ASSET PURCHASE AGREEMENT
dated as of
January 9, 1996
among
EMHART INDUSTRIES, INC.,
EMHART, INC.
and
KAYNAR TECHNOLOGIES INC.
TABLE OF CONTENTS
SECTION PAGE
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ARTICLE 1
PURCHASE AND SALE OF ASSETS................................... 1
1.1 Sale of Assets................................................ 1
1.1.1 Names......................................................... 1
1.1.2 Inventory..................................................... 1
1.1.3 Equipment..................................................... 1
1.1.4 Intellectual Property......................................... 2
1.1.5 Sales Materials............................................... 2
1.1.6 Books and Records............................................. 2
1.1.7 Assigned Contracts............................................ 2
1.2 Accounts and Work-In-Process Not Transferred.................. 2
ARTICLE 2
CLOSING/DELIVERY OF ASSETS/PURCHASE PRICE/
ASSUMPTION OF LIABILITIES................................... 3
2.1 The Closing................................................... 3
2.2 Selection of Inventory and Equipment/Purchase Price/Closing
Date.......................................................... 3
2.2.1 Purchase of Inventory and Equipment/Determination of Inventory
Price and Equipment Price..................................... 3
2.2.2 Closing Date and Purchase Price............................... 5
2.2.3 Allocation of Purchase Price.................................. 6
2.3 Payments to Seller............................................ 6
2.4 Instruments of Conveyance and Transfer........................ 7
2.5 Assumption of Certain Liabilities............................. 7
2.6 Non-Assumption of Liabilities................................. 7
2.7 Sales and Use Tax............................................. 7
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER...................... 8
3.1 Organization, Corporate Power and Authority................... 8
3.2 Authorization of Agreements................................... 8
3.3 Effect of Agreement........................................... 8
3.4 Permits....................................................... 8
3.5 Assigned Contracts............................................ 9
3.6 Sufficiency of Property....................................... 9
3.7 Equipment..................................................... 9
3.8 Inventory..................................................... 9
3.9 Legal Proceedings............................................. 9
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3.10 Compliance with Law........................................... 9
3.11 Intellectual Property......................................... 10
3.12 Taxes and Proration........................................... 10
3.13 Insurance..................................................... 10
3.14 Worker Adjustment and Retraining Notification................. 10
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER....................... 11
4.1 Organization, Corporate Power and Authority................... 11
4.2 Authorization of Agreement.................................... 11
4.3 Effect of Agreement........................................... 11
4.4 Financing..................................................... 11
ARTICLE 5
COVENANTS WITH RESPECT TO
CONDUCT OF SELLER AND BUYER PRIOR TO CLOSING............... 12
5.1 Access........................................................ 12
5.2 Material Adverse Changes...................................... 12
5.3 Conduct of Business........................................... 12
5.4 Preservation of Business Prior to Delivery Date of Retained
Equipment..................................................... 13
5.5 Disposal of Inventory and Equipment Not Selected for Purchase. 14
ARTICLE 6
ADDITIONAL CONTINUING COVENANTS............................... 14
6.1 Permits and Approvals......................................... 14
6.2 Nondisclosure of Proprietary Data............................. 14
6.3 Access to Information......................................... 15
ARTICLE 7
CONDITIONS OF PURCHASE........................................ 15
7.1 General Conditions............................................ 15
7.2 Conditions to Obligations of Buyer............................ 15
7.3 Conditions to Obligations of Seller........................... 16
ARTICLE 8
INDEMNIFICATION............................................... 16
8.1 Obligations of Seller......................................... 16
8.2 Obligations of Buyer.......................................... 17
8.3 Notice and Defense............................................ 17
ARTICLE 9
GENERAL....................................................... 18
9.1 Amendments; Waivers........................................... 18
9.2 Schedules; Exhibits; Integration.............................. 18
9.3 Further Assurances............................................ 18
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9.4 Governing Law................................................. 19
9.5 Counterparts.................................................. 19
9.6 Remedies Cumulative........................................... 19
9.7 Notices....................................................... 19
9.8 Expenses and Attorneys Fees................................... 20
9.9 Survival...................................................... 21
9.10 Specific Performance; Return of Initial Payment............... 21
9.11 Bulk Transfer Laws............................................ 21
9.12 No Assignment................................................. 22
9.13 Headings...................................................... 22
ARTICLE 10
DEFINITIONS................................................... 22
iii
EXHIBITS
EXHIBIT A Assignment and Assumption Agreement
EXHIBIT B Xxxx of Sale
EXHIBIT C Form of Assignment of Intellectual Property Rights
EXHIBIT D Form of Non-Competition Agreement
EXHIBIT E Valiant Supply Agreement
EXHIBIT F The Business
SCHEDULES
1.1.1 - Names
1.1.3 - Equipment
1.1.4 - Intellectual Property
1.1.7 - Assigned Contracts
1.2 - Excluded Assets
2.2.1 - Inventory Price Calculation Procedure
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is entered into as of January 9, 1996,
among Kaynar Technologies Inc., a Delaware corporation ("BUYER"), Emhart
Industries, Inc., a Connecticut corporation ("SELLER") and Emhart, Inc., a
Delaware corporation ("INTELLECTUAL PROPERTY SELLER"). Capitalized terms used
herein without definition are defined in Article 10.
A G R E E M E N T
In consideration of the mutual promises contained herein and intending
to be legally bound, the parties agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS
1.1 SALE OF ASSETS. (a) Subject to the terms and conditions of this
Agreement Seller (and Intellectual Property Seller with respect to the
Intellectual Property owned by it) will sell, transfer and assign to Buyer, and
Buyer will purchase from Seller, all of Seller's right, title and interest in
and to the following assets (collectively, the "ASSETS"):
1.1.1 NAMES. All of Seller's right to use the name "KELOX" and
the other tradenames or product names set forth on SCHEDULE 1.1.1 (the
"NAMES");
1.1.2 INVENTORY. All raw materials, product samples, parts,
finished goods, and inventory owned by the Seller and relating principally
to the Business and existing as of the date hereof (the "INVENTORY"), but
solely to the extent that Buyer is required or elects to purchase such
Inventory pursuant to Section 2.2.1(B) hereof; provided that Buyer shall
not purchase any Inventory required by Seller to fill orders existing as of
the date hereof (or which may be placed following the date hereof and
before Closing) and delivery of which is due on or before 60 days following
Closing (the "CUSTOMER ORDER BACKLOG"), and, within 10 days of the date
hereof, Seller shall provide Buyer with a reasonably detailed written
description of the Inventory which Seller estimates it may need with
respect to the Customer Order Backlog;
1.1.3 EQUIPMENT. The machinery, equipment, furniture, supplies,
tools, designs, patterns, molds, office equipment and supplies, computer
hardware and other tangible property listed on SCHEDULE 1.1.3 annexed
hereto (such assets being collectively referred to as the "EQUIPMENT"),
but solely to the extent that Buyer elects to purchase such Equipment
pursuant to Section 2.2.1(C) hereof;
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1.1.4 INTELLECTUAL PROPERTY. All trademarks and trade names,
trademark and trade name registrations, service marks and service xxxx
registrations, copyright registrations, the applications therefor and the
licenses with respect thereto all as identified on SCHEDULE 1.1.4, and all
unregistered copyrights engineering reports and specifications, technical
information, trade secrets, secret processes, confidential information,
know-how, and other intellectual property of the Seller or Intellectual
Property Seller, as the case may be, used or held for use primarily in the
Business, together with the goodwill appurtenant to each of the foregoing
(collectively, the "INTELLECTUAL PROPERTY");
1.1.5 SALES MATERIALS. All of Seller's sales and purchase data
and information (including sales history), customer lists, pricing sheets,
product costs, supplier lists, mailing lists, catalogues, brochures, sales
literature, promotional material, advertising material, and other selling
material, in each case, pertaining to the Assets, the Assumed Liabilities
or otherwise to the Business (collectively, the "SALES MATERIALS");
1.1.6 BOOKS AND RECORDS. All books and records and all files,
documents and papers (including, but not limited to, those contained in
computerized storage media) principally pertaining to the Assets, the
Assumed Liabilities or otherwise to the Business, including, without
limitation, all manufacturing documentation to the extent not included in
the Intellectual Property (collectively, the "BOOKS AND RECORDS");
1.1.7 ASSIGNED CONTRACTS. All rights of Seller under all of the
Contracts (including the Valiant Supply Agreement), guarantees and
warranties from third parties, listed on SCHEDULE 1.1.7 annexed hereto (the
"ASSIGNED CONTRACTS");
(b) The Assets shall include all assets, rights and properties of the
type described above that are acquired by Seller between the date hereof and the
Closing principally in connection with the Business, and shall exclude the
assets listed on Schedule 1.2 annexed hereto and, subject to Article 5, any
assets, rights and properties that are disposed of, sold or consumed after the
date hereof in the ordinary course of business.
