ASSET PURCHASE AGREEMENT
THIS AGREEMENT (the "AGREEMENT") is made as of December 19, 2000, by
and between Allied Products Corporation, D.I.P., a Delaware corporation
("SELLER"), and Enprotech Corp., a Delaware corporation ("ENPROTECH"), either
directly or through its assignee or assignees, as contemplated by Section 9.7
("PURCHASER").
R E C I T A L S
(a) Seller is engaged directly and through its Verson division
in, among other things, the business of developing, manufacturing and marketing,
and providing after-market support, maintenance, repair, service, upgrades and
enhancements to, and supplying spare parts for, mechanical and hydraulic
presses, and developing, manufacturing and providing after-market support as
aforesaid for presses incorporating electronic transfer feed technology (the
"BUSINESS").
(b) Seller has experienced financial difficulty.
(c) Seller has filed for protection under Chapter 11 of Title 11
(11 U.S.C Section 101 ET SEQ.) (the "BANKRUPTCY CODE") by filing a petition (the
"PETITION") in the United States Bankruptcy Court for the Northern District of
Illinois, Eastern Division (the "COURT").
(d) On the terms and subject to the conditions contained in this
Agreement, Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, as specified herein, certain assets, properties and rights
relating to the Business.
AGREEMENTS
Therefore, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the parties agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
1.1. AGREEMENT TO PURCHASE AND SELL. At the Closing (as defined
herein) on the terms and subject to the conditions contained in this Agreement,
Purchaser agrees to purchase from Seller, and Seller agrees to sell to
Purchaser, all of the Purchased Assets (as defined herein). The Purchased Assets
shall be sold to Purchaser free and clear of any liens, claims, obligations
(including, without limitation, title claims and claims of taxing authorities),
licenses, encumbrances, pledges, security interests or charges of any kind
(collectively, "CLAIMS"), other than the Assumed Liabilities (as defined
herein).
1.2. ENUMERATION OF PURCHASED ASSETS. The assets, properties and
rights of Seller used or held for use in the operation of the Business, which
are set forth on SCHEDULE 1.2 shall constitute the "PURCHASED ASSETS".
1.3. EXCLUDED ASSETS. Notwithstanding Sections 1.1 and 1.2 above, the
Purchased Assets shall not include any assets of the Seller not related to the
Business, including the assets of Seller listed on SCHEDULE 1.3 (collectively,
the "EXCLUDED ASSETS").
ARTICLE II
ASSUMPTION OF LIABILITIES
2.1. AGREEMENT TO ASSUME. At the Closing on the terms and subject to
the conditions contained in this Agreement, Seller shall assign to Purchaser and
Purchaser shall assume and agree to discharge and perform in full promptly when
due the liabilities and obligations (and only such liabilities and obligations)
of Seller relating to the period from and after the Closing and set forth on
SCHEDULE 2.1 (the "ASSUMED LIABILITIES"). The liabilities and obligations of
Seller set forth on SCHEDULE 2.1 (and only the liabilities and obligations set
forth on SCHEDULE 2.1) shall constitute the Assumed Liabilities.
2.2. EXCLUDED LIABILITIES. (a) Notwithstanding Section 2.1 (and
without implication that Purchaser is assuming any liability not expressly
excluded by this Section 2.2 and, where applicable without implication that any
of the following would constitute Assumed Liabilities but for the provisions of
this Section 2.2), all claims against and liabilities and obligations of Seller
not specifically assumed by Purchaser pursuant to Section 2.1 are expressly not
assumed by Purchaser. Such claims, liabilities and obligations of Seller,
including without limitation those set forth in Section 2.2(b), are set forth on
Schedule 2.2 and are collectively referred to herein as the "EXCLUDED
LIABILITIES."
(b) Purchaser shall not assume any collective bargaining
agreement of Seller or any obligation or liabilities arising thereunder or any
Plan (as defined herein) or be responsible for any claim, obligation or
liability relating to any Plan or relating to the employment or termination of
employment of any employee, or former employee or other person providing
services to Seller or any Affiliate of Seller, including without limitation,
claims for wages, bonuses, commissions, accrued vacation, severance, or pension,
welfare, continuation coverage under COBRA (as defined herein), fringe benefits
or any other compensation or benefits of any kind.
2.3. NO THIRD PARTY RIGHTS. The assumption by Purchaser of the Assumed
Liabilities shall not create any third party beneficiary rights.
ARTICLE III
PURCHASE PRICE, MANNER OF PAYMENT AND CLOSING
3.1. PURCHASE PRICE. The purchase price ("PURCHASE PRICE") of
the Purchased Assets shall be equal to Twenty-One Million Five Hundred
Thousand U.S. Dollars (US$21,500,000.00), less (a) the amount of any Assumed
Liabilities set forth in item (b) of SCHEDULE 2.1, (b) any amounts paid
pursuant to Section 9.11 and (c) Thirty Thousand US Dollars (US $30,000.00)
in the event that the Xxxxxxxx Steel Property (as defined herein) becomes an
Excluded Asset as
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provided in Section 6.2(k); provided, however, that in no event shall Purchase
Price be less than Eleven Million US Dollars (US $11,000,000.00).
3.2. XXXXXXX MONEY DEPOSIT; INDEMNIFICATION ESCROW. (a) Purchaser
shall, within one (1) business day after the later of (i) the date of the
execution of this Agreement and (ii) the date of the entry of the Scheduling
Order (as defined herein), deposit as security for its performance hereunder
Eight Hundred Thousand U.S. Dollars (US$800,000.00) (the "XXXXXXX MONEY
AMOUNT"), with La Salle Bank, N.A. as escrow agent (the "ESCROW AGENT"), such
funds to be maintained by Escrow Agent and to be administered and payable in
accordance with an escrow agreement substantially in the form of EXHIBIT A
hereto ("ESCROW AGREEMENT"). If the Closing is consummated, the Xxxxxxx Money
Amount, together with the interest earned thereon, shall be applied as a credit
against the Purchase Price and will continue to be held in escrow following the
Closing, to be used as provided in Section 3.2(b) of this Agreement. If the
Closing is not consummated for the sole reason of Purchaser's material default
under this Agreement, the Xxxxxxx Money Amount shall be remitted to Seller, as
liquidated damages and as Seller's sole and exclusive remedy (in law or equity)
against Purchaser for material breach of or material default under this
Agreement or any agreement delivered in connection herewith, or any other act or
omission of Purchaser (or any of its Affiliates) in connection with the
transactions contemplated by this Agreement; it being understood that in no
event shall Purchaser have any liability in connection with this Agreement in
excess of the Xxxxxxx Money Amount. If the Closing is not consummated for any
reason or reasons other than the sole reason of Purchaser's material default
under this Agreement, the Xxxxxxx Money Amount shall be immediately returned to
Purchaser upon its written request to the Escrow Agent plus payment of
Transaction Expenses as provided in Section 8.2(d). "SCHEDULING ORDER" for the
purposes of this Agreement shall mean an order of the Court scheduling a hearing
on a motion regarding approval of this Agreement, the approval of the sale of
the Purchased Assets pursuant to bidding procedures consistent with Section 7.7
of this Agreement and assignment and assumption of executory contracts and
unexpired leases pursuant to this Agreement, approving the Transaction Fee
described in Section 7.7 of this Agreement and in the form annexed hereto as
Exhibit B.1 hereto, or in a form that is otherwise satisfactory to the
Purchaser.
