1
EXHIBIT 2.7
ASSET PURCHASE AGREEMENT
Between
KAYDON ACQUISITION VII, INC.
And
KEYNOTE HOLDING CO., INC.
And
XXXXXX FLUID POWER CO.
And
XXXXXX HARBOR ENGINEERING CO., INC.
JANUARY 30, 1996
2
TABLE OF CONTENTS
Section Page
------- ----
1. SALE AND PURCHASE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Transfer of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Assumed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.3 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2. PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Allocation of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.3 Adjustment to Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3. THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1 Time and Place . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2 Transfer of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.3 Delivery of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4. REPRESENTATIONS AND WARRANTIES OF SELLERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.1 Organization, Standing, etc. of Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.2 Authorization; Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.3 Consents; Defaults; Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.4 Machinery and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.5 Intellectual Property and Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.6 Employment Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.7 Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.8 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.9 Certain Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.10 Broker, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.11 Title to Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.12 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.13 No Burdensome Restrictions, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.14 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.15 Accuracy of Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.16 Absence of Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.17 Leases and Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.18 Condition of Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.19 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.20 Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.21 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.22 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.23 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.24 Terex Corporation Not a Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
-i-
3
Section Page
------- ----
5. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.1 Organization, Standing and Authority of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.2 Authorization; Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.3 Assumption of Assumed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.4 Consents, Defaults, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.5 Broker, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.6 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.7 Financial Capability to Consummate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6. COVENANTS OF SELLERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.1 Maintenance of Assets; etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.2 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.3 Continuing Responsibility for Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . 18
6.4 Environmental Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.5 Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7. COVENANTS OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
7.1 Negative Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
7.2 Assumption of Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8. CONDITIONS TO OBLIGATION OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.1 Accuracy of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.2 Performance by Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.3 Sellers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.4 Opinion of Sellers' Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.5 Corporate Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
8.6 Instruments of Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
8.7 Examination Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
8.8 VIC Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
9. CONDITIONS TO OBLIGATION OF SELLERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.1 Accuracy of Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.2 Performance by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.3 Officer's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.4 Opinion of Buyer's Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.5 Corporate Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
9.6 Delivery of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10. COVENANT NOT TO COMPETE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.1 Non-competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.2 Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
10.3 Injunctive Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
-ii-
4
Section Page
------- ----
11. ADDITIONAL COVENANTS OF BUYER AND SELLERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
11.1 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
11.2 Bulk Sales Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
11.3 Rights to Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
11.4 Use of Trade Names . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
11.5 Access and Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
12. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION; ETC. . . . . . . . . . . . . . . . . 45
12.1 Survival of Representations, Warranties and Covenants . . . . . . . . . . . . . . . . . . . . . . . 45
12.2 Indemnification by Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
12.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
12.4 Environmental Indemnities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
13. LEASE OF XXXXXX PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
14. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
15. EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
16. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
17. AMENDMENTS; TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
18. EFFECT OF THIS AGREEMENT; COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
19. GOVERNING LAW AND JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
20. REMEDIES AND INDEMNITIES CUMULATIVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
21. ASSIGNMENTS; SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
22. PRESS RELEASES AND ANNOUNCEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
23. CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
-iii-
5
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made and executed as of January 30,
1996, between KAYDON ACQUISITION VII, INC., a Delaware corporation (the
"Buyer"), XXXXXX FLUID POWER CO., a Michigan corporation and XXXXXX HARBOR
ENGINEERING CO., INC., a Michigan corporation (the "Sellers"), KEYNOTE HOLDING
CO., INC., a Delaware corporation ("Keynote") with reference to the
following facts:
Sellers are a wholly-owned subsidiaries of Keynote and wishes to sell
to Buyer and Buyer wishes to purchase from Sellers all of the business and
certain assets relating to Sellers' manufacturing business located in Xxxxxx
Xxxxxx, Xxxxxxxx xxx Xxxxxxx Xxxxx, Xxxxxxxxx (the "Business").
In consideration of the premises and the mutual covenants contained
herein, Sellers, Keynote and Buyer agree as follows:
1. SALE AND PURCHASE OF ASSETS
1.1 Transfer of Assets. In reliance on the representations and
warranties contained herein and subject to the terms and conditions hereof,
Sellers shall on the Closing Date (as defined in Section 3 herein) sell,
convey, transfer, assign and deliver, free and clear of all liens, mortgages,
security interests, pledges, charges, agreements, restrictions, claims, defects
in title and encumbrances of any kind or description, except for those items
listed on the attached Exhibit 1.1 (collectively referred to herein as "Claims
and Encumbrances"), and Buyer shall purchase from Sellers, all of Sellers'
right, title and interest in and to the tangible and intangible assets (the
"Assets") of Sellers (excluding any hazardous materials or substances located
at the Xxxxxx Harbor facility), including:
(a) Inventories. All inventory, including, without
limitation, all work in process, finished parts and products and raw
materials ("Inventory");
6
(b) Machinery and Equipment. All machinery, equipment,
tools, vehicles, furniture, tooling, fixtures, molds, dies, and all
other tangible property used in the Business, including, without
limitation, the machinery and equipment described on Exhibit 1.1(b)
hereto ("Machinery and Equipment"). Provided Buyer shall have the
right during the six (6) months transition period from the Xxxxxx
Harbor facility in its sole discretion, to abandon any machinery or
equipment, in which case Seller shall have the right to dispose of
such items as it sees fit.
(c) Intangible Personal Property. All intangible
personal property, including (i) all procedures, processes, products,
formulae, scientific, technical and other information, trade secrets,
ideas, licenses, franchises, customer lists, vendor lists, plans,
specifications, designs, drawings, catalogues, manuals, reports,
samples, prototypes, know-how, items in application, development or
other pending status and all similar items which are owned by Sellers
and applicable to or used in the operation of the Business
("Intellectual Property"), including, without limitation, the items of
Intellectual Property of Sellers described on Exhibit 1.1(c) hereto,
(ii) rights pursuant to all contracts applicable to or used in the
operation of the Business, including, without limitation, the
contracts listed on Exhibit 4.17 hereto, (iii) the leases of real and
personal property applicable to or used in the operation of the
Business described on Exhibit 4.17 hereto, (iv) all computer and
automatic machinery software programs and source disks, program
documentation, tapes, manuals, forms, guides and other materials with
respect thereto applicable to or used in the Business, and (v) to the
extent the same are transferable, all federal, state or local
governmental or regulatory permits, licenses, approvals and franchises
which are owned or have
2
7
been received by Sellers in connection with the operation of the
Business or ownership of the Assets (collectively, "Permits"),
including, without limitation, the Permits which are listed on
Exhibit 4.7 hereto;
(d) Patents, Trademarks and Copyrights. All registered
and unregistered trademarks, trademark applications, trade names,
service marks and service names and the goodwill of the Business
connected therewith or symbolized thereby, and all copyrights, patents
and patent applications, including, without limitation, the items
listed on the attached Exhibit 1.1(d).
(e) Records. All accounting information pertaining to
the operations of the Business and all media in which all or any of
the information, knowledge, data or records relating to the Business
may be related or stored, all customer lists, customer files,
personnel records, credit information, pending litigation documents,
insurance documents, pension documents, advertising, promotional and
sales materials, sales data, surveys, account histories, information
relating to sales or servicing of products applicable to, used in or
manufactured by the Business;
(f) Miscellaneous Assets. All goodwill of the Business
and all information, identification of supplies, gross data, recorded
knowledge, and all warranties inuring to the benefit of Sellers in
connection with the Business;
(g) Cash. All cash on hand, (except that Buyer shall not
assume any negative cash balance), and
(h) Accounts Receivable and Notes Receivable. All
accounts receivable and notes receivable, provided, that any accounts
receivable existing on the books of the Sellers as of December 31,
1995 attributable to sales to Terex Corporation or any
3
8
of its subsidiaries shall be paid in full by Terex and its subsidiaries
at or prior to the Closing.
1.2 Assumed Liabilities. At the Closing, Buyer shall assume only
(i) the obligations or liabilities of Sellers listed on the combined balance
sheet of Sellers dated October 31, 1995 and attached as Exhibit 1.2 hereto in
the amounts listed therein, as such amounts may have increased or decreased
since that date in the ordinary course of business. Provided, however, that
Buyer's obligation to assume the liability to Congress Financial Corporation,
shall under no condition whatsoever exceed Seven Million Seven Hundred Thousand
Dollars ($7,700,000.00) which Buyer will pay-off at Closing. Provided,
further, Buyer is not assuming the liabilities listed on said Balance Sheet to
the SBA in the amount of Three Hundred Ninety-Three Thousand Five Hundred Fifty
Dollars ($393,550.00); nor to Yellow Medicine County Bank in the amount of Four
Hundred Ninety-Three Thousand Two Hundred Fifty-Four Dollars ($493,254.00) nor
to Minnesota Development Authority in the amount of Ninety-Three Thousand Nine
Hundred Seventy-Four Dollars ($93,974.00) which liability is secured by a
mortgage on the real property of the Xxxxxx facility (referred to in this
Agreement as the "Xxxxxx Property"), nor to Terex Corporation in the amount of
Five Hundred Twenty Six Thousand Five Hundred and no/100 Dollars ($526,500.00).
