3.1(q) - Employee Benefits
Schedule 3.1(s) - Brokers Employed By Sellers
Schedule 3.1(t) - Transactions With Affiliates
Schedule 3.1(u) - Principal Customers
Schedule 3.1(v) - Best Knowledge
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DEFINITIONS
THE FOLLOWING TERMS WHICH MAY APPEAR IN MORE THAN ONE SECTION OF THIS AGREEMENT
ARE DEFINED IN THE FOLLOWING SECTIONS:
TERM SECTION OR OTHER LOCATION
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Accountants' Determination 2.3(b)
Actual Stand-Alone Costs 5.8(a)
Additional Payment 2.3(c)
Affiliate 3.1(t)
Arbitrating Accountants 2.3(b)
Assigned Contracts 1.1(a)(viii)
Assumed Employee Plans 1.1(a)(xi)
Assumed Obligations 1.3
Best Knowledge 3.1(w)
Xxxx of Sale and Assumption Agreement 1.5(a)
Business First Paragraph
Business Day 7.4
Buyer Caption
Buyer Indemnification Event 5.1(a)
Buyer Indemnified Persons 5.1(b)
Buyer's Accountants 2.3(b)
By-Laws 3.1(a)
Cash Payment 2.2
CERCLA 3.1(j)(iv)
CERCLIS 3.1(j)(iv)
Charter 3.1(a)
Claim 5.1(c)
Closing Article IV
Closing Date Article IV
Closing Net Working Capital 2.3(a)
Closing Statement 2.3(a)
Code 2.4
Contracts 3.1(k)
Conveyance Instruments 1.5(a)
Current Employees 3.1(p)
Employee Plan 3.1(q)(i)
Encumbrances 1.1(a)
Environmental Laws 3.1(j)(i)
ERISA 3.1(q)(i)
ERISA Affiliate 3.1(q)(i)
Excluded Assets 1.2
Excluded Obligations 1.4
Final Determination Date 2.3(e)
Financial Statements 3.1(d)
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GAAP 3.1(d)
Governmental Authority 3.1(c)
Hazardous Materials 3.1(j)(ii)
Hired Employees 6.4(a)
Holdings 1.9
HSR Act 3.1(c)
Indemnified Persons 5.1(d)
Indemnifying Person 5.1(e)
Intellectual Property Rights 3.1(i)(iii)
Interim Balance Sheet 3.1(d)(ii)
Interim Balance Sheet Date 3.1(d)(ii)
Leased Real Property 1.1(a)(iv)
Leases 1.1(a)(iv)
Legal Requirement 3.1(c)
Liability Letter 5.3(b)(i)
Losses 5.1(f)
MAI Caption
MascoTech 1.9
MASG Caption
Net Working Capital Statement 2.3(a)
NPL 3.1(j)(v)
Objection Notice 2.3(b)
Owned Real Property 1.1(a)(iii)
Permits 3.1(m)(ii)
Permitted Encumbrances 1.1(a)
Permitted Owned Real Property Exceptions 3.1(g)(ii)
Person 3.1(c)
Principal Customers 3.1(u)
Projected Working Capital Statement 3.1(d)(iii)
Proprietary Technology 3.1(i)(iii)
Purchase Price 2.1
Purchased Assets 1.1(a)
Purchased Inventory 1.1(a)(v)
Real Property 1.1(a)(iv)
Related Documents 7.3
Release 3.1(j)(ii)
Requisite Rights 3.1(i)(i)
Seller Indemnification Event 5.1(g)
Seller Indemnified Persons 5.1(h)
Sellers Caption
Sellers' Accountants 2.3(b)
Sellers' Refund 2.3(c)
Settlement Agreement 2.3(b)
Stand-alone Costs Accountants' Determination 5.8(c)
Stand-alone Costs Arbitrating Accountants 5.8(c)
Stand-alone Costs Objection Notice 5.8(c)
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Stand-alone Costs Statement 5.8(b)
Statement of Allocation 2.4
Subscription Agreement 1.9
Survival Date 5.4
Target Net Working Capital 2.3(a)
Taxes 5.1(i)
Third Party Claim 5.3
US EPA 3.1(j)(iv)
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ASSET PURCHASE AGREEMENT dated
as of September 28, 1995, among
MASCOTECH AUTOMOTIVE SYSTEMS GROUP,
INC., a Michigan corporation ("MASG"),
MASCOTECH ACCESSORIES, INC., a
California corporation ("MAI"; and
together with MASG, the "Sellers"), and
ADVANCED ACCESSORY SYSTEMS, LLC, a
Delaware limited liability company (the
"Buyer").
MASG, through its accessories group and MAI, is engaged in the
business (the "Business") of designing, engineering, manufacturing, selling and
distributing rack systems, vehicular lifestyle accessories (such as bike racks,
ski racks, surfboard carriers, and roof-mounted spare tire carriers) and
exterior decorative trim for automobiles, light trucks and other vehicles. The
parties hereto desire that the Sellers sell, transfer, convey and assign to the
Buyer all of the assets, properties, interests in properties and rights
principally used in the Business and that the Buyer purchase and acquire the
same, subject to the assumption by the Buyer of certain specified liabilities
and obligations of the Sellers relating to the Business, upon the terms and
subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements hereinafter set forth, the
parties hereto hereby agree as follows:
ARTICLE I
TRANSFER OF PURCHASED ASSETS,
ASSUMPTION OF LIABILITIES AND RELATED MATTERS
1.1 TRANSFER OF ASSETS.
(a) On the terms and subject to the conditions set forth in this
Agreement, at the Closing the Sellers shall sell, transfer, convey and assign to
the Buyer, free and clear of all Encumbrances (other than Permitted
Encumbrances), and the Buyer shall purchase and acquire from the Sellers, all of
the Sellers' right, title and interest in, to and under the assets, properties,
interests in properties and rights of the Sellers of every kind, nature and
description, whether real, personal or mixed, tangible or intangible,
principally used in or held for use in the Business (other than the Excluded
Assets), wherever located, as the same shall exist immediately prior to the
Closing, including, without limitation, the following:
(i) all machinery and equipment, including, without
limitation, all manufacturing, production, maintenance, packaging,
testing and other machinery, equipment, molds, presses, rolling stock,
motor vehicles, tractors and other vehicles, spare or replacement
parts, computer equipment (including the A/S 4000 computer system used
in the Business), furniture, fixtures, office equipment and software
programs (including Sellers' interest in the software used on the A/S
4000 computer system), supplies and other items of tangible personal
property;
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(ii) all tooling owned by the Sellers and used in connection
with the Business, including any tooling jointly owned with any
customers or Affiliates of the Sellers; provided that in the case of
tooling jointly owned with customers, Buyer shall only receive Sellers'
rights and interest in such tooling;
(iii) all real property listed on Schedule 3.1(g), together
with all appurtenances to such real property and all structures,
fixtures and improvements located thereon (the "Owned Real Property");
(iv) all real property leases listed on Schedule 3.1(g)
(collectively, the "Leases"), together with all of the Seller's
interest in all of the structures, fixtures and improvements located on
the real property covered by such Leases (the "Leased Real Property";
and the Leased Real Property, together with the Owned Real Property,
being collectively referred to herein as the "Real Property");
(v) all inventories of work-in-process, raw materials,
finished products, returned goods, stores and supplies, spare parts,
packaging, shipping containers and other materials (the "Purchased
Inventory");
(vi) all prepaid expenses (other than prepaid Taxes),
advances, deposits (including utility deposits) and accounts
receivable;
(vii) all insurance and indemnity claims against third
parties relating to the Purchased Assets and the Assumed Obligations
(including, without limitation, all insurance proceeds paid or payable
by any insurance provider for any Purchased Asset that is destroyed or
damaged after the Interim Balance Sheet Date and on or prior to the
Closing Date) other than any of the foregoing to the extent that they
relate to the Excluded Assets or Excluded Obligations;
(viii) all contracts, agreements, licenses, personal
property leases, commitments, purchase orders, sales orders and other
agreements (collectively, the "Assigned Contracts");
(ix) all Requisite Rights, including, without
limitation, the names "APPEND", "Huron/St. Clair" and all other names
used or held for use in the Business and owned by Sellers or their
Affiliates (excluding the name "MascoTech");
(x) all records of the Sellers, either in computer or
original or photostatic form (except in the case of computer software,
which must be in original form), whether or not in computer or machine
readable format, including, without limitation, property records,
plans, specifications, surveys, titles policies, production records,
engineering records, purchasing and sales records, personnel and
payroll records, accounting records, mailing lists, customer and vendor
lists and records, and computer software and related licenses, manuals
and other materials, in each case principally relating to the Purchased
Assets or the Business;
(xi) all telephone, telex and telecopier numbers and all
listings in all telephone books and directories (excluding listings
using the name "MascoTech");
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(xii) all interests in and to joint ventures, technology
transfers or offshore businesses or ventures;
(xiii) all warranties and guarantees received from vendors,
suppliers or manufacturers with respect to the Purchased Assets or the
Business to the extent assignable;
(xiv) all stationery, purchase orders, forms, labels,
shipping material, catalogs, brochures, art work, photographs and
advertising material (subject to Buyer covering over the name
"MascoTech" or any variation thereof on any such materials);
(xv) all Permits to the extent assignable;
(xvi) all rights which are transferable by the Sellers
(including experience ratings) with respect to unemployment, workers'
compensation and other similar insurance reserves, in each case
relating to employees of the Sellers who become employees of the Buyer;
(xvii) all rights, recoveries, refunds, counterclaims, rights
to offset, other rights, choses in action and Claims (known or unknown,
matured or unmatured, accrued or contingent) against third parties
(including, but not limited to, all warranty and other contractual
claims (express, implied or otherwise) against third parties), other
than any of the foregoing to the extent that they relate to the
Excluded Assets or Excluded Obligations;
(xviii) all assets of MAI, excluding the Lease, dated
August 20, 1993, between PSLC Limited Partnership II and Sport Rack
Systems, Inc. and any sublets thereunder;
(xix) all assets reflected on the Closing Statement other
than assets identified as I/C MascoTech;
(xx) the goodwill of the Sellers associated with the
Business; and
(xxi) control over all assets associated with the Huron/St.
Clair Company Plant II Hourly Pension Plan, the Golden Dental Plan, the
Plant II Hourly Employees Medical Benefit and Short-Term Disability
Plans, and the Plant II Hourly Employees Life Insurance Plan (the
"Assumed Employee Plans").
For convenience of reference, the assets, properties, interests in properties
and rights that are to be sold, transferred, conveyed and assigned to the Buyer
by the Sellers pursuant to this Section are collectively called the "Purchased
Assets" in this Agreement. As used in this Agreement, the term "Encumbrances"
means, collectively, all security interests, judgments, liens, pledges, charges,
escrows, encumbrances, Claims, options, rights of first refusal, rights of first
offer, mortgages, indentures, security agreements and other agreements,
arrangements, contracts, commitments, understandings or obligations, whether
written or oral and whether or not relating in any way to credit or the
borrowing of money. As used in this Agreement, the term "Permitted Encumbrances"
means, collectively, (i) Encumbrances for current taxes or other governmental
assessments or charges not yet due and payable, (ii) Encumbrances granted under
any of the
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Assigned Contracts and any other Encumbrances being assumed by the Buyer
pursuant to Section 1.3 and (iii), with respect to real property, any
Encumbrance indicated on the title commitment for such property.
(b) Anything contained in this Agreement to the contrary
notwithstanding, but subject to the provisions of Section 1.2, to the extent
that any asset, property, interest in property or right principally used in the
conduct of the Business is owned by any Affiliate of the Sellers, such asset,
property, interest in property or right shall be deemed to be a Purchased Asset
for all purposes of this Agreement, and the Sellers shall do, and shall cause
any such other Affiliate of any Seller to do, all things required to be done by
the Sellers with respect thereto, including, but not limited to, those things
set forth in Sections 1.5, 1.6, 1.7 and 1.8.
1.2 ASSETS NOT BEING TRANSFERRED.
Anything contained in this Agreement to the contrary notwithstanding,
there are expressly excluded from the Purchased Assets the following:
(a) the consideration delivered to the Sellers pursuant to this
Agreement;
(b) all assets used primarily in connection with the Sellers'
corporate functions (including, but not limited to, corporate charters, seals,
minute books, stock transfer ledgers, taxpayer and other identification numbers,
tax returns, tax information and tax records), whether or not used for the
benefit of the Business;
(c) rights to or claims for refunds or rebates of Taxes for
periods ending on or prior to the Closing Date and the benefit of net operating
loss carryforwards, carrybacks or other credits of any Seller;
(d) claims or rights against third parties relating to any other
Excluded Asset or Excluded Liability;
(e) all records relating to pending lawsuits to which a Seller
is a party and which involve the Business, provided that copies thereof shall
have been furnished to the Buyer prior to or at the Closing;
(f) all "MascoTech" and "Creative" marks, including any and all
trademarks, service marks, trade names and service names;
(g) all accounts receivable due from Affiliates of the Sellers;
(h) except as provided in Section 1.1(xxi), all assets related
to or owned by any "employee benefit plan" (as that term is defined in Section
3(3) of ERISA) sponsored or maintained by the Sellers, or any of its ERISA
Affiliates; and
(i) all assets identified on the Closing Statement as I/C
MascoTech.