(b) At the Closing, a portion of the Purchase Price equal to One
Million U.S. Dollars (US$1,000,000.00) (the "INDEMNIFICATION ESCROW AMOUNT")
shall be deposited with the Escrow Agent to be maintained by the Escrow Agent
and administered and payable in accordance with the Escrow Agreement. Such
deposit shall be made by the Escrow Agent continuing to hold the Xxxxxxx Money
Amount (and all interest earned thereon) and by Purchaser paying a portion of
the Purchase Price equal to the difference between the Indemnification Escrow
Amount and the Xxxxxxx Money Amount (and the interest earned thereon) to the
Escrow Agent. As provided in the Escrow Agreement, the Indemnification Escrow
Amount, together with interest earned thereon, shall be payable to the Purchaser
in respect of Seller's indemnification obligations to the Purchaser; the
Indemnification Escrow Amount (minus any amounts previously paid or distributed
out of such escrow or amounts which are the subject of pending claims), together
with interest earned thereon, will be distributed to Seller twelve (12) months
after the Closing Date; and amounts which are the subject of pending claims will
be distributed in accordance with the resolution of such claims.
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3.3. TIME AND PLACE OF THE CLOSING. The transactions contemplated by
this Agreement shall be consummated (the "CLOSING") at 2:00 p.m. at the offices
of Altheimer & Xxxx, 00 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000
on (a) the later of January 23, 2001 or the first business day after the Sale
Order becomes a Final Order; or (b) such other date as the parties mutually
agree upon; provided, however, that the date of the Closing shall be
automatically extended from time to time for so long as any of the conditions
set forth in Article VI shall not be satisfied or waived, subject, however, to
the provisions of Article VIII. The date on which the Closing occurs in
accordance with the preceding sentence is referred to in this Agreement as the
"CLOSING DATE". For purposes of this Agreement, a "FINAL ORDER" means a valid
and enforceable order or judgment of the Court having jurisdiction over the
bankruptcy case known as In Re Allied Products Corporation, Case No 00B28798 as
entered on the docket of the Court which, not having been reversed, modified,
amended, or stayed and the time for seeking review of which by way of appeal,
petition for certiorari, motion for reargument and rehearing or other review
having expired, and as to which no appeal, petition for certiorari, motion for
reargument and rehearing or other review is pending, has become conclusive of
all matters adjudicated thereby and is in full force and effect.
3.4. MANNER OF PAYMENT OF THE PURCHASE PRICE. At the Closing,
Purchaser shall (a) assume or pay, as the case may be, the Assumed Liabilities,
(b) deposit the difference between the Indemnification Escrow Amount and the
Xxxxxxx Money Amount with the Escrow Agent as provided in Section 3.2(b), and
(c) pay the remaining amount of the Purchase Price by wire transfer of
immediately available funds to Seller's account, which Seller shall designate by
written notice delivered to Purchaser not later than three (3) days prior to the
Closing Date.
3.5. CLOSING DELIVERIES. At the Closing, the parties shall execute and
deliver the agreements, instruments and certificates, and take the actions,
described on SCHEDULE 3.5 hereto and otherwise set forth in this Agreement. All
documents to be delivered by a party pursuant to this Agreement shall be in form
and substance reasonably satisfactory to the other party.
3.6. ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be
allocated among the Purchased Assets in the manner required by Section 1060 of
the Internal Revenue Code of 1986, as amended (the "CODE"). The Purchaser and
Seller shall use reasonable efforts to agree on an allocation of the Purchase
Price to the Purchased Assets as soon as possible after the Closing Date,
provided that the allocation to the Chicago Facility (as herein defined) shall
be made on or prior to the Closing Date. Should the parties fail to agree within
five (5) days after Closing, such allocation shall be determined by an appraiser
appointed by the Purchaser and reasonably acceptable to Seller. The fees of such
appraiser shall be paid by the Purchaser. Notwithstanding such allocation, the
transactions set forth herein are indivisible.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1. PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser represents
and warrants to Seller that:
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(a) Purchaser is a corporation duly organized, existing and in
good standing under the laws of the State of Delaware.
(b) Purchaser has full corporate power and authority to enter
into and perform this Agreement and all documents and instruments to be executed
by Purchaser pursuant to this Agreement ("PURCHASER'S ANCILLARY DOCUMENTS"). The
execution and delivery of this Agreement and Purchaser's Ancillary Documents by
Purchaser, and the performance by Purchaser of all of its obligations hereunder
and thereunder, have been duly authorized and approved prior to the date hereof
by all necessary corporate or other requisite action, as the case may be. This
Agreement has been, and Purchaser's Ancillary Documents, will be duly executed
and delivered by duly authorized officers of Purchaser.
(c) This Agreement constitutes, and Purchaser's Ancillary
Documents will constitute, valid and legally binding obligations of Purchaser,
enforceable against Purchaser in accordance with their respective terms (except
to the extent that enforcement may be affected by laws relating to bankruptcy,
reorganization, insolvency and creditors' rights and by the availability of
injunctive relief, specific performance and other equitable remedies).
(d) Except for the Court's entry of the Sale Order (as defined
herein), no consent, authorization, order or approval of, or filing or
registration with, any governmental authority or other person is required for
the execution and delivery by Purchaser of this Agreement and the consummation
by Purchaser of the transactions contemplated by this Agreement.
(e) Neither the execution and delivery of this Agreement by
Purchaser, nor the consummation by Purchaser of the transactions contemplated
hereby, will conflict with or result in a breach of any of the terms, conditions
or provisions of Purchaser's Certificate of Incorporation or By-laws or of any
statute or administrative regulation, or of any order, writ, injunction,
judgment or decree of any court or governmental authority or of any arbitration
award.
(f) Purchaser is not a party to any unexpired, undischarged or
unsatisfied written or oral contract, agreement, indenture, mortgage, debenture,
note or other instrument under the terms of which timely performance by
Purchaser according to the terms of this Agreement may be prohibited, prevented
or delayed.
(g) With the exception of Xxxxxx Xxxxxxxx, LLP, working solely
on behalf of Seller, Purchaser has not dealt with any person or entity who is or
may be entitled to a broker's commission, finder's fee, investment banker's fee
or similar payment from Seller for arranging the transactions contemplated
hereby or introducing the parties to each other.
(h) Purchaser will, at the time of Closing, have sufficient
funds to consummate the transactions contemplated by this Agreement.
(i) Prior to the date hereof, Purchaser or IHI inspected the
Purchased Assets.
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4.2. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and
warrants to Purchaser that, except as set forth on SCHEDULE 4.2 delivered by
Seller to Purchaser concurrently herewith and attached hereto (the "DISCLOSURE
SCHEDULE"):
(a) Seller is a corporation duly organized and existing under
the laws of the State of Delaware. Except for the Court's entry of the Sale
Order, Seller has full power and authority to enter into and perform this
Agreement and all documents, agreements and instruments to be executed by Seller
pursuant to or in connection with this Agreement (collectively, "SELLER'S
ANCILLARY DOCUMENTS"). The execution and delivery by Seller of this Agreement
and Seller's Ancillary Agreements, and the performance by Seller of all of its
obligations hereunder and thereunder, have been duly authorized and approved
prior to the date hereof by all necessary corporate or other requisite action,
except for the Court's entry of the Sale Order. This Agreement has been, and
Seller's Ancillary Documents will be, duly executed and delivered by duly
authorized officers of Seller.
(b) This Agreement constitutes, and Seller's Ancillary Documents
will constitute, valid and legally binding obligations of Seller, enforceable
against Seller in accordance with their respective terms (except to the extent
that enforcement may be affected by the availability of injunctive relief,
specific performance and equitable remedies).