(a) Those additional liabilities set forth on the
attached Exhibit 1.2(a). Except for the foregoing liabilities, Buyer
shall not assume any obligation, duty or liability of any nature
whatsoever, fixed or contingent, including, without limitation:
(i) any liability of Sellers for violation of Environmental
Requirements; generation, management, handling, transportation,
treatment, storage, disposal, delivery, discharge, release or emission
of any Hazardous Material or other substance;
4
9
Environmental Damages; or any other action, omission or condition
affecting the environment arising from the conduct of the Business or
occurrences prior to the Closing Date, including, without limitation,
those conditions specified on Exhibit 4.12 as described herein;
(ii) any tax liabilities or similar assessments arising from the
conduct of the Business or occurrences prior to the Closing Date or
arising from the transfer of the Assets and consummation of the
transactions contemplated hereby, including, without limitation, any
liabilities for sales, bulk sales, use, transfer, stamp or income
taxes, and any filing, recording or similar fees or charges; (iii) any
liabilities for breach or default by Sellers under any contract, lease
or agreement assigned to Buyer hereunder, which accrued prior to the
Closing Date; (iv) any liability with respect to any claim, suit,
action or judicial, administrative or arbitration proceeding made or
pending or commenced against Sellers at or prior to the Closing Date,
or made or commenced after the Closing Date in respect of any action,
omission or condition occurring or existing prior to the Closing Date;
(v) any undisclosed liabilities, which accrued prior to the Closing
Date and (vi) any collective bargaining agreement (other than the
Agreement covering employees at the Xxxxxx location), labor or
employment agreement liabilities, any pension plan withdrawal or other
liability, severance liability, funding deficiency, workmen's
compensation, employee life and health insurance or similar liability
to any employee or former employee of Sellers, including, without
limitation, any such liability under any multi-employer or
single-employer plan, contract or arrangement, or any other liability
in respect of any employee attributable to or in respect of any period
prior to the Closing Date. Sellers shall discharge and satisfy, when
and if due and payable, all
5
10
liabilities which are not specifically assumed by Buyer under this
Agreement and shall, upon request of Buyer, give Buyer evidence of such
payment.
In the event Buyer is assessed with a liability it did not assume
hereunder, Buyer shall notify Sellers in writing of such assessment and provide
Sellers ten (10) business days to either acknowledge the liability or dispute
it. If Sellers acknowledges such assessment of liability, Sellers may either,
at its sole option, (i) discharge and satisfy such liability directly, (ii)
dispute such liability and indemnify and hold Buyer harmless, or (iii) pay Buyer
the full amount of such assessed liability. Under no circumstances shall
Sellers pay Buyer for any liability which Buyer satisfies and discharges on
Sellers' behalf unless Buyer first provides Sellers with the notice required
herein.
1.3 Excluded Assets. The Assets shall not include the assets of
Sellers listed in Exhibit 1.3 attached hereto.
2. PRICE
2.1 Purchase Price. The purchase price for the Assets based on
Sellers' balance sheet attached as Exhibit 1.2 hereto shall be the sum of Two
Million Five Hundred Thousand Dollars ($2,500,000) in cash (transferred via wire
transfer) at Closing, plus the assumption of liabilities described in Paragraph
1.2.
2.2 Allocation of Purchase Price. The Purchase Price paid for
the respective Assets will be as shown on an allocation exhibit to be provided
by Buyer to Sellers prior to the Closing which shall be approved by Sellers.
2.3 Adjustment to Purchase Price. The purchase price described in
paragraph 2.1 hereof, shall be adjusted upward or downward as a result of any
change in the net worth of
6
11
Sellers from the amount set forth on Seller's balance sheet of October 31, 1995
and the balance sheet as of the date of Closing.
3. THE CLOSING
3.1 Time and Place. The Closing of the sale and purchase of the
Assets (the "Closing") shall take place at the offices of _____________________
in ______________, ___________ as soon as practicable following Buyer receipt
of the No Association Letter from Minnesota Pollution Control Agency Voluntary
Investigation and Cleanup ("VIC") Program as more fully described in Paragraph
8.8 (a) hereof, (the "Closing Date"). In the event the No Association Letter
is not received by January 31, 1996, the parties shall have the right to extend
the Closing Date or terminate the Purchase Agreement. Sellers shall close down
the operations of Xxxxxx Harbor and terminate all employees prior to the
Closing Date. The delivery of all documents by the parties and the performance
of all acts at the Closing shall be deemed to have occurred simultaneously.
3.2 Transfer of Assets. At the Closing, Sellers shall deliver to
Buyer such bills of sale, endorsements, assignments and other good and
sufficient instruments of conveyance and transfer, in form and substance
reasonably satisfactory to Buyer and its counsel, as shall be effective to
convey and transfer to and vest in Buyer title to the Assets, free and clear of
any Claims and Encumbrances, except such Claims and Encumbrances listed on
Exhibit 1.1 attached hereto. Simultaneously with such delivery, Sellers shall
take such action as may be necessary or reasonably requested by Buyer to place
Buyer in possession and control of the Assets.
3.3 Delivery of Purchase Price. Buyer shall pay to Sellers via
wire transfer at the Closing, the full amount of the Purchase Price.
7
12
4. REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers represents and warrants to Buyer as follows:
4.1 Organization, Standing, etc. of Sellers. Each of the Sellers
is duly organized, validly existing and in good standing under the laws of the
State of Michigan, and has all requisite power to own or lease and to operate
its properties and to carry on the Business as conducted with the Assets.
4.2 Authorization; Binding Effect. This Agreement has been duly
executed and delivered by Sellers and constitutes the legally binding
obligation of Sellers in accordance with its terms.
4.3 Consents; Defaults; Etc. Except as set forth on the attached
Exhibit 4.3, neither the execution, delivery or performance by Sellers of this
Agreement nor the consummation by Sellers of the transactions contemplated
hereby (i) is prohibited by, or requires Sellers to obtain or make any consent,
authorization, approval, filing or registration under, any law, rule or
regulation, judgment, order, writ, injunction or decree which is binding upon
Sellers, or any of the Assets, or (ii) will violate any provision of, result in
any default or acceleration of any obligations under, result in the creation or
imposition of any lien on any of the Assets pursuant to, or require any consent
under, any indenture, lease, mortgage or other agreement to which Sellers is a
party or by which Sellers or any of the Assets is otherwise bound.
4.4 Machinery and Equipment. Except as listed in Exhibit 4.4
attached hereto, all Machinery and Equipment has been maintained so as to be,
and all of the Machinery and Equipment is, in good operating condition and
repair (ordinary wear and tear excepted), and
8
13
to the best of Sellers' knowledge, after due inquiry, there are no repairs which
are required to be made to the Machinery and Equipment, except as listed in
Exhibit 4.4.
4.5 Intellectual Property and Processes. Exhibit 1.1(c) includes
all of the material Intellectual Property, and all patents, trademarks and
copyrights owned by, used or necessary for use in the Business. The formulae,
manufacturing procedures, processes, know-how and trade secrets used or
necessary for use in the operation of the business are hereinafter referred to
as the "Processes". The United States trademark registrations listed on the
attached Exhibit 1.1(c) and, to the best of Sellers' knowledge, after due
inquiry, the Intellectual Property and Processes which are owned by Sellers are
owned free and clear of any license, sublicense, agreement, right,
understanding, judgment, order, decree or stipulation, and Sellers, to the best
of its knowledge, after due inquiry, has not infringed on or misappropriated
any intellectual property of third parties. To the best of Sellers' knowledge
no third party has infringed or misappropriated any Intellectual Property,
patents, trademarks and Copyrights or Processes.
4.6 Employment Matters. Except as listed on the attached Exhibit
4.6, there is no claim of any employee or any former employee of Sellers for
any unpaid compensation or remuneration of any nature, including, without
limitation, contingent salaries, incentive payments, pension benefits (whether
or not vested), (excluding benefits to be paid in the future from pension
trusts established and administered for such purpose by Sellers), medical
expense reimbursement, vacation pay, severance payments and other awards,
interests and payments. Exhibit 4.6 shall contain the current funding status
of the Xxxxxx Pension Plan.
4.7 Permits. Attached as Exhibit 4.7 hereto is a list of all
material Permits Sellers has obtained in connection with the operation and
ownership of the Assets, and, except
9
14
Permits that Buyer designates as not to be transferred in Exhibit 4.7, or which
have been designated as non-transferable or transferable only with consent from
a third party or government or regulatory body on Exhibit 4.7, each of the
Permits is transferable by Sellers without notice to or consent from any third
party or governmental or regulatory body. Sellers shall take all reasonable
steps requested by Buyer to enable Buyer to obtain in its own name any Permit
that is not so transferable. The Permits listed on Exhibit 4.7 constitute all
of the Permits required to operate the Business as previously conducted by
Sellers. Except as listed on attached Exhibit 4.7, there are no proceedings
pending or, to the best of Sellers' knowledge, threatened which may result in
the revocation, cancellation or suspension, or any adverse modification, of any
Permit.
4.8 Litigation. Except as listed on the attached Exhibit 4.8,
there is no suit, action, proceeding, investigation or inquiry pending or, to
the best of Sellers' knowledge, threatened (or any basis therefor), at law or
in equity or before any governmental department, commission, board, body,
agency or instrumentality, domestic or foreign, against Sellers which affects
or could have a material effect on the Assets or involves or could involve the
validity or legality of this Agreement or any action taken or to be taken
pursuant hereto.
4.9 Certain Tax Matters. Sellers has paid, accrued on its Latest
Financial Statement, or will pay when due all income, sales, use, business,
occupation, personal or real property or any similar taxes and all taxes of any
kind related to any period prior to the Closing Date, including without
limitation, any tax relating to the wages, benefits or income of any employee,
consultant or commission agent connected with the Assets, whether owed by
Sellers or by any such employee, consultant or commission agent.
10
15
4.10 Broker, etc. Except as set forth on the attached Exhibit
4.10, Sellers have employed no finder, broker, agent or other intermediary in
connection with the negotiation or consummation of this Agreement or any of the
transactions contemplated hereby.