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For convenience of reference, the assets, properties, interests in properties
and rights of the Sellers which do not constitute Purchased Assets are
collectively called the "Excluded Assets" in this Agreement.
1.3 LIABILITIES BEING ASSUMED.
Subject to the terms and conditions of this Agreement, simultaneously
with the sale, transfer, conveyance and assignment to the Buyer of the Purchased
Assets, the Buyer shall assume, pay and perform when due the following, and only
the following, liabilities and obligations of the Sellers:
(a) accounts payable and accrued expenses of the Business
(excluding accruals for (i) any Taxes other than Taxes to the extent accrued on
the Closing Statement and (ii) any intercompany or other payments due to
Affiliates of the Seller, including all items identified as I/C MascoTech on the
Closing Statement) to the extent accrued or otherwise properly reflected on the
Closing Statement;
(b) all liabilities and obligations arising after the Closing
under the Assigned Contracts in accordance with their respective terms;
(c) all obligations under open customer orders and purchase
orders (including any such orders placed with any Affiliate of the Sellers
relating to products or services of the Business) included in the Assigned
Contracts which arose in the ordinary course of business of the Business prior
to the Closing Date;
(d) accrued payroll and vacation expenses of the Sellers arising
in the ordinary course of business of the Business and relating to the Hired
Employees to the extent reflected on the Closing Statement;
(e) warranty obligations of the Sellers with respect to the
Business resulting from products manufactured, distributed or sold or services
performed on or before the Closing Date, notwithstanding that the date on which
the warranty obligation is asserted is after the Closing Date; provided,
however, the Buyer shall assume no liability with respect to warranty claims for
rack systems sold prior to the Closing for the "NS Minivan";
(f) liabilities and obligations relating to the Business and
disclosed on Schedule 1.3(f);
(g) the liabilities and obligations assumed by the Buyer under
Section 6.4;
(h) liabilities and obligations arising out of the operation of
the Business after the Closing Date; and
(i) l liabilities associated with the Assumed Employee Plans.
For convenience of reference, the foregoing liabilities and
obligations of the Sellers being assumed by the Buyer are collectively called
the "Assumed Obligations" in this
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Agreement. The Buyer hereby expressly agrees with the Sellers to pay and perform
when due all of the Assumed Obligations.
1.4 LIABILITIES NOT BEING ASSUMED.
Anything contained in this Agreement to the contrary notwithstanding,
the Buyer is not assuming any liabilities or obligations (fixed or contingent,
known or unknown, matured or unmatured) of the Sellers other than the Assumed
Obligations, whether or not relating to the Purchased Assets or the Business,
all of which liabilities and obligations shall at and after the Closing remain
the exclusive responsibility of the Sellers. Without limiting the generality of
the foregoing, the Buyer is not assuming any of the following liabilities and
obligations:
(a) except as provided in Section 1.3(a), all liabilities and
obligations for Taxes of the Sellers and all liabilities and obligations for
Taxes arising out of or in connection with the operation of the Business on or
prior to the Closing Date (in each case regardless of whether arising as a
result of or in connection with the transactions contemplated hereby or
otherwise);
(b) except as provided in Section 1.3(e) with respect to
warranty obligations, all Claims, liabilities and obligations of any nature
(including product liability claims) with respect to any products sold on or
before the Closing Date, notwithstanding that the date on which the Claim,
liability or obligation is asserted is after the Closing Date;
(c) all liabilities and obligations of any nature whatsoever of
the Sellers to any of their respective Affiliates (including any notes or
accounts payable and the items identified on the Closing Statement as I/C
MascoTech);
(d) except as provided in Sections 1.3(d), (g) and (i), all
Claims by and all liabilities and obligations to employees and independent
contractors for periods prior to and including the Closing Date, including,
without limitation, any Claims, liabilities and obligations arising out of
workers' compensation, unemployment, any employee benefit plan (as that term is
defined in Section 3(3) of ERISA) sponsored by the Sellers or their ERISA
Affiliates, the Sellers' failure to deposit or fund any amounts withheld from
employees pursuant to any retirement plan or arrangement or retiree medical plan
or arrangement, any unfunded retirement plan or arrangement or retiree medical
plan or arrangement, any obligations to current or former plan participants or
beneficiaries under any plan or arrangement intended to provide benefits to
current or former employees of the Sellers, or any stay bonuses required to be
paid to any employee of the Business;
(e) all liabilities and obligations of the Sellers to financial
institutions or other Persons for borrowed money or with respect to indebtedness
and obligations of others which any Seller has directly or indirectly
guaranteed;
(f) all liabilities and obligations of the Sellers relating to
the Excluded Assets and all liabilities and obligations of the Sellers under or
arising out of this Agreement and any Related Document or with respect to the
transactions contemplated hereby and thereby, including, without limitation,
legal and accounting fees, expenses and Taxes incurred by the Sellers;
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(g) all cash overdrafts for any banking accounts maintained for
the benefit of the Business; and
(h) all liabilities identified on the Closing Statement as I/C
MascoTech and all obligations to Hired Employees for stay bonuses.
For convenience of reference, the liabilities and obligations of the Sellers
which do not constitute Assumed Obligations are collectively called the
"Excluded Obligations" in this Agreement.
1.5 INSTRUMENTS OF CONVEYANCE AND TRANSFER, ETC.
(a) Simultaneously with the execution herewith, the Sellers are
executing and delivering (or causing to be executed and delivered) to the Buyer,
such deeds, bills of sale, endorsements, assignments and other good and
sufficient instruments of sale, transfer, conveyance and assignment
(collectively, the "Conveyance Instruments") as are necessary to sell, transfer,
convey and assign to the Buyer, in accordance with the terms hereof, the
Purchased Assets, free and clear of all Encumbrances (other than Permitted
Encumbrances), including, without limitation, a xxxx of sale, assignment and
assumption agreement (the "Xxxx of Sale and Assumption Agreement").
Simultaneously with the execution herewith, the Sellers shall relinquish to the
Buyer possession and operating control of the Purchased Assets and shall take
all other steps that may be required to pass title to the Purchased Assets to
the Buyer.
(b) Simultaneously with the execution herewith, the Buyer is
executing and delivering (or causing to be executed and delivered) to the
Sellers, such instruments of assumption as are necessary to assume, in
accordance with the terms hereof, the Assumed Obligations, including, without
limitation, the Xxxx of Sale and Assumption Agreement.
1.6 FURTHER ASSURANCES, ETC.
(a) The Sellers shall promptly pay or deliver to the Buyer any
amounts or items which may be received by any Seller after the Closing which
constitute Purchased Assets and shall cause all customer orders and purchase
orders placed with Affiliates of the Sellers and relating to the products or
services of the Business to be assigned at the Closing to the Buyer. The Sellers
shall, at any time and from time to time after the Closing, upon the reasonable
request of the Buyer and at the expense of the Sellers, do, execute,
acknowledge, deliver and file, or cause to be done, executed, acknowledged,
delivered and filed, all such further acts, transfers, conveyances, assignments
or assurances as may reasonably be required for better selling, transferring,
conveying, assigning and assuring to the Buyer, or for aiding and assisting in
the collection of or reducing to possession by the Buyer, any of the Purchased
Assets.
(b) The Buyer shall promptly pay or deliver to MascoTech on
behalf of the Sellers any amounts or items which may be received by the Buyer
after the Closing which constitute Excluded Assets. The Buyer shall, at any time
and from time to time, after the Closing, upon the reasonable request of the
Sellers and at the Buyer's expense, do, execute, acknowledge, deliver and file,
or cause to be done, executed, acknowledged, delivered and filed, all such
further acts, transfers, conveyances, assignments or assurances as may
reasonably be required for better assuming the Assumed Obligations.
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1.7 ASSIGNMENT OF CONTRACTS, RIGHTS, ETC.
Anything contained in this Agreement to the contrary notwithstanding,
this Agreement shall not constitute an agreement or attempted agreement to
transfer, sublease or assign any contract, license, real or personal property
lease, sales order, purchase order or other agreement, or any Claim or right
with respect to any benefit arising thereunder or resulting therefrom, or any
Permit, if an attempted transfer, sublease or assignment thereof, without the
required consent of any other party thereto, would constitute a breach thereof
or in any way affect the rights of the Buyer or the Sellers thereunder. The
parties shall use commercially reasonable efforts to obtain the consent of any
such third party to any of the foregoing to the transfer or assignment thereof
to the Buyer in all cases in which such consent is required for such transfer or
assignment. If such consent is not obtained, the parties shall cooperate in any
arrangements necessary or desirable to provide for the Buyer the benefits
thereunder, including, without limitation, enforcement by the Sellers for the
benefit of the Buyer of any and all rights of the Sellers thereunder against the
other party thereto.
1.8 RIGHT OF ENDORSEMENT, ETC.
The Sellers hereby constitute and appoint the Buyer and its successors
and assigns the true and lawful attorney of the Sellers with full power of
substitution, in the name of the Buyer, or the name of the Sellers, on behalf of
and for the benefit of the Buyer, to collect all accounts and notes receivable
and other items being sold, transferred, conveyed and assigned to the Buyer as
provided herein, to endorse, without recourse, checks, notes and other
instruments constituting the Purchased Assets in the name of the Sellers, to
institute and prosecute all proceedings which the Buyer may deem proper in order
to collect, assert or enforce any claim, right or title of any kind in or to the
Purchased Assets, to defend and compromise any and all actions, suits or
proceedings in respect of any of the Purchased Assets or the Business (excluding
any with respect to which Buyer makes a claim for indemnification hereunder) and
to do all such acts and things in relation thereto as the Buyer may deem
advisable. The foregoing powers are coupled with an interest and shall be
irrevocable by the Sellers, directly or indirectly, whether by the dissolution
of the Sellers or in any manner or for any reason.
1.9 SUBSCRIPTION AGREEMENT.
Simultaneously with the execution herewith, MascoTech, Inc., a Delaware
corporation ("MascoTech"), is executing and delivering to AAS Holdings, LLC, a
Delaware limited liability company ("Holdings"), a Subscription Agreement (the
"Subscription Agreement") to purchase 1,500 Units from Holdings for an aggregate
of $1,500,000, receipt of which is hereby acknowledged.
ARTICLE II
PURCHASE PRICE; ALLOCATION
2.1 PURCHASE PRICE.
The aggregate purchase price (the "Purchase Price") to be paid for the
Purchased Assets shall be an amount equal to the sum of (i) the Cash Payment
plus any Additional Payment or less
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any Sellers' Refund, as the case may be, pursuant to Section 2.3(c), plus (ii)
the Assumed Obligations.
2.2 PAYMENTS AT CLOSING.
Against delivery of the Conveyance Instruments by the Sellers to the
Buyer at the Closing, the Buyer shall deliver to MascoTech on behalf of the
Sellers (i) $46,000,000 (the "Cash Payment") by transfer of immediately
available funds to an account or accounts designated by the Sellers to the
Buyer, and (ii) the Xxxx of Sale and Assumption Agreement, duly executed by the
Buyer.
2.3 PURCHASE PRICE ADJUSTMENT.
(a) As soon as practicable, but in no event later than 60
calendar days, following the Closing Date, the Sellers shall prepare, and shall
deliver to Buyer, a statement of total current assets, total current liabilities
and intercompany accounts of the Business as of the Closing Date (the "Closing
Statement"), which Closing Statement shall be prepared on a basis consistent
with the preparation of the Projected Working Capital Statement utilizing the
same line items, the same accounting methodologies, practices and procedures as
used therein (including the accrual of intercompany payables and receivables in
the ordinary course of business consistent with past practice), consistent with
the basis used for determining reserves and all valuation methods and practices
used therein, together with a statement (the "Net Working Capital Statement")
setting forth the Sellers' computations of Closing Net Working Capital and the
amount, if any, by which the Closing Net Working Capital is greater than or less
than $4,700,000 (the "Target Net Working Capital"). All items designated as I/C
MascoTech on the Projected Working Capital Statement shall be similarly
designated on the Closing Statement. As used herein, the term "Closing Net
Working Capital" means the current assets of the Business minus current
liabilities of the Business in each case as of the Closing Date and as reflected
on the Closing Statement. The Sellers shall bear all costs and expenses incurred
in connection with the preparation of the Closing Statement.