(c) Except for the Court's entry of the Sale Order and the
consents and releases set forth on SCHEDULE 4.2 (the "CONSENTS") and subject to
the expiration or termination of all applicable waiting periods under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"XXXX-XXXXX ACT"), no consent, release, authorization, order or approval of, or
filing or registration with, any governmental authority or other person is
required for the execution and delivery of this Agreement and Seller's Ancillary
Documents and the consummation by Seller of the transactions contemplated by
this Agreement and Seller's Ancillary Documents. Except for the Court's entry of
the Sale Order and the Consents and subject to the expiration or termination of
all applicable waiting periods under the Xxxx-Xxxxx Act, neither the execution
and delivery by Seller of this Agreement and Seller's Ancillary Documents, nor
the consummation by Seller of the transactions contemplated hereby and thereby,
will conflict with or result in a breach of any of the terms, conditions or
provisions of Seller's Certificate of Incorporation, By-Laws, any statute or
administrative regulation, or of any order, writ, injunction, judgment or decree
of any court or any governmental authority or of any arbitration award or any
agreement, instrument, permit or authorization held by Seller or included within
the Purchased Assets, in each case to which Seller is subject or by which Seller
is bound, which conflict or breach is reasonably likely to have a material
adverse effect on the Business, the Purchased Assets, the transactions
contemplated by this Agreement, or completion of GM Presses 3 and 4 (as herein
defined) as contemplated by the GM purchase order in effect on October 1, 2000
(the "ORIGINAL GM PURCHASE ORDER").
(d) [Intentionally Omitted]
(e) Seller has good title to and, subject only to the Court's
entry of the Sale Order and receipt of the Consents, the power to sell the
Purchased Assets, free and clear of any Claims, as set forth in the title
insurance policy, referred to in Section 6.2 (j) on the Closing Date.
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(f) There are (i) no licenses or other agreements used by Seller
(or authorizing Seller or granting Seller rights) in the sale of, in the
ordinary course of business, any inventory or other assets included in the
Purchased Assets, and (ii) no material permits or governmental approvals used in
the operation of the Business or relating to the real property described on
SCHEDULE 4.2. SCHEDULE 4.2 correctly and completely lists all equipment leases
and other leases or agreements used in the operation of the Business or relating
to the real property described on SCHEDULE 4.2 ("MATERIAL CONTRACTS"); and,
except for items shown in open purchase orders (complete and correct copies of
all of which have been made available to Purchaser or IHI (as herein defined)),
all Material Contracts are included in the Purchased Assets. Complete and
accurate copies of all Material Contracts have previously been delivered to
Purchaser or IHI. SCHEDULE 4.2 also correctly and completely lists (x) all
Inventory (as defined herein) and the number of items in each category of such
Inventory and (y) all Equipment (as defined herein) used in the operation of the
Business or relating to the real property described on SCHEDULE 4.2. All such
Inventory and Equipment are included in the Purchased Assets. The Purchased
Assets listed on SCHEDULE 1.2 include all raw materials, work in process, spare
parts and other Inventory on hand on the date of the inspection referred to in
Section 4.1(i). All work in process inventory of the presses covered by Contract
Nos. WHS 14585 and WHS 14586 between General Motors Corporation ("GM") and
Seller ("GM PRESSES 3 AND 4"), is in materially the same condition as on the
date of such inspection. "ORDINARY COURSE OF BUSINESS", "OPERATION OF THE
BUSINESS" and similar phrases, shall mean, for the purposes of this Agreement,
the Business as historically conducted in the ordinary course by Seller.
(g) Except as set forth in Schedules filed with the Court, (i)
there is no litigation or proceeding, in law or in equity, pending against
Seller with respect to the Business or the Purchased Assets and there are no
proceedings or governmental investigations before any commission or other
administrative authority, pending against or, to Seller's Knowledge, affecting
Seller with respect to the Business, and (ii) to Seller's Knowledge, there is no
claim, litigation or proceeding (in law or equity), or governmental proceeding
or investigation anticipated or threatened against Seller with respect to
products liability matters involving Seller or its products. As used in this
Agreement, "KNOWLEDGE" the case of Seller, shall mean actual knowledge of
Xxxxxxx X. Xxxxxxx, Xxxx X. Xxxxxxxxx, Xxxxxxx X. Xxxxxx, and Xxxx X.
Xxxxxxxxxx, Xx. without any duty of investigation.
(h) All Seller Intellectual Property (as defined in Schedule
1.2) which Seller owned or had a right to use on October 2, 2000 or which was
then used or held for use with respect to the Business is included in the
Purchased Assets. To Seller's Knowledge (as herein defined) SCHEDULE 4.2
includes an identification of all of following items of the Seller Intellectual
Property: (i) all trademarks, service marks, logos, trade names, domain names,
corporate names, trade dress and the like, whether registered or common law, and
including, without limitation, the name and xxxx "Verson," and all U.S. and
foreign registrations and applications to register any such rights, (ii) all
copyrights and all U.S. and foreign registrations of and applications to
register and renewals of copyrights, (iii) all foreign and U.S. patents, patent
applications and similar rights of any kind (including letters, design and plant
patents and design works), (iv) all mask works and all applications,
registrations, and renewals in connection therewith, (v) all computer software
and databases (including data and related documentation) and all registrations
and applications to register same, and (vi) all other registrations or
applications for any other intellectual property or proprietary rights. Seller
is the owner of the "Verson" trademark in the
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Xxxxxx Xxxxxx, and, to Seller's Knowledge, Seller is the owner of all other
Seller Intellectual Property or is duly licensed to use the Seller Intellectual
Property pursuant to the license agreements identified in SCHEDULE 4.2. Except
pursuant to license agreements identified in SCHEDULE 4.2 as licenses to third
parties, Seller has not assigned, granted or transferred to any person or entity
any right under any of the Seller Intellectual Property. Except for the license
agreements identified in SCHEDULE 4.2, there is no agreement, contract,
judgment, decree or order limiting, restricting or affecting the use or
exploitation of the Seller Intellectual Property. Except as set forth on
SCHEDULE 4.2, there is no pending or, to Seller's Knowledge, threatened claim,
assertion or contention, (i) that any of the Seller Intellectual Property is
invalid or is not in full force and effect, (ii) that any of the Seller
Intellectual Property or the use or exploitation thereof infringes,
misappropriates or violates any intellectual property, contract or other right
of any other person or entity, or (iii) that Seller is not the owner of, or is
not licensed to use (in the manner used in the ordinary course of business by
Seller), the Seller Intellectual Property.
(i) Seller has not dealt with any person or entity who is or may
be entitled to a broker's commission, finder's fee, investment banker's fee or
similar payment from Purchaser for arranging the transactions contemplated
hereby or introducing the parties to each other.
(j) [Intentionally Omitted]
(k) The Seller's facilities in Chicago, Illinois are legally
described on SCHEDULE 4.2 and such facilities (with an address of 0000 Xxxx 00xx
Xxxxxx, Xxxxxxx, Xxxxxxxx), including all assets and interests and appurtenances
which are comprised of or constitute part of real property, land, buildings,
structures and improvements and all related facilities located at such address,
including easements, rights-of-way, options to purchase and the like are
referred to herein as the "CHICAGO FACILITY". Seller holds fee simple title to
the Chicago Facility, subject only to real estate taxes not delinquent and to
covenants, conditions, restrictions and easements of record described in
SCHEDULE 4.2. The Chicago Facility is not subject to any leases, tenancies, or
any other rights of access or occupancy or any other similar rights, except for
rights under the Sprintcom, Inc. agreement referred in SCHEDULE 1.2(E). There
are no pending or, to the Seller's Knowledge, threatened condemnation or eminent
domain proceedings or assessments affecting the Chicago Facility.