4.11 Title to Assets. Except as set forth on the attached Exhibit
4.11, Sellers has undivided marketable title, legal and equitable, in and to
all of the Assets being sold under this Agreement. The Assets are owned by
Sellers free and clear of any Claims and Encumbrances, except liens for current
taxes and assessments not yet due and payable and those liens, Claims and
Encumbrances described on the attached Exhibit 4.11. All of the Assets are
located in Xxxxxx Xxxxxx, Xxxxxxxx xxx Xxxxxxx Xxxxx, Xxxxxxxxx or such other
location listed in Exhibit 4.11. The Assets, taken as a whole, constitute all
of the operating properties and assets which are reasonably necessary for the
conduct of the Business as conducted by Sellers.
4.12 Compliance With Laws. Except as set forth on Exhibit 4.12
(which includes the Environmental Report described in Section 6.5 herein), the
Business and the Assets are and have been operated and maintained in
substantial compliance with all applicable governmental laws, rules,
regulations, Environmental Requirements and ordinances, including, without
limitation, laws, regulations and other requirements (a) relating to pricing of
products and antitrust, and (b) imposed by action of, permits from, or
agreements with any governmental agency or authority relating to the
generation, management, handling, transportation, treatment, storage, disposal,
delivery, discharge, release or emission of any waste, pollutant or toxic,
hazardous or other substance or other action, omission or condition
affecting the environment, air, soil and water pollution, ground water
contamination, the handling, storage or release into the environment of
hazardous materials or hazardous
11
16
substances, or the transportation of hazardous materials (collectively
"Environmental Laws and Regulations") and federal and state occupational safety
and health laws and regulations and the Consumer Products Safety Commission laws
and regulations; and Sellers has no notice of any failure to comply therewith,
except as set forth on Exhibit 4.12. Exhibit 4.12 lists each offsite disposal
site used by Sellers presently or used by Sellers from March 1992 with respect
to the Xxxxxx facility and from December 1994 with respect to the Xxxxxx
facility to the present. Except as set forth in Exhibit 4.12, to the best of
Sellers' knowledge, after due inquiry and investigation by qualified Sellers
representatives, all properties and equipment of Sellers have been since
December 31, 1994 and now are free of asbestos, PCB's, methylene chloride,
trichloroethylene, 1,2-transdichloroethylene, dioxins, dibenzoforans and
"extremely hazardous substances" as that term is defined in the Toxic Substance
Control Act. Phase I and Phase II studies performed by Sellers and Keynote
shall be attached as part of Exhibit 4.12.
4.13 No Burdensome Restrictions, etc. There are no judgments,
orders, writs, injunctions, or decrees to which the Assets are subject and to
which Sellers is a party, or which materially adversely affect the Assets,
except those set forth on the attached Exhibit 4.13.
4.14 Disclosure. The representations and warranties contained in
this Agreement and the information contained in the Exhibits hereto, written
documents, financial statements including the latest financial statements dated
December 31, 1995, provided by Sellers to Buyer (the "Latest Financial
Statements"), and other certificates or instruments delivered by or on behalf of
Sellers in connection with the purchase and sale of the Assets are true and
correct in all material respects and do not contain any untrue statement of a
material fact or
12
17
omit to state a fact necessary to make the statements contained therein and
herein not misleading. Except as set forth in the attached Exhibit 4.14, there
is no fact known to Sellers which materially adversely affects the Assets which
has not been set forth in this Agreement or in the other documents, certificates
or instruments delivered by Sellers or on behalf of Sellers, specifically for
use in connection with the transactions contemplated by this Agreement.
4.15 Accuracy of Financial Statements. The financial statements of
Sellers provided to Buyer (including, without limitation, the Latest Financial
Statements, and Sellers' annual unaudited financial statements dated December
31, 1995) fairly present the financial condition of Sellers and the results of
its operations, as of the dates thereof and for the periods indicated therein,
in accordance with generally accepted accounting principles consistently
applied. As of the Closing Date, and except as set forth on the attached
Exhibit 4.15, Sellers shall have no liabilities of any nature required to be
reflected in financial statements under generally accepted accounting
principles that were not shown or provided for in the aggregate on the
financial statements, and all reserves set forth on the financial statements
are adequate in all material respects.
4.16 Absence of Changes. Since the date of the Latest Financial
Statements, Sellers has, and until the Closing Date shall have, operated the
Business in the ordinary and usual course, maintained the Assets in good
condition and repair, reasonable wear and use excepted, and not sold, assigned,
transferred, encumbered or otherwise disposed of, or contracted, agreed or
become bound to sell, assign, transfer, encumber or otherwise dispose
of any of the Assets, other than in the ordinary course of business, and except
as otherwise provided in this Agreement. Since such date, there has been no
material adverse change in
13
18
the Business, Assets or condition, financial or otherwise, of Sellers nor, to
the best of Sellers' knowledge, has any such change threatened to occur, nor has
there been any damage, destruction or loss, other than that fully covered by
insurance, of a material nature affecting the Business, properties or financial
condition of Sellers.
4.17 Leases and Contracts. Exhibit 4.17 attached hereto includes
each lease of real or personal property and each agreement to which Sellers is
a party that involves the sum of $10,000.00 or more, including employment
agreements and collective bargaining agreements. Each such lease and agreement
(a) is valid, binding and enforceable, and (b) to the best of Sellers'
knowledge, no event has taken place which with notice or lapse of time would
constitute a breach or default, or permit termination or modification of such
lease or contract. Sellers has not received notice of any default, and, to the
best of Sellers' knowledge, Sellers is not in default in respect of any such
lease or agreement to which it is a party or by which it is bound. Exhibit
4.17 shall contain a copy of the Management Contract between Terex and Keynote.
4.18 Condition of Inventory. All inventory, materials and supplies
of Sellers are at least of merchantable quality for such items in the
Business. The inventory reserves described in the Latest Financial Statements
are adequate in all material respects.
4.19 Accounts Receivable. Except as set forth on the attached
Exhibit 4.19, all of Sellers' accounts receivables of any nature are good and
collectible at the aggregate recorded amounts thereof in the usual and ordinary
course of business and without resort to legal proceedings.
4.20 Real Property. Exhibit 4.20 includes a legal description of
all real property owned by Sellers.
14
19
Sellers agree that Buyer shall have the right to utilize the Xxxxxx
Harbor Engineering Co., Inc. premises for a period of not to exceed six (6)
months following the "Closing" at no charge to allow an orderly transition of
the equipment located at that facility to Buyer's relocation. Buyer shall
provide a liaison person following Closing for a period not to exceed six weeks
to provide for an orderly transition and close down of the Xxxxxx Harbor
facility.
4.21 Insurance. Exhibit 4.21 attached hereto sets forth all
insurance carriers and policy numbers by policy period as to policies to which
Sellers has been a party or beneficiary within the past seven (7) years,
including, without limitation, worker's compensation, liability, casualty and
property insurance, and, except as identified in Exhibit 4.21, all such
policies are in full force and effect.
4.22 Labor Matters. Except as set forth on the attached Exhibit
4.22, Sellers is not subject to any labor grievances, claims of unfair labor
practices, or other material collective bargaining disputes.
4.23 Employee Benefits. Exhibit 4.23 lists all employee benefit
plans to which Sellers is a party, including all such plans as defined or
described under ERISA.
4.24 Terex Corporation Not a Party. Terex Corporation is not a
party to this Agreement and therefore makes no representations or warranties,
directly or indirectly, as to any matter contained in this Paragraph 4.
5. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants as follows:
5.1 Organization, Standing and Authority of Buyer. Buyer is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and
15
20
has the corporate power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby.
5.2 Authorization; Binding Effect. The execution and delivery by
Buyer of this Agreement and the performance by Buyer of its obligations
hereunder and the consummation by Buyer of the transactions contemplated hereby
have been duly authorized by all necessary action on the part of Buyer. This
Agreement has been duly executed and delivered by a duly authorized officer of
Buyer and constitutes the valid and legally binding obligation of Buyer
enforceable against Buyer in accordance with its terms.
5.3 Assumption of Assumed Liabilities. All of the contracts,
agreements or instruments to be assumed by Buyer pursuant to this Agreement and
the Assumption Agreement are valid and binding upon Buyer, and are enforceable
against and fully performable by Buyer in accordance with their terms; and
there are no existing facts or circumstances which would prevent the full and
complete performance thereof by Buyer.
5.4 Consents, Defaults, etc.. Neither the execution, delivery or
performance by Buyer of this Agreement, nor the consummation by Buyer of the
transactions contemplated hereby (i) is prohibited by, or requires Buyer to
obtain or make any consent, authorization, approval, filing or registration
under, any law, rule or regulation, judgment, order, writ, injunction or decree
which is binding upon Buyer, or (ii) will violate any provision of, result in
any default or acceleration of any obligations under, or require any consent
under, any indenture, lease, mortgage or other agreement to which Buyer is a
party or by which Buyer is bound.
16
21
5.5 Broker, etc.. Buyer has employed no broker, agent or other
intermediary in connection with the negotiation or consummation of this
Agreement or any of the transactions contemplated hereby.
5.6 Disclosure. The representations and warranties contained in
this Agreement and the information contained in any written documents,
financial statements and other certificates or instruments delivered by or on
behalf of Buyer in connection with the purchase of the Assets are true and
correct in all material respects and do not contain any untrue statement of a
material fact. There is no fact known to Buyer which materially adversely
affects the ability of Buyer to consummate the transactions contemplated herein
which has not been set forth in this Agreement or in the other documents,
certificates or instruments delivered by Buyer or on behalf of Buyer,
specifically for use in connection with the transactions contemplated by this
Agreement.