(b) The Sellers shall provide, and shall (if applicable) cause
the Sellers' independent certified public accountants (the "Sellers'
Accountants") to provide, the Buyer and the Buyer's independent certified public
accountants (the "Buyer's Accountants") with timely access to the work papers,
trial balances and similar materials used in connection with the preparation of
the Closing Statement. The Buyer shall have 30 calendar days following its
receipt of the Closing Statement and the Net Working Capital Statement within
which to deliver to the Sellers a written notice of objection thereto (the
"Objection Notice"), which Objection Notice shall (i) set forth the Buyer's
determination of the Closing Net Working Capital and (ii) specify in reasonable
detail the Buyer's basis for objection. Each individual item forming a basis for
objection must be for an amount greater than $10,000 or shall not be considered
as an item forming the basis for an objection; provided, however, that if the
aggregate of all individual items forming a basis for objection exceeds $25,000,
then all such items, including those for an amount less than $10,000, shall form
a basis for objection. The failure by the Buyer to deliver the Objection Notice
within such 30-calendar-day period shall constitute the Buyer's acceptance of
the Closing Statement and the Sellers' calculation of the Closing Net Working
Capital contained therein. The Buyer and the Sellers shall in good faith attempt
to resolve their
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differences, if any, with respect to the Closing Statement and the computation
of the Closing Net Working Capital and reach a written agreement with respect
thereto (the "Settlement Agreement") within 30 calendar days following delivery
of the Objection Notice. If the Buyer and the Sellers are unable to resolve all
of such differences within such 30-calendar-day period, the items in dispute
will be referred for determination as promptly as practicable to Ernst & Young,
LLP, or if such firm is unable or unwilling to serve, to another "Big 6"
accounting firm independent of the Buyer and the Sellers selected by agreement
between the Buyer and the Sellers or, if the Buyer and the Sellers cannot so
agree within the 30-calendar-day period referred to above, by lot (the
"Arbitrating Accountants"). The Arbitrating Accountants will make a
determination (the "Accountants' Determination") as to each of the items in
dispute, which Accountants' Determination will be (A) in writing, (B) furnished
to the Buyer and the Sellers as soon as practicable after the items in dispute
have been referred to the Arbitrating Accountants, (C) made in accordance with
this Agreement and (D) conclusive and binding upon the Buyer and the Sellers.
The Arbitrating Accountants will be entitled (but shall not be required) to rely
on the work papers, trial balances and similar materials used in connection with
the preparation of the Closing Statement. The reasonable fees and expenses of
the Arbitrating Accountants shall be shared one-half by the Buyer and one-half
by the Sellers.
(c) Upon the final determination of Closing Net Working Capital
in accordance with this Section 2.3, the following adjustments to the Purchase
Price and the following payments will be made, as applicable, within three
Business Days after the Final Determination Date: (i) if Closing Net Working
Capital exceeds Target Net Working Capital by more than $250,000, the Buyer
shall pay the Sellers an amount equal to (A) the amount by which Closing Net
Working Capital exceeds Target Net Working Capital, minus (B) $250,000, and (ii)
if Target Net Working Capital exceeds Closing Net Working Capital by more than
$250,000, the Sellers shall pay the Buyer an amount equal to (A) the amount by
which the Target Net Working Capital exceeds Closing Net Working Capital, minus
(B) $250,000. Any payment made pursuant to clause (i) of the preceding sentence
is called an "Additional Payment" in this Agreement. Any payment made pursuant
to clause (ii) of the preceding sentence is called a "Sellers' Refund" in this
Agreement. If Closing Net Working Capital is within $250,000 of Target Net
Working Capital, no adjustment shall be made to the Purchase Price.
(d) Any Additional Payment to be made to the Sellers pursuant to
Section 2.3(c) shall be made by transfer of immediately available funds to the
account or accounts designated by MascoTech, on behalf of the Sellers, in
writing to the Buyer. The payment of any Sellers' Refund shall be made by
transfer of immediately available funds to the account or accounts designated by
the Buyer in writing to the Sellers.
(e) For purposes of this Agreement, the "Final Determination
Date" means the earliest to occur of (i) the 31st calendar day following the
Buyer's receipt of the Closing Statement if, prior to such date, the Sellers
shall not have received an Objection Notice, (ii) the date on which the Buyer
receives a written notice from the Sellers stating that the Sellers have no
objection to the Buyer's determination of the Closing Net Working Capital set
forth in the Objection Notice, (iii) the date on which the Sellers and the Buyer
shall have executed and delivered a Settlement Agreement and (iv) the dates on
which the Buyer and the Sellers shall have received the Accountants'
Determination.
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2.4 ALLOCATION OF PURCHASE PRICE.
The Purchase Price shall be allocated to the Purchased Assets in a
statement (the "Statement of Allocation") prepared by the Buyer's Accountants
and approved by Sellers, which approval shall not be unreasonably withheld. The
Buyer's Accountants shall deliver the Statement of Allocation to the Sellers
within 90 days of the Closing Date. The Sellers shall (a) complete and execute a
Form 8594 Asset Acquisition Statement Under Section 1060 of the Internal Revenue
Code of 1986, as amended (the "Code"), promptly upon receipt of such allocation,
in a manner consistent with the Statement of Allocation and (b) deliver a copy
of such form to the Buyer and (c) file a copy of such form with the Sellers' tax
returns, as the case may, for the period which includes the Closing. None of the
parties shall take any action inconsistent with the Statement of Allocation
prepared in accordance with this Section 2.4.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF THE SELLERS.
Each of the Sellers, jointly and severally, represents and warrants to
the Buyer as follows:
(a) Organization; Corporate Authority; Good Standing. Each of
the Sellers is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has all
requisite power and authority to own, lease and operate its properties and to
carry on its business as now being conducted, to execute and deliver this
Agreement and the Related Documents to which it is or will be a party, to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. Each Seller has delivered to the
Buyer a copy of its Charter and By-laws in effect on the date hereof. As used in
this Agreement, the terms "Charter" and "By-laws" mean, respectively with
respect to any corporation, those instruments that, among other things, (A)
define its existence, as filed or recorded with the applicable Governmental
Authority, including, without limitation, such corporation's Articles or
Certificate of Incorporation, Organization or Association, and (B) govern its
internal affairs, in each case as amended, supplemented, or restated.
(b) Other Jurisdictions. Neither Seller is qualified to do
business as a foreign corporation in any jurisdiction due to the operation of
the Business.
(c) Corporate Action; No Conflict. The execution, delivery and
performance by each Seller of this Agreement and the Related Documents to which
it is or will be a party and the consummation of the transactions contemplated
hereby and thereby have been duly and validly authorized by all necessary
corporate action on the part of such Seller. This Agreement has been duly and
validly executed and delivered by each Seller and is, and each of the Related
Documents to which such Seller is or will be a party, when executed and
delivered in accordance with its terms, will be, the valid and binding
obligation of such Seller enforceable against it in accordance with the terms
thereof, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and other laws now or hereafter in effect relating to creditors'
rights generally and
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subject to limitations on the remedy of specific performance and injunctive and
other forms of equitable relief. Except as set forth on Schedule 3.1(c), neither
the execution, delivery or performance by any Seller of this Agreement or any
Related Document to which it is or will be a party, nor the consummation by such
Seller of the transactions contemplated hereby or thereby, nor compliance by
such Seller with any provision hereof or thereof will (i) conflict with or
result in a breach of any provision of the Charter or By-laws of such Seller, in
each case as in effect on the date hereof, (ii) cause a default or give rise to
any right of termination, cancellation or acceleration under any of the terms,
conditions or provisions of any note, bond, lease, mortgage, indenture, license,
agreement or other instrument or obligation to which such Seller is a party or
by which it or its properties or assets may be bound or (iii) violate any law,
statute, ordinance, rule, regulation, order, writ, judgment, injunction, award,
decree, concession, grant, franchise, restriction or agreement (each, a "Legal
Requirement") of, from or with any Governmental Authority applicable to such
Seller or any of its properties or assets. Except as set forth on Schedule
3.1(c), no Permit, consent or approval of or by, or any notification of or
filing with, any Person is required in connection with the execution, delivery
or performance by each Seller of this Agreement and the Related Documents to
which it is or will be a party, or the consummation of the transactions
contemplated hereby or thereby, other than required filings under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX Xxx"). For the
purposes of this Agreement, the term "Person" means any individual, corporation,
association, partnership, joint venture, trust or other entity or organization,
including a Governmental Authority, and "Governmental Authority" means any
international or federal, state, local or regional (whether domestic or foreign)
government, authority, instrumentality, department, commission, board, bureau,
agency or court.
(d) Financial Information. Schedule 3.1(d) contains a true and
complete copy of the following:
(i) the unaudited balance sheet of the Business as at
December 31, 1994, and the related unaudited statements of income and
retained earnings and cash flows for the fiscal year then ended;
(ii) the unaudited balance sheet of the Business as at
August 31, 1995 (the "Interim Balance Sheet"), and the related
statements of income and retained earnings and cash flows for the
eight-month period ended August 31, 1995 (the "Interim Balance Sheet
Date"); and
(iii) the unaudited projected working capital statement
of total current assets, total current liabilities and intercompany
accounts of the Business (the "Projected Working Capital Statement"),
which was prepared by the Sellers.
The financial statements described in the foregoing clauses (i) and (ii) are
collectively referred to herein as the "Financial Statements." The Financial
Statements (B) were prepared in accordance with the books and records of the
Business (whether maintained by MascoTech or MASG or otherwise) and (B) fairly
present the financial position of the Business in each case at and as of the
dates indicated and the results of operations, retained earnings and cash flows
of the Business for the periods indicated. Except as set forth on Schedule
3.1(d), the financial statements described in the foregoing clauses (i) and (ii)
were prepared in accordance with generally
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accepted accounting principles ("GAAP") consistently applied throughout the
periods covered thereby.
(e) Absence of Undisclosed Liabilities. Except for liabilities
incurred in the ordinary course of the Business since the Interim Balance Sheet
Date, there are no liabilities of any nature (matured or unmatured, fixed or
contingent) affecting or relating to the Business which were not provided for or
disclosed on the Interim Balance Sheet and which should have been provided for
or disclosed thereon in accordance with GAAP, except as disclosed on Schedule
3.1(d).
(f) Absence of Changes. Except as set forth on Schedule 3.1(f),
since the Interim Balance Sheet Date the Business has been operated in the
ordinary course and consistent with past practice, and there have not been any:
(i) material adverse changes in the assets
(including, without limitation, levels of working capital and the
components thereof), properties, rights, liabilities, earnings,
financial condition, operations, results of operations, earnings or
business of the Business;
(ii) occurrences resulting in the damage, destruction
or loss (whether or not covered by insurance) affecting any tangible
asset or property of the Business in excess of $50,000 in the
aggregate;
(iii) obligations or liabilities (whether absolute,
accrued, contingent or otherwise and whether due or to become due)
created or incurred or entered into, or any transactions, contracts or
commitments entered into, by the Business, other than in the ordinary
course of the business of the Business and consistent with past
practice;
(iv) licenses, sales, transfers, pledges, mortgages
or other hypothecations or dispositions of any tangible or intangible
assets of the Business, other than in the ordinary course of the
business of the Business and consistent with past practice;
(v) agreements or contracts entered into by or on
behalf of the Business which require the delivery by any Seller of a
performance bond;
(vi) any amendments, terminations or waivers of any
rights of material value to the Business;
(vii) increases in, or changes in the method of
computing, the compensation of employees of MascoTech or MASG who are
employed in the Business (including, without limitation, increases
pursuant to or change in method under any bonus, pension, profit
sharing, deferred compensation arrangement or other plan or
commitment), or increase in compensation payable to any officer,
employee, consultant or agent of MascoTech or MASG who are employed in
the Business, or entering into of any employment contract with or
making of any loan to, or engagement in any transaction with, any
officer or employee of MascoTech or MASG who are employed in the
Business, in each case other than in the ordinary course of the
business of the Business and consistent with past practice;
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(viii) material changes in the manner in which the
Business extends discounts or credits to customers or otherwise deals
with customers;
(ix) changes in the accounting methods or practices
followed by or with respect to the Business, or any changes in
depreciation or amortization policies or rates theretofore adopted;
(x) forward purchase commitments in excess of normal
operating inventories or at prices higher than current market prices;
(xi) termination of employment of any key employee of
MascoTech or MASG employed in the Business, or any expression of
intention by any key employee of MascoTech or MASG employed in the
Business to terminate his employment;
(xii) cancellation or termination of any insurance
policy maintained by or with respect to the Business;
(xiii) any account receivable with a face amount in
excess of $50,000 having (i) become past due in excess of 90 days in
its payment, (ii) had asserted against it any claim, refusal to pay or
right of set-off or (iii) to the best knowledge of any Seller, been
placed in jeopardy by reason of its account debtor having become
insolvent or bankrupt;
(xiv) any material write-down or write-up of the
value of any inventory of the Business, or any material write-off of
any accounts receivable or notes receivable of the Business or any
material portion thereof;
(xv) any changes in the manner in which corporate
overhead is allocated to the Business; or
(xvi) agreements or understandings, whether in
writing or otherwise, for any Seller to take any of the actions
specified in items (i) through (xv) above.
(g) Real Property -- Owned or Leased.