(l) "ENVIRONMENTAL LAWS" shall mean all present federal,
state and local laws, statutes, ordinances, rules, regulations, orders,
policies and determinations of any governmental authority, pertaining to
health, protection of the environment, natural resources, conservation,
wildlife, waste management, regulation of activities involving Hazardous
Materials, particulate emissions and pollution, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. Section 9601 et seq., the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. Section 9061(2)(D), the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., the Federal
Water Pollution Control Act, as amended by the Clean Water Act , 33 U.S.C.
Section 1251 et seq., the Clean Air Act, 42 U.S.C. Section 7401 et seq., the
Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq. and the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et seq., as amended, and any
state or local counterpart of each such statute or regulation. "HAZARDOUS
MATERIAL" shall mean anything defined as a "hazardous substance", "hazardous
material," "hazardous waste," "pollutant," "contaminant," "toxic substance"
or other similar item in any Environmental Law, and shall include, without
limitation,
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asbestos, asbestos-related and asbestos-containing products or materials,
chlorofluorocarbons, oils or petroleum-derived compounds, and polychlorinated
biphenyls.
To the Knowledge of Seller:
(i) The operations and activities of Seller with respect to the
Business and the Chicago Facility have at all times complied in all material
respects with all applicable Environmental Laws (as defined herein).
(ii) The Chicago Facility has not been used by Seller for the
generation, manufacture, refining, treatment, storage or disposal of any
Hazardous Materials (as defined herein) in violation of any Environmental Laws.
(iii) No Hazardous Materials are or have been emitted, discharged
or released from the Chicago Facility, directly or indirectly, into the
atmosphere or any body of surface water, the soil or the groundwater in
violation of any Environmental Law during the period of ownership by Seller.
(iv) No permits, licenses, or authorizations used pursuant to the
Environmental Laws are required for the occupancy of the Chicago Facility, by
Seller or Purchaser, or the operation of the Business.
(m) (1) SCHEDULE 4.2(m) contains a true and complete list of
each plan, program, policy, practice, contract, agreement or other arrangement
providing for compensation, severance, termination pay, performance awards,
stock or stock-related awards, fringe benefits or other employee benefits of any
kind, whether formal or informal, funded or unfunded and whether or not legally
binding, including, without limitation, each "employee benefit plan" within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA") which is now, or during the last five years has been,
maintained, contributed to, or required to be contributed to, for the benefit of
any Employee ("PLAN"), and each management, employment, severance or consulting
agreement or contract between Seller and any Employee ("EMPLOYEE AGREEMENT"). No
Plan has been terminated with respect to which there is any remaining liability
to Seller. "EMPLOYEE" means any current or former employee, officer, independent
contractor, agent or consultant working for Seller in the Business.
(i) Seller shall have provided to Purchaser, prior to the
Closing, true and complete copies of all documents, if any, embodying each Plan
and Employee Agreement, including all amendments thereto and written
interpretations thereof; the three most recent annual reports filed (Form 5500
Series with applicable schedules) with respect to each Plan required under
ERISA; the most recent summary plan description, if any, with respect to each
Employee Plan required under ERISA; the most recent favorable determination
letter from the IRS, if applicable, with respect to each Plan; and all material
communications, if any, to any Employee relating to each Plan.
(ii) Each Plan can be amended, terminated, or otherwise
discontinued after the Closing in accordance with its terms, without liability
to Purchaser or any of its Affiliates or creation of any lien on the Purchased
Assets. No action or failure to act with respect to any Plan could subject
Purchaser or any of its Affiliates to any tax, penalty or other liability, for
breach of
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fiduciary duty or otherwise, under ERISA, the Code or any other applicable law,
whether by way of indemnity or otherwise. With respect to any Plan that is a
defined benefit plan, neither Seller nor any trade or business, whether or not
incorporated, that is, along with Seller, a member of a controlled group of
corporations, a controlled group of trades or businesses, or an affiliated
service group as described in section 414(b), (c), or (m) of the Code or that is
required to be aggregated with the Seller under section 414(o) of the Code (an
"ERISA AFFILIATE") has incurred any liability to the Pension Benefit Guaranty
Corporation (the "PBGC") as a result of the voluntary or involuntary termination
of any pension plan subject to Title IV of ERISA; there is currently no active
filing by Seller or any ERISA Affiliate with the PBGC (and no proceeding has
been commenced by the PBGC) to terminate any pension plan subject to Title IV of
ERISA maintained or funded, in whole or in part, by Seller or any ERISA
Affiliate; and neither Seller nor any ERISA Affiliate has made a complete or
partial withdrawal from a multiemployer plan, within the meaning of section
3(37) of ERISA, resulting in any withdrawal liability, as defined in Section
4201 of ERISA. No lien has been attached and neither the PBGC nor the Internal
Revenue Service has threatened to attach a lien on any assets of Seller or any
ERISA Affiliate as a result of any failure to comply with the Code or the
Treasury regulations thereunder or ERISA, nor has any action taken place with
respect to any pension plan subject to Title IV of ERISA that could reasonably
be expected to give rise to any lien on the Purchased Assets.
(iii) Each "group health plan" within the meaning of Section
4980B(g)(2) of the Code maintained by Seller or any ERISA Affiliate, has been
administered in good faith in compliance with the continuation coverage
requirements contained in the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended ("COBRA"), as set forth at Section 4980B of the Code and any
regulations promulgated or proposed thereunder. Seller has delivered to
Purchaser records that set forth for each M&A qualified beneficiary (as defined
in Proposed Regulation Section 54.4980B-9 Q&A-4(a)) the identity, mailing
address, commencement and termination date of COBRA eligibility, reason for
COBRA coverage and such other information reasonably required by Purchaser.
(iv) Seller (i) is in compliance with all applicable federal and
state laws, rules and regulations respecting employment, employment practices,
terms and conditions of employment and wages and hours, in each case, with
respect to Employees, except where the failure to be in compliance would not,
singly or in the aggregate, have a material adverse effect on such Seller, its
financial condition or business; (ii) has withheld all amounts required by law
or by agreement to be withheld from the wages, salaries and other payments to
Employees; (iii) is not liable for any arrears of wages or any taxes or any
penalty for failure to comply with any of the foregoing; and (iv) (other than
routine payments to be made in the normal course of business and consistent with
past practice) is not liable for any payment to any trust or other fund or to
any governmental or administrative authority, with respect to unemployment
compensation benefits, Social Security or other benefits for Employees.
(n) Except for the representations and warranties given in this
Section 4.2, no representation or warranty, express or implied, has been made by
or on behalf of Seller with respect to the condition of the Purchased Assets or
the present or future suitability thereof for any intended use by Purchaser.
Seller does not warrant that the Purchased Assets are free from latent defects.
Seller makes no warranty, express or implied, regarding the commercial
suitability of the Purchased Assets for Purchaser's intended use.
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ARTICLE V
CONDUCT PRIOR TO THE CLOSING
5.1. GENERAL. The parties acknowledge that Seller's performance
hereunder is subject to its receiving continuing financing for its operations;
Seller's non-performance due to non-funding shall not constitute a breach by
Seller, but shall entitle Purchaser to terminate this Agreement as provided in
Article VIII; provided however that Seller shall in any event perform its
obligations under Section 5.1(c) and Seller's non-performance of its obligations
under such Section due to non-funding or any other reason shall constitute a
breach by Seller. Between the date hereof and the Closing Date:
(a) Seller shall give to Purchaser's officers, employees,
attorneys, consultants, accountants and lenders full access to all of the
properties, books, contracts, documents, records and personnel of Seller
pertaining to the Business and shall furnish to Purchaser such available
information as Purchaser may at any time and from time to time reasonably
request. Without limiting the generality of the foregoing, Seller shall permit
Purchaser to meet with any of its employees, agents, customers and suppliers.