5.7 Financial Capability to Consummate Transactions. Buyer has,
or will have on the Closing Date, sufficient financial resources readily
available to enable Buyer to consummate the transactions contemplated in this
Agreement on the terms and conditions contained herein. There is no fact known
to Buyer which materially adversely affects the ability of Buyer to consummate
the transactions contemplated herein which has not been set forth in this
Agreement or in the other documents, certificates or instruments delivered by
Buyer or on behalf of Buyer, specifically for use in connection with the
transactions contemplated by this Agreement.
6. COVENANTS OF SELLERS
Sellers covenants and agrees with Buyer that:
17
22
6.1 Maintenance of Assets; etc. Sellers will, through the Closing
Date, (a) maintain and keep all material Machinery and Equipment and other
Assets in as good repair, working order and condition as at present (reasonable
wear and tear excepted), (b) keep in full force and effect insurance as
necessary to fully insure the Assets, (c) perform in all material respects all
its obligations under all of its leases, contracts, commitments and
arrangements, and not amend, alter or modify, other than in the ordinary course
of business of Sellers, any provision of any lease, contract, obligation or
commitment to be assumed by Buyer, and (d) do all things reasonably necessary
to avoid any action that would render Sellers' representations and warranties
hereunder inaccurate as of the Closing Date.
6.2 Access to Information. Sellers will give to Buyer, Buyer's
accountants, counsel, employees and other representatives full access to all of
the properties, books, contracts, commitments, reports and records of Sellers
relating to the Business and Assets and will furnish Buyer all such documents,
records and information with respect to the affairs of the Business and copies
of any working papers relating to that Business as Buyer shall from time to
time reasonably request. Buyer will endeavor not to disrupt the operations of
Sellers' Business during any such investigations.
6.3 Continuing Responsibility for Environmental Matters.
(a) The following definitions shall be applicable to this
Agreement:
(i) "Contamination" shall mean all
"Chrome-Plating Contamination", "Tank Contamination",
"Transformer Contamination" and "Asbestos Contamination" as
hereinafter defined.
(ii) "Environmental Report shall mean,
collectively, the following reports that have been
prepared with respect to the Xxxxxx Property: Phase I
18
23
Environmental Site Assessment, dated August 12, 1994, prepared
by ATEC (the "Phase I Report"); the Phase I ESA Update, dated
December 21, 1995, prepared by ATEC; the Phase II Soil Boring
and Asbestos Survey, dated September 16, 1994, prepared by ATEC
(the "Phase II(A) Report"); and Limited Subsurface Assessment,
dated December 21, 1995, prepared by ATEC (the "Phase II(B)
Report").
(iii) "Tank" means any of the underground or above
ground storage tanks (including the associated containers,
piping and other appurtenant structures or systems attached to
any of the tanks) identified in any of the Environmental
Reports.
(iv) "Tank Contamination" is any Hazardous
Material spilled, released, leaked, or otherwise discharged
from a Tank, or any Hazardous Material no longer in use as of
the Closing which must be removed from any tank for disposal,
recycling, treatment or other disposition.
(v) "Hazardous Material" means any substance:
(1) the presence of which requires
investigation, remediation or any other
response under any federal, state or local
statute, regulation, ordinance, order,
action, policy, or common law; or
(2) which is or becomes defined as
a "hazardous waste," "hazardous substance,"
"pollutant", or "contaminant" under any
federal, state, or local statute, regulation,
rule, or ordinance or amendments thereto
including, without limitation,
19
24
the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C.
Section 9601 et seq.) and/or the Resource
Conservation and Recovery Act (42 U.S.C.
Section 6901 et seq.); or
(3) which is toxic, explosive,
corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic, or
otherwise hazardous or dangerous and is or
becomes regulated by any governmental
authority, agency, department, commission,
board, agency, or instrumentality of the
United States, the State of Minnesota or any
political subdivision thereof; or
(4) the presence of which on the
Xxxxxx Property causes or threatens to cause
a nuisance or other damage or harm upon the
Xxxxxx Property or to other properties, poses
or threatens to pose a hazard to the health
or safety of persons on or about the Xxxxxx
Property or other properties, or poses or
threatens to pose a harm to the environment
or natural resources wherever they may be
located; or
(5) the presence of which on
properties other than the Xxxxxx Property
could constitute a trespass; or
(6) without limitation, which
contains gasoline, diesel fuel, or other
petroleum hydrocarbons; or
20
25
(7) without limitation, which
contains polychlorinated biphenyls (PCBs),
asbestos, or urea formaldehyde foam
insulation; or
(8) without limitation, radon gas;
or
(9) without limitation, asbestos or
asbestos-containing materials or lead-based
paint; or
(10) the term Hazardous Material
shall not include asbestos containing floor
tiles as identified in the Phase II(A)
Report.
(vi) "Environmental Requirements" means all
applicable present and future statutes, regulations, rules,
ordinances, codes, licenses, permits, orders, approvals,
plans, authorizations, concessions, franchises, and similar
items, of all governmental agencies, departments, commissions,
boards, bureaus, or instrumentalities of the United States,
states, and political subdivisions thereof and all applicable
judicial, administrative, and regulatory decrees, judgments,
and orders relating to the protection of human health or the
environment, including, without limitation:
(1) All requirements, including but
not limited to those pertaining to reporting,
licensing, permitting, investigation, and
remediation of emissions, discharges,
releases, or threatened releases of Hazardous
Materials, chemical substances, pollutants,
contaminants, or hazardous or toxic
substances, materials or wastes whether
solid, liquid, or
21
26
gaseous in nature, into the air, surface
water, groundwater, or land, or relating to
the manufacture, processing, distribution,
use, treatment, storage, disposal, transport,
or handling of chemical substances,
pollutants, contaminants, or hazardous or
toxic substances, materials, or wastes,
whether solid, liquid, or gaseous in nature;
and
(2) All requirements pertaining to
the protection of the health and safety of
employees or the public.
(vii) "Environmental Damages" means all claims,
judgments, damages, losses, penalties, fines, liabilities
(including strict liability), encumbrances, liens, costs, and
expenses of investigation and defense of any claim, whether or
not such claim is ultimately defeated, and of any good faith
settlement of judgment, of whatever kind or nature, contingent
or otherwise, matured or unmatured, foreseeable or
unforeseeable, including without limitation reasonable
attorneys' fees and disbursements and consultants' fees, any
of which are incurred at any time as a result of the existence
prior to Closing of Hazardous Materials upon, about, beneath
the Xxxxxx Property or migrating or threatening to migrate to
or from the Xxxxxx Property, or the existence of a violation
of Environmental Requirements pertaining to the Xxxxxx
Property or the operation of any business or other activities
thereon, regardless of whether the existence of such Hazardous
Material or the violation of Environmental Requirements arose
prior to Sellers' ownership or operation of the Xxxxxx
Property, and including without limitation:
22
27
(1) Damages for personal injury, or
injury to property or natural resources
occurring upon or off of the Xxxxxx Property,
foreseeable or unforeseeable, including
without limitation, lost profits,
consequential damages, the cost of demolition
and rebuilding of any improvements on real
property, interest and penalties;
(2) Fees incurred for the services
of attorneys, consultants, contractors,
experts, and laboratories and all other costs
incurred in connection with the investigation
or remediation of such Hazardous Materials or
violation of Environmental Requirements
including, but not limited to, the
preparation of any feasibility studies or
reports or the performance of any cleanup,
remediation, removal, response, abatement,
containment, closure, restoration, or
monitoring work required by any federal,
state, or local governmental agency or
political subdivision, or reasonably
necessary to make full economic use of
Property in a manner consistent with its
current use or otherwise expended in
connection with such conditions, and
including without limitation any attorneys'
fees, costs, and expenses incurred in
enforcing this Agreement or collecting any
sums due hereunder and Sellers and Keynote
shall have the right to copies of any reports
so generated; and
23
28
(3) Liability to any third person
or governmental agency to indemnify such
person or agency for costs expended in
connection with the items referenced in
subparagraph (2) herein;
(b) Sellers and Keynote (hereinafter collectively
referred to as "Environmental Indemnitors"), through and after the
Closing Date, at their sole cost and expense, shall undertake the
following:
(i) not less than five (5) days prior to
the Closing, provide to Buyer a list of all Hazardous
Materials or substances located at its facilities as
defined in the OSHA Toxic and Hazardous Substances
Hazard Communication Standard, 48 FR 53280, Nov. 25,
1983, as amended, and
(ii) notwithstanding the obligation of
Environmental Indemnitors to indemnify Buyer pursuant
to this Agreement, Environmental Indemnitors, at
their sole cost and expense, shall perform all
obligations set forth in Paragraphs 6.3 (c) - (i)
below; and
(iii) promptly take any and all actions to
investigate and remediate the Xxxxxx Property and/or
other properties, if necessary, which are required by
any federal, state, or local government agency or
political subdivision or which are reasonably
necessary to mitigate Environmental Damages or to
allow full economic use of the Xxxxxx Property, which
investigation and remediation are necessitated from
the presence at the Closing of the Contamination,
Hazardous Materials, or
24
29
a violation of any Environmental Requirements. Such
actions hereunder shall include, but not be limited
to, the investigation of the environmental condition
of the Xxxxxx Property, the preparation of any
feasibility studies, reports, or remedial plans, and
the performance of any cleanup, remediation,
containment, operation, maintenance, monitoring or
restoration work, whether on or off of the Xxxxxx
Property (hereinafter referred to as "Response
Action(s)").
(c) The parties acknowledge that Buyer will retain X.X.
Xxxxxx Associates, Inc. or such other environmental consultant as it
selects, in its sole discretion (the "Consultant"), to supervise and
manage all Response Actions to be performed by or on behalf of
Environmental Indemnitors under this Agreement. Environmental
Indemnitors shall, upon submission of invoices from the Consultant by
Buyer, promptly reimburse Buyer for all costs and expenses Buyer
incurs for services provided by the Consultant. Environmental
Indemnitors shall cooperate with the Consultant in all respects in
performing Environmental Indemnitors' obligations hereunder.
(d) Environmental Indemnitors shall promptly after the
Closing retain one or more qualified independent environmental
contractors, each of which contractors shall be subject to the prior
written approval of the Buyer (collectively the "Contractor") to
perform the following tasks:
(i) Within thirty (30) days from the date of
execution of this Agreement, Environmental Indemnitors shall
cause the Contractor to register all Tanks located on the
Xxxxxx Property with the Minnesota Pollution Control
25
30
Agency (MPCA) and all other governmental bodies with
jurisdiction over such Tanks to the extent required by
applicable Environmental Requirements; to provide all notices
required by Minn. Stat. Section 116.48; to document, in
writing, the tightness and integrity of the Tanks; and to
identify any and all other actions that are required to bring
said Tanks, and the operation thereof, into compliance with
applicable Environmental Requirements. As soon as possible
after the Contractor has completed the tasks identified in the
preceding sentence, Environmental Indemnitors shall cause the
Contractor to complete any and all activities with respect to
the Tanks required to achieve compliance with applicable
Environmental Requirements, including without limitation,
removing and disposing of any Hazardous Materials no
longer in use in any of the Tanks, removing any of the Tanks no
longer in use (unless Buyer indicates that it intends to use
such Tanks), and repairing (or replacing to the extent repair
is not practical) any of the Tanks that cannot be demonstrated
to be tight and otherwise in compliance with applicable
Environmental Requirements.
(ii) Within thirty (30) days from the date of
execution of this Agreement, Environmental Indemnitors, in
consultation with the Consultant, shall develop a work plan,
which plan shall be subject to the prior approval of Buyer, to
investigate comprehensively any existing or potential
Contamination, including without limitation, any Tank
Contamination; any releases of Hazardous Materials from the
chemical use, storage and disposal activities identified in
the Environmental Reports; and the Transformer Contamination.
The purpose of said investigation shall be to establish the
source, extent and
26
31
impact of, and any required response to, any existing or
potential Contamination, and to facilitate issuance of the
Voluntary Investigation and Cleanup (VIC) determinations
required by Paragraph 4 of this Agreement. Said investigation
shall, as appropriate, include but not be limited to, soil,
ground water, tank tightness and surface water testing, and
shall include a proposed schedule for completion of all
investigatory activities. Within thirty (30) days after said
work plan has been approved by Buyer, Environmental Indemnitors
shall cause the Contractor to commence the investigation
required therein, and thereafter, to promptly complete said
investigation and any other Response Actions with respect to
any contamination discovered as soon as practical to the extent
required by applicable Environmental Requirements.
(e) Environmental Indemnitors promptly shall complete any
and all necessary Response Actions with respect to all Chrome-Plating
Contamination, whether or not presently known or identified. In this
regard, Environmental Indemnitors expressly acknowledge that certain
contaminants associated with a chrome-plating process have been
discovered in the soil on the Xxxxxx Property as disclosed in the
Phase II(B) Report and that the full environmental impacts (including,
without limitation, the contaminants present, the receptors of any
contaminants, and the present and future extent of potential ground
water, surface water and additional soil contamination) associated
with this chrome-plating process have not yet been identified. The
full extent of such impacts shall be referred to in this Agreement as
the "Chrome-Plating Contamination". Without limiting the obligations
stated elsewhere in this Agreement, Environmental Indemnitors agrees
that prior to Closing
27
32
it will advise the Minnesota Pollution Control Agency (MPCA) VIC
program of information currently available regarding the
Chrome-Plating Contamination, and that after the Closing,
Environmental Indemnitors, in accordance with the plans prepared by
the Consultant, shall cause the Contractor to comprehensively and
promptly undertake and complete all Response Actions with respect to
any and all impacts to the environment (including, without limitation,
soil, ground water and surface water contamination, whether located on
or off the Xxxxxx Property) associated with the Chrome-Plating
Contamination to the extent recommended by the VIC program. Further,
compliance with each and every groundwater standard established by the
VIC program must be documented by Environmental Indemnitors for five
(5) successive semi-annual monitoring events, using a certified
independent consultant and laboratory, approved in advance by Buyer,
with the monitoring to occur at the location of the highest
contamination observed and the most downgradient location on the
Xxxxxx Property.
(f) Environmental Indemnitors promptly after the Closing
shall xxxxx all friable asbestos-containing material ("ACM")
identified in the Phase II(A) Report and any other friable ACM that is
present on the Xxxxxx Property at the time of the Closing ("Asbestos
Contamination"). All such abatement shall be in accordance with the
recommendations in the Phase II(A) Report and in compliance with all
applicable Environmental Requirements. All ACM abatement required
hereunder shall be completed within forty-five (45) days after the
Closing unless it is not feasible to complete said abatement in that
time period, in which case said abatement shall be completed as soon
as is practical. Any ACM abatement at the Xxxxxx Property shall
28
33
be completed by a licensed abatement contractor and monitored by a
professional engineer or certified industrial hygienist ("Engineer"),
each of whom must be accredited under AHERA and otherwise must meet
all applicable Environmental Requirements, and must be satisfactory to
Buyer. Air monitoring shall be performed at appropriate intervals
during the ACM abatement, and the samples shall be analyzed using
appropriate analytical techniques by an AHERA accredited laboratory.
Immediately after Environmental Indemnitors has completed the ACM
abatement, it shall deliver to Buyer a clearance audit prepared by the
Engineer and in scope, form and substance satisfactory to Buyer
demonstrating that the abatement has been completed, the ACM has been
properly disposed of, and the abatement satisfies the requirements of
this Agreement.
(g) Prior to the Closing, Environmental Indemnitors shall
cause the Contractor to dispose, in accordance with all applicable
Environmental Requirements, of any "hazardous wastes," as such term is
defined in Minn. Stat. ch. 116, located on the Xxxxxx Property as of
the Closing Date, including without limitation, any such hazardous
wastes identified in any of the Environmental Reports. The Contractor
shall provide Buyer with written documentation on the Closing that all
such hazardous wastes have been removed and disposed of by
Environmental Indemnitors in accordance with applicable Environmental
Requirements.
(h) Environmental Indemnitors promptly shall address the
PCB transformer contamination identified in the Phase I Report
("Transformer Contamination"). In this regard, Environmental
Indemnitors acknowledges that certain transformers on the Xxxxxx
Property are leaking substances that may be Hazardous Materials as
described
29
34
in the Phase I Report. Environmental Indemnitors, promptly after
Closing, shall seek to have Granite Falls Electric, the company
identified in the Phase I Report as the owner of the transformers
("Transformer Contamination"), repair said transformers and take all
necessary Response Actions regarding any Hazardous Materials released
from the transformers, as soon as practical, to the extent required by
applicable Environmental Requirements. If Granite Falls Electric does
not commence said Response Actions within sixty (60) days after the
Closing, or if Granite Falls Electric at any time does not proceed
expeditiously and diligently to complete such Response Actions, then
Environmental Indemnitors shall complete said Response Actions as soon
as practical.
(i) The parties agree as follows with respect to the
requirements of Paragraph 6.3:
(i) Environmental Indemnitors shall perform or
cause to be performed all of the obligations under this
Agreement, at its sole cost and expense, including but not
limited to all power and utility costs, and any and all taxes
or fees that may be applicable to any activities required
hereunder.
(ii) Environmental Indemnitors shall cooperate in
all respects with the Consultant, and shall promptly implement
all plans of the Consultant for the Response Actions required
by this Agreement that are prepared in accordance with the
recommendations of the MPCA VIC program, applicable
Environmental Requirements, or otherwise under the terms of
this Agreement.
(iii) Environmental Indemnitors shall proceed
continuously, diligently and expeditiously after the Closing
to complete any and all
30
35
obligations imposed by Paragraph 6.3, and all actions taken by
Environmental Indemnitors shall be in compliance with all
applicable Environmental Requirements and shall be performed in
a good, safe and workmanlike manner;
(iv) Environmental Indemnitors shall obtain or
cause to be obtained all necessary permits, licenses,
certificates and other approvals, however defined, required in
connection with the performance of any obligations hereunder;
(v) Environmental Indemnitors shall make all
reasonable efforts to avoid any interruption of the use of the
Xxxxxx Property and any occupants thereof and visitors
thereto, and if such interruption is not avoidable,
Environmental Indemnitors shall minimize such interruption and
shall repair as soon as possible any damage to the Xxxxxx
Property occasioned by the performance of any obligation
hereunder;
(vi) Environmental Indemnitors shall maintain
reasonable insurance policies with respect to its activities
and those of its agents and representatives at any time on the
Xxxxxx Property, and shall take all necessary and appropriate
precautions for the safety of the occupants of and visitors to
the Xxxxxx Property;
(vii) Environmental Indemnitors shall keep Buyer
apprised of the progress and performance of the obligations
hereunder, including, without limitation, providing Buyer with
semi-annual reports on Environmental Indemnitors' activities
with regard to the Chrome-Plating Contamination;
31
36
(viii) Environmental Indemnitors shall permit no
mechanics, materialmen, laborers or other lien to be made or
imposed upon the Xxxxxx Property;
(ix) Environmental Indemnitors shall provide to
Buyer copies of all notices that may be received from any
governmental agency involved in any matter subject to this
Paragraph 6.3, and any responses to such notices;
(x) Buyer shall provide reasonable access to the
Xxxxxx Property to Environmental Indemnitors and their agents
and representatives for purposes of performing the activities
required by this Paragraph 6.3, provided that Buyer shall
provide at least forty-eight (48) hours advance notice to
Environmental Indemnitors of the access requested; and
(xi) Environmental Indemnitors shall promptly
provide to Buyer copies of testing results and reports that
are generated in connection with the activities hereunder;
(xii) Promptly upon completion of any investigatory
and/or remedial activities hereunder, Environmental
Indemnitors shall permanently seal or cap all monitoring xxxxx
and test holes to industrial standards in compliance with
applicable federal, state, and local laws and regulations;
remove all associated equipment; and restore the Xxxxxx
Property to the maximum extent possible, which shall include,
without limitation, the repair of any surface damages,
including paving, caused by such investigation or remediation
hereunder.