(i) Schedule 3.1(g) sets forth a list of all Owned
Real Property and all Leased Real Property. Except for the Real
Property listed on Schedule 3.1(g), neither MASG nor MascoTech owns
any real property or interest therein that is held for use in the
Business.
(ii) The Sellers are the owners of good and
marketable fee title to the Owned Real Property, free and clear of all
Encumbrances and other matters affecting title, except for the matters
listed on Schedule 3.1(g) (collectively, the "Permitted Owned Real
Property Exceptions"). To the Best Knowledge of the Sellers, the
Sellers and the Owned Real Property are in compliance with any
and all covenants and restrictions contained in all recorded deeds,
resolutions, Declarations of Protective Covenants and similar recorded
documents in any way applicable to the Owned Real Property.
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(iii) (A) Each Lease is in full force and effect and all
rent and other sums and charges payable thereunder are current, (B) no
notice of default or termination under any Lease is outstanding, (C) no
termination event or condition or uncured default under any Lease
caused by Sellers exists, and to the Best Knowledge of Sellers, no such
termination event or condition or uncured default caused by any other
party exists or has occurred, (D) no event or condition caused by
Sellers which, with the giving of notice or the lapse of time or both,
would constitute a default or termination event or condition under any
Lease exists or has occurred, and to the Best Knowledge of Sellers, no
such event or condition caused by any other party exists or has
occurred, and (E) no lessor under any Lease has any Encumbrance under
any Lease or otherwise against the Purchased Assets. The Sellers'
leasehold estate under and the Sellers' leasehold interest in each
Lease is held free and clear of all Encumbrance and other matters
affecting title thereto, which is claimed by or through the Sellers.
The Sellers have delivered to the Buyer true and complete copies of all
Leases.
(iv) Except as set forth on Schedule 3.1(g), (A) all
improvements on the Real Property conform in all material respects to
all applicable Legal Requirements (including applicable environmental
and occupational safety and health laws and regulations) and zoning and
building ordinances of Governmental Authorities, and all of the Real
Property is zoned for the various purposes for which such Real Property
is presently being used, (B) all improvements on the Real Property are
in good condition, normal wear and tear excepted, and there does not
exist any condition which materially interferes with the present
economic value or use thereof, (C) none of the buildings and structures
located on the Real Property, the appurtenances thereto or the
equipment therein or the operation or maintenance thereof violates any
restrictive covenant or encroaches on any property owned by others or
any easement, right of way or other encumbrance or restriction
affecting such Real Property, nor does any building or structure of any
third party encroach upon the Real Property or any easement or right of
way benefitting the Real Property, and (D) no condemnation proceeding
is pending or, to the Best Knowledge of the Sellers, threatened, which
would preclude or materially impair the use of any Real Property for
the uses for which it is intended.
(h) Title to Assets, Properties, Interests in Properties and
Rights and Related Matters. Except as set forth on Schedule 3.1(h), the Sellers
have good, valid and marketable title to all of the Purchased Assets (other than
the Owned Real Property), free and clear of all Encumbrances, other than
Permitted Encumbrances. Except as disclosed on Schedule 3.1(h), no other
Affiliate of any Seller owns any assets, properties, interests in properties or
rights, of any kind or description, principally used in the Business. There does
not exist any condition which materially interferes with the use of any tangible
personal property included in the Purchased Assets. The Purchased Assets are, in
the aggregate, in good operating condition, normal wear and tear excepted. Other
than the Excluded Assets, the Purchased Assets include all assets and properties
(real, personal and mixed, tangible and intangible), interests in properties and
rights necessary to permit the Buyer to carry on the Business as presently
conducted by the Sellers. Except as set forth on Schedule 3.1(h), each Seller
has the complete and unrestricted power and the unqualified right to sell,
transfer, convey and assign the Purchased Assets owned by it.
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(i) Intellectual Property Rights. (i) Schedule 3.1(i)(i)(a)
attached hereto, sets forth a list of all extant (a) patents, trademarks,
service marks, and registrations thereof, trade names and copyrights,
applications and registrations for the foregoing owned by Sellers and licenses
of Intellectual Property granted to Seller that are used or held for use in the
Business; and invention disclosures of the employees on Schedule 3.1(i)(ii),
which invention disclosures relate to the Business and for which patent
applications have not been filed. As used herein, the term "Requisite Rights"
means the Intellectual Property Rights of Sellers listed on Schedule
3.1(i)(i)(a) together with all other Intellectual Property owned or possessed by
Sellers that is used or held for use in the Business as presently conducted and
as proposed to be conducted. Except as set forth or disclosed (or
cross-referenced) in Schedule 3.1(i)(i)(b):
(A) Sellers own, and possess all incidents of
ownership of, the Requisite Rights;
(B) no royalties or other such fees are payable by any
Seller to other persons by reason of the ownership, sale, license or
use of the Requisite Rights in the Business as presently conducted;
(C) (x) to the Best Knowledge of the Sellers, no
product or service manufactured, marketed or sold presently by the
Business violates or infringes any Intellectual Property Rights of any
other Person and (y) no Rack Product manufactured, marketed or sold
presently by the Business violates or infringes any Intellectual
Property Rights of any other Person;
(D) there is no pending or, to the Best Knowledge of
the Sellers, threatened claim or litigation against any Seller (nor, to
the Best Knowledge of the Sellers, does there exist any basis therefor)
contesting the validity of or the right to bring actions for
infringement (to the extent any such right presently exists with any
Seller) or the right to use in the Business as presently conducted any
of the Requisite Rights, nor has any Seller received any notice that
any of the Requisite Rights or the operation or proposed operation of
the Business conflicts or will conflict with the asserted rights of any
other Person; and
(E) the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby
will not breach, violate or conflict with any instrument or agreement
governing any Requisite Right and will not cause the forfeiture or
termination or give rise to a right of forfeiture or termination of any
Requisite Right or in any way impair the right of the Buyer to use,
sell, license or dispose of or bring any action for the infringement
(to the extent any such right presently exists) of any Requisite Right
or portion thereof.
(ii) Schedule 3.1(i)(ii) sets forth the form of an agreement
entitled Proprietary Confidential Information And Invention Assignment
Agreement and a list of the employees of the Sellers who have been
engaged in the Business and have signed such an agreement or an
Agreement substantially similar thereto which provides for such
employees to assign or otherwise transfer to the respective Seller all
of their respective right, title and interest in and to any
Intellectual Property Rights relating to the Business.
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(iii) As used herein, the term "Intellectual Property Rights"
means all intellectual property rights including, without limitation,
Proprietary Technology, patents, patent applications, patent rights,
trademarks, trademark registrations, trademark applications, trade
names, service marks, service xxxx registrations, service xxxx
applications, logos, copyrights (statutory and common law), copyright
applications, copyright registrations, know-how, licenses, trade
secrets, proprietary processes and formulae, layouts, processes,
inventions, development tools and all documentation and media
constituting, describing or relating to any of the foregoing,
including, without limitations, manuals, memoranda and records. As used
herein, the term "Proprietary Technology" means all proprietary
processes, formulae, inventions, trade secrets, know-how, development
tools and other proprietary rights owned by any Seller pertaining to
any product or service currently or previously manufactured, sold,
distributed or marketed or proposed to be manufactured, sold,
distributed or marketed (as the case may be), by the Business or used,
employed or exploited in the development, manufacture, license, sale,
distribution, marketing or maintenance of the business thereof, and all
documentation and media constituting, describing or relating to the
foregoing. As used herein, "Rack Product" shall mean any roof rack,
deck rack (or component thereof) and other products which are
functionally equivalent to a roof rack or deck rack.
(j) Environmental Matters. Except as disclosed on Schedule 3.1(j)(i),
(i) each Seller has obtained all Permits which are
required to conduct the Business under all Legal Requirements existing
as of the Closing Date relating to the environment and the release of
any materials into the environment (collectively, "Environmental
Laws"). Each Seller is as of the Closing Date and for the past five
years has been in compliance with the terms and conditions of all
such Permits and with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and
timetables contained in any Environmental Law applicable to the
Business or in any regulation, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated or
approved thereunder.
(ii) Except as disclosed on Schedule 3.1(j)(ii), no notice,
notification, demand, request for information, citation, summons or
order has been issued, no complaint has been filed, no penalty has been
assessed and no investigation or review is pending or, to the Best
Knowledge of Sellers, threatened by any Governmental Authority with
respect to any alleged failure by any Seller to comply with any
Environmental Law or to have any Permit required in connection with the
conduct of the Business or with respect to any generation, treatment,
storage, recycling, transportation, release or disposal, or any release
as defined in 42 U.S.C. Section 9601(22) ("Release") of any pollutants,
contaminants, chemicals or industrial, hazardous or toxic substances or
wastes of any kind regulated under Environmental Laws ("Hazardous
Materials").
(iii) Except as disclosed on Schedule 3.1(j)(iii), in the
conduct of the Business, (A) no Seller has handled any Hazardous
Material so as to require a hazardous waste management permit, and no
Seller has generated, recycled, treated, stored, disposed of or
Released any Hazardous Material in violation of any
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Environmental Law in the conduct of the Business; (B)no PCB is or has
been present, in violation of any Environmental Law, at any property
occupied by the Business; (C) no asbestos is or has been present, in
violation of any Environmental Law, at any property occupied by the
Business; (D) there are no underground storage tanks for Hazardous
Materials, active or abandoned, in violation of any Environmental Law,
at any property occupied by the Business; and (E) no Hazardous
Materials have been Released in excess of a "reportable quantity"
established by statute, ordinance, rule, regulation or order or in a
quantity or manner that would support an order from any government
agency or other legal obligation under Environmental Laws requiring
Buyer to perform or pay for investigation, remediation, or other relief
or response to such Release.
(iv) Except as disclosed on Schedule 3.1(j)(iv), in the
conduct of the Business, no Seller has transported or arranged for the
transportation of any Hazardous Material to any location which is
listed on the National Priorities List under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), listed on the Comprehensive Environmental Response
Compensation and Liability and Information System ("CERCLIS")
maintained by the U.S. Environmental Protection Agency ("US EPA"), or
listed on any similar state list, or which, to the Best Knowledge of
Sellers, may lead to any Claim under Environmental Laws against such
Seller or the Business for or with respect to clean-up costs, remedial
work, damages to natural resources or personal injury claims,
including, but not limited to, Claims under CERCLA.
(v) Except as disclosed on Schedule 3.1(j)(v), no oral or
written notification of a Release of a Hazardous Material has been
filed by or on behalf of any Seller in the conduct of the Business, and
no property now or previously owned or leased by any Seller in the
conduct of the Business is listed on the National Priorities List
("NPL") promulgated pursuant to CERCLA, on CERCLIS or on any similar
state list of sites potentially requiring investigation or clean-up or
formally proposed for listing by the US EPA on the NPL.
(vi) Sellers have provided to Buyer a copy of all draft or
final reports or studies in Sellers' possession or control relating to
compliance of the Business with Environmental Laws or contamination of
the Real Property or other environmental issues affecting the Business.
(k) Contracts, Etc. Schedule 3.1(k) and, with respect to
Intellectual Property Rights, Schedule 3.1(i) contains a list of all oral and
written contracts, agreements and other instruments to which any Seller is a
party and which relate solely or in significant part to the Business, which are
outside the ordinary course of business or which are referred to in clauses (i)
through (xvi) below (collectively, the "Contracts"). Except as set forth in
Schedule 3.1(k), no Seller is, with respect to the Business, a party to any of
the following:
(i) distributor, dealer, sales, advertising, agency,
manufacturer's representative, franchise or similar contract or any
other contract requiring the payment of any commissions in excess of
$25,000 per year;
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(ii) continuing contract for the future purchase of
inventory, material, supplies, equipment or services or for the future
sale of products or services, in each case which is not immediately
terminable without cost or other liability at the Closing or any other
time thereafter;
(iii) any license or other agreement or arrangement
providing for the payment of a royalty or licensing fee to or by any
Seller;
(iv) any contract with or commitment for the employment or
retention of any officer, employee or consultant or any other type of
contract or understanding with any officer, employee or consultant for
services rendered to any Seller;
(v) any profit-sharing, bonus, stock option, pension,
retirement, stock purchase, disability, hospitalization, insurance or
similar plan or agreement, formal or informal, providing benefits to
any current or former director, officer or employee of or consultant to
any Seller employed in or retained with respect to the Business;
(vi) any indenture, mortgage, promissory note, loan
agreement or other agreement or commitment for the borrowing of money,
for a line of credit or for any leasing transaction of a type required
to be capitalized in accordance with Statement of Financial Accounting
Standards No. 13 issued by the Financial Accounting Standards Board;
(vii) any contract or commitment for capital expenditures
involving more than $50,000 each or $200,000 in the aggregate;
(viii) any lease, sublease or other agreement pursuant to
which it is a lessee of or holds or operates any real or personal
property owned by any third party;
(ix) any option or other agreement to purchase or otherwise
acquire or sell or otherwise dispose of any interest in real property;
(x) any contract or commitment for charitable contributions
involving more than $5,000 each or $25,000 in the aggregate;
(xi) any agreement or contract with a "disqualified
individual" (as defined in Section 280G(c) of the Code) which would
result in a disallowance of the deduction for any "excess parachute
payment" (as defined under Section 280G(b)(i) of the Code) if such
Seller were subject to such provisions;
(xii) any guaranty of the obligations of third parties;
(xiii) any agreement which restricts it from conducting the
Business anywhere in the world;
(xiv) any agreement under which it has agreed to indemnify
any third party with respect to, or to share, the tax liability of any
third party;
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(xv) any agreement or arrangement for the purchase or other
acquisition of or sale or other disposition of any assets, properties
or rights other than in the ordinary course of business; or
(xvi) any other agreement or contract which is material to
the Business or the Purchased Assets or Assumed Obligations (including,
without limitation, levels of working capital and the components
thereof), other than this Agreement, the Related Documents and any
other agreement related to the transactions contemplated hereby and
thereby.