Seller shall permit Purchaser to perform such other due diligence with respect
to the Business and the Purchased Assets as shall be necessary and appropriate
in Purchaser's judgment, and shall use best efforts to assist and cooperate with
Purchaser in all phases of its due diligence investigation. In addition, Seller
shall give to Purchaser's employees and agents access, at all times, to all or
any portion of the Chicago Facility, including, without limitation, access for
the purpose of providing security.
(b) Seller shall use its reasonable efforts and make every good
faith attempt (and Purchaser shall cooperate with Seller) to obtain the
Consents.
(c) Seller shall provide adequate utilities to safeguard and
preserve the current condition of the Chicago Facility and other Purchased
Assets.
(d) Seller shall not without the prior written consent of
Purchaser (i) sell, transfer, or otherwise dispose of any Purchased Assets or
any interest therein, (ii) waive any material rights included in the Purchased
Assets, (iii) terminate, amend or modify any agreement, license, contract,
instrument or governmental permit or approval used in the Business and to be
assigned to Purchaser pursuant to this Agreement or (iv) take, or omit to take,
any other action, which action or omission could reasonably be expected to
impair the value of the Purchased Assets.
(e) Without implication that such laws apply to the transactions
contemplated hereby, Seller and Purchaser shall not comply with the laws of any
State relating to bulk-sales.
(f) No party shall intentionally perform any act which, if
performed, or omit to perform any act which, if omitted to be performed, would
prevent or excuse the performance of this Agreement by any party hereto or which
would result in any representation or warranty herein contained of said party
being untrue in any material respect as if originally made on and as of the
Closing Date.
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5.2. XXXX-XXXXX ACT. Forthwith upon execution and delivery of this
Agreement, Purchaser and Seller shall prepare (or cause their respective
Affiliates to prepare) all pre-sale notification forms necessary under the
Xxxx-Xxxxx Act together with any necessary exhibits thereto. No later than
January 2, 2001, Purchaser and Seller shall file (or cause their respective
Affiliates to file) such forms with exhibits with the Federal Trade Commission
and the Department of Justice. Each party shall use (or cause its respective
Affiliates to use) commercially reasonable efforts to cause the waiting period
under the Xxxx-Xxxxx Act to expire as promptly as possible, including requesting
early termination, promptly furnishing such additional materials or information
as shall be requested in connection therewith, promptly responding to all
inquiries and using all commercially reasonable efforts to overcome any
objections which may be raised by the Federal Trade Commission or the Department
of Justice.
ARTICLE VI
CONDITIONS TO CLOSING; EFFECT OF CLOSING
6.1. CONDITIONS TO SELLER'S OBLIGATIONS. The obligations of Seller to
consummate the transactions contemplated hereby are subject to the fulfillment
of all of the following conditions on or prior to the Closing Date, upon the
non-fulfillment of any of which this Agreement may, at Seller's option, be
terminated pursuant to and with the effect set forth in Article VIII:
(a) Each and every representation and warranty made by Purchaser
shall have been true and correct when made and shall be true and correct as if
originally made as of the Closing Date;
(b) All obligations of Purchaser to be performed hereunder
through, and including on, the Closing Date (including, without limitation, all
obligations which Purchaser would be required to perform at the Closing if the
transactions contemplated hereby was consummated) shall have been performed and
all items listed on SCHEDULE 3.5(2) shall have been delivered;
(c) No action or proceeding before any court, government body,
or other tribunal shall have been commenced or threatened wherein an unfavorable
judgment, decree or order would (i) prevent the carrying out of this Agreement
or any of the transactions contemplated hereby, (ii) declare unlawful any of the
transactions contemplated by this Agreement, or (iii) cause any of such
transactions to be rescinded;
(d) All necessary pre-sale notification filings required under
the Xxxx-Xxxxx Act shall have been made with the Federal Trade Commission and
the United States Department of Justice and the prescribed waiting periods (and
any extensions thereof) shall have expired or been terminated; and
(e) Seller shall have received evidence that GM has released
Seller from its obligations under contracts to provide GM Presses 3 and 4 and
that GM has waived its right to any additional claims against Seller's
bankruptcy estate with respect to GM Presses 3 and 4.
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(f) The Sale Order shall have been entered by the Court.
6.2. CONDITIONS TO PURCHASER'S OBLIGATIONS. The obligation of
Purchaser to consummate the transactions contemplated hereby is subject to the
fulfillment of all of the following conditions on or prior to the Closing Date,
upon the non-fulfillment of any of which this Agreement may, at Purchaser's
option, be terminated pursuant to and with the effect set forth in Article VIII:
(a) Each and every representation and warranty made by Seller
shall have been true and correct when made and shall be true and correct as if
originally made on and as of the Closing Date;
(b) All obligations of Seller to be performed hereunder through,
and including on, the Closing Date (including, without limitation, all
obligations which Seller would be required to perform at the Closing if the
transactions contemplated hereby were consummated) shall have been performed and
all items listed on SCHEDULE 3.5(1) shall have been delivered;
(c) No action or proceeding before any court, government body,
or other tribunal shall have been commenced or threatened wherein an unfavorable
judgment, decree or order would (i) prevent the carrying out of this Agreement
or any of the transactions contemplated hereby, (ii) declare unlawful the
transactions contemplated by this Agreement, (iii) cause such transactions to be
rescinded, or (iv) materially affect the right of Purchaser to own, operate or
control the Purchased Assets or occupy the Chicago Facility;
(d) [ Intentionally Omitted ]
(e) Purchaser shall have received evidence that GM and
Ishikawajima-Harima Heavy Industries Co., Ltd., ("IHI") or an Affiliate of IHI
have entered into a binding agreement (the "NEW GM PURCHASE ORDER") which covers
(i) the completion of GM Presses 3 and 4 and (ii) GM's acknowledgement of the
cancellation of the agreement between Seller and GM relating to GM Presses 3 and
4 and GM's purchase of such Presses from IHI or an entity jointly owned by
Affiliates of Enprotech and IHI; provided that such evidence and agreement shall
be satisfactory to Purchaser in its sole discretion (as used in this Agreement,
the term "AFFILIATE" shall mean any person or entity which controls a party to
this Agreement, which is controlled by a party to this Agreement, or which is
under common control with that party and "CONTROL" means ownership of a twenty
five (25)% voting or equity interest);
(f) [ Intentionally Omitted ];
(g) Seller shall have served the Scheduling Order as required
therein within the time frame required by the Scheduling Order and on all
persons required therein;
(h) [ Intentionally Omitted]
(i) All necessary pre-sale notification filings required under
the Xxxx-Xxxxx Act shall have been made with the Federal Trade Commission and
the United States Department of Justice and the prescribed waiting periods (and
any extensions thereof) shall have expired or been terminated;
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(j) Title insurance policies with respect to the Chicago
Facility, as described in Schedule 3.5 (1) (e), shall have been issued to
Purchaser or its assignee upon Seller's payment of customary premiums therefor;
(k) (i) Purchaser shall have received from Xxx X. Xxxxxx a Phase
I environmental assessment of that portion of the Chicago Facility formerly
known as the Xxxxxxxx Steel foundry consisting of approximately seven (7) acres
and more particularly shown on the survey of the Chicago Facility delivered to
Purchaser (the "XXXXXXXX STEEL PROPERTY"), such assessment to be conducted in
accordance with the applicable requirements of ASTM Standard Practice E1527-97,
and (ii) either (x) such assessment shall not disclose any actual or potential
violation of Environmental Law or other condition for which following the
Closing Date Purchaser could have any liability in excess of one hundred
thousand U.S. Dollars (US$100,000) and shall not recommend any further
environmental investigation or any remediation the cost of which could
reasonably expected to be in excess of one hundred thousand U.S. Dollars
(US$100,000) or (y) if such assessment does not meet the requirements of the
above clause (x), so long as the Xxxxxxxx Steel Property may be excluded from
the definition of the Chicago Facility (and therefore the Purchased Assets)
without materially adversely affecting Purchaser's right to use and occupy the
Chicago Facility, then Purchaser shall elect either to exclude the Xxxxxxxx
Steel Property from the Purchase Assets whereupon purchase price will be reduced
by thirty thousand U.S. Dollars (US$30,000), as provided in Section 3.1, or to
waive such election.
(l) Seller and Purchaser shall have obtained an order (the "SALE
ORDER") of the Court authorizing (i) the sale of assets under this Asset
Purchase Agreement pursuant to Sections 363 (b), (f), (l) and (m) of the
Bankruptcy Code, (ii) cancellation of the agreement between Seller and GM
related to GM Presses 3 and 4 by consent of the parties as contemplated by
Section 6.2(e), and (iii) the assumption and assignment of any leases or
executory contracts included within the Purchased Assets, pursuant to Section
365 of the Bankruptcy Code (with all defaults required to be cured for
assumption and assignment of such leases or executory contracts pursuant to
Section 365 of the Bankruptcy Code being cured by Seller) and otherwise in the
form of Exhibit B.2 (with such other changes or provisions therein as shall be
acceptable to the Purchaser in its discretion); and the Sale Order shall have
become a Final Order; and
(m) Since the date of this Agreement, there shall not have
occurred any change in the physical condition of the Purchased Assets, including
without limitation any damage or destruction to, or inaccessibility of, such
assets, which change has a material adverse effect on Purchaser's ability to
conduct or operate the Business or to complete the manufacture of GM Presses 3
and 4 in accordance with the terms of the Original GM Purchase Order, in
substantially the same condition required to be delivered under the Original GM
Purchase Order.
6.3. EFFECT OF CLOSING. Upon the consummation of the Closing,
Purchaser acknowledges that its acceptance of the Purchased Assets is on an "as
is" "where is" basis.
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ARTICLE VII
OTHER AGREEMENTS
7.1. INSPECTION OF RECORDS. Purchaser shall retain and make the books
and records included within the Purchased Assets (which are in its possession or
reasonably available to it), available for inspection by Seller, or by its duly
accredited representatives, for reasonable business purposes at all reasonable
times during normal business hours, for a three (3) year period after the
Closing Date.
7.2. DISCLOSURE OF CONFIDENTIAL INFORMATION; NON-COMPETITION;
NON-SOLICITATION. As a further inducement for Purchaser to enter into this
Agreement, Seller agrees that for a period of five (5) years after the Closing
Date.
(a) Seller shall hold in strictest confidence, and shall not,
without the prior written approval of Purchaser, use for its own benefit or the
benefit of any party other than Purchaser or disclose to any person, firm or
corporation other than Purchaser (other than as required by law) any information
of any kind relating to the Business, except such information as was publicly
available prior to the Closing Date. Upon and after the Closing, Seller shall
cease to use and shall not license any third party to use the Trademarks
(including without limitation "Verson"), or any name, slogan, logo or trademark
which is similar or deceptively similar to any of the Trademarks.
Notwithstanding anything to the contrary herein contained, Seller shall not be
prohibited from using information relating to the Business in the course of
litigation brought by Seller after the Closing Date and relating to the
operations of the Business prior to the Closing Date.
(b) Neither Seller nor any of its Affiliates will directly or
indirectly, on its own account or for the account of any other person, firm,
corporation or other business entity (i) engage in the Business; (ii) acquire or
possess control of, or manage or operate, any other such person or entity
engaged in the Business; or (iii) invest in, own, operate, manage, or
participate in the ownership, operation or management of or render management
services to any other such person or entity engaged in the Business.
(c) Seller will not directly or indirectly encourage any person
listed on SCHEDULE 6.2(e) or any other employee, consultant, or other service
provider of the Purchaser or any of its Affiliates not to enter the employ of
or, to terminate his or her relationship with, the Purchaser or such Affiliate,
nor will Seller solicit the employment of, or hire, any person who shall then
be, or in the prior twelve months shall have been, an employee, consultant or
service provider of the Purchaser.
7.3. INJUNCTIVE RELIEF. Seller specifically recognizes that any breach
of Section 7.2 shall cause irreparable injury to Purchaser and that actual
damages may be difficult to ascertain, and in any event, may be inadequate.
Accordingly (and without limiting the availability of legal or equitable,
including injunctive, remedies under any other provisions of this Agreement),
Seller agrees that in the event of any such breach, Purchaser shall be entitled
to injunctive relief in addition to such other legal and equitable remedies that
may be available. Seller and Purchaser recognize that the time limitation in
Section 7.2 is reasonable and properly required for the
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protection of Purchaser and in the event that such limitation is deemed to be
unreasonable by a court of competent jurisdiction, Seller agrees and submits to
the imposition of such limitation as said court shall deem reasonable.
7.4. TEMPORARY USE AND OCCUPANCY. (a) Effective as of the Closing and
for thirty (30) business days thereafter, Seller will take all steps necessary,
at no expense to Purchaser, to provide Purchaser access to any other facility
not leased or owned by Purchaser after the Closing Date where any Purchased
Assets are located in order for Purchaser to prepare for the removal of such
assets and to remove such assets. Seller will cooperate with Purchaser in
connection with such access and removal, and Seller will not permit any landlord
of any such leased facilities to interfere with such access or removal.
(b) Effective as of the Closing and for thirty (30) business
days thereafter, Purchaser will provide access to office space in the Chicago
Facility during normal business hours for use by executive, legal, financial,
tax, accounting, human resources and administrative personnel of Seller,
provided that (i) such access shall not interfere with Purchaser's use of the
Chicago Facility; (ii) Seller shall reimburse Purchaser for costs or expenses in
connection with such access; and (iii) Seller shall be fully responsible for any
losses incurred by Purchaser in connection with such access.
7.5. SURVIVAL. The representations, warranties, covenants and
agreements of the parties hereto contained in this Agreement or any agreement
delivered in connection herewith shall not survive the Closing Date, except as
provided in Sections 7.1, 7.2, 7.4, 7.8 and 9.11 (the "CONTINUING COVENANTS")
and Article VIII and which shall not merge into any instrument of conveyance.
7.6. EMPLOYEES AND EMPLOYEE BENEFIT PLANS. It is expressly understood
by the parties to this Agreement that nothing contained in this Agreement shall
be construed to require Purchaser to (i) hire any Employee; (ii) assume any
collective bargaining agreement with the union referred to in Section 8.3 or any
liability that arises therefrom; or (iii) continue or maintain in effect, or
assume any liability in respect of any employee pension, welfare, fringe
benefit, or any other benefit plans or arrangement or other agreements to which
Seller is a party or has any responsibility therefor.
7.7. HIGHER PRICE. At any time prior to the Court's entry of the Sale
Order, Seller, without any further liability to Purchaser (except as provided in
this Agreement), but subject to the approval of the Court, may agree to sell all
or substantially all the Purchased Assets to a bona fide third party purchaser,
but only for an amount in excess of the sum of the Purchase Price plus Seven
Hundred and Fifty Thousand US Dollars (US$750,000.00), and only provided such
sale is made under the following terms and conditions:
(a) any offer for the Purchased Assets made by a bona fide third
party purchaser (a "COMPETING OFFER") shall include evidence, satisfactory to
the Court, of such third party purchaser's financial ability to close a purchase
of the Purchased Assets;
(b) any Competing Offer shall be for substantially all of the
Purchased Assets and shall include all of the material terms of this Agreement
(including, without limitation, a
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requirement for the posting of an xxxxxxx money deposit in the amount of the
Xxxxxxx Money Amount no later than the date Competing Offer is made) and no
other material terms;
(c) the amount of the Competing Offer shall be payable in cash
at a closing to take place not more than eleven (11) calendar days after the
Court's order approving the Competing Offer has been docketed by the clerk of
the Court; and
(d) concurrent with the consummation of the transactions
contemplated by such Competing Offer, Seller shall pay Purchaser an amount in
immediately available funds equal to all of Purchaser's, IHI's and their
Affiliates' out-of-pocket expenses (including, without limitation, the
reasonable legal fees and expenses of RubinBaum LLP, counsel to Purchaser, Arent
Fox Xxxxxxx Xxxxxxx & Xxxx, PLLC, counsel to IHI or other consultants) incurred
in connection with the transactions contemplated by this Agreement, including
without limitation due diligence with respect to, and negotiation and
preparation of agreements referred to in this Agreement and other documents
prepared in connection with, such transactions, (ii) filing fees paid to
governmental agencies for filings necessitated as part of the transactions
contemplated by this Agreement, and (iii) monies advanced with the consent of
the Seller to preserve or maintain the value of the Purchased Assets (the
"Transaction Expenses"), provided that (x) such Transaction Expenses shall not
exceed Five Hundred Thousand US Dollars (US$500,000.00), and (y) if such
Transaction Expenses are not paid concurrently with the consummation of the
transactions contemplated by such Competing Offer, an amount equal to the
Transaction Expenses incurred by Purchaser, IHI and their Affiliates shall be
set aside from the proceeds of such transactions and held in a segregated
account until payment of Transaction Expenses either has been agreed to as
provided in the Scheduling Order or has been authorized by the Court, whereupon
Transaction Expenses shall be paid as so agreed or authorized.
If the Competing Offer is made meeting the above conditions, Purchaser and any
other bona fide third party purchaser shall be able to make new offers for the
Purchased Assets for amounts in excess of the sum of the immediately preceding
Competing Offer plus Two Hundred and Fifty Thousand US Dollars (US$250,000.00)
subject to the terms and conditions of (a), (b) and (c) of this Section 7.7.
Seller shall immediately notify Purchaser in writing upon becoming aware of any
Competing Offer or any other expression of interest in the Purchased Assets by a
third party.
7.8. FURTHER ASSURANCES. The parties shall execute such further
documents, and perform such further acts, as may be reasonably necessary to
transfer and convey the Purchased Assets to Purchaser, on the terms herein
contained, and to otherwise comply with the terms of this Agreement and
consummate the transactions contemplated hereby
ARTICLE VIII
EFFECT OF TERMINATION; REMEDIES
8.1. RIGHT TO TERMINATE. This Agreement and the transactions
contemplated hereby may be terminated at any time prior to the Closing by prompt
notice given in accordance with Section 9.2:
(a) by the mutual written consent of Purchaser and Seller;
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(b) by Purchaser if (i) the Sale Order shall not have been
entered by the Court by January 11, 2001; (ii) at any time beginning January 26,
2001 if the Closing has not occurred by such date; or (iii) at any time, if
there is no commercially realistic possibility that a Closing condition
contained in Section 6.2 can be met prior to January 26, 2001 (it being
understood that if the action of a non-party is required for a Closing condition
to be satisfied and such non-party indicates in writing that it will not take or
be able to take such action, such refusal or inability shall mean that there is
no realistic possibility of such Closing condition being met); or
(c) by Seller at any time beginning January 26, 2001 if the
Closing has not occurred by such date; or
(d) as provided in Article VI or Section 8.2(a).
8.2. REMEDIES. If there shall occur a material breach of this
Agreement, the non-breaching party shall have the following (and only the
following) rights and remedies:
(a) the non-breaching party may terminate this Agreement; and,
in addition,
(b) if Purchaser is the breaching party, Seller shall be
entitled to receive, and shall be limited to recovery of, the Xxxxxxx Money
Amount from the Escrow Agent (which the parties agree shall be liquidated
damages); or
(c) if Seller is the breaching party, Purchaser shall be
entitled to receive the Xxxxxxx Money Amount plus payment by Seller to Purchaser
of all Transaction Expenses and to assert such legal or equitable claims
(including without limitation claims for specific performance and damages) and
causes of action as it may deem appropriate against Seller or its Chapter 11
estate (or Chapter 7 estate, if applicable), which shall be entitled to priority
in payment as an administrative expense pursuant to Sections 503 and 507(a)(1)
of the Bankruptcy Code; and
(d) if this Agreement is terminated for any reason other than a
material breach by Purchaser, then (to the extent not otherwise paid to
Purchaser under this Agreement) Purchaser shall be paid by Seller an amount
equal to the aggregate amount of the Transaction Expenses as a priority in
payment as an administrative expense pursuant to Sections 503 and 507(a)(1) of
the Bankruptcy Code.
8.3. INDEMNIFICATION. (a) Seller agrees to indemnify and to hold
Purchaser harmless from and against and in respect of any losses incurred by
Purchaser or any Affiliate of Purchaser from: (i) any damage or deficiency
resulting (A) from any material misrepresentation or breach of warranty pursuant
to Section 4.2(m), (B) from any material misrepresentation in or omission from
any schedule, certificate or other instrument furnished or to be furnished by
Seller to Purchaser pursuant to Section 4.2(m), or (C) non-fulfillment of any
Continuing Covenant on the part of Seller under this Agreement; (ii) any
Excluded Liabilities; (iii) all claims, obligations, or liabilities relating to
any pension, welfare, fringe benefit or any other benefit plan, agreement,
policy or arrangement of Seller or any Affiliate, whether by an Employee, the
PBGC, the Internal Revenue Service, the Department of Labor, the International
Union, United Automobile,
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Aerospace and Agricultural Implement Workers of America and its Local No. 2006
or any union related fund or pension plan or trust or any other person or
entity, whether arising under the collective bargaining agreements, plan
documents, trust agreements by statute or otherwise; (iv) all claims,
obligations, or liabilities relating to the employment or termination of
employment of any employee or former employee or other person providing services
to the Seller or any of its Affiliates, including, without limitation, claims
for wages, bonuses, commissions, severance, wrongful discharge, continuation
health coverage under COBRA, and medical, welfare and pension benefits payable
after retirement or other termination of employment, and (v) except as otherwise
specifically provided in this Agreement, all reasonable costs and expenses
(including reasonable attorneys' fees) incurred by Purchaser or any Affiliate of
Purchaser in connection with any action, suit, proceeding, demand, assessment or
judgment incident to any of the matters the Purchaser or any such Affiliate is
indemnified against by Seller in this Agreement.
(b) Purchaser shall give prompt written notice to Seller of any
claim against Purchaser or any of its Affiliates which might give rise to a
claim by Purchaser against Seller based upon any indemnity contained herein. The
notice shall set forth in reasonable detail the nature and basis of the claim
and the actual or estimated amount thereof. Subject to the provisions of Section
8.3(c) hereof, in the event any action, suit or proceeding is brought against
Purchaser or any of its Affiliates with respect to which Seller may have
liability under any indemnity contained herein, Seller shall have the right if
it so elects by notice to Purchaser within 10 business days of receipt of notice
referred to in the second sentence of this Section, at its sole cost and
expense, to defend such action in the name and on behalf of the indemnified
party, provided that such notice to Purchaser shall be accompanied by proof
reasonably acceptable to Purchaser of due appointment of legal counsel
authorized to act in such matter under the Bankruptcy Code and the rules
thereunder. In connection with any such action, suit or proceeding, the parties
hereto agree to render to each other such assistance as may reasonably be
required in order to insure the proper and adequate defense of any such action,
suit or proceeding. The indemnified person shall have the right to participate,
at its own expense and with counsel of its choosing, in the defense of any claim
against which it is indemnified hereunder and it shall be kept fully informed
with respect thereto. If Seller shall not elect to assume the defense or
thereafter vigorously defend such claim, Purchaser shall be entitled to assume
the defense and/or settlement thereof with counsel of its choosing and the
expenses of such defense an/or settlement incurred by Purchaser may be paid as
incurred out of the Indemnification Escrow Amount. If Seller assumed the
defense, the indemnified person hereunder shall give Seller notice of any
proposed settlement of any claim which might give rise to liability of Seller
under any indemnity contained herein. If Seller has not objected to such
settlement within 10 days of receipt of such notice, the indemnified person may
make such settlement. If Seller has objected to such settlement within 10 days
of such notice, the indemnified person shall not make such settlement without
the prior written consent of Seller, which consent shall not be unreasonably
withheld.
(c) Purchaser hereby agrees that Purchaser's right to make any
claims or obtain recourse or redress against Seller pursuant to the provisions
of this Section 8.3 is and shall be subject to the following limitations:
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(i) Purchaser shall be entitled to indemnity from Seller only
for those claims made as to which Purchaser has given Seller written notice
thereof before the date which is twelve (12) months after the Closing Date;
(ii) In no event shall the obligation of Seller to indemnify
Purchaser hereunder with respect to any claims exceed the Indemnification Escrow
Amount, and the Indemnification Escrow Amount shall be the sole source of
payment for such claims; and
(iii) In addition, Seller shall not have any liability to
Purchaser with respect to any matter for which Seller has indemnified Purchaser
under Section 8.3(a) until the amounts to which Purchaser would otherwise have
been entitled pursuant to Section 8.3(a)(i) (other than in respect of a breach
of a Continuing Covenant) shall exceed the threshold amount of Two Hundred
Thousand U.S. Dollars (US$200,000.00), and Seller shall thereafter be liable for
such threshold amount and the excess over such threshold amount; and
(iv) Purchaser shall not be entitled to recover under this
Section 8.3 with respect to title to the Chicago Facility.
ARTICLE IX
MISCELLANEOUS
9.1. PUBLICITY. Except as otherwise required by law or in connection
with Seller's bankruptcy filing with the Court and the publication of requisite
notices of sale in national and regional publications in connection with the
sale of the Purchased Assets in the bankruptcy proceeding, press releases
concerning this transaction shall be made only with the prior agreement of
Seller and Purchaser.
9.2. NOTICES. All notices required or permitted to be given hereunder
shall be in writing and may be delivered by hand, by facsimile, by nationally
recognized private courier, or by United States mail. Notices delivered by mail
shall be deemed given three (3) business days after being deposited in the
United States mail, postage prepaid, registered or certified mail. Notices
delivered by hand, by facsimile or by nationally recognized private carrier
shall be deemed given on the first business day following receipt; provided,
however, that a notice delivered by facsimile shall only be effective if such
notice is also delivered by hand, or deposited in the United States mail,
postage prepaid, registered or certified mail, on or before two (2) business
days after its delivery by facsimile. All notices shall be addressed as follows:
If to Seller,
addressed to:
Allied Products Corporation
0000 X. 00xx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxxx
Telecopier: (000) 000-0000
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with a copy to:
Altheimer & Xxxx
00 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. XxXxxx, Esq.
Telecopier: (000) 000-0000
If to Purchaser,
addressed to:
Enprotech Corp.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxx
Telecopier: (000) 000-0000
with a copy to:
RubinBaum LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000
and/or to such other respective addresses and/or addressees as may be designated
by notice given in accordance with the provisions of this Section 9.2.
9.3. EXPENSES. Except as otherwise provided for herein, each party
hereto shall bear all fees and expenses incurred by such party 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.
9.4. ENTIRE AGREEMENT. This Agreement and the instruments to be
delivered by the parties pursuant to the provisions hereof constitute the entire
agreement between the parties. Each exhibit and schedule, shall be considered
incorporated into this Agreement.
9.5. APPLICABLE LAW. This Agreement shall be governed and controlled
as to validity, enforcement, interpretation, construction, effect and in all
other respects by the internal laws of the State of Illinois applicable to
contracts made in that State.
9.6. BINDING EFFECT; BENEFIT. This Agreement shall inure to the
benefit of and be binding upon the parties hereto, and their successors and
permitted assigns. Nothing in this Agreement, express or implied, is intended to
confer on any person other than the parties hereto, and their respective
successors and permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
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9.7. ASSIGNABILITY. This Agreement is assignable by Seller only with
the prior written consent of Purchaser; it is assignable by Enprotech to such
person or persons as Purchaser designates by notice to Seller on or prior to the
Closing and upon such assignment and payment of the Purchase Price, Enprotech
shall be released from all obligations hereunder.
9.8. AMENDMENTS. This Agreement shall not be modified or amended
except pursuant to an instrument in writing executed and delivered on behalf of
each of the parties hereto.
9.9. REMEDIES CUMULATIVE. Except as otherwise specifically provided
herein, each and all of the rights and remedies in this Agreement provided, and
each and all of the rights and remedies allowed at law and in equity in like
case, shall be cumulative, and the exercise of one right or remedy shall not be
exclusive of the right to exercise or resort to any and all other rights or
remedies provided in this Agreement or at law or in equity.
9.10. HEADINGS. The headings contained in this Agreement are for
convenience of reference only and shall not affect the meaning or interpretation
of this Agreement.
9.11. SALES AND TRANSFER TAXES AND FEES. Seller shall pay when due
from assets other than the Purchased Assets all sales taxes and/or use taxes,
real property transfer taxes and fees and all other taxes and fees on transfer
of the Purchased Assets arising by virtue of the sale of the Purchased Assets to
Purchaser, regardless of whether the liability for such taxes or fees is imposed
by law upon Seller or upon Purchaser. To the extent that any such payments are
made out of Purchased Assets or to the extent that Purchased Assets or Purchaser
remain or become subject to such liabilities, the payment pursuant to Sections
3.1 and 3.4 shall be reduced by a like amount.
9.12. MULTIPLE COUNTERPARTS. This Agreement may be executed by
facsimile, in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute but one and the same
instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
SELLER:
ALLIED PRODUCTS CORPORATION, D.I.P.
By: Xxxx X. Xxxxxxxxx
------------------
Its: Senior Vice President
PURCHASER:
ENPROTECH CORP.
By: /s/ Xxxxxx X. Xxxxx
-------------------
Its: Senior Vice President
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