1.2 ACCOUNTS AND WORK-IN-PROCESS NOT TRANSFERRED. All accounts receivable
arising from sales prior to the Closing (other than accounts receivable arising
from the Assigned Contracts in respect of sales of products to be delivered
after 60 days following Closing) and from the Work-In-Process (as defined below)
even if the invoices relating to such sales have not been issued (collectively,
the "ACCOUNTS"), all work-in-process existing as of the Closing (the
"WORK-IN-PROCESS"), and the assets listed on SCHEDULE 1.2 annexed hereto are
specifically excluded from the Assets and shall be retained by Seller (the
"EXCLUDED ASSETS"), provided that Seller shall be solely responsible for
collecting the Accounts, for disposing of or completing the manufacture of the
Work-In-Process in accordance with Article 5 and for filling the Customer Order
Backlog. Buyer shall grant to Seller an irrevocable and fully-paid up license
to use any Intellectual Property acquired by Buyer on the Closing Date in
connection with Seller's disposition and
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completion of its manufacture of the Work-In-Process following Closing in the
manner contemplated by this Agreement.
ARTICLE 2
CLOSING/DELIVERY OF ASSETS/PURCHASE PRICE/
ASSUMPTION OF LIABILITIES
2.1 THE CLOSING.
The consummation of the Transactions (the "CLOSING") will take place
at the offices of O'Melveny & Xxxxx located at 000 Xxxxx Xxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, on the date specified in Section 2.2.2
below after the satisfaction or waiver of the conditions in Article 7.
2.2 SELECTION OF INVENTORY AND EQUIPMENT/PURCHASE PRICE/CLOSING DATE.
2.2.1 PURCHASE OF INVENTORY AND EQUIPMENT/DETERMINATION OF
INVENTORY PRICE AND EQUIPMENT PRICE. Seller and Buyer agree that the
obligation of Buyer to purchase any Inventory or Equipment, and the amount
payable by Buyer to Seller for the Inventory (the "INVENTORY PRICE") and
for the Equipment (the "EQUIPMENT PRICE") purchased by Buyer, shall be
determined in accordance with the procedures set forth in (A), (B) and (C)
below and such determinations shall be binding on Buyer and Seller for
purposes of determining the Inventory Price and the Equipment Price
components of the actual Purchase Price.
(A) INSPECTION OF INVENTORY AND EQUIPMENT. Pursuant to Section 5.1,
immediately following the date hereof, Seller shall permit Buyer and its
agents to have access to all of the Assets and shall provide Buyer all
financial information and records, in each case, only to the extent
necessary for Buyer to conduct a physical inspection, count and valuation
of the Inventory and the Equipment. On or before February 20, 1996, Buyer
and Seller shall complete a physical inspection, count and valuation of the
Inventory and the Equipment (the "PHYSICAL INSPECTION") and determine the
actual amount of the Inventory Price and the Equipment Price in accordance
with the terms and provisions of this Section 2.2.1. Notwithstanding
anything to the contrary contained herein, Buyer shall not be obligated to
purchase any Inventory or Equipment which is not in good condition and/or
repair, reasonable wear and tear excepted.
(B) PURCHASE OF INVENTORY/INVENTORY PRICE. During or within twenty
business days following the completion of the Physical Inspection, Buyer
and Seller shall determine the total amount of Inventory (other than
Inventory needed by Seller to fill the Customer Order Backlog) held by
Seller and available for purchase by Buyer (the "TOTAL INVENTORY"). Buyer
and Seller shall also determine, based on the sales history of Seller for
the 12-month period prior to the date of completion of the Physical
Inspection, the average amount of Inventory (by item) actually sold by
Seller in each month during such 12-month period (such average,
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the "PRIOR TWELVE-MONTH AVERAGE"); PROVIDED THAT, if, Buyer can demonstrate
in good faith that the Prior Twelve-Month Average is not indicative of
demand for the Inventory during the 24-month period following the date of
completion of the Physical Inspection, the Prior Twelve-Month Average
figure shall be adjusted downward to reflect the projected demand for the
Inventory during such 24-month period as mutually agreed upon between Buyer
and Seller (such adjusted average, the "ADJUSTED TWELVE-MONTH AVERAGE").
Based on the final determination by Buyer and Seller of the Total
Inventory, the Prior Twelve-Month Average and the Adjusted Twelve-Month
Average (if any), Buyer shall be obligated to purchase the lesser of (i)
the Total Inventory and (ii) an amount of Inventory (by item) equal to the
product of (x) the Prior Twelve-Month Average (if no adjustment is made to
the Prior Twelve-Month Average) or the Adjusted Twelve-Month Average (if an
adjustment is made to the Prior Twelve-Month Average) multiplied by (y)
twenty-four (24) (such product, the "TWENTY-FOUR MONTH INVENTORY"). The
Buyer shall have the option, but not the obligation, to purchase all or any
portion of the Total Inventory (if any) in excess of the Twenty-Four Month
Inventory. The Inventory Price for each item of Inventory required to be
purchased by Buyer pursuant to this Section 2.2.1 shall be determined in
the manner specified on SCHEDULE 2.2.1 annexed hereto.
(C) PURCHASE OF EQUIPMENT/EQUIPMENT PRICE. During or within twenty
business days following the Physical Inspection, Buyer shall provide Seller
a list of the particular items of Equipment Buyer elects to purchase and
Buyer shall be obligated to purchase only the items of Equipment set forth
on such list or as otherwise communicated in writing by Buyer to Seller.