No Seller is or, to the Best Knowledge of the Sellers, has been alleged to be in
default in any material respect, and each Seller has in all material respects
performed all the obligations required to be performed by it to date and is not
in default in any material respect under any Contract, and there exists no
event, condition or occurrence which, with the giving of notice or lapse of
time, or both, would constitute a default by any Seller under any Contract. No
Seller has received from any party to any Contract notice of its intention to
cancel or terminate such Contract. The Sellers have furnished to the Buyer true
and complete copies of all of the Contracts or a description thereof as part of
Schedule 3.1(k).
(l) Litigation, Etc. Except as set forth on Schedule 3.1(i) or
(l), there are no (i) claims (whether legal, administrative, arbitration or
otherwise) pending or, to the Best Knowledge of the Sellers, threatened against
any Seller affecting the Business or the Purchased Assets or Assumed
Obligations, whether at law or in equity, or before or by any Governmental
Authority or (ii) judgments, decrees, injunctions or orders of any Governmental
Authority, or arbitrator against any Seller affecting the Business or the
Purchased Assets or Assumed Obligations. The Sellers have delivered to the Buyer
true and complete copies of all documents and correspondence relating to matters
referred to in Schedule 3.1(l) which are included in the Assumed Obligations.
(m) Compliance with Law; Governmental Authorizations.
(i) No Seller is in violation in any material respect
of any Legal Requirement applicable to the Business.
(ii) (A) Each Seller has all licenses, permits, orders,
approvals and other authorizations of or from all Governmental
Authorities which are necessary in the conduct of the Business
(collectively, the "Permits"), (B) such Permits are in full force and
effect, (C) no violations are currently pending with respect to any
such Permit, and (D) no proceeding is pending or, to the Best Knowledge
of the Sellers, threatened to revoke or limit any such Permit. Schedule
3.1(m) contains a true and complete list of all of the Permits and the
Sellers have furnished to the Buyer true and complete copies thereof.
(iii) No studies have been conducted and to the Best
Knowledge of Sellers no conditions exist which indicate the presence of
any occupational health or safety problem relating to any of the
manufacturing or research operations of any Seller. Within the past
five years, neither the United States Occupational Safety and Health
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Administration nor any other Governmental Authority has alleged or
requested a correction of any such occupational health or safety
problem.
(n) Warranties of Products; Products Liability; Regulatory
Compliance Regarding Products.
(i) In the aggregate, the products manufactured, sold
or distributed, by any Seller in connection with the Business are free
from any significant defects in workmanship and materials, and conform
in all material respects with all standards for products of such type.
(ii) No Governmental Authority regulating the
marketing, testing or advertising of any of the products manufactured,
sold or distributed by the Business has requested that any such product
be removed from the market, that substantial new product testing be
undertaken as a condition to the continued manufacturing, selling or
distribution of any such product or that such product be modified.
(o) Inventories. Except as set forth on Schedule 3.1(o), the
inventories of the Sellers with respect to the Business include no items which
are obsolete, of below standard quality or of a quality or quantity not usable
or salable in the normal course of business of the Business, the aggregate value
of which has not been written down on the books of account of any Seller to
realizable market value or with respect to which adequate reserves have not been
provided.
(p) Labor Relations; Employees. Schedule 3.1(p) contains a true
and complete list of the persons employed by each Sellers in the Business as of
the date hereof (the "Current Employees"). Except as set forth on Schedule
3.1(p), (i)no material grievance or problem exists between any Seller and any of
the Current Employees; (ii)no Seller is delinquent in payments to any of the
Current Employees for any wages, salaries, commissions, bonuses or other direct
or indirect compensation for any services performed by them to the date hereof
or for amounts required to be reimbursed to the Current Employees; (iii) upon
termination of the employment of any of the Current Employees, none of the
Sellers or the Buyer will by reason of anything done prior to the Closing, or by
reason of the consummation of the transactions contemplated hereby, be liable
for any excise taxes pursuant to Section 4980B of the Code or to any of the
Current Employees for so-called "severance pay" or any other payments; (iv) each
of the Sellers is in compliance in all material respects with all Legal
Requirements respecting labor, employment and employment practices, terms and
conditions of employment and wages and hours (including, without limitation, all
Legal Requirements promulgated by the Equal Employment Opportunity Commission
and the Department of Labor under the Occupational Safety Hazards Act and the
Worker Adjustment and Retraining Notification Act); (v) there is no unfair labor
practice complaint against any Seller relating to or arising out of the conduct
of the Business pending or, to the Best Knowledge of the Sellers, threatened
before the National Labor Relations Board or any comparable state, local or
foreign agency; (vi) there is no labor strike, dispute, slowdown or stoppage
pending or, to the Best Knowledge of the Seller, threatened against or involving
any Seller affecting the Business; (vii) no representation question exists
regarding the Current Employees; (viii) no grievance and no arbitration
proceeding arising out of or under collective bargaining agreements is actually
pending and no Claim therefor has been asserted; and (ix) no
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collective bargaining agreement or other contract with or commitment to any
labor union is in effect or currently being negotiated by any Seller. The
Sellers have delivered to the Buyer true and complete copies of all handbooks,
manuals and other policies describing the employment policies with respect to
the Business.
(q) Employee Plans.
(i) Except as set forth on Schedule 3.1(q), no Seller
has been within the past five years a party to, sponsors or maintains
any Employee Plans. "Employee Plan" means any "employee benefit plan"
(as that term is defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), as well as any other
plan, program or arrangement involving direct and indirect
compensation, under which the Sellers have any present or future
obligations or liability on behalf of their employees or former
employees, contractual employees or their dependents or beneficiaries.
"ERISA Affiliate" means any entity that is a member of a "controlled
group of corporations" with or is under "common control" with the
Sellers as defined in Section 414(b) or (c) of the Code.
(ii) Schedule 3.1(q) contains a true and complete list
of all Employee Plans.
(iii) No Employee Plan currently maintained by the
Sellers is or was a "multiple employer plan" (within the meaning of
Section 413 of the Code).
(iv) No Seller is or has been for the past five years
obligated to contribute to any "multiemployer plan" (within the meaning
of Section 3(37) of ERISA.
(v) No Seller, nor to the knowledge of the Sellers,
any other "disqualified person" or "party in interest" (as defined in
Section 4975 of the Code and Section 3(14) of ERISA, respectively)
with respect to an Assumed Employee Plan has breached the fiduciary
rules of ERISA or engaged in a prohibited transaction which
could subject the Sellers to any tax or penalty imposed under Section
4975 of the Code or Section 502(i), (j) or (l) of ERISA.
(vi) Each Assumed Employee Plan has been maintained and
operated in accordance with its terms and are in substantial compliance
with the requirements of ERISA and the Code and in accordance with the
provisions of any applicable collective bargaining agreement.
(vii) Each Assumed Employee Plan for which the Sellers
have claimed a deduction under Section 404 of the Code, as if such
Assumed Employee Plan were qualified under Section 401 of the Code, has
received or has timely applied for a favorable determination letter
from the Internal Revenue Service as to the qualification of such
Assumed Employee Plan, and such favorable determination letter has not
been modified, revoked or limited.
(viii) All contributions due and payable on or before
the Closing Date in respect of the Assumed Employee Plans will be made
in full and in proper form, and adequate accruals have been provided
for in the financial statements for all other
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contributions or amounts in respect of the Assumed Employee Plans for
periods ending on the Closing Date.
(ix) The present value of all accrued benefits (whether
or not vested) under each Assumed Employee Plan subject to Title IV of
ERISA did not exceed, as of the Closing Date, the then current fair
market value of the assets of such Assumed Employee Plan (for purposes
of determining the present value of accrued benefits under the Assumed
Employee Plans, the actuarial assumptions and methods used under each
Assumed Employee Plan for the most recent plan valuation date shall be
used) by more than $50,000.
(x) No Assumed Employee Plan subject to Part (3) of
Subtitle B of Title I of ERISA or Section 412 of the Code has incurred
any "accumulated funding deficiency" (as defined in Section 412(a) of
the Code), whether or not waived.
(xi) No Seller has made nor agreed to make, nor is it
required to make (in order to bring any of the Assumed Employee Plans
into substantial compliance with ERISA or the Code), any change in
benefits that would materially increase the costs of maintaining any of
the Assumed Employee Plans.
(xii) As of the Closing Date, there are no actions,
suits, disputes, arbitration or claims pending (other than routine
claims for benefits) or legal, administrative or other proceedings or
governmental investigations pending or, to the knowledge of the
Sellers, threatened against any Assumed Employee Plan or against the
assets of any Assumed Employee Plan.
(xiii) No Employee Plan subject to Title IV of ERISA has
been terminated within the past four years, and no proceeding has been
initiated, to the knowledge of the Sellers or their ERISA Affiliates,
to terminate any Employee Plan.
(xiv) Neither the Sellers nor their ERISA Affiliates nor
any member of a controlled group including the Sellers and their ERISA
Affiliates has incurred within the past five years, nor reasonably
expects to incur, any liability in respect of any Employee Plan under
Section 4064 or 4069 of ERISA.
(xv) No "reportable event" (within the meaning of
Section 4043 of ERISA) has occurred within the past five years with
respect to any Employee Plan subject to ERISA.
(xvi) Each Assumed Employee Plan which is a "group
health plan" (as defined in Section 5000 of the Code) has been
maintained in compliance with Section 4980B of the Code and Title I,
Subtitle B, Part 6 of ERISA and no tax payable on account of Section
4980B of the Code has been or is expected to be incurred.
(xvii) No benefit payable or which may become payable by
the Sellers pursuant to any Assumed Employee Plan shall constitute an
"excess parachute payment" (within the meaning of Section 280G of the
Code) which is subject to the imposition of
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an excise tax under Section 4999 of the Code or which would not be
deductible by reason of Section 280G of the Code.
(xviii) No Employee Plan currently maintained by the
Sellers provides any post-retirement health or life insurance benefits,
and the Sellers do not maintain any obligations to provide any
post-retirement benefits in the future.
(xix) Prior to the Closing Date, Sellers have made
contributions to the Huron/St. Clair Company Plant II Hourly Employees
Pension Plan for the 1994 and/or 1995 plan years, in an amount of at
least $500,000.
(r) Tax Matters. (i) The Sellers have paid all Taxes required to
be paid through the date hereof and will pay all Taxes required to be paid by
them for periods ending on or prior to the Closing Date and have properly and
timely filed and will, prior to the Closing, properly and timely file all
returns, declarations of estimated Tax, Tax reports, information returns and
statements required to be filed by either of them prior to the Closing (other
than those for which extensions shall have been granted prior to Closing)
relating to any Taxes with respect to any income, properties or operations of
the Seller prior to the Closing and (ii) no tax liens have been filed with
respect to any of the Purchased Assets, and there are no pending tax audits of
any Returns of the Sellers relating to the Business. No Seller is a foreign
person within the meaning of ss.1.1445-2(b) of the Regulations under Section
1445 of the Code.
(s) Brokers. Except as set forth on Schedule 3.1(s), neither
Seller nor any of their respective officers, directors, stockholders or
employees has employed any investment banker, broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated hereby.
(t) Distributions; Transactions with Affiliates. Except for the
Excluded Assets and as set forth on Schedule 3.1(t), since the Interim Balance
Sheet Date, no Affiliate of any Seller has purchased, acquired or leased any
property or services from (or made any payments or incurred any indebtedness
with respect thereto), or sold, transferred or leased any property or services
to, or entered into any management, consulting or similar agreement or
tax-sharing agreement with, the Business. For purposes of this Agreement, the
term "Affiliate," as to any Person, means any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by or is
under common control with such Person.
(u) Principal Customers. Schedule 3.1(u) sets forth a list of
each customer of the Sellers to which either Seller, individually or in the
aggregate, sold more than $900,000 in goods or services in connection with the
Business in its most recent fiscal year (the "Principal Customers"). Except as
set forth on Schedule 3.1(u), (1) no material disagreement or problem exists
between the Sellers and any of the Principal Customers, (2) the business
relationship between the Sellers and each of the Principal Customers is
generally good and (3) to the Best Knowledge of the Sellers, no Principal
Customer has threatened to terminate its relationship and dealings with the
Business, whether as a result of the transactions contemplated by this Agreement
or otherwise.