(xiii) Xxxxxx Xxxxx Fluid Co. ("Xxxxxx") shall
not be wound up or otherwise dissolved until after all
Response Actions required hereunder have
32
37
been completed, and Environmental Indemnitors shall cause
Xxxxxx to execute any documents and take such other actions as
are necessary to complete the obligations under this
Agreement, including without limitation, taking such actions as
are requested by the MCPA VIC program.
6.4 Environmental Report. Sellers have arranged and paid for the
preparation and delivery to Buyer of the Environmental Reports identified in
Paragraph 6.3(a) prepared by an environmental consultant with respect to the
Xxxxxx Property in form and substance adequate to assess the environmental
condition of the Xxxxxx Property. Sellers shall certify to Buyer that, to the
best of Sellers' knowledge, after due inquiry, Sellers is not aware of any
events, facts or circumstances that would lead it to conclusions different from
those reflected in the Environmental Reports.
6.5 Employment. Sellers shall terminate the employment of each
of its employees of Xxxxxx Harbor Engineering Co., Inc. immediately prior to
the Closing. Between the date of the execution of this Agreement and the date
of Closing, Buyer is not the employer of the employees of Sellers and this
Agreement shall not be construed to make Buyer the employer of Sellers'
employees. Buyer agrees to compensate Sellers for the ordinary and reasonable
costs to accomplish the severance obligation pursuant to this paragraph not to
exceed an amount of $150,000.
7. COVENANTS OF BUYER
Buyer covenants and agrees with Sellers that:
7.1 Negative Actions. Between the date hereof and the Closing
Date, Buyer will refrain from taking any action that would render Buyer's
representations and warranties hereunder inaccurate as of the date hereof or
the Closing Date.
33
38
7.2 Assumption of Liabilities. Buyer shall execute and deliver
to Sellers an instrument of assumption of liabilities in form reasonably
satisfactory to Sellers and its counsel pursuant to which Buyer shall agree to
assume and pay the assumed liabilities described in Section 1.2 above.
8. CONDITIONS TO OBLIGATION OF BUYER
The obligation of Buyer to consummate the transactions contemplated
hereby is subject to the satisfaction, or waiver, by Buyer, at or prior to the
Closing, of the following conditions, in the absence of the satisfaction of
which Buyer may terminate this Agreement without liability:
8.1 Accuracy of Representations and Warranties. The
representations and warranties contained herein or otherwise made by or on
behalf of Sellers in connection with this Agreement and the transactions
contemplated hereby shall have been true and correct in all material respects
on the Closing Date to the same extent as if made on the Closing Date, except
to the extent non-material changes occur in the ordinary course of Sellers'
business.
8.2 Performance by Sellers. Sellers shall have duly performed
and complied in all material respects with all terms, agreements, and
conditions required by this Agreement to be performed or complied with by
Sellers prior to or at the Closing.
8.3 Sellers' Certificate. Sellers shall have delivered to Buyer
a certificate, dated as of the Closing Date, and executed by Sellers' executive
officer, to the effect that Sellers has duly performed and complied with the
covenants and conditions set forth in Sections 8.1 and 8.2.
34
39
8.4 Opinion of Sellers' Counsel.
(a) Buyer shall have received from Xxxxxx Xxxxxxxxxx,
Esq., counsel of Sellers and Keynote, a favorable opinion, dated as of
the Closing Date, and satisfactory in substance and form to Buyer and
its counsel, to the following effect:
(i) Standing, etc. of the Sellers. Sellers
has all requisite power and authority to own the Assets and
to perform Sellers' obligations hereunder and to consummate
the transactions contemplated hereby.
(ii) Litigation. Except as set forth on
counsel's opinion, there is no suit, action, proceeding,
investigation or inquiry pending or, to the best of such
counsel's knowledge, threatened at law or in equity or
before any governmental department, commission, board, body,
agency or instrumentality, domestic or foreign, which
materially affects or could materially affect the Business
or Assets or involves or could involve the validity or
legality of this Agreement or any action taken or to be
taken pursuant hereto, nor has any such suit, action,
proceeding, investigation or inquiry been pending within the
three years preceding the date of this Agreement.
(iii) Execution and Delivery. This Agreement has
been duly executed and delivered by Sellers and Keynote, and
constitutes the legal, valid and binding obligation of
Sellers and Keynote enforceable against Sellers and Keynote
in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency,
reorganization and other similar laws relating to or
affecting the rights of
35
40
creditors generally, and is subject to general principles
of equity, regardless of whether such enforceability is
considered in a proceeding at law or in equity.
(iv) Consents; Defaults, Etc. To the best of
counsel's knowledge, after due inquiry, neither the
execution, delivery or performance by Sellers and Keynote of
this Agreement, nor the consummation by Sellers and Keynote
of the transactions contemplated hereby (i) is prohibited
by, or requires Sellers or Keynote to obtain or make any
consent, authorization, approval, filing or registration
under, any law, rule or regulation, or, under any judgment,
order, writ, injunction or decree which is binding upon
Sellers or Keynote, or (ii) will violate any provision of,
result in any default or acceleration of any obligations
under, result in the creation or imposition of any lien on
any of the Assets pursuant to, or require any consent (other
than consents identified in such opinion and duly obtained
prior to the Closing) under, any indenture, lease, mortgage
or other agreement to which Sellers or Keynote is a party or
is otherwise bound.
(v) Conveyance of Assets. The instruments of
conveyance, transfer and assignment executed and delivered
to Buyer have been duly executed by Sellers and are valid
and effective to vest in Buyer all of the right, title and
interest of Sellers in and to the Assets as contemplated by
the Agreement.
36
41
8.5 Corporate Documents. Sellers shall deliver to Buyer (a) a
certificate of good standing from its state of incorporation; and (b) certified
resolutions of the Board of Directors of Sellers and Keynote authorizing this
transaction.
8.6 Instruments of Transfer. Sellers shall execute and deliver
to Buyer the instruments of transfer described in Section 3.2 above.
8.7 Examination Period. Buyer shall have completed a purchase
investigation and review of the financial statements and operations of Sellers
that shall have confirmed that all such statements and operations materially
conform to the representations and warranties contained herein. Materiality
(or material) shall be defined as an occurrence, financial or otherwise, which
adversely impacts the value of the business to the extent that a reasonably
prudent purchaser could determine that the negative impact on current or future
value was significant enough to make the purchase transaction sufficiently
different from the bargained for consideration and, therefore, warrant a
refusal to close the transaction. Any dispute that would arise concerning this
definition of materiality shall be resolved by submission to arbitration
pursuant to rules of the American Arbitration Association and shall be binding
on the parties hereto, and judgment may be entered upon such an award.
8.8 VIC Determinations.
(a) Buyer shall have obtained prior to Closing, a
no-association determination from the MPCA VIC program providing Buyer
with environmental liability protection for the Hazardous Materials
identified in the Environmental Reports, or other studies, evaluations
or assessments which may be available prior to Closing, provided that
said determination must be satisfactory to Buyer, in its sole
discretion, exercising good faith and reasonable business judgment in
its form, scope
37
42
and content. Environmental Indemnitors, at its own cost and expense,
shall cooperate with Buyer and perform any and all such actions as are
necessary for Buyer to obtain the above-referenced MPCA VIC
determination, including, but not limited to, performing any
investigatory actions with respect to any Contamination recommended by
the Consultant, providing additional information requested by the
MPCA, and taking any other actions requested by the VIC program.
(b) In addition to the VIC determination referenced in
subparagraph (a) above, Environmental Indemnitors, at its own cost and
expense, shall obtain from the MPCA VIC program as soon as practical
after Closing, but in no event later than January 31, 1999:
(i) a no-action letter addressed to Sellers,
Buyer and Buyer's successors and assigns, or if mutually
agreed upon by Sellers and Buyer, a certificate of
completion or other form of closure determination addressed
to said parties, from the MPCA VIC program with respect to
all Contamination, including, but not limited to, the
Chrome-Plating Contamination identified in the Phase II(B)
Report, identified on the Xxxxxx Property in connection with
the activities performed under Paragraph 2 of this
Agreement, and
(ii) a no-association determination addressed
to Buyer and its successors and assigns, or such other form
of environmental liability protection acceptable to Buyer,
in its sole discretion, using good faith and reasonable
business judgment with respect to all of such Contamination
identified on the Xxxxxx Property; provided that all VIC
determinations provided by MPCA hereunder shall be
acceptable to Buyer, in its sole
38
43
discretion, using good faith and reasonable business judgment
in their form, scope and content; and provided further that
Environmental Indemnitors, at their sole cost and expense,
shall promptly complete all such activities, including any
Response Actions with respect to any Hazardous Materials
requested by MPCA in order for the VIC program to issue the
determinations required under this Paragraph.
9. CONDITIONS TO OBLIGATION OF SELLERS
The obligation of Sellers to consummate the transactions contemplated
hereby is subject to the satisfaction, or waiver, by Sellers, at or prior to the
Closing, of the following conditions in the absence of the satisfaction of which
Sellers may terminate this Agreement without liability:
9.1 Accuracy of Representations. The representations and
warranties contained in this Agreement shall have been true and correct in all
material respects when made and shall be true and correct in all material
respects on the Closing Date to the same extent as if made on the Closing Date.
9.2 Performance by Buyer. Buyer shall have duly performed and
complied with all terms, agreements and conditions required by this Agreement
to be performed or complied with by it prior to or at the Closing.
9.3 Officer's Certificate. Buyer shall have delivered to
Sellers a certificate, dated as of the Closing Date and executed by an officer
of Buyer, to the effect that Buyer has duly performed and complied with the
covenants and conditions set forth in Sections 9.1 and 9.2.
39
44
9.4 Opinion of Buyer's Counsel. Sellers shall have received
from counsel to Buyer, a favorable opinion, dated as of the Closing Date, and
satisfactory in substance and form to Sellers and its counsel, to the following
effect:
(a) Standing etc. of the Buyer. Buyer has all
requisite power and authority to consummate the transactions
contemplated in the Agreement and to perform Buyer's obligations
contemplated therein;
(b) Consents, Defaults, etc. Neither the execution,
delivery or performance by Buyer of this Agreement, nor the
consummation by Buyer of the transactions contemplated hereby (i) is
prohibited by, or requires Buyer to obtain or make any consent,
authorization, approval, filing or registration under, any law, rule
or regulation, or, to the best of counsel's knowledge after due
inquiry, under any judgment, order, writ, injunction or decree which
is binding upon Buyer, or (ii) will violate any provision of, result
in any default or acceleration of any obligations under, result or
require any consent (other than consents identified in such opinion
and duly obtained prior to the Closing) under, any indenture, lease,
mortgage or other agreement to which Buyer is a party or is otherwise
bound;
(c) Execution and Delivery. This Agreement has been
duly executed and delivered by Buyer, and constitutes the legal, valid
and binding obligation of Buyer enforceable against Buyer in
accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization and other
similar laws relating to or affecting the rights of creditors
generally, and is subject to general principles of equity,
40
45
regardless of whether such enforceability is considered in a
proceeding at law or in equity.
9.5 Corporate Documents. Buyer shall deliver to Sellers (a) a
certificate of good standing from its state of incorporation; and (b)
certified resolutions of the Board of Directors of Buyer authorizing this
transaction.
9.6 Delivery of Purchase Price. Buyer shall deliver to Sellers
the Purchase Price via wire transfer directly into an account designated by
Sellers.
10. COVENANT NOT TO COMPETE
10.1 Non-competition. In furtherance of the sale of the Assets
to Buyer, for a period of five (5) years following the Closing, Sellers and
Keynote shall not, nor permit any person or entity then controlled by Sellers
or Keynote to, directly or indirectly, engage, participate in (as a partner,
shareholder, officer, or director, employee, consultant, agent or otherwise)
any business activity which is the same as, or similar to, or competitive with,
the business conducted by Buyer utilizing the Assets anywhere in the world, nor
shall Sellers or Keynote directly or indirectly tamper with or induce any
employee, agent, salesperson, contractor, customer, supplier, manufacturer or
dealer of Buyer to leave, to stop selling to or stop buying from Buyer or
otherwise to cease dealing with Buyer. Nothing herein shall prohibit any
person or entity from owning 2% or less of a publicly traded Company which
conducts a business which could be deemed competitive with Buyer's business.
Prior to the Closing, Terex Corporation of Westport, Connecticut,
which has managed Sellers pursuant to a Management Agreement set forth on
Exhibit 4.17 agrees to enter into a Non-Competition Agreement with Buyer which
contains terms identical to those set forth in this paragraph 10.1.
41
46
10.2 Enforcement. The provisions of the covenant contained in
this Section 10 are severable and independent and shall be interpreted and
applied consistently with requirements of reasonableness and equity. If any
provision of the covenant contained in this Section 10 shall be held to be
invalid or otherwise unenforceable, in whole or in part, the remainder of the
provisions, or the enforceable parts thereof, shall not be affected thereby.
10.3 Injunctive Relief. Buyer, Keynote and Sellers acknowledge
that compliance by Sellers and Keynote with the covenant contained in this
Section 10 is necessary to protect the interests of Buyer and that a breach of
the covenant contained in this Section 10 will result in irreparable and
continuing damage to Buyer for which there will be no adequate remedy at law.
Sellers and Keynote hereby agree, without intending to limit the remedies
available to Buyer, that Buyer and its successors and assigns shall be entitled
to injunctive relief with respect to the covenant contained in this Section 10
in addition to such other and further relief as may be appropriate.
11. ADDITIONAL COVENANTS OF BUYER AND SELLERS
11.1 Further Assurances. After the Closing, and for no further
consideration, Sellers shall perform all other action reasonably requested by
Buyer (including without limitation the use of Sellers' best efforts) to enable
Buyer to accomplish transfer of registrations, permits, approvals and the like
as contemplated by this Agreement and shall execute, acknowledge and deliver
such assignments, transfers, consents and other documents as Buyer or its
counsel may reasonably request to vest in Buyer, and protect Buyer's right,
42
47
title and interest in, and enjoyment of, the Assets intended to be assigned and
transferred to Buyer pursuant to this Agreement.
11.2 Bulk Sales Laws. Buyer waives compliance by Sellers and
Sellers waives compliance by Buyer with the provisions of any applicable bulk
sales, fraudulent conveyance or other law for the protection of creditors, and
Sellers shall indemnify and hold Buyer harmless and reimburse Buyer for, any
and all claims, liabilities or obligations (other than those assumed by Buyer
hereunder) which Buyer may suffer or incur by virtue of noncompliance by Buyer
with such applicable laws under the indemnity provisions of Section 12 herein.
11.3 Rights to Intellectual Property. Sellers shall not, at any
time after the Closing Date, use or disclose to any third party any
Intellectual Property or Processes which at such time is not generally known to
the public or recognized as standard practice, or any formulae, scientific and
technical information, manufacturing procedure, know-how, processes, trade
secrets or other confidential information transferred to Buyer pursuant to this
Agreement, without the express prior written consent of Buyer.
11.4 Use of Trade Names. Sellers agrees that Buyer may, at its
discretion, use Sellers' name and any trade names used by Sellers, or a phrase
similar thereto in connection with marketing products after the Closing Date.
Sellers further agrees that Buyer may use containers, forms and other supplies
which have Sellers' name printed thereon after the Closing Date. Sellers shall
change its name to a dissimilar name as of the Closing and
43
48
shall file a certificate of amendment to its articles of incorporation as of the
Closing to effect this change.
11.5 Access and Information. For a period of three (3) years
following the Closing Date (or the period of Buyer's ownership of the Business,
if shorter), Buyer shall use reasonable efforts to retain all books, records and
other documents pertaining to the Business that are included in the Purchased
Assets and Assumed Liabilities and shall make the same available after the
Closing Date for inspection and copying by Sellers, at Sellers' expense, during
normal business hours, upon reasonable request and upon reasonable prior notice.
During such ten (10) year period, Buyer shall advise Sellers of any planned
substantial destruction of books, records and documents in writing and give
Sellers a reasonable opportunity to obtain possession thereof. Upon reasonable
request and reasonable notice, Buyer will cooperate fully with Sellers, and will
permit Sellers access to and the services of all employees of Buyer (in a manner
which will not impair the operation of the Business) reasonably necessary (i)
for preparing tax returns for periods prior to the Closing. Sellers will pay
Buyer an amount equal to the salaries or wages earned by such employees while so
assisting Sellers and all out-of-pocket expenses incurred by Buyer in allowing
Sellers to use such employees. Notwithstanding the foregoing, Buyer shall not
be liable to Sellers for any claim by Sellers that Buyer has breached this
Section 11.6 for losing any books, records or other documents.
12. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS;
INDEMNIFICATION; ETC.
12.1 Survival of Representations, Warranties and Covenants. The
representations, warranties and covenants herein and in any Exhibit,
certificate, instrument or document
44
49
delivered pursuant to this Agreement shall survive both the Closing and any
investigation at any time made for or on behalf of any party hereto (i) for a
period of five (5) years after the Closing as to Sellers' representations,
warranties and covenants relating to environmental matters; provided, however,
that the parties' relative liability for a breach of any such representation,
warranty or covenant shall be as set forth in Section 12.2, and (ii) for a
period of three (3) years as to all other representations, warranties and
covenants of either party.
12.2 Indemnification by Sellers. Subject to the conditions
contained in Section 12.4 hereof, Sellers and Keynote shall, jointly and
severally, indemnify and hold Buyer (and its shareholders, directors, officers,
employees and affiliates) harmless from and against any and all claims,
liabilities (including any strict liabilities with respect to any Loss
specified under clause (iv) below), fines, penalties, losses, damages,
(excluding incidental or consequential damages such as lost profits resulting
from any disruption of operation of the Assets), costs and expenses (including
reasonable counsel fees) incurred by Buyer (i) within five (5) years from the
date of Closing with respect to environmental matters, and (ii) within three
(3) years from the date of Closing with respect to all other matters, from or
related to any of the following (hereinafter called a "Loss" or "Losses"):
(i) any breach by Sellers of any representation, warranty,
covenant, obligation or undertaking made by Sellers in or pursuant to
this Agreement;
(ii) any claim or liability not arising out of an
obligation assumed by Buyer hereunder and asserted for failure to
comply with any applicable bulk sales, fraudulent conveyance or other
laws for the protection of creditors;
45
50
(iii) any product liability claim or other claim for the
breach of any express or implied warranty, and any other claim of
whatever nature, and from all damages resulting therefrom, which may
be made in connection with the sale of products manufactured by
Sellers prior to the Closing Date;
(iv) any claim or liability relating to the operation of
the Business prior to the Closing Date not assumed by Buyer,
including, without limitation, liability under labor, collective
bargaining, or employment agreements and liability relating to
pension, retirement or other employee benefit plans.