The parties agree that the Equipment Price for each item of Equipment
selected by Buyer for purchase shall initially be equal to the "LIQUIDATION
VALUE" of such Equipment as set forth in that certain Appraisal, Heli-Coil
Fastening Systems Division, Shelter Xxxx Xxxx, Xxxxxxx, Xxxxxxxxxxx 00000,
dated March 29, 1994, prepared by Xxxxxx Xxxxxxx, Appraiser, of Xxxxxxx
National, Inc. (the "APPRAISAL"). The purchase price of any gages and
thread roll dies listed on Schedule 1.1.3 but not included in the Appraisal
and which Buyer elects to purchase shall be agreed upon between Buyer and
Seller in good faith prior to Closing. Any form tools, taps, round dies,
welding punches and nests and miscellaneous other items of Equipment listed
on Schedule 1.1.3 but not included in the Appraisal and which Buyer elects
to purchase shall be deemed to be part of the other Equipment purchased by
Buyer and shall be included in the Equipment Price payable by Buyer for
such other Equipment. The Liquidation Value of any item of Equipment may,
however, be adjusted downward by an amount agreed upon between Buyer and
Seller during the completion of the Physical Inspection if the Physical
Inspection reveals that the physical condition of such item of Equipment is
such that the appraised Liquidation Value of such Equipment is materially
higher than the true liquidation value of such Equipment as agreed upon
between Buyer and Seller; PROVIDED that, notwithstanding anything to the
contrary contained herein, Buyer shall not be obligated to purchase any
such Equipment if Buyer and Seller cannot agree on the true liquidation
value of such Equipment; provided further that
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Seller may but shall not be obligated to sell any item of Equipment at less
than its Liquidation Value.
2.2.2 CLOSING DATE AND PURCHASE PRICE.
(a) Following the date of this Agreement, Seller shall maintain the
Assets in its possession in accordance with Article V. The Closing shall occur
within 10 days after the date on which the Inventory Price and the Equipment
Price are conclusively determined pursuant to Section 2.2.1, or such later date
(which shall not be beyond February 29, 1996) as the parties may agree in the
event that the conditions to the parties' obligations to close set forth in
Article 7 have not been satisfied within 10 days after the date that the
Inventory Price and Equipment Price are determined. At Closing, all equitable,
legal and beneficial title incidental to the ownership of the Assets (other than
the Equipment) shall pass to Buyer, and Seller shall promptly initiate in
accordance with Buyer's instructions the delivery to Buyer (via commercially
reasonable means of transportation designated by Buyer to a location designated
by Buyer) of the Inventory, the Equipment (other than the Retained Equipment (as
defined below)), and the other Assets purchased by Buyer. Equitable, legal and
beneficial title to the Equipment (including the Retained Equipment) shall pass
to Buyer upon delivery of the Equipment to a location in California designated
by Buyer; provided that Buyer shall be entitled to receive any insurance
proceeds in the event the Equipment is damaged, lost or destroyed during
transit. Because Seller shall retain possession of the Assets after Closing,
the risk of loss incidental to the ownership of the Assets shall pass to Buyer
upon delivery of the Assets to the carrier who will transport the Assets to
Buyer. Seller shall be entitled to retain for a period of up to 30 days from
the date of the Closing, any Equipment Seller reasonably determines it will need
in order to complete its manufacture and delivery of Customer Order Backlog (the
"RETAINED EQUIPMENT"). Seller shall deliver to Buyer, via commercially
reasonable means of transportation designated by Buyer to a location designated
by Buyer, the Retained Equipment immediately after the end of such 30 day
period. Seller shall deliver the Retained Equipment to Buyer in substantially
the same condition as the Retained Equipment existed on the Closing Date.
Seller shall bear all costs of crating and packaging the Assets for delivery to
Buyer and Buyer shall bear all costs of shipping and taking delivery of the
Assets (other than any taxes payable by Seller under Section 3.12).
(b) In consideration of the purchase and sale of the Assets and the
promises of Seller contained in this Agreement and the other Transaction
Documents, Buyer agrees to make the following payments to Seller:
(i) Buyer shall pay to Seller $100,000 on the date of this
Agreement (the "INITIAL PAYMENT");
(ii) On the Closing Date, Buyer shall pay to Seller the
Inventory Price for the Inventory purchased by Buyer pursuant to
Sections 2.2.1 and 2.2.2;
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(iii) On the Closing Date, Buyer shall pay to Seller the
Equipment Price for the Equipment (other than the Retained Equipment)
purchased by Buyer pursuant to Sections 2.2.1 and 2.2.2;
(iv) On the date on which Seller notifies Buyer that the
Retained Equipment has been packed and crated for delivery to Buyer,
Buyer shall pay to Seller the Equipment Price for the Retained
Equipment being delivered to Buyer;
(v) On the Closing Date, Buyer shall pay to Seller the sum of
$175,000 (a portion of which shall be distributed by Seller to
Intellectual Property Seller as payment for the Intellectual property
being sold by Intellectual Property Seller) in consideration for the
remaining Assets purchased by Buyer and the Non-Competition Agreement.
For purposes of this Agreement, the "Purchase Price" shall mean the
sum of (i) the Initial Payment, (ii) the Inventory Price, (iii) the Equipment
Price, and (iv) the sum of $175,000 payable by Buyer to Seller with respect to
the remaining Assets and the Non-Competition Agreement.
2.2.3 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be
allocated among the Assets as follows:
Inventory: actual aggregate Inventory Price
Equipment: actual aggregate Equipment Price
Non Competition Agreement: $50,000
Names and Intellectual Property: $175,000
Remainder of Assets: $50,000
Buyer and Seller each agrees to file Internal Revenue Service Form
8594, and all federal, state, local and foreign tax returns, in accordance with
the above calculation and allocation of the Purchase Price.
2.3 PAYMENTS TO SELLER. On the date hereof, Buyer shall pay to Seller the
Initial Payment of $100,000 by wire transfer in immediately available funds to
Seller's account specified below. The Initial Payment shall be refundable to
Buyer in accordance with Section 9.10 of this Agreement. On the Closing date,
Buyer shall pay to Seller the Inventory Price for the Inventory purchased by
Buyer, the Equipment Price for the Equipment (other than the Retained Equipment)
purchased by Buyer and the $175,000 payment relating to the remaining Assets and
the Non-Competition Agreement by wire transfer to Seller's account specified
below. On the date specified in Section 2.2.2(b)(iv), Buyer shall pay to Seller
the Equipment Price for the Retained Equipment purchased by Buyer by wire
transfer in immediately available funds to Seller's account specified below
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or by certified check. For purposes of this Section 2.3, Seller's account
information is as follows:
Citibank New York
ABA 000000000
Account of: Emhart Industries Inc.
Account No: 4057-7082
2.4 INSTRUMENTS OF CONVEYANCE AND TRANSFER. On the Closing, Seller (and
Intellectual Property Seller in the case of clause (c) below) shall execute and
deliver or cause to be delivered to Buyer against Seller's receipt of the wire
transfer made in accordance with Section 2.3 at Closing (a) a Xxxx of Sale,
conveying all of the Assets other than the Retained Equipment (b) the Assignment
and Assumption Agreement, (c) the Assignment of Intellectual Property Rights and
specific assignments of each trademark and copyright included in the
Intellectual Property in a form recordable in the United States Patent and
Trademark Office, (d) the Non-Competition Agreement, (e) such other instrument
or instruments of transfer as shall be necessary or appropriate to transfer to
and vest in Buyer all of Seller's and Intellectual Property Seller's respective
rights, title and interests in and to the Assets, and (f) on or after the
Closing, such other documents as may be reasonably requested by Buyer in order
to carry out the Transactions. Seller and Intellectual Property Seller shall
use their reasonable best efforts to execute and deliver assignments of
Intellectual Property in a form recordable in each remaining jurisdiction
granting such rights on or before Closing; provided that if such assignments
cannot be delivered on or before Closing, Seller and Intellectual Property
Seller shall deliver such assignments promptly following Closing. Against the
receipt by Seller of the Equipment Price for the Retained Equipment, Seller
shall execute and deliver to Buyer a separate Xxxx of Sale conveying the
Retained Equipment.