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(v) Securities Act. The Sellers are purchasing the Units for
their own account and not with a view to any distribution or resale of the
Shares in any manner which would be in violation of the Securities Act of 1933,
as amended.
(w) Definition of Best Knowledge. As used in this Agreement, the
term "Best Knowledge" of each of the Sellers means and includes actual knowledge
of those employees of the Sellers listed on Schedule 3.1(w).
3.2 REPRESENTATIONS AND WARRANTIES OF THE BUYER.
The Buyer represents and warrants to the Sellers as follows:
(a) Organization; Corporate Authority; Good Standing. The Buyer
is a limited liability company duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has all
requisite power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. The Buyer has all requisite power
and authority to execute and deliver this Agreement and the Related Documents to
which it is or will be a party, to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
(b) Capitalization. The authorized capital of the Buyer consists
of 14,000 Units which are all issued and outstanding and owned by Holdings and
Chemical Venture Capital Associates, A California Limited Partnership.
Immediately after the Closing, all such issued and outstanding Units will be
duly authorized and validly issued and outstanding.
(c) Corporate Action; No Conflict. The execution, delivery and
performance by the Buyer of this Agreement and the Related Documents to which
the Buyer is or will be a party and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
necessary corporate action on the part of the Buyer. This Agreement has been
duly and validly executed and delivered by the Buyer and is, and each of the
Related Documents to which the Buyer is or will be a party, when executed and
delivered in accordance with its terms, will be, the valid and binding
obligation of the Buyer, enforceable in accordance with the terms thereof.
Neither the execution, delivery or performance by the Buyer of this Agreement or
any of the Related Documents to which the Buyer is or will be a party, nor the
consummation by the Buyer of the transactions contemplated hereby or thereby,
nor compliance by the Buyer with any provision hereof or thereof will (i)
conflict with or result in a breach of any provision of the Operating Agreement
or By-laws of the Buyer, in each case as in effect on the date hereof, (ii)
cause a default (or give rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or provisions of any note,
bond, lease, mortgage, indenture, license, agreement or other instrument or
obligation to which the Buyer is a party or by which it or any of its properties
or assets is or may be bound or (iii) violate any Legal Requirement of, from or
with any Governmental Authority applicable to the Buyer or any of its properties
or assets. No Permit, consent or approval of or by, or any notification of or
filing with, any Person is required in connection with the execution, delivery
or performance by the Buyer of this Agreement and the Related Documents to which
the Buyer is or will be a party, or the consummation by the Buyer of the
transactions contemplated hereby or thereby, other than required filings under
the HSR Act.
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(d) Brokers. Neither the Buyer nor Holdings nor any of their
respective officers, managers or employees has employed any investment banker,
broker or finder or incurred any liability for any brokerage fees, commissions
or finders' fees in connection with the transactions contemplated hereby.
(e) No Prior Business. The Buyer and Holdings were formed for
the purpose of acquiring the Business and have not conducted any business in the
past, except in connection with the transactions contemplated by this Agreement
and related activities.
ARTICLE IV
CLOSING
The closing (the "Closing") for the consummation of the
transactions contemplated by this Agreement is taking place at the offices of
Sidley & Austin simultaneously with the execution herewith (the "Closing Date").
ARTICLE V
INDEMNIFICATION
5.1 DEFINITIONS.
As used in this Agreement, the following terms shall have the following
meanings:
(a) "Buyer Indemnification Event" means any of the following:
(i) the untruthfulness, inaccuracy or breach of any
representation or warranty of any Seller contained in this
Agreement or any Related Document, any Schedule or Exhibit
attached hereto or thereto or any certificate delivered by such
Seller in connection herewith or therewith at or before the
Closing; provided that for purposes of this Section 5.1(a)(i), the
representation contained in Section 3.1(m)(i) shall be deemed to
have been made as if the words "in all material respects" did not
appear therein and the representation contained in Section
3.1(g)(ii) shall be deemed to have been made as if the words "To
the Best Knowledge of Sellers" did not appear therein;
(ii) the breach by any Seller of any agreement or
covenant of such Seller contained in this Agreement or any Related
Document;
(iii) (Insert Title Here)
(A) the assertion of any Claim against or the
payment of any Loss by any Buyer Indemnified Person that arose in
connection with, or is in any way related to any Excluded
Obligations identified in Sections 1.4(b) or (d), regardless of
whether or not any Seller had any knowledge of such Claim or Loss
or the basis thereof;
(B) the assertion of any Claim against or the
payment of any Loss by any Buyer Indemnified Person that arose in
connection with, or is in any way related
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to any other Excluded Obligations, regardless of whether or not
any Seller had any knowledge of such Claim or Loss or the basis
thereof;
(C) the assertion of any Claim against or the
payment of any Loss of any Buyer Indemnified Person that arose in
connection with, or is in any way related to the matters described
on Schedule 4.1(l) (other than items 1 and 4 of such Schedule);
(iv) the assertion against or payment by any Buyer
Indemnified Person of any Claim or Loss as a result of
non-compliance by any Seller or the Buyer with the "bulk sales
laws" of any state or foreign jurisdiction which may be applicable
to the transactions contemplated hereby;
(v) the assertion of any Claim against or payment of
any Loss by any Buyer Indemnified Person relating in any way to
Taxes of any kind whatsoever, or expenses, interest or penalties
relating thereto, with respect to periods ending on or prior to
the Closing Date, other than Taxes relating to the conduct of the
Business after the Closing Date and Taxes accrued on the Closing
Statement;
(vi) the assertion of any Claim against or the payment
of any Loss by any Buyer Indemnified Person relating to or arising
out of the environmental matters existing or occurring prior to
the Closing Date described on Schedule 5.1(a)(vii) (except that
Sellers shall not be required to indemnify any Buyer Indemnified
Person to the extent that Buyer's actions exacerbate any such
environmental matter by causing a Release or threatened Release of
Hazardous Material);
(vii) any amount paid under the Settlement Agreement
dated September 2, 1992 among MascoTech, Xxxx X. Xxxx, The Xxxx
Group, Inc., and JAC Products, Inc., to the extent such payment
relates to periods prior to the Closing;
(viii) any amount paid to or credited against
receivables of Chrysler Corporation related to any credit or
reimbursement obligation owed to Chrysler Corporation or any
Affiliate thereof for periods prior to the Closing; and
(ix) all reasonable fees, costs and expenses (including,
without limitation, reasonable attorneys', accountants' and other
professional fees and expenses) incurred by any Buyer Indemnified
Person in connection with any action, suit, proceeding, demand,
assessment or judgment incident to any of the matters indemnified
against under this Article or in connection with the enforcement
by any Buyer Indemnified Person of its rights under this Article;
provided, however, that if such Buyer Indemnified Person is found
partially liable in connection with any Buyer Indemnification
Event, only the percentage of such fees, costs and expenses equal
to the percentage of Sellers' liability in connection with such
Buyer Indemnification Event shall be included pursuant hereto.
(b) "Buyer Indemnified Persons" means and includes the Buyer and
its officers, directors, stockholders (other than MascoTech), employees, agents,
Affiliates, successors and assigns of all or any substantial portion of the
Business.
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(c) "Claim" means any claim, demand, assessment, action, suit,
proceeding, investigation, cause of action, litigation, judgment, order or
decree.
(d) "Indemnified Persons" means the Buyer Indemnified Persons or
the Seller Indemnified Persons, as the case may be.
(e) "Indemnifying Person" means the Buyer, in the case of any
Seller Indemnification Event, or the Sellers, jointly and severally, in the case
of any Buyer Indemnification Event, as the case may be.
(f) "Losses" means any and all losses, claims, shortages,
damages, liabilities, obligations, expenses, assessments, tax deficiencies and
Taxes, and fees, costs and expenses (including, without limitation, reasonable
attorneys', accountants' and other professional fees and expenses) sustained,
suffered or incurred by any Indemnified Person in connection with any Claim
incident to or otherwise arising from any matter which is the subject of
indemnification under this Article or in connection with the enforcement by the
Indemnified Persons or any of them of their respective rights under this
Article; provided, however, that in computing the amount of any Losses for
purposes of determining the liability of any Indemnifying Party under Section
5.2, the amount of any insurance proceeds actually received by the Indemnified
Party, less any deductibles and any resulting premium increases, shall be
deducted from such Losses.
(g) "Seller Indemnification Event" means the following:
(i) the untruthfulness, inaccuracy or breach of any
representation or warranty of the Buyer contained in this Agreement or
any Related Document, any Schedule or Exhibit attached hereto or
thereto or any certificate delivered by the Buyer in connection
herewith or therewith at or before the Closing;
(ii) the breach of any agreement or covenant of the
Buyer contained in this Agreement or any Related Document;
(iii) the assertion of any Claim against or payment of
any Loss by any Seller which arose in connection with or is in any way
related to any Assumed Obligation;
(iv) the assertion of any Claim against or payment of
any Loss by any Seller Indemnified Person relating in any way to Taxes
of any kind whatsoever, or expenses, interest or penalties relating
thereto, with respect to periods after the Closing Date or in
connection with the conduct of the Business after the Closing Date;
(v) all reasonable fees, costs and expenses
(including, without limitation, reasonable attorneys', accountants'
and other professional fees and expenses) incurred by any Seller
Indemnified Person in connection with any action, suit, proceeding,
demand, assessment or judgment incident to any of the matters
indemnified against under this Article or in connection with the
enforcement by any Seller Indemnified Person of its rights under
this Article; provided, however, that if such Seller Indemnified
Person is found partially liable in connection with any Seller
Indemnification Event, only the percentage of such fees, costs and
expenses equal to the percentage of Buyer's liability in connection
with such Seller Indemnification Event shall be included pursuant
hereto; and
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(vi) the assertion of any Claim against or payment of
any Loss by any Seller Indemnified Person related to the conduct of the
Business or the ownership of the Purchased Assets after the Closing
Date and with respect to which Seller has no indemnification obligation
to any Buyer Indemnified Person hereunder.
(h) "Seller Indemnified Persons" means and includes the Sellers
and their respective officers, directors, stockholders, employees, agents,
Affiliates and successors.
(i) "Taxes" means, with respect to any Person, (A) all income
taxes (including any tax on or based upon net income, or gross income, or income
as specially defined, or earnings, or profits, or selected items of income,
earnings or profits) and all gross receipts, sales, use, ad valorem, transfer,
franchise, license, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property or windfall profits taxes, real property tax,
alternative or add-on minimum taxes, customs duties or other taxes, fees,
assessments or charges of any kind whatsoever, together with any interest and
any penalties, additions to tax or additional amounts imposed by any
Governmental Authority and (B) any liability for the payment of any amount of
the type described in the immediately preceding clause (A) as a result of being
a "transferee" (within the meaning of Section 6901 of the Code or any other
applicable law) of another Person or a member of an affiliated or combined
group.
5.2 INDEMNIFICATION GENERALLY.
(a) Buyer Indemnification. The Sellers shall, jointly and
severally, indemnify the Buyer Indemnified Persons for, and hold each of them
harmless from and against, any and all Losses resulting from any Buyer
Indemnification Event (other than a Buyer Indemnification Event described in
clause (vi) of Section 5.1(a)); provided, however, that:
(i) the Sellers shall have no obligation or liability
to indemnify and hold harmless the Buyer Indemnified Persons from and
against Losses resulting from a Buyer Indemnification Event described
in Section 5.1(a)(i) (unless such Buyer Indemnification Event relates
to a breach of the representation set forth in Section 3.1(q)(xix)),
Section 5.1(a)(iii)(A) and Section 5.1(a)(ix) (in the case of (ix),
only to the extent such fees, costs and expenses arise from a Buyer
Indemnification Event described in clause (i) and (iii)(A) of Section
5.1(a)) unless and until the aggregate amount of all such Losses shall
exceed $450,000 and then only to the extent of such Losses in excess of
$450,000 and the aggregate liability of the Sellers under this Section
5.2(a) for such Losses shall not exceed, when aggregated with any other
payment by the Sellers to the Buyer Indemnified Persons under this
Agreement, the Purchase Price; and
(ii) the Buyer Indemnified Persons shall not be
entitled to indemnification for any Losses resulting from a Buyer
Indemnification Event described in clause (i) of Section 5.1(a) which
is based upon a breach of the representation and warranty set forth in
Section 3.1(i)(i)(C)(y) which result from sales of Rack Products after
the Buyer has knowledge that such Rack Product infringes the
Intellectual Property Rights of another Person.