12.3 Indemnification by Buyer. Subject to the conditions
contained in Section 12.4 hereof, Buyer shall indemnify and hold Sellers
harmless from and against any and all claims, liabilities, losses, damages,
costs and expenses (including reasonable counsel fees) from or related to (a)
any breach by Buyer of any representation, warranty, covenant, obligation or
undertaking made by Buyer in or pursuant to this Agreement, (b) matters arising
solely from the operation of the Business after the Closing Date, other than
liabilities retained by Sellers hereunder, and (c) any product liability claim
for injury to persons or property which may be made in connection with the sale
of products manufactured by Buyer after the Closing Date.
12.4 Environmental Indemnities.
(a) (i) Environmental Indemnitors, their
successors, assigns and guarantors, agree to indemnify,
defend, reimburse, and hold harmless Buyer, its directors,
officers, shareholders, employees, representatives, and
assigns from and against any and all Environmental Damages
arising in any manner
46
51
whatsoever from (a) the presence of Hazardous Materials upon,
about, or beneath the real property described in Exhibit 4.20
("Sellers' Real Property") or migrating or threatening to
migrate to or from such Sellers' Real Property, including,
but not limited to, the Contamination; (b) any violation of
any Environmental Requirements pertaining to the Sellers'
Real Property or the operation of any business or any other
activities thereon; (c) any non-performance or
violation of any obligation of Sellers and/or Environmental
Indemnitors created by Paragraphs 6.3, 6.4 and 8.8 with
respect to certain environmental matters; and (d) any breach
of any warranty or covenant or any inaccuracy of any
representation of Sellers or Environmental Indemnitors
contained in this Agreement.
(ii) This obligation shall include, but not be
limited to, the burden and expense of defending all claims,
suits, and administrative proceedings, even if such claims,
suits, or proceedings are groundless, false, or fraudulent,
and conducting all negotiations of any description, and
paying and discharging, when and as the same become due, any
and all judgments, penalties or other sums due against such
indemnified persons. Buyer, at its sole expense, may employ
additional counsel of its choice to associate with counsel
representing Environmental Indemnitors.
(iii) The obligations of Environmental
Indemnitors under this paragraph shall not be affected by
any investigation by or on behalf of Buyer, or by any
information that Buyer may have or obtain with respect
thereto.
47
52
12.5 Indemnification Notice, etc.
(a) If any action, suit or proceeding shall be
commenced, or any claim or demand shall be asserted, in respect of
which a party entitled to indemnification pursuant to this Agreement
(the "Indemnitee") demands indemnification under this Section 12, the
party from which such indemnification is demanded under this Section
12 (the "Indemnitor") shall be notified to that effect with reasonable
promptness and shall have the right to assume entire control of its
defense (including the selection of counsel), subject to the right of
the Indemnitee to participate (with counsel of its choice) in, the
defense, compromise or settlement thereof.
(b) The fees and expenses of any counsel chosen by
Indemnitee following acceptance by Indemnitor of its indemnity
obligations shall be at the expense of the Indemnitee unless (i) the
employment of such counsel by the Indemnitee has been specifically
authorized by the Indemnitor, or (ii) the named parties to any such
action (including any impleaded parties) include both the Indemnitor
and the Indemnitee shall have been advised by its counsel that there
may be one or more good faith legal defenses available to it which are
different from or additional to those available to the Indemnitor.
(c) The Indemnitee shall cooperate fully in all
respects with the Indemnitor in any such defense, compromise or
settlement, including, without limitation, by making available all
pertinent information under its control to the Indemnitor. The
Indemnitor will not compromise or settle any such action, suit,
proceeding, claim or demand without the prior written consent of the
Indemnitee;
48
53
provided, however, that in the event such consent is withheld, then
the liabilities of the Indemnitor shall be limited to the total sum
representing the amount of the proposed compromise or settlement and
the amount of counsel fees accumulated at the time such consent is
withheld. The Indemnitor shall not be liable for any settlement by
Indemnitee of any action, suit, proceeding, claim or demand, unless
the Indemnitee obtains the prior written consent of the Indemnitor.
13. LEASE OF XXXXXX PROPERTY. At Closing, the parties shall
enter into a lease agreement, a copy of which is attached hereto as Exhibit 13,
which provides for the lease of the Xxxxxx facility for a period of three (3)
years with two three (3) year renewal options at an annual rental of One Hundred
Fourteen Thousand Four Hundred Twenty-Four Dollars ($114,424.00) per year.
Such lease shall further provide that Buyer shall purchase the Xxxxxx Property
for a purchase price equal to the assumption of the indebtedness to the SBA,
SWMI and Yellow Medicine County Bank which approximates Nine Hundred Eight
Thousand Seven Hundred Seventy-Eight Dollars ($980,778.00) upon Buyer's receipt
of all MPCA VIC determinations required by Paragraph 8.8(b) hereof, which
determinations must be satisfactory using good faith and reasonable business
judgement to Buyer, in its sole discretion, in form, scope and content and
Seller have completed the Chromium Remediation and returned the property and
buildings to their present condition.
14. TERMINATION
Either party may terminate this Agreement upon material breach by the other
party and following fifteen (15) days prior written notice and opportunity to
cure.
49
54
15. EXPENSES
Each party hereto shall bear its own expenses, including the fees of
any attorneys, accountants or other engaged by such party, incurred in
connection with this Agreement and the transactions contemplated hereby, it
being understood that Sellers' expenses shall not be paid from the Assets.
16. NOTICES
All notices, requests, demands and other communications made hereunder
shall be in writing and shall be deemed duly given if and when delivered by
hand, with receipt duly acknowledged, or sent by registered or certified mail,
postage prepaid, as follows, or to such other address or person as any party
may designate by notice to the other party or parties hereunder:
If to Sellers and Keynote:
Xxxxxx Fluid Power Co. Xxxxxx Harbor Engineering Co., Inc.
Highway 212 2200 E. Empire Avenue, P.O. Box 367
Granite Falls, MN 56241 Xxxxxx Xxxxxx, XX 00000-0000
With copies to:
Terex Corporation
000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxxx
Attn: Xxxxxx Xxxxxxxxx
If to Buyer:
Kaydon Corporation
Arbor Shoreline Office Park
19345 XX 00 Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000-0000
ATTENTION: Xxxxxx Xxxxxxxx
50
55
17. AMENDMENTS; TERMINATION
This Agreement cannot be changed or terminated orally and no waiver of
compliance with any provision or condition hereof and no consent provided for
herein shall be effective unless evidenced by an instrument in writing duly
executed by the proper party.
18. EFFECT OF THIS AGREEMENT; COUNTERPARTS
This Agreement (including the Exhibits hereto) sets forth the entire
understanding of the parties and supersedes any and all prior agreements,
arrangements and understandings relating to the subject matter hereof. The
section headings of this Agreement are for convenience of reference only and do
not form a part hereof and do not in any way modify, interpret or construe the
intentions of the parties. This Agreement may be executed in two or more
counterparts, and all such counterparts shall constitute one and the same
instrument.
19. GOVERNING LAW AND JURISDICTION
This Agreement has been made and entered into under the laws of the
State of Delaware and said laws shall control the interpretation thereof. The
parties hereto agree to submit to the personal jurisdiction of the courts in
the State of Delaware to address any suit, action or proceeding related to this
Agreement.
20. REMEDIES AND INDEMNITIES CUMULATIVE
The indemnities contained in this Agreement shall not be limited by
the exercise by Buyer of any rights or remedies available under the Purchase
Agreement or otherwise. The rights and indemnities in favor of Buyer hereunder
shall be cumulative and in addition to any other rights and remedies to which
Buyer may be entitled.
51
56
21. ASSIGNMENTS; SUCCESSORS AND ASSIGNS
This Agreement may not be assigned without the written consent of the
other party, except that Buyer may assign this Agreement to a wholly-owned
subsidiary in which event Buyer shall remain liable for the obligations
incurred hereunder. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors, legal representatives
and assigns.
22. PRESS RELEASES AND ANNOUNCEMENTS
No party shall issue any press release or announcement relating to the
subject matter of this Agreement (prior to the Closing) without the prior
written approval of the other party; provided, however, that any party may make
any public disclosure it believes in good faith is required by law or
regulation (in which case the disclosing Party will advise the other party
prior to making the disclosure).
23. CONSTRUCTION
The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rule of strict
construction shall be applied against any party. Any reference to any federal,
state, local, or foreign statute or law shall be deemed also to refer to all
rules and regulations promulgated thereunder, unless the context requires
otherwise.
52
57
IN WITNESS WHEREOF, each party hereto has executed this Agreement by
its respective duly authorized officer as of the day and year first above
written.
KAYDON ACQUISITION VII, INC.
By /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Its President
- Buyer
XXXXXX FLUID POWER CO.
By /s/ Xxxxxx Xxxxxxxx
-----------------------------------
Its President
XXXXXX HARBOR ENGINEERING CO., INC.
By /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Its President
- Sellers
KEYNOTE HOLDING CO., INC.
By /s/ Xxxxx X. Xxxxx
-----------------------------------
Its Vice President
KAYDON GUARANTY
Kaydon Corporation, a Delaware corporation, an owner of 100% of the
outstanding stock of Kaydon Acquisition VII, Inc., hereby guarantees the
obligations of Kaydon Acquisition VII, Inc. as set forth in this Agreement.
KAYDON CORPORATION
By /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Its President
53