2.5 ASSUMPTION OF CERTAIN LIABILITIES. On the Closing, Buyer shall
execute and deliver to Seller the Assignment and Assumption Agreement, pursuant
to which, subject to Section 2.6, Buyer shall, after the closing and subject to
Section 6.1, assume and agree to pay, perform and discharge when due, all the
liabilities and obligations of Seller arising solely out of the Valiant Supply
Agreement and the other Assigned Contracts (collectively, the "ASSUMED
LIABILITIES"), except any liability or obligation arising thereunder as a result
of a breach of any such Assigned Contract prior to Closing.
2.6 NON-ASSUMPTION OF LIABILITIES. Buyer is not assuming, and shall not
be deemed to have assumed any liability or obligation of Seller or any affiliate
of Seller, of any kind or nature, whether absolute, contingent, accrued or
otherwise, known or unknown, and whether arising before or after the date hereof
which is not set forth in Section 2.5 or is not otherwise expressly assumed in
any other provision of this Agreement.
2.7 SALES AND USE TAX. Buyer and Seller shall cooperate in preparing and
filing use and sales tax returns, if required, relating to, and Buyer shall pay
any and all sales, transfer or use tax due with regard to, the Transactions.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller (and Intellectual Property Seller with respect to Sections 3.1,
3.2, 3.3, 3.9 and 3.11) represents and warrants to Buyer as of the date hereof
and as of Closing as follows:
3.1 ORGANIZATION, CORPORATE POWER AND AUTHORITY. Each of Seller and
Intellectual Property Seller is a corporation duly organized, validly existing
and in good standing under the laws of the state in which it is incorporated and
is duly qualified to do business as a foreign corporation in the jurisdictions
in which Seller conducts the Business, except where the failure so to qualify
will not have a material adverse effect on the Assets or the Business. Seller
has all requisite corporate power and authority to own, operate and lease the
Assets, to conduct the Business, to execute and deliver the Transaction
Documents and to perform its obligations thereunder. Seller's principal
executive offices are located in the State of Connecticut and all of the
material tangible Assets are located in the County of Fairfield, State of
Connecticut.
3.2 AUTHORIZATION OF AGREEMENTS. The execution, delivery and performance
by Seller and Intellectual Property Seller of the Transaction Documents, and the
consummation by it of the Transactions, have been duly authorized by all
necessary corporate action by Seller and Intellectual Property Seller. This
Agreement has been, and each other Transaction Document will be at the date
thereof, duly executed and delivered by Seller and Intellectual Property Seller
and constitutes, or will, when executed and delivered, constitute, the legal,
valid and binding obligations of Seller, enforceable against Seller and
Intellectual Property Seller in accordance with their respective terms, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, and other similar laws and equitable principles relating to or
limiting creditors' rights generally.
3.3 EFFECT OF AGREEMENT. The execution, delivery and performance by
Seller and Intellectual Property Seller of the Transaction Documents, and the
consummation by each of them of the Transactions, will not violate the charter
documents or bylaws of Seller or Intellectual Property Seller or any law to
which Seller or Intellectual Property Seller is subject, or any judgment, award
or decree or any indenture, agreement or other instrument to which Seller or
Intellectual Property Seller is a party, or by which Seller or Intellectual
Property Seller or its Assets are bound, or conflict with, result in a breach of
or constitute (with due notice or lapse of time or both) a default under, any
such indenture, agreement or other instrument, or result in the creation or
imposition of any encumbrance or lien of any nature whatsoever upon any of its
Assets. No consents, approvals, authorizations, qualifications, waivers and
releases (collectively, the "APPROVALS"), including any Approvals of any
governmental entity, are required to be obtained by Seller to consummate the
transactions contemplated by this Agreement and the other Transaction Documents.
3.4 PERMITS. No Permit has been obtained by or issued to Seller or is
required in connection with the conduct of the Business.
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3.5 ASSIGNED CONTRACTS.
SCHEDULE 1.1.7 annexed hereto lists each Assigned Contract. Each
Assigned Contract is valid and subsisting; Seller has duly performed all its
obligations thereunder to the extent that such obligations to perform have
accrued; and no breach or default, alleged breach or default, or event which
would (with the passage of time, notice or both) constitute a breach or default
thereunder by Seller, or, to the best knowledge of Seller, any other party or
obligor with respect thereto, has occurred or as a result of the Transactions
will occur. True copies of the Assigned Contracts, including all amendments and
supplements thereto, have been delivered to Buyer. EXHIBIT E annexed hereto is
a true, complete and correct copy of the Valiant Supply Agreement.
3.6 SUFFICIENCY OF PROPERTY.
Seller has and shall transfer to Buyer on the date hereof good and
marketable title to, free of any encumbrances and liens, all of the Assets. The
Assets, together with the Inventory and Equipment not purchased by Buyer
pursuant to Section 2.2.1, constitute (A) all of the assets necessary for the
manufacture of the products of the Business in the manner in which such products
are currently manufactured by Seller, and (B) all of the assets of Seller used
to manufacture the products of the Business.
3.7 EQUIPMENT. SCHEDULE 1.1.3 annexed hereto is a schedule which is
complete and accurate in all material respects describing, and specifying the
location of, the Equipment. All Equipment taken as a whole and including any
Equipment not purchased by Buyer is adequate for the manufacture of the products
of the Business and is sufficient in quantity and quality for the manufacture of
the products of the Business in the manner in which such products are currently
manufactured. No Equipment is held under any lease, security agreement,
conditional sales contract, or other title retention or security arrangement or
is located other than in the possession of the Seller.
3.8 INVENTORY. Seller does not hold any Inventory on consignment and does
not have title to any Inventory in the possession of others other than
approximately $10,000 worth of raw materials held on consignment by Valiant Tool
Company, Inc.
3.9 LEGAL PROCEEDINGS.
There are no legal proceedings pending, or, to the best knowledge of
Seller, threatened, against or affecting Seller or the Assets that individually
or when aggregated with one or more other legal proceedings have or would
reasonably be expected to have a material adverse effect on the Business or on
Seller's ability to perform its obligations under the Transaction Documents.
3.10 COMPLIANCE WITH LAW.
Seller has conducted the Business in accordance with applicable laws.
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3.11 INTELLECTUAL PROPERTY.
SCHEDULE 1.1.4 annexed hereto lists any and all trademarks,
tradenames, and registered copyrights which presently are, or at any time in the
past 5 years have been used and is currently required by Seller or Intellectual
Property Seller in the operation of the Business and in which Seller or
Intellectual Property Seller has or has had an interest and the nature of such
interest. Except as set forth on SCHEDULE 1.1.4, to the knowledge of Seller or
Intellectual Property Seller, Seller or Intellectual Property Seller has
complete rights to and ownership of all Intellectual Property required for use
in connection with the Business, does not use any Intellectual Property by
license or consent of any other person or entity and the Intellectual Property
of Seller or Intellectual Property Seller used in connection with the Business
are fully assignable, free and clear of any encumbrances or liens. Neither
Seller nor Intellectual Property Seller has received any notice to the effect
(or is otherwise aware) that any Intellectual Property or any use by Seller or
Intellectual Property Seller thereof in connection with the Business conflicts
with or allegedly conflicts with or infringes the rights of any other person or
entity. Neither Seller nor Intellectual Property Seller owns or has a license
to use any registered or unregistered patents relating to the Business.
3.12 TAXES AND PRORATION.
(a) Seller has timely filed or will file (or, where permitted or
required, its respective direct or indirect parents have timely filed or will
file) all required tax returns and have paid all taxes of any kind applicable to
the Assets and the Business due for all periods ending on or before the Closing
Date. Seller has not elected to be treated as a consenting corporation under
Section 341(f) of the Code.
(b) Subject to Section 2.7, all ad valorem, property and similar
taxes in respect of the Assets and the Business attributable to the period prior
to the Closing, shall be prorated to the Closing, based on the latest available
applicable tax rates. Each party shall immediately pay on demand to the other
party the amount of any taxes paid or payable by the other party in excess of
the tax liability accruing to such party under this Sections 3.12 and Section
2.7.
3.13 INSURANCE.
Seller is currently insured with reputable insurers against all risks
with respect to the Assets and the Business normally insured against by
companies engaged in similar businesses. All insurance policies and bonds are
in full force and effect and shall remain in full force and effect until
delivery of the Assets to the carrier who will transport the Assets pursuant to
Section 2.2.2(a).
3.14 WORKER ADJUSTMENT AND RETRAINING NOTIFICATION.
Seller represents and warrants that Seller has complied with the
Worker Adjustment and Retraining Notification Act, 29 U.S.C. Sections 2101 ET.
SEQ. (the "WARN ACT") and has timely served all the notices required under the
WARN Act.
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Seller agrees to defend, indemnify and hold harmless Buyer from and against any
losses in connection with or arising out of or resulting from or incident to the
WARN Act.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as of the date hereof and as
of Closing as follows:
4.1 ORGANIZATION, CORPORATE POWER AND AUTHORITY. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
state in which it is incorporated. Buyer has all requisite corporate power and
authority to acquire, own, lease and operate the Assets, to conduct the Business
after the date hereof, to execute and deliver the Transaction Documents to which
it is a party and to perform its obligations thereunder.
4.2 AUTHORIZATION OF AGREEMENT. The execution, delivery and performance
by Buyer of the Transaction Documents to which it is a party, and the
consummation by it of the Transactions, have been duly authorized by all
necessary corporate action by Buyer. This Agreement has been, and each other
Transaction Document to which Buyer is a party will be at the date of delivery
thereof, duly executed and delivered by Buyer and constitute, or will, when
delivered, constitute, the legal, valid and binding obligations of Buyer,
enforceable against Buyer in accordance with their respective terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws and equitable principles relating to or
limiting creditors' rights generally.
4.3 EFFECT OF AGREEMENT. The execution, delivery and performance by Buyer
of the Transaction Documents to which it is a party, and the consummation by it
of the Transactions, will not violate the charter documents or bylaws of Buyer
or any law to which Buyer is subject, or any judgment, award or decree or any
material indenture, material agreement or other material instrument to which
Buyer is a party, or by which Buyer or its properties or assets are bound, or
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under, any such indenture, agreement or other
instrument, except to the extent the effect thereof will not be materially
adverse to Buyer's ability to fulfill its obligations under the Transaction
Documents to which it is a party.
4.4 FINANCING. Buyer has sufficient funds available to enable it to pay
the Purchase Price and otherwise satisfy its obligations under the terms of this
Agreement in a timely fashion.
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ARTICLE 5
COVENANTS WITH RESPECT TO
CONDUCT OF SELLER AND BUYER PRIOR TO CLOSING
5.1 ACCESS.
(a) From the date hereof to and including the Closing (the
"TRANSITION PERIOD"), Seller shall authorize and permit Buyer and its agents to
have access during such times as may be agreed to between Buyer and Seller, to
the Assets and all other information with respect to the Business as Buyer may
from time to time reasonably request, and to discuss the Business with Seller's
officers, employees, accountants, counsel, suppliers, and a representative
sampling of customers to be agreed upon between Buyer and Seller for the Buyer's
purpose of familiarizing itself with the Business, completing the Physical
Inspection obtaining any necessary Approvals for the Transactions. Prior to
Closing, Buyer shall not be entitled to make or retain any copies of books,
records or other materials and shall destroy any notes, analyses or other
written information it may produce based on or in connection with the access it
may be granted to Seller pursuant to this Agreement in the event that Closing
does not occur for any reason. Buyer shall arrange for the access provided
pursuant to this Section 5.1 (including the sampling of customers) only through
Xxxxxx XxXxx and any other person Xx. XxXxx may designate following the date of
this Agreement.
(b) Prior to Closing, Buyer and Buyer's partners, officers,
co-venturers, directors, officers, employees, affiliates, agents, advisors and
representatives (collectively, "BUYER'S REPRESENTATIVES") will keep all the
information (whether written or oral) pertaining to the Seller or the Seller's
Business which is furnished pursuant this Section 5.1 or has been furnished
prior to the date of this Agreement by the Seller or by any officer, employee,
affiliate, agent, advisor or representative of the Seller (collectively, the
"SELLER REPRESENTATIVES") confidential and will not without the Seller's prior
written consent, use or disclose any of such information in any manner
whatsoever. Nothing contained herein shall be construed to prevent the Buyer
from making disclosures that may be required by applicable law, regulation or
legal process. The terms of this Section 5.1 shall survive the termination of
this Agreement in the event that Closing does not occur.
5.2 MATERIAL ADVERSE CHANGES.
Seller will promptly notify Buyer of any event of which Seller obtains
knowledge which has had or might reasonably be expected to have a material
adverse effect on the Business or which if known as of the date hereof would
have been required to be disclosed to Buyer.
5.3 CONDUCT OF BUSINESS.
Prior to and for 30 days following Closing, Seller shall have the
right, power and authority to use the Assets and continue the Business solely
for the purpose of filling the Customer Order Backlog. To this end, Seller may
deliver to its customers
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any Inventory (for a period of 60 days following Closing) needed to fill the
Customer Order Backlog and may complete the build out of any Work-In-Process.