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The Sellers shall, jointly and severally, indemnify the Buyer
Indemnified Persons for, and hold each of them harmless from and against, any
and all Losses resulting from any Buyer Indemnification Event described in
clause (vi) of Section 5.1(a); provided, however, that the Sellers shall have no
obligation or liability to indemnify and hold harmless the Buyer Indemnified
Persons from and against 50% of the first $450,000 of Losses (other than Losses
arising from the first item described under Section III of Schedule 5.1(a)(vii)
as to which no basket shall apply) resulting from a Buyer Indemnified Event
described in clause (vi) of Section 5.1(a) (after the Buyer Indemnified Persons
have incurred 50% of the first $450,000 of Losses all Losses above $450,000
shall be indemnified by the Sellers) and the aggregate liability of the Sellers
under this Section 5.2(a) for such Losses shall not exceed, when aggregated with
any other payment by the Sellers to the Buyer Indemnified Persons under this
Agreement, the Purchase Price.
(b) Seller Indemnification. The Buyer shall indemnify the Seller
Indemnified Persons for, and hold each of them harmless from and against, any
and all Losses resulting from any Seller Indemnification Event.
5.3 NOTICE AND DEFENSE OF THIRD PARTY CLAIMS.
The obligations and liabilities of the Indemnifying Persons with
respect to Claims resulting from the assertion of liability by third parties
(each, a "Third Party Claim") shall be subject to the following terms and
conditions:
(a) The Indemnified Persons shall give prompt written notice to
the Indemnifying Persons of any Third Party Claim which might give rise to a
Claim by the Indemnified Persons against the Indemnifying Persons based on the
indemnity agreements contained in Section 5.2, stating the nature and basis of
said Third Party Claim, and the amount thereof to the extent known. Such notice
shall be accompanied by copies of all relevant documentation with respect to
such Third Party Claim, including, without limitation, any summons, complaint or
other pleading which may have been served or written demand, or other document
or other instrument. Failure to give notice within the terms of this Section
5.3(a) shall serve to excuse the Indemnifying Person from its obligation under
Section 5.2 only if and to the extent that the Indemnifying Person can establish
that it was prejudiced or injured by the failure.
(b) (Insert Title Here)
(i) The Indemnifying Persons will have the right to
participate in or, if the Indemnifying Persons shall acknowledge in a
writing delivered to the Indemnified Persons that the Indemnifying
Persons shall be obligated under the terms of their indemnity hereunder
in connection with such Third Party Claim (a "Liability Letter"), then
the Indemnifying Persons shall have the right to assume the defense of
any Third Party Claim at their own expense and by their own counsel
(reasonably satisfactory to the Indemnified Persons); provided,
however, that the Indemnifying Persons shall not have the right to
assume the defense of any Third Party Claim if (x) such Third Party
Claim seeks an injunction, restraining order, declaratory relief or
other non-monetary relief, (y) the named parties to any such action or
proceeding (including any impleaded parties) include both the
Indemnified Persons and the Indemnifying Persons and the former shall
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have been advised in writing by counsel (with a copy to the
Indemnifying Persons) that there are one or more legal or equitable
defenses available to them which are different from or additional to
those available to Indemnifying Persons or (z) such action or
proceeding involves matters beyond the scope of the indemnification
obligation of the Indemnifying Persons, and in such event under
subsection (y) or (z) the suit or proceeding may, at the election of
the Indemnifying Person, be defended jointly as provided in (ii) below.
(ii) Notwithstanding the foregoing subsection (b)(i),
if the Indemnifying Persons desire to participate in the defense of
any Third Party Claim without delivering a Liability Letter to the
Indemnified Persons, the Indemnifying Persons and the Indemnified
Persons shall jointly assume the defense against such Third Party
Claim under the following conditions:
(A) a law firm will be selected by agreement
between the Indemnifying Persons and the Indemnified Persons to
represent the interests of both such parties in defending against the
Third Party Claim;
(B) if such law firm determines at any time that
a conflict of interest exists between the Indemnifying Persons and the
Indemnified Persons for any reason and that such law firm can not
adequately represent the interests of both parties, then such law firm
shall promptly notify the Indemnified Persons and the Indemnifying
Persons in writing of such determination and the Indemnified Persons
and Indemnifying Persons shall decide by agreement, based upon which
party is more likely to be more liable for the Third Party Claim,
which party the law firm will continue to represent;
(C) if the party which is no longer represented
by the law firm as a result of subclause (B) desires to continue to
participate in the defense of the Third Party Claim, such party may do
so and may retain its own counsel at its own expense; provided,
however, that if such party is found to have no liability in connection
with such Third Party Claim, its reasonable fees and expenses in
connection with this subclause (C) shall be reimbursed by the other
party.
(c) (Insert Title Here)
(i) If the Indemnifying Persons exercise their right
to assume the defense of a Third Party Claim pursuant to subsection
(b)(i) or (b)(ii) above, they shall not make any settlement of any
claims other than settlements consisting solely of monetary awards
without the prior written consent of the Indemnified Persons, which
consent shall not be unreasonably withheld. (ii) If the Indemnifying
Persons do not exercise their right to assume the defense of a Third
Party Claim, the Indemnified Persons shall not make any settlement of
any claims for which they may seek indemnification hereunder unless (A)
they first provide written notice to the Indemnifying Persons
describing the material terms of the settlement and (B) the
Indemnifying Persons fail to deliver a Liability Letter within ten days
of receiving such notice.
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5.4 SURVIVAL OF REPRESENTATIONS, WARRANTIES, AGREEMENTS AND COVENANTS.
The representations and warranties of the Sellers in Section 3.1 and
the representations and warranties of the Buyer contained in Section 3.2 shall
survive the Closing and remain in full force and effect for a period of 24
months and thereafter shall terminate; provided, however, that (a) the
representations and warranties of the Sellers set forth in Section 3.1(j) shall
survive the Closing and remain in full force and effect for a period of four
years from the Closing Date, (b) the representations and warranties of the
Sellers set forth in Section 3.1(r) shall survive the Closing and remain in full
force and effect for the applicable statute of limitations, and (c) the
representations and warranties of the Sellers set forth in Sections 3.1(a), (c)
and (e), shall survive the Closing and remain in full force and effect without
time limit. Except as otherwise expressly provided in this Agreement, all
agreements and covenants requiring future performance contained in this
Agreement shall survive the Closing and remain in full force and effect without
time limit. For convenience of reference, the date upon which any
representation, warranty, agreement or covenant shall terminate, if any, shall
be referred to herein as the "Survival Date." No Claim under Section 5.2 for
indemnification based on (a) the untruthfulness, inaccuracy or breach of any
representation or warranty or (b) any Losses resulting from a Buyer
Indemnification Event identified in Section 5.1(a)(iii)(A) shall be brought by
an Indemnified Person against an Indemnifying Person, and an Indemnified Person
shall not be entitled to receive any payment with respect thereto, unless the
Indemnified Persons, or any of them, at any time prior to in the case of
subclause (a), the applicable Survival Date and in the case of subclause (b),
seven years from the Closing Date, give the Indemnifying Persons written notice
of the existence of any such Claim, specifying in such notice the nature and
amount of such Claim together with the applicable provisions of this Agreement
to the extent known by the Indemnified Persons based on then available
information. Upon the giving of such written notice as aforesaid, the
Indemnified Persons, or any of them, shall have the right to commence legal
proceedings (whether before or after the applicable Survival Date or the end of
the seven year period, as the case may be) for the enforcement of their rights
under Section 5.2.
5.5 REMEDIES CUMULATIVE.
The rights of the Indemnified Persons to indemnification under this
Article shall be cumulative and the pursuit thereof shall not preclude the
assertion of any other right or remedy by the Indemnified Persons in connection
with any Losses arising from or in connection with this Agreement; provided,
however, with respect to any Claim arising or asserted by any Buyer Indemnified
Person or any third party (including any governmental agency) at any time under
any statute or the common law, the rights of any Indemnified Person shall be
limited to the indemnification remedy provided under this Agreement, and
provided, further, that to the extent any provision of this Agreement limits or
excludes Sellers' liability or indemnification obligation for certain matters,
Sellers shall have no liability or indemnification obligation for such matters
under any other provisions of this Agreement or the Related Documents.
5.6 REMEDIATION.
Sellers shall, at their sole expense and in the manner determined by
Sellers consistent with applicable law, conduct or direct any environmental
cleanup or remediation which is required by law after the date of Closing for
which Sellers are responsible hereunder; provided,
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however, that Sellers will consult with Buyer with respect to such matters, and
will provide Buyer with a complete copy of any governmental filing or submission
at the time it is made. Buyer agrees to cooperate with Sellers (including,
without limitation, by making relevant personnel and records available to
Sellers at all reasonable times free of charge) in connection with any such
cleanup or remediation. Notwithstanding the foregoing, Sellers shall not take
any action which will materially interfere with the ability of Buyer to carry on
its business in the ordinary course; provided, however, if the Sellers are
required by law to effect any environmental cleanup or remediation that will so
disrupt the business of the Buyer, the Sellers and the Buyer shall use their
best efforts to conduct such cleanup and remediation in a manner that will
minimize the disruption to the business of the Buyer.
5.7 PRODUCT DISTINGUISHMENT.
Buyer will use commercially reasonable efforts after the Closing to
distinguish products manufactured after the Closing Date from products
manufactured before the Closing Date.
5.8 STAND-ALONE COSTS.
(a) Beginning with fiscal year 1996 and ending with fiscal year
1999, the Sellers agree to pay to the Buyer an amount equal to 50% of the
difference between (i) the lower of the Actual Stand-alone Costs for such fiscal
year and $866,000 and (ii) $516,000. As used herein, the term "Actual
Stand-alone Costs" shall mean all costs and expenses incurred by the Buyer in
connection with workers compensation insurance, commercial and business
insurance (including general product liability, automobile, property, boiler and
machinery and umbrella insurance), and administration of any pension or profit
sharing plans adopted by Buyer in replacement of the plans currently covering
the Hired Employers (including 401(k) plans), all as reflected on the Buyer's
audited financial statements for such fiscal year; provided, however, if at any
time after the Closing the Buyer materially increases the level of any type of
insurance coverage included in the calculation of Actual Stand-alone Costs,
Actual Stand-alone Costs shall be calculated on a pro forma basis as if the
level of such insurance coverage was substantially the same as the level of
insurance coverage in effect on the Closing Date.
(b) For any fiscal year for which the Buyer seeks reimbursement
pursuant to Section 5.8(a), the Buyer shall prepare, and shall deliver to the
Sellers, a statement setting forth its computation of the Actual Stand-alone
Costs for such fiscal year (the "Stand-alone Costs Statement").
(c) The Buyer shall provide, and shall (if applicable) cause the
Buyer's Accountants to provide, the Sellers and the Sellers' Accountants with
timely access to the work papers, trial balances and similar materials used in
connection with the preparation of the Stand-alone Costs Statement. The Sellers
shall have 30 calendar days following its receipt of the Stand-alone Costs
Statement within which to deliver to the Buyer a written notice of objection
thereto (the "Stand-alone Costs Objection Notice"), which Stand-alone Costs
Objection Notice shall (i) set forth the Sellers' determination of the Actual
Stand-alone Costs and (ii) specify in reasonable detail the Sellers' basis for
objection. The failure by the Sellers to deliver the Stand-alone Costs Objection
Notice within such 30-calendar-day period shall constitute the Sellers'
acceptance of the Stand-Alone Costs Statement and the Buyer's calculation of the
Actual Stand-alone Costs contained therein. The Buyer and the Sellers shall in
good faith attempt to resolve their differences, if any, with respect to the
Stand-alone Costs Statement and the computation of the Actual Stand-
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alone Costs and reach a written agreement with respect thereto within 30
calendar days following delivery of the Stand-alone Costs Objection Notice. If
the Buyer and the Sellers are unable to resolve all of such differences within
such 30-calendar-day period, the items in dispute will be referred for
determination as promptly as practicable to Ernst & Young, LLP, or if such firm
is unable or unwilling to serve, to another "Big 6" accounting firm independent
of the Buyer and the Sellers selected by agreement between the Buyer and the
Sellers or, if the Buyer and the Sellers cannot so agree within the
30-calendar-day period referred to above, by lot (the "Stand-alone Costs
Arbitrating Accountants"). The Stand-alone Costs Arbitrating Accountants will
make a determination (the "Stand-alone Costs Accountants' Determination") as to
each of the items in dispute, which Stand-alone Costs Accountants' Determination
will be (A) in writing, (B) furnished to the Buyer and the Sellers as soon as
practicable after the items in dispute have been referred to the Stand-alone
Costs Arbitrating Accountants, (C) made in accordance with this Agreement and
(D) conclusive and binding upon the Buyer and the Sellers. The Stand-alone Costs
Arbitrating Accountants will be entitled (but shall not be required) to rely on
the work papers, trial balances and similar materials used in connection with
the preparation of the Stand-alone Costs Statement. The reasonable fees and
expenses of the Stand-alone Costs Arbitrating Accountants shall be shared
one-half by the Buyer and one-half by the Sellers.