Any such Work-In-Process built out by Seller and constituting Inventory but not
needed by Seller to fill the Customer Order Backlog shall, if purchased by Buyer
pursuant to Section 2.2.1, be delivered to Buyer in accordance with Section
2.2.2(a). Seller covenants and agrees that it shall not without the prior
consent in writing of Buyer which may not be unreasonably withheld:
(a) conduct the Business in any manner except as provided in this
Article 5 and consistent with prudent industry practice;
(b) default in any of its obligations under any Assigned Contract or
take any action that would jeopardize the continuance of its material supplier
or customer relationships (it being understood that there cannot be any
assurance that material suppliers or customers will initiate relationships with
Buyer following Closing, PROVIDED that Seller shall reasonably cooperate with
Buyer to induce such material suppliers or customers to initiate and develop
relationships with Buyer following Closing);
(c) terminate, amend or fail to renew any existing insurance coverage
with respect to the Assets of the Business (it being understood that such
insurance coverage will not apply or be continued following delivery of the
Assets to the carrier who will transport the Assets to Buyer;
(d) sell, transfer, mortgage, encumber or otherwise dispose of any
Assets or any liabilities other than the Customer Order Backlog; or
(e) agree to or make any commitment to take any actions prohibited by
this Section 5.3.
5.4 PRESERVATION OF BUSINESS PRIOR TO DELIVERY DATE OF RETAINED EQUIPMENT.
Prior to the date of delivery of the Retained Equipment, Seller will
use its reasonable efforts to preserve the Business and to preserve the goodwill
of customers, suppliers and others having business relations with Seller and
shall fully cooperate with Buyer in making a smooth transition of the Assets and
the Business to the Buyer (it being understood that the terms of this covenant
shall not require Seller to pay money to any third parties other than in the
ordinary course of business and consistent with past practices).
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5.5 DISPOSAL OF INVENTORY AND EQUIPMENT NOT SELECTED FOR PURCHASE.
Any Inventory or Equipment not selected for purchase by Buyer pursuant
to Section 2.2.1 may be disposed of by Seller in any manner that Seller deems
appropriate and nothing contained herein (including the Non-Competition
Agreement) shall prevent Seller from selling or transferring such Inventory or
Equipment to a competitor of Seller or Buyer or any vendor, broker or other
person connected to or engaged in the Business or a similar business.
ARTICLE 6
ADDITIONAL CONTINUING COVENANTS
6.1 PERMITS AND APPROVALS.
Seller and Buyer each agree to cooperate and use their reasonable best
efforts to obtain all Approvals and Permits (if any) not obtained on or before
Closing pursuant to Section 7.2 that may be necessary or which may be reasonably
requested by Buyer to consummate the Transactions. Notwithstanding anything
herein to the contrary, the parties hereto acknowledge and agree that, Seller
will not assign to Buyer any Assigned Contract that by its terms requires, prior
to such assignment, the consent of any other contracting party thereto unless
such consent has been obtained prior to the Closing. With respect to each such
Assigned Contract not assigned at Closing, following Closing Seller shall
continue to deal with the other contracting parties to such Assigned Contract as
the prime contracting party, and Seller shall use its reasonable best efforts to
obtain the consent of all required parties to the assignment of such Assigned
Contract. Such Assigned Contract shall be promptly assigned by Seller to Buyer
after receipt of such consent after Closing. Notwithstanding the absence of any
such consent, Buyer shall be entitled to the benefits of such Assigned Contract
accruing after Closing; Buyer agrees to perform all of the obligations of Seller
to be performed under such Assigned Contract (other than any performance arising
as a result of a breach by Seller) after the Closing. Seller shall pay all
costs and expenses incurred by Buyer or Seller in obtaining any consents to the
assignment of the Assigned Contracts pursuant to this Section 6.1. Buyer shall
pay all costs and expenses incurred by Buyer or Seller in obtaining any Permits
or other Approvals (other than consents to the Assigned Contracts) pursuant to
this Section 6.1. Nothing contained in this Agreement shall require the Seller
to pay money to any third party in order to obtain any consent to the assignment
of an Assigned Contract.
6.2 NONDISCLOSURE OF PROPRIETARY DATA.
Neither Seller nor any of its representatives or affiliates shall, at
any time, make use of, divulge or otherwise disclose, directly or indirectly,
any trade secret or other proprietary data (including, but not limited to, any
customer list, record or financial information) concerning the Business;
PROVIDED that Seller may make use of any trade secret or other proprietary data
concerning the Business to the extent necessary to complete the build out of the
Work-In-Process as contemplated in Sections 1.2 and 5.3.
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In addition, neither Seller nor any of its representatives or affiliates shall
make use of, divulge or otherwise disclose, directly or indirectly, to any
person or entity other than Buyer, any confidential information concerning the
Business. The terms of this covenant shall not apply with respect to trade
secrets, proprietary data or information which (a) is or becomes generally
available to the public other than as a result of a disclosure by the Seller or
the Seller Representatives; or (b) becomes available to the Seller on a
nonconfidential basis from a source other than the Buyer or the Buyer
Representatives, provided, that the Seller has no reason to believe after due
inquiry with Buyer that such source is not entitled to disclose the information
to it or a nonconfidential basis. Furthermore, nothing contained herein shall
be construed to prevent the Seller from making disclosures that may be required
by applicable law, regulation or legal process.
6.3 ACCESS TO INFORMATION.
Buyer shall, from and after the Closing, not destroy or dispose of the
books and records of the Business relating to any period prior to the Closing
for a period of 7 years after the Closing without giving adequate notice to the
Seller of such pending disposal and offering Seller the right to copy or take
possession of such records. Buyer shall give Seller and Seller's employees,
counsel and accountants, full access upon reasonable notice during such times as
may be agreed to between Buyer and Seller, to all such records for any proper
purpose including, without limitation, in connection with the preparation of any
tax returns or financial statements or in connection with any judicial, quasi
judicial, administrative, tax audit or arbitration proceeding. Seller shall
arrange for the access provided pursuant to this Section 6.3 only through Xxxxx
Xxxxxx or another authorized officer of Buyer.
ARTICLE 7
CONDITIONS OF PURCHASE
7.1 GENERAL CONDITIONS.
The obligations of the parties to effect the Closing shall be subject
to the following condition:
(a) NO ORDERS; LEGAL PROCEEDINGS. No law or order shall have been
enacted, entered, issued, promulgated or enforced by any governmental entity,
nor shall any legal proceedings have been instituted and remain pending or have
been threatened and remain which prohibits or restricts or would (if successful)
prohibit or restrict the Transactions.
7.2 CONDITIONS TO OBLIGATIONS OF BUYER.
The obligations of Buyer to effect the Closing are subject to the
satisfaction or written waiver of each of the following conditions (it being
understood that a waiver of a Closing condition shall also constitute a waiver
of any post-Closing remedy (other than as provided in Section 9.8) that may
otherwise be available to Buyer in respect of the matter or matters which cause
the Closing condition not to be satisfied):
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(a) REPRESENTATIONS AND WARRANTIES AND COVENANTS OF SELLER. The
representations and warranties of Seller herein contained shall be true in all
material respects as of the Closing; Seller shall have in all material respects
performed all obligations and complied with all covenants and conditions
required by this Agreement to be performed or complied with by it at or prior to
the Closing, and Seller shall have delivered to Buyer a certificate of Seller in
form and substance satisfactory to Buyer, dated as of the Closing and signed by
its Chief Executive Officer or Chief Financial Officer to such effect.
(b) Buyer shall have received certified copies of resolutions passed
by the respective Boards of Directors of Seller and Intellectual Property Seller
authorizing and approving the Transactions and the Transaction Documents.
7.3 CONDITIONS TO OBLIGATIONS OF SELLER.
The obligations of Seller to effect the Closing are subject, at the
option of Seller, to the satisfaction or written waiver of the following
condition (it being understood that a waiver of a Closing condition shall also
constitute a waiver of any post-Closing remedy (other than as provided in
Section 9.8) that may otherwise be available to Seller in respect of the matter
or matters which cause the Closing condition not to be satisfied):
(a) REPRESENTATIONS AND WARRANTIES OF BUYER. The representations and
warranties of Buyer herein contained shall be true in all material respects as
of the Closing; Buyer shall have in all material respects performed all
obligations and complied with all covenants and conditions required by this
Agreement to be performed or complied with by it at or prior to the Closing, and
Buyer shall have delivered to Seller a certificate of Buyer in form and
substance satisfactory to Seller, dated as of the Closing and signed by its
Chief Executive Officer or Chief Financial Officer, to such effect.
ARTICLE 8
INDEMNIFICATION
8.1 OBLIGATIONS OF SELLER.
Following Closing, Seller agrees to indemnify and hold harmless Buyer
and its directors, officers, employees, affiliates, agents and assigns during
the periods specified below from and against any and all losses or damages,
directly or indirectly, as a result of, or based upon or arising from:
(a) any breach of any representation, warranty or covenant of Seller
made in this Agreement, for the periods covered by Section 9.9;
(b) any claims (other than those arising under (a), (c) or (d) of
this Section 8.1) made after the Closing to the extent and only to the extent
that such claims relate (i) to the conduct of the Business before Closing or
(ii) to the build out of the
16
Work-In-Process and the filling of the Customer Order Backlog as contemplated in
Sections 1.2 and 5.3, in each case, indefinitely;
(c) any products liability claims made prior to or after Closing to
the extent and only to the extent that such claims relate to products
manufactured and sold (even if not delivered) by Seller in the conduct of its
Business prior to Closing, indefinitely; or
(d) any recall of products effective on or after the date hereof
mandated as to Buyer by any federal, state, local or foreign governmental
authority to the extent and only to the extent that such recall relates to
products manufactured and sold (even if not delivered) by Seller prior to
Closing, indefinitely.
8.2 OBLIGATIONS OF BUYER.
Following Closing, Buyer agrees to indemnify and hold harmless Seller
and its directors, officers, employees, affiliates, agents and assigns during
the periods set forth below from and against any and all losses or damages,
directly or indirectly, as a result of, or based upon or arising from:
(a) any breach of any representation, warranty or covenant of Seller
made in this Agreement, for the periods covered by Section 9.9;
(b) any claims (other than those arising under (a), (c) or (d) of
this Section 8.2) made after the Closing with respect to the conduct of the
Business by Buyer following the Closing, indefinitely;
(c) any products liability claims made after Closing to the extent
and only to the extent that such claims relate to the products manufactured and
sold by Buyer in the conduct of the Business after the Closing, indefinitely;
(d) any recall of products effective on or after Closing mandated as
to Seller by any federal, state, local or foreign governmental authority to the
extent and only to the extent that such recall relates to products manufactured
and sold by Buyer after Closing, indefinitely; or
(e) any failure of Buyer to satisfy, perform, pay and discharge the
Assumed Liabilities to the extent assumed by Buyer pursuant to Section 2.5 and
the Assignment and Assumption Agreement.
8.3 NOTICE AND DEFENSE.
If Buyer or Seller is seeking indemnification (the party seeking
indemnification to be referred to as the "INDEMNIFIED PARTY") and desires to
make a claim against the other party for indemnification (the "INDEMNIFYING
PARTY") under this Article 8, the Indemnified Party shall, within 30 days after
the Indemnified Party becomes aware of a claim by notice or knowledge, notify
the Indemnifying Party in
17
writing of any claim or demand as to which the Indemnified Party is entitled to
claim indemnification, the section under this Agreement with respect to which
such claim is being made and, to the extent known, the amount and circumstances
surrounding such claim. In the event the claim is a third party claim against
an Indemnified Party or involves a claim by or liability involving a
governmental authority, the Indemnifying Party shall have the right to employ
counsel of its choice to defend any such claim or demand; provided, however,
that (i) the Indemnified Party is kept fully informed of all developments and is
furnished copies of all relevant papers; (ii) the Indemnifying Party diligently
prosecutes the defense; and (iii) the Indemnified Party shall have the right to
participate, at its own undertaking and through counsel selected by it, in the
defense of any such claim. If the conditions of the foregoing proviso are not
met, or if the Indemnifying Party chooses not to control the defense, the
Indemnified Party shall assume and control the defense of such third party claim
or suit at the expense of the Indemnifying Party. The Indemnifying Party, or,
if the conditions to the foregoing proviso are not met, the Indemnified Party,
shall have the right to pay, compromise or settle any such third party claim
with the consent of the Indemnifying Party, which consent shall not be
unreasonably withheld.
ARTICLE 9
GENERAL
9.1 AMENDMENTS; WAIVERS.
This Agreement and any schedule or exhibit attached hereto may be
amended only by agreement in writing of all parties. No waiver of any provision
nor consent to any exception to the terms of this Agreement shall be effective
unless in writing and signed by the party to be bound and then only to the
specific purpose, extent and instance so provided.
9.2 SCHEDULES; EXHIBITS; INTEGRATION.
Each schedule and exhibit delivered pursuant to the terms of this
Agreement shall be in writing and shall constitute a part of this Agreement,
although schedules need not be attached to each copy of this Agreement. This
Agreement, together with such schedules and exhibits, constitutes the entire
agreement among the parties pertaining to the subject matter hereof and
supersedes all prior agreements and understandings of the parties in connection
therewith.
9.3 FURTHER ASSURANCES.
Each party shall execute and deliver both before and after the date
hereof such further certificates, agreements and other documents and take such
other actions as the other party may reasonably request to consummate or
implement the transactions contemplated hereby or to evidence such events or
matters. In furtherance and not in limitation of the foregoing, Seller and
Intellectual Property Seller shall execute and deliver any and all documents and
perform any actions (including the payment of money
18
to third parties) necessary to release and terminate any liens of any type
whatsoever (other than liens created by Buyer) that may exist on any of the
Assets purchased by Buyer. Seller and Intellectual Property Seller shall also
execute and deliver any and all documents and perform any actions (other than
the payment of recording and filing fees) necessary to make any filings with any
governmental entity or office (foreign or domestic) necessary to record and/or
perfect Buyer's interests in the Assets.
9.4 GOVERNING LAW.
This Agreement and the legal relations between the parties shall be
governed by and construed in accordance with the laws of the State of California
applicable to contracts made and performed in such State and without regard to
conflicts of law doctrines except to the extent that certain matters are
preempted by federal law or are governed by the law of the jurisdiction of
incorporation of the respective parties.
9.5 COUNTERPARTS.
This Agreement and any amendment hereto or any other agreement (or
document) delivered pursuant hereto may be executed in one or more counterparts
and by different parties in separate counterparts. All of such counterparts
shall constitute one and the same agreement (or other document) and shall become
effective (unless otherwise provided therein) when one or more counterparts have
been signed by each party and delivered to the other party.
9.6 REMEDIES CUMULATIVE.
All rights and remedies existing under this Agreement are cumulative
to, and not exclusive of, any rights or remedies otherwise available. In
addition, Article 9 shall not be deemed to preclude or otherwise limit in any
way the exercise of any other rights or pursuit of other remedies for the breach
of this Agreement or with respect to any misrepresentation.
9.7 NOTICES.
Any notice or other communication hereunder must be given in writing
and (a) delivered in person, (b) transmitted by telex, telefax or
telecommunications mechanism, provided that any notice so given is also mailed
as provided in clause (c), or (c) mailed by certified or registered mail,
postage prepaid, receipt requested as follows:
IF TO BUYER, ADDRESSED TO:
Kaynar Technologies Inc.
000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
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WITH A COPY TO:
O'Melveny & Xxxxx
000 Xxxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: C. Xxxxx Xxxxx and
Xxxxxx X. Xxx
IF TO SELLER OR INTELLECTUAL PROPERTY SELLER, ADDRESSED TO:
Emhart Industries, Inc.
000 Xxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx XxXxx
WITH A COPY TO:
Xxxxxxx X. Xxxxxx, Esquire
Vice President and General Counsel
The Black & Xxxxxx Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
AND
Xxxx X. Xxxxxx, Esquire
Miles & Stockbridge, a Professional Corporation
00 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
or to such other address or to such other person as either party shall have last
designated by such notice to the other party. Each such notice or other
communication shall be effective (i) if given by telecommunication, when
transmitted to the applicable number so specified in (or pursuant to) this
Section 9.7 and an appropriate answerback is received, (ii) if given by mail,
three days after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iii) if given by any other means,
when actually received at such address.
9.8 EXPENSES AND ATTORNEYS FEES.
Seller and Buyer shall each pay their own expenses incident to the
negotiation, preparation and performance of this Agreement and the transactions
contemplated hereby, including but not limited to the fees, expenses and
disbursements
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of their respective accountants and counsel; provided that Seller shall pay or
reimburse Buyer for any and all fees and disbursements of Buyer's counsel if
Closing does not occur as a result of Seller's refusal to consummate the Closing
despite the fact that all of the conditions to Closing set forth in Sections 7.1
and 7.3 have been satisfied. Buyer shall pay or reimburse Seller for any and
all fees and expenses of Seller's counsel if the Closing does not occur due to
Buyer's refusal to consummate the Closing despite the fact that all of the
conditions to Closing set forth in Sections 7.1 and 7.2 have been satisfied. In
the event of any legal proceedings for the breach of this Agreement by any
party, the prevailing party shall be entitled to reasonable attorney's fees,
costs and expenses incurred in such legal proceedings.
9.9 SURVIVAL.
The representations and warranties and agreements contained in or made
pursuant to this Agreement shall expire on the first anniversary of the Closing
except that (i) the representations and warranties contained in Sections 3.1,
3.2, 3.3, 4.1, 4.2 and 4.3 shall survive the Closing and shall remain in full
force and effect indefinitely, (ii) the agreements made in Article 8 shall
continue for the periods set forth therein, (iii) this Section 9.9 shall be
continuing indefinitely and (iv) the provisions of Section 6.3 shall continue to
the periods specified therein.
9.10 SPECIFIC PERFORMANCE; RETURN OF INITIAL PAYMENT.
Seller acknowledges that, in view of the uniqueness of the Business
and the transactions contemplated by this Agreement, Buyer would not have an
adequate remedy at law for money damages in the event that this Agreement has
not been performed in accordance with its terms, and therefore agrees that Buyer
shall be entitled to specific enforcement of the terms hereof in addition to any
other remedy to which it may be entitled, at law or in equity. Notwithstanding
anything contained herein to the contrary, in the event that Closing does not
occur because the conditions to Buyer's obligations to proceed to Closing set
forth in Sections 7.1 and 7.2 have not been satisfied, or because Seller refuses
to consummate the Closing even though the conditions to Seller's obligations to
proceed to Closing set forth in Sections 7.1 and 7.3 have been satisfied, Seller
shall immediately refund the Initial Payment by wire transfer in immediately
available funds to Buyer and in that event Buyer shall not be entitled to any
other remedy (other than as provided in Section 9.8) or to otherwise proceed
against Seller.
9.11 BULK TRANSFER LAWS.
Seller and Buyer hereby waive compliance with any applicable bulk
transfer laws, including, but not limited to, the bulk transfer provisions of
the Uniform Commercial Code of any state, or any similar statute, with respect
to the transactions contemplated hereby. Seller agrees to indemnify, defend and
hold harmless Buyer from any and all losses and damages resulting from the
assertion of claims made against the Assets sold hereunder or against Buyer by
creditors of Seller under any bulk sales law with respect to liabilities and
obligations of Seller not assumed by Buyer hereunder.
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9.12 NO ASSIGNMENT.
Neither this Agreement nor any rights or obligations under it are
assignable by either party without the prior written consent of the other party.
9.13 HEADINGS.
The descriptive headings of the Articles, Sections and subsections of
this Agreement are for convenience only and do not constitute a part of this
Agreement.
ARTICLE 10
DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires,
(a) the terms defined in this Article 11 have the meanings assigned
to them in this Article 11 and include the plural as well as the singular,
(b) all accounting terms not otherwise defined herein have the
meanings assigned under GAAP,
(c) all references in this Agreement to designated "Articles,"
"Sections" and other subdivisions are to the designated Articles, Sections and
other subdivisions of the body of this Agreement,
(d) pronouns of either gender or neuter shall include, as
appropriate, the other pronoun forms, and
(e) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.
As used in this Agreement and the Exhibits and Schedules delivered
pursuant to this Agreement, the following definitions shall apply.
"ASSIGNMENT OF INTELLECTUAL PROPERTY RIGHTS" means an Assignment of
Intellectual Property Rights substantially in the form of Exhibit C hereto.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" means an Assignment and
Assumption Agreement substantially in the form of Exhibit A hereto.
"XXXX OF SALE" means a Xxxx of Sale substantially in the form of
Exhibit B hereto.
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"BUSINESS" means the Seller's business of manufacturing, producing and
selling the "KELOX" product line of products as identified on Exhibit F annexed
hereto.
"CLOSING" has the meaning given thereto in Section 2.1.
"CONTRACT" means any contract, agreement, lease, license, sales order,
purchase order, or other legally binding commitment or instrument, whether or
not in writing.
"CUSTOMER ORDER BACKLOG" has the meaning given thereto in Section
1.1.2.
"GAAP" means generally accepted accounting principles in the United
States, as in effect on the date hereof.
"NON-COMPETITION AGREEMENT" means the Non-Competition Agreement
substantially in the form of Exhibit D hereto.
"PERMIT" means any license, permit, franchise, certificate of
authority, or order, or any waiver of the foregoing, required to be issued by
any governmental entity in connection with the Assets or the Business.
"TRANSACTION DOCUMENTS" means this Agreement, the Assignment and
Assumption Agreement, the Xxxx of Sale, Non-Competition Agreement and the
Assignment of Intellectual Property.
"TRANSACTIONS" means the transactions contemplated by the Transaction
Documents.
"VALIANT SUPPLY AGREEMENT" means the agreement attached hereto as
Exhibit E.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officers as of the day and year
first above written.
BUYER
KAYNAR TECHNOLOGIES INC.
By: /s/ Xxxxx X. Xxxxxx
--------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
SELLER
EMHART INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
INTELLECTUAL PROPERTY SELLER
EMHART, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
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