(d) Within 2 business days of the final determination of the
Actual Stand-alone Costs in accordance with Section 5.8(c), the Sellers shall
make any payment required by Section 5.8(a) to the Buyer by wire transfer of
immediately available funds to an account designated by Buyer.
(e) The provisions of this Section 5.8 shall terminate upon a
public offering of Class A Units of Holdings with net proceeds to the Company of
at least $25,000,000 or upon a sale of all or substantially all of the assets of
the Buyer to an unaffiliated third party of the Buyer or Holdings.
ARTICLE VI
ADDITIONAL POST-CLOSING AGREEMENTS
6.1 ACCESS.
In connection with any financial audit of the Sellers or any tax audit
or other governmental investigation of the Sellers for any matter relating to
any period prior to the Closing, or for any other reasonable and lawful purpose,
the Buyer shall, upon request, permit the Sellers and their respective
representatives to have access, at reasonable times during normal business hours
and in a manner which is not disruptive to the operations of the Buyer, to the
work papers, books and records of the Buyer relating to the Sellers and their
conduct of the Business prior to the Closing which shall have been in the
possession of the Buyer as of the Closing and which remain in the possession of
the Buyer. The Buyer shall not dispose of such work papers, books and records
during the six-year period beginning with the Closing without the Sellers'
consent, which consent shall not be unreasonably withheld. Following the
expiration
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of such six-year period, the Buyer may dispose of such work papers, books and
records at any time upon giving 30 days' prior written notice to the Sellers,
unless the Sellers agree to take possession of such work papers, books and
records within such 30 days at no expense to the Buyer.
6.2 BULK SALES LAWS.
Each of the parties waives compliance by the other parties with the
provisions of the "bulk sales laws" of any jurisdiction which may be applicable
to the transactions contemplated by this Agreement.
6.3 BROKERS, FINDERS AND INVESTMENT BANKERS.
The Sellers and the Buyer shall be responsible for any compensation
payable to any broker, finder or investment banker which such party has retained
in connection with this Agreement, the Related Documents and the transactions
contemplated hereby and thereby.
6.4 CERTAIN EMPLOYEE MATTERS.
(a) On the Closing Date the Buyer intends to offer employment to
the employees of the Sellers who are actively employed by the Sellers in the
Business on the Closing Date, and the employees identified on Schedule 6.4 (any
such employees who accept such offer of employment being referred to herein as
the "Hired Employees"); provided, however, that the Buyer shall offer the Hired
Employees employee benefit plans that are similar to those offered by other
companies that are of the same size as the Buyer after the Closing Date; except
for Hired Employees, the Buyer shall have no liability to any employees of the
Sellers who, on the Closing Date, are not actively employed or are on
disability, leave of absence, military service leave or lay-off (whether or not
with recall rights), or whose employment has been terminated (voluntarily or
involuntarily) or who have retired prior to the Closing Date. Nothing contained
in this Agreement shall confer upon any Hired Employee any rights or remedies of
any nature or kind whatsoever under or by reason of this Agreement, including,
without limitation, any right to employment or continued employment or to any
benefits that may be provided, directly or indirectly, under any employee
benefit plan, policy or arrangement of the Buyer, nor shall anything contained
in this Agreement constitute a limitation on or restriction against the right of
the Buyer to amend, modify or terminate any such plan, policy or arrangement or
the terms or conditions of employment. The Sellers shall retain all liabilities
and obligations arising from the termination or severance of all employees of
the Business who do not become Hired Employees on the Closing Date. The Buyer
shall bear the cost of any liability to Hired Employees under the Worker
Adjustment and Retraining Notification Act which arises as a consequence of
actions of the Buyer after the Closing.
(b) The Sellers shall cause all Current Employees to be fully
vested as of the Closing Date under each defined benefit pension plan (except
for the Huron/St. Clair Company Plant II Hourly Employees Pension Plan), profit
sharing plan, benefit restoration programs, savings plan and other employee
pension benefit plan and retirement arrangements of the Sellers covering such
employees.
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(c) Buyer shall adopt and assume the assets, liabilities and
obligations to maintain the Huron/St. Clair Company Plant II Hourly Employees
Pension Plan, effective as of the Closing Date.
(d) The Buyer shall provide that (i) any amount paid by Sellers'
employees through the Closing Date for medical expenses that are treated as
deductible or co-insurance payments under the Sellers' health plan shall reduce
the amount of any deductible or co-insurance payment required to be paid for a
similar period under the Buyer's health plan; provided, however, that the
Sellers provide a list of all current and former employees participating in the
Sellers' health plan along with a listing of each employee's deductible and
co-insurance payments through the Closing Date, and (ii) Sellers' employees
shall receive credit towards satisfying the eligibility requirements for
participation in the Buyer's health plan to the extent such employees satisfied
eligibility requirements under the Sellers' health plan. The transfer of assets
from the trust maintained by the Sellers for the Huron/St. Clair Company Plant
II Hourly Employees Pension Plan will take place on or after the Closing Date,
but as soon as administratively possible, and the amount of such transfer shall
be reduced by the amount of required benefit payments due on or about October 1,
1995.
6.5 GUARANTIES.
(a) MascoTech hereby irrevocably and unconditionally guarantees
to Buyer the prompt and complete payment and performance of all obligations of
the Sellers under this Agreement. The obligations of MascoTech (i) are absolute
and unconditional and shall continue in full force and effect until the payment
and performance of all of the obligations of the Sellers that are guaranteed
hereunder, (ii) other than a good faith demand for payment or performance
against the Sellers, are not conditioned upon any event or contingency, or upon
any attempt to enforce the Sellers' performance under this Agreement or any
other right or remedy against the Sellers or to collect from the Sellers through
the commencement of legal proceedings or otherwise, and (iii) shall be binding
upon and enforceable in full against MascoTech without regard to any
circumstance which might otherwise constitute a legal defense available to, or a
discharge of, MascoTech in respect of the obligations guaranteed hereby;
provided, however, that MascoTech shall be entitled to assert any rights or
defenses which any Seller may have against the Buyer or its assigns and the
Buyer's and its assigns rights hereunder shall be subject thereto (excluding any
defenses based upon the insolvency of such Seller). In no event shall
MascoTech's liability under this guarantee exceed the liability it would have
had if MascoTech were the primary obligor under this Agreement.
(b) Holdings hereby irrevocably and unconditionally guarantees
to Sellers the prompt and complete payment and performance of all obligations of
the Buyer under this Agreement. The obligations of Holdings (i)are absolute and
unconditional and shall continue in full force and effect until the payment and
performance of all of the obligations of the Buyer that are guaranteed
hereunder, (ii) other than a good faith demand for payment or performance
against the Buyer, are not conditioned upon any event or contingency, or upon
any attempt to enforce the Buyer's performance under this Agreement or any other
right or remedy against the Buyer or to collect from the Buyer through the
commencement of legal proceedings or otherwise, and (ii) shall be binding upon
and enforceable in full against Holdings without regard to any circumstance
which might otherwise constitute a legal defense available to, or a discharge
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of, Holdings in respect of the obligations guaranteed hereby; provided however,
that Holdings shall be entitled to assert any rights or defenses which the Buyer
may have against the Sellers or their assigns and the Sellers' and their assigns
rights hereunder shall be subject thereto (excluding any defenses based upon the
insolvency of Buyer). In no event shall Holdings liability under this guarantee
exceed the liability it would have had if Holdings were the primary obligor
under this Agreement.
6.6 AUDITED FINANCIALS.
Upon the request of the Buyer, the Sellers shall use their best efforts
to cause Sellers' Accountants to prepare at Buyer's expense audited financial
statements for any period preceding the Closing Date.
ARTICLE VII
MISCELLANEOUS
7.1 EXPENSES; TRANSFER TAXES, ETC.
All fees, costs and expenses incurred by any party to this Agreement in
connection with, relating to or arising out of the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby, including, without limitation, attorneys', accountants' and
other professional fees and expenses, shall be borne by such party. The Sellers
shall pay all sales, use, gains and excise taxes and all registration, or
transfer taxes which may be payable in connection with the transactions
contemplated by this Agreement and the Related Documents. The Buyer shall pay
all recording fees which may be payable in connection with the transactions
contemplated by this Agreement and the Related Documents.
7.2 ENTIRE AGREEMENT.
This Agreement and the Related Documents (including the Schedules and
the Exhibits attached hereto and thereto) and the other documents, instruments
and certificates referred to herein and therein contain the entire agreement
among the parties hereto with respect to the transactions contemplated hereby
and thereby and supersede all prior agreements or understandings between the
parties with respect hereto and thereto, other than the Confidentiality
Agreement dated as of April 25, 1995 between MascoTech and Chemical Venture
Partners.
7.3 RELATED DOCUMENTS.
As used in this Agreement, the term "Related Documents" means,
collectively, the Xxxx of Sale and Assumption Agreement and the other Conveyance
Instruments.
7.4 NOTICES.
All notices or other communications which are required or permitted
hereunder shall be in writing and shall be deemed to have been given if (a)
personally delivered or sent by telecopier, (b) sent by nationally-recognized
overnight courier or (c) sent by registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:
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if to the Buyer, to:
Advanced Accessory Systems, LLC
c/o Chemical Venture Partners
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Telephone: 000-000-0000
Telecopier: 000-000-0000; and
if to the Sellers, to:
MascoTech, Inc.
00000 Xxx Xxxx Xxxx
Xxxxxx, XX 00000
Attention: President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
MascoTech, Inc.
00000 Xxx Xxxx Xxxx
Xxxxxx, XX 00000
Attention: General Counse
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
or to such other address as the party to whom notice is to be given may have
furnished to each other party in writing in accordance herewith. Any such
communication shall be deemed to have been received (i) when delivered, if
personally delivered or sent by telecopier, (ii) on the Business Day after
dispatch, if sent by nationally recognized, overnight courier and (iii) on the
fifth Business Day following the date on which the piece of mail containing such
communication is posted, if sent by mail. As used herein, the term "Business
Day" means a day that is not a Saturday, Sunday or a day on which banking
institutions in New York City are not required to be open.
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7.5 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, and each
such counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement; provided, however,
that in proving this Agreement, it shall not be necessary to produce or account
for more than one counterpart hereof.
7.6 GOVERNING LAW; CONSENT TO JURISDICTION.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to the principles of
conflicts of laws.
7.7 BENEFITS OF AGREEMENT; ASSIGNMENT.
The terms and provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. Anything contained herein to the contrary notwithstanding,
this Agreement shall not be assignable by any party hereto without the consent
of the other parties hereto; provided, however, that (a) the Buyer may transfer
or assign, in whole or from time to time in part, to one or more of its
Affiliates, any of its rights in, to and under this Agreement, including,
without limitation, the right to purchase all or any part of the Purchased
Assets, but in no event shall any such transfer or assignment relieve the Buyer
of its obligations under this Agreement, (b)the Buyer may assign its rights to
indemnification hereunder to or for the benefit of any Person and (c) the
Sellers may assign their rights to indemnification hereunder to or for the
benefit of any Affiliate.
7.8 CONSTRUCTION.
The provisions of this Agreement shall be construed according to their
fair meaning and neither for nor against any party hereto irrespective of which
party caused such provisions to be drafted. Each of the parties acknowledges
that it has been represented by an attorney in connection with the preparation
and execution of this Agreement.
7.9 PRONOUNS.
As used herein, all pronouns shall include the masculine, feminine,
neuter, singular and plural thereof whenever the context and facts require such
construction.
7.10 DESCRIPTIVE HEADINGS.
Descriptive headings are for convenience only and shall not control or
affect the meaning or construction of any provisions of this Agreement.
7.11 SEVERABILITY.
It is the desire and intent of the parties that the provisions of this
Agreement shall be enforced to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any provision of this Agreement shall be adjudicated to be
invalid, illegal or unenforceable in any respect in any jurisdiction, such
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provision shall be automatically deemed amended, but only to the extent
necessary to render such provision valid, legal and enforceable in such
jurisdiction, such amendment to apply only with respect to the operation of such
provision in such jurisdiction, and the validity, legality and enforceability of
the remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.
7.12 AMENDMENT.
This Agreement may not be amended except by an instrument in writing
signed by the Buyer and the Sellers.
7.13 NO THIRD PARTY BENEFICIARIES.
Nothing in the Agreement shall confer any rights upon any Person other
than the parties hereto and their respective heirs, successors and permitted
assigns.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Asset Purchase Agreement to be executed on its behalf as of the day and year
first above written.
MASCOTECH AUTOMOTIVE SYSTEMS GROUP, INC.
By:___________________________
Name:
Title:
MASCOTECH ACCESSORIES, INC.
By:___________________________
Name:
Title:
ADVANCED ACCESSORY SYSTEMS, LLC
By:___________________________
Name:
Title:
Only with respect to the guaranty in Section 6.5(a):
MASCOTECH, INC.
By:___________________________
Name:
Title:
Only with respect to the guaranty in Section 6.5(b):
AAS HOLDINGS, LLC
By:___________________________
Name:
Title:
