ASSET PURCHASE AGREEMENT
Exhibit
10.28
This
Asset Purchase Agreement is entered into between Delta Star Electric, Inc.,
an
Indiana corporation with its principal offices at 0000 X. Xxxxxx Xxxxxx
(“Seller”); TransTech Electric, Inc., an Indiana corporation (“TransTech”); and
Magnetech Industrial Services, Inc., an Indiana corporation (“MIS”). TransTech
and MIS are purchasing the assets of the Construction/Service division and
the
Motor/Magnet division, respectively, of Seller, and shall collectively be
referred to as “Buyer.” Unless specified otherwise, references to “Buyer” in
this Agreement shall be construed to include TransTech and MIS, as opposed
to
TransTech or MIS. The assets being purchased by Buyer constitute all or
substantially all of the assets owned by Seller.
SELLER
AND BUYER NOW AGREE AS FOLLOWS:
1. Sale
of
Assets of the Construction/Service Division. On the Closing Date (as later
defined), Seller agrees to sell and TransTech agrees to purchase the following
property and rights of the Construction/Service division:
(a) Operational
Assets.
All of
Seller's interest in equipment, machinery, fixtures, vehicles, and tools
presently being used in the operation of that division.
(b) Inventory.
Any
inventory of the division, which is described as all existing finished products,
work in process and raw materials
(c) Name
and Goodwill.
An
undivided one-half interest in all of Seller's rights, title and interest
in its
business goodwill, service names, service marks, technology, know-how,
processes, trade secrets, inventions, proprietary data, research and development
data, computer software programs and other intangible property, including
all
interest in the name “Delta Star” and all goodwill associated with that name;
Seller's rights, title and interest in its telephone and telecopier numbers;
and
all of Seller's present and former customer and agent lists, supply lists,
advertising materials, price lists, sales and promotional literature,
correspondence files, sales and purchase records, displays, manuals, data,
lists
of present and former suppliers and all other files or records related to
the
operation of Seller's business.
(d) Contracts.
To the
extent assumed by TransTech, all of Seller's rights, title and interest in
and
to its contracts and agreements with customers and service providers related
to
this division.
(e) Liabilities
and Obligations of Seller related to the division.
TransTech is accepting none of the Seller's liabilities or obligations, except
for those identified on Schedule 1(e). Except for the Assumed Obligations,
TransTech shall not assume, nor shall TransTech be responsible for, any debts,
liabilities, obligations, or commitments of Seller whatsoever, whether actual,
absolute,
accrued,
fixed, contingent, asserted or unasserted, including without limitation:
(i) any
of Seller's accounts payable or other obligations or claims payable; (ii)
any of
Seller's liabilities relating to any federal, state, local or other governmental
taxes, fees, penalties or related charges; (iii) any liabilities or obligations
arising under any contract or agreement to which Seller is a party or relating
to any violation or breach of any thereof; (iv) any liabilities of Seller
arising in connection with any employees of Seller as a result of Seller's
employment or discharge of any such persons; (v) any liabilities arising
from
the failure of Seller to comply with the rules and requirements of employee
pension or benefit plan provisions; or (vi) any fines, civil penalties or
other
liabilities based upon or arising out of or based upon any claim, action,
suit,
litigation or proceeding to which Seller is or may be named a party, or relating
to the business of Seller.
2. Sale
of Assets of the Motor/Magnet Division.
On the
Closing Date, Seller agrees to sell and MIS agrees to purchase the following
property and rights of the Motor/Magnet division:
(a) Operational
Assets.
All of
Seller's interest in equipment, machinery, furniture, communications equipment,
fixtures, vehicles, tools, computer hardware, computer software and office
supplies presently being used in the operation of Seller's business, except
for
those assets described in paragraph 1(a) (together with the assets listed
in
paragraph 1(a), the “Operational Assets”).
(b) Inventory.
All
inventory of the division, which is described as all existing finished products,
work in process and raw materials (together with the assets listed in paragraph
1(b), the “Inventory”) existing on the Closing Date except that work in process
listed on attached Schedule 2(b) (the “Excepted Work in Process.”) With regard
to the Excepted Work in Process, Buyers and Seller agree that the receivable
created upon shipment and payment of the respective Excepted Work in Process
will be split between Seller and Buyers as follows: the respective parties
will
be reimbursed for the cost of the labor and material invested in the project
with the remaining balance or profit of the project split 50/50 between the
Seller and the Buyers.
(c) Name
and Goodwill.
An
undivided one-half interest in all of Seller's rights, title and interest
in its
business goodwill, service names, service marks, technology, know-how,
processes, trade secrets, inventions, proprietary data, research and development
data, computer software programs and other intangible property, including
all
interest in the name “Delta Star” and all goodwill associated with that name;
Seller's rights, title and interest in its telephone and telecopier numbers;
and
all of Seller's present and former customer and agent lists, supply lists,
advertising materials, price lists, sales and promotional literature,
correspondence files, sales and purchase records, displays, manuals, data,
lists
of present and former suppliers and all other files or records related to
the
operation of Seller's business.
-2-
(d) Contracts.
To the
extent assumed by MIS, all of Seller's rights, title and interest in and
to its
contracts and agreements with customers and service providers related to
this
division.
(e) Other
Assets.
All
other of Seller's assets which are useful or necessary to conduct the business
of both the Construction/Service division and this division (either
independently or jointly) other than those listed on Schedule 2(e) (“Excluded
Assets”).
(f) Liabilities
and Obligations of Seller related to the division.
MIS is
accepting none of the Seller's liabilities or obligations, except for those
identified on Schedule 2(t) (together with the liabilities identified on
Schedule 1(e), the “Assumed Obligations”). Except for the Assumed Obligations,
MIS shall not assume, nor shall MIS be responsible for, any debts, liabilities,
obligations, or commitments of Seller whatsoever, whether actual, absolute,
accrued, fixed, contingent, asserted or unasserted, including without
limitation: (i) any of Seller's accounts payable or other obligations or
claims
payable; (ii) any of Seller's liabilities relating to any federal, state,
local
or other governmental taxes, fees, penalties or related charges; (iii) any
liabilities or obligations arising under any contract or agreement to which
Seller is a party or relating to any violation or breach of any thereof;
(iv)
any liabilities of Seller arising in connection with any employees of Seller
as
a result of Seller's employment or discharge of any such persons; (v) any
liabilities arising from the failure of Seller to comply with the rules and
requirements of employee pension or benefit plan provisions; or (vi) any
fines,
civil penalties or other liabilities based upon or arising out of or based
upon
any claim, action, suit, litigation or proceeding to which Seller is or may
be
named a party, or relating to the business of Seller.
The
assets being purchased by TransTech and by MIS shall collectively be referred
to
as the “Assets.”
3. Purchase
Price.
(a) Construction/Service
Division.
(i) Base
Price.
On the
Closing Date, TransTech will deliver to Seller the total purchase price of
One
Hundred Twenty Thousand Dollars ($120;000) in cash, certified or bank check
or
by transfer of immediately available federal funds, plus a “rental” payment of
Two Thousand Six Hundred Seventeen Dollars ($2,617) per month from March
1, 2000
through the Closing Date (“TransTech Purchase Price”). The TransTech Purchase
Price shall be reduced by: 1) the dollar amount which TransTech pays to the
secured creditors of Seller in order for TransTech to receive clear title
to the
Assets it is purchasing; and 2) the amount of Assumed Obligations by
TransTech.
(ii) Incentive
Payment.
In
addition to the TransTech Purchase Price, Seller shall be entitled, for the
calendar years 2000 and 2001, to an incentive payment of one-half of the
annual
gross sales for Service Work (as later defined) in excess of Three Hundred
Thirty Thousand Dollars
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($330,000)
to the following customers (each an “Incentive Customer”): Memorial Hospital,
St. Xxxxxx County Airport, Steel Warehouse, Total Enterprises, Graphix Unlimited
and Mossberg (“Incentive Payment”). The Incentive Payment shall be based on
Service Work actually invoiced to an Incentive Customer during the applicable
calendar year and subsequently paid. The term “Service Work” shall include any
work performed by TransTech or MIS for the Incentive Customers which work
(or
natural grouping of work) is less than Forty Thousand Dollars ($40,000).
The
maximum annual amount of the Incentive Payment shall be Seventy-five Thousand
Dollars ($75,000). As an example, if the total invoices for Service Work
to the
Incentive Customers during calendar year 2000 equal $400,000 and payment
is
received for such amount, then the Incentive Payment shall be $35,000. The
Incentive Payment shall be paid no later than April 1 following the applicable
calendar year-end for Service Work invoiced to an Incentive Customer during
the
applicable calendar year and subsequently paid. Partial payments of the
Incentive Payment earned after such date shall be paid within thirty (30)
days
after receipt of payment from Incentive Customer.
(b) Motor/Magnet
Division.
On the
Closing Date, MIS will deliver to Seller a purchase price of Four Hundred
Thousand Dollars ($400,000), reduced by: 1) the amount the Buyers have expended
for the benefit of Seller's business prior to the Closing; 2) the dollar
amount
which MIS pays to the secured creditors of Seller in order for MIS to receive
clear title to the Assets it is purchasing (or, if MIS assumes the position
of
Seller's secured creditors, the amount necessary to satisfy the secured debt
in
full); and 3) the amount of Assumed Obligations by MIS (“MIS Purchase Price”).
Any balance remaining on the MIS Purchase Price will be paid by delivery
of a
promissory note from MIS to Seller, payable in two equal annual principal
installments (“Note”) beginning on the first anniversary date of the Closing
Date. Provided payments are timely made on the Note, no interest shall accrue
on
that obligation. The principal balance of the promissory note shall be subject
to reduction pursuant to the provisions of paragraph 14.
4. Closing
Date.
The
closing of this transaction (“Closing”) shall take place on or before August 10,
2000 or at such other date as may be agreed to by TransTech, MIS and Seller
(“Closing Date”).
5. Conduct
of Business Pending Closing.
Pending
Closing, Seller covenants as follows:
(a) Seller
will conduct its affairs (including purchase of inventory and supplies) only
in
the ordinary course of business. Any substantial deviation from the normal
course of business may be undertaken only with the prior written consent
of
Buyer;
(b) Seller
will use its best efforts to preserve its business organization and to maintain
for Buyer the goodwill of suppliers, customers and others having business
relationships with Seller;
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(c) Seller
will allow Buyer and its authorized representatives reasonable access during
normal business hours, upon reasonable notice to Seller, at a time and place
mutually agreed, to all books and records of Seller for the purposes of
completing Buyer's due diligence requirements;
(d) As
of the
Closing Date, the value of the Assets shall not have been materially affected
in
any adverse manner by reason of any loss, destruction or physical damage,
whether or not insured. If the Assets have been materially adversely affected
in
value, Buyer may, in its sole discretion, cancel this Agreement;
and
(e) Seller
shall take whatever steps necessary to cause all right, title and interest
in
the Patents to be transferred to MIS as of the Closing Date,
6. Seller's
Representations and Warranties. Seller represents and warrants as
follows:
(a) Seller
has, or within two days of signing this Agreement will have, delivered to
Buyer
financial statements of Seller for the fiscal years ending October 31, 1997,
October 31, 1998 and October 31,1999, including statements of revenues and
expenses of Seller for those periods, and supplementary information set forth
in
such financial statements (“Financial Statement(s]”). Seller has no unrecorded
liabilities or obligations of any type, nature or description, known or unknown,
asserted or unasserted, direct or indirect, absolute or contingent, except
as
set forth in the Financial Statements. The Financial Statements are true
and
correct representations of the financial condition and operating results
of
Seller as of the dates and for the periods of those Financial Statements,
and
were prepared in accordance with generally accepted accounting principles
applied on a consistent basis;
(b) Seller's
business consists principally of providing services to Seller's customers
and
while some goods are sold in the course of providing those services, the
sale of
goods from inventory is not the Seller's principal business;
(c) All
of
the inventories and information delivered to TransTech or MIS shall be accurate
and complete. The Inventory shown on the balance sheet contained in the most
recent Financial Statement of Seller, or thereafter acquired and shown on
Seller's books on the Closing Date, consist or will consist in all material
respects of items of a quality and quantity usable or salable in the normal
course of business; and the values at which such Inventory is will be carried
reflect the Seller's normal inventory valuation policy. The Inventory shown
as
assets on such Financial Statement or such books are and will be consistent
with
past practice, and will be stated at proper values, and reflect and will
reflect
assets of true future economic value after the Closing;
(d) All
of
the tangible property included in the Assets is located at Seller's place
of
business in South Bend, Indiana. To the best of Seller's knowledge after
due
inquiry, the Operational Assets are in a good state of repair (normal wear
and
tear excepted) and in good working order free from
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any
material defects and are suitable for the ordinary and regular conduct and
operation of Seller's business. Seller has maintained each of the Operational
Assets according to good business practice for assets of that type. On or
before
the Closing, Seller shall have purchased all vehicles or other rolling stock
currently leased by Seller. Upon Buyers' request, Seller shall assign to
Buyers
any and all other leases of equipment currently in force or, for such leases
that the Buyers do not make such request, Seller shall terminate said leases
and
assume all liability arising from such termination. Except with regard to
the
Leased Equipment and of the security interests of National City Bank which
have
been previously disclosed to Buyers, Seller has good and marketable title
to all
the Assets, free and clear of any and all security interests, pledges, liens,
conditional sales agreements, claims or encumbrances. No person, firm or
corporation other than Seller has any right to the use or possession of any
of
the Assets. Except as set forth on Schedule 6(d), no currently effective
financing statement under the Uniform Commercial Code with respect to any
of the
Assets has been filed in any jurisdiction and no agent of Seller has signed
any
financing statement or security agreement authorizing anyone to file any
financing statement;
(e) Except
as
listed on Schedule 6(e), Seller has not received any notice nor has knowledge
that any of its largest 20 customers (based on net revenues for the Financial
Statements) intends to terminate or materially reduce its business with Seller
and no such customer has terminated or materially reduced its business with
Seller in the last twelve (12) months;
(f) No
key
employee or no group of more than five (5) employees or independent contractors
of Seller has given oral or written notice to Seller of any plans to terminate
the employment or independent contractor relationship with Seller. Seller
has
complied with all applicable laws relating to the employment of labor, including
provisions relating to wages, hours, equal opportunity, collective bargaining,
and the payment of Social Security and other taxes. During the twelve (12)
months preceding the Closing Date, there have been no material or adverse
changes in the relationship between Seller and its employees or independent
contractors, nor has there been any strike, labor disturbance or union
organizational activities involving its employees;
(g) Seller
is
a corporation duly organized, validly existing and in good standing under
the
laws of the State of Indiana and is duly qualified to do business and is
in good
standing under the laws of all other jurisdictions in which its ownership
or use
of property for the conduct of its businesses requires it to qualify. Seller
has
all necessary corporate power and authority to own ail of its property and
assets, to conduct its business as now being conducted, and to make, execute,
deliver, and perform this Agreement and the other documents and instruments
contemplated hereby;
(h) The
action taken by Seller in the signing of this Agreement and all action
contemplated with this Agreement shall be properly authorized by the
shareholders and directors of Seller.
-6-
The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby do not and will not violate any of the
provisions of the Articles of Incorporation or By-laws of Seller or constitute
a
breach of any contract which is material to Seller's business;
(i) No
litigation or claims, governmental or other proceedings or investigations
are
pending or threatened by or against Seller, or against or affecting the Assets
except as listed on attached Schedule 6(i) (the “Pending
Litigation”);
(j) Seller
has duly and timely filed all tax returns and information returns required
by
local, state, federal or other governmental entities; has paid all taxes
due on
such returns, all deficiencies and assessment notices, and all other taxes,
duties, penalties, interest and fines; no income, business or occupation,
or
franchise tax returns are currently being audited by any taxing authority;
there
are no suits, actions, claims, investigations, inquiries or other proceedings
pending or threatened against Seller regarding taxes or assessments or other
charges;
(k) None
of
the statements or information contained in any of the representations,
warranties, covenants or agreements of Seller or any of its shareholders
or
other representatives set forth in this Agreement or any information or
documents delivered or to be delivered to TransTech or MIS prior to the
execution of this Agreement, contains any untrue statement of a material
fact or
omits a material fact necessary to make the statements contained in this
Agreement or in any exhibit or schedule to this Agreement or in any of the
other
information provided or the documents delivered to TransTech or MIS in
connection with the transactions contemplated by this Agreement, in light
of the
circumstances in which those statements were made, not misleading. Seller
has
fully disclosed all relevant material facts affecting the business, Seller's
liabilities and the Assets;
(l) Seller
has not, within five (5) years prior to the Closing Date, conducted business
under any name other than “Delta Star”;
(m) Seller
will not, directly or indirectly, engage in discussions or negotiations with
any
person other than Buyer concerning any merger, sale of stock, sale of assets
or
similar transaction involving or affecting ownership or operation of Seller's
business; and
(n) Seller
shall cause, either before, at or after the Closing, but in any event no
later
than October 1, 2000, the accounts payable by Seller as of the Closing Date
to
certain key suppliers (“Key Suppliers”) to be satisfied in full. The Key
Suppliers are Armotec Materials Corp., Baldor Electric Co., Essex Group,
Xxxxx
Steel, Precision Coil, Inc., and Artisan Technology.
7. TransTech's
Representations and Warranties. TransTech represents and warrants to Seller
as follows:
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(a) TransTech
is a corporation duly organized and validly existing under the laws of the
State
of Indiana. TransTech has all necessary corporate power and authority to
own all
of its property and assets, to conduct its business, and to make, execute
and
deliver this Agreement and other documents and instruments contemplated in
the
Agreement; and
(b) None
of
the statements or information contained in any of the representations,
warranties, covenants or agreements of TransTech set forth in this Agreement
or
any information or documents delivered or to be delivered to Seller prior
to the
execution of this Agreement, contains any untrue statement of a material
fact or
omits a material fact necessary to make the statements contained in this
Agreement or in any exhibit or schedule to this Agreement or in any of the
other
information provided or the documents delivered to Seller in connection with
the
transactions contemplated by this Agreement, in light of the circumstances
in
which those statements were made, not misleading.
8. MIS'
Representations and Warranties. MIS represents and warrants to Seller as
follows:
(a) MIS
is a
corporation duly organized and validly existing under the laws of the State
of
Indiana. MIS has all necessary corporate power and authority to own all of
its
property and assets, to conduct its business, and to make, execute and deliver
this Agreement and other documents and instruments contemplated in the
Agreement; and
(b) None
of
the statements or information contained in any of the representations,
warranties, covenants or agreements of MIS set forth in this Agreement or
any
information or documents delivered or to be delivered to Seller prior to
the
execution of this Agreement, contains any untrue statement of a material
fact or
omits a material fact necessary to make the statements contained in this
Agreement or in any exhibit or schedule to this Agreement or in any of the
other
information provided or the documents delivered to Seller in connection with
the
transactions contemplated by this Agreement, in light of the circumstances
in
which those statements were made, not misleading.
9. Conduct
of Business Following Closing. Following the Closing, Seller covenants as
follows:
(a) Seller
shall cause the accounts payable by Seller to the Key Suppliers to be paid
in
full as described in paragraph 6(n);
(b) Seller
shall cooperate with Buyers and use its best efforts to assure that each
of
Xxxxx Xxxx, Xxx Xxxxxx and Xxxx Xxxxxxxxx (collectively, the “Key Employees”)
shall remain employed by TransTech and/or MIS until the first anniversary
of the
Closing Date. As an incentive, Seller shall fund a bonus payment to Xxx Xxxxxx
and Xxxx Xxxxxxxxx of $5,000 each, and to Xxxxx Xxxx of $10,000. These bonus
payments shall be payable to MIS on the Closing Date. MIS shall then hold
the
bonus payments in escrow and distribute them to the applicable Key Employee,
on
the first anniversary of the Closing Date,
-8-
provided
the Key Employee has been continuously employed by MIS or TransTech, or a
successor of either company, from the Closing Date to the first anniversary
of
the Closing Date. If for any reason a Key Employee is not employed continuously
from the Closing Date to the first anniversary of the Closing Date, that
Key
Employee's respective bonus payment shall be retained by MIS; and
(c) Seller
shall cause Buyer to receive all rights, title and interest in the Electromagnet
Patent identified in paragraph 10(h).
10. Conditions
to Obligation of Buyer. The obligation of Buyer to purchase the Assets from
Seller under this Agreement is subject to the satisfaction of the following
conditions on or before the Closing Date (unless any condition is waived
in
writing by Buyer):
(a) All
representations and warranties of Seller contained in or made pursuant to
this
Agreement shall be true and correct as of the Closing Date;
(b) Seller
shall have performed, observed and complied with all the obligations and
conditions required by this Agreement, including, but not limited to, the
execution and delivery of all documents listed in paragraph 17;
(c) No
order
of any Court or administrative agency shall be in effect which restrains
or
prohibits the transactions contemplated in this Agreement, or which would
affect
or limit Buyer's ownership or control of the assets, and there shall not
have
been threatened or pending any proceeding before any Court, governmental
agency,
or other regulatory entity challenging any of the transactions contemplated
by
this Agreement;
(d) On
or
prior to the Closing Date, there shall have been no loss, damage or destruction
to the Assets which materially impairs the value of the Assets in any way,
and
Seller shall not have suffered any material adverse change in its financial
condition, results of operations, assets, liabilities, business or
prospects;
(e) Buyer
shall have completed its due diligence review of Seller's business with the
results being satisfactory to Buyer in its sole discretion;
(f) Seller
shall have delivered title and other appropriate documents, including bills
of
sale and instruments of assignment sufficient to evidence and transfer to
Buyer
complete legal and equitable title in the Assets, free and clear of any and
all
security interests, pledges, liens, conditional sales agreements, claims,
encumbrances or charges or restraints on transfer;
(g) Buyer
shall be satisfied that each of the Key Employees will remain employed with
TransTech and/or MIS following the Closing, which satisfaction shall be to
Buyer's sole discretion and may include Buyer requiring that each Key Employee
execute an employment agreement with TransTech and/or MIS; and
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(h) Seller
shall have received all right, title and interest in an electromagnet patent,
identified as Patent Number 5,410,289 (the “Electromagnet Patent”).
11. Conditions
to Obligation of Seller. The obligation of Seller to sell and transfer the
Assets to Buyer under this Agreement is subject to the satisfaction of the
following conditions on or before the Closing Date (unless any condition
is
waived in writing by Seller):
(a) All
representations and warranties of Buyer contained in this Agreement shall
be
true and correct as of the Closing Date;
(b) Buyer
shall have performed all the obligations and conditions required by this
Agreement, including, but not limited to, delivery of the cash or cash
equivalents and the Note required under this Agreement, on the Closing Date;
and
(c) No
order
of any Court or administrative agency shall be in effect which restrains
or
prohibits the transactions contemplated in this Agreement, or which would
affect
or limit Seller's ability to sell or transfer ownership or control of the
Assets, and there shall not have been threatened or pending any proceeding
before any Court, governmental agency, or other regulatory entity challenging
any of the transactions contemplated by this Agreement.
12. Change
of
Name of Seller. As soon as reasonably possible after the Closing Date, Seller
agrees that it will take all necessary action to either amend its corporate
name
to one that will not be confused with its present name, or to dissolve its
corporation by filing Articles of Dissolution with the Indiana Secretary
of
State.
13. Notices.
Notice from one party to another relating to this Agreement shall be deemed
effective if made in writing (including telecommunications) and delivered
to the
recipient's address, telex number or facsimile number set forth under its
name
by any of the following means: (a) hand delivery, (b) registered or certified
mail, postage prepaid, with return receipt requested (c) first class or express
mail, postage prepaid, (d) Federal Express or like overnight courier service
or
(e) facsimile, telex or other wire transmission with request for assurance
of
receipt in a manner typical with respect to communications of that type.
Notice
made in accordance with this section shall be deemed delivered on receipt
if
delivered by hand or wire transmission, on the third business day after mailing
if mailed by first class, registered or certified mail, or on the next business
day after mailing or deposit with an overnight courier service if delivered
by
express mail or overnight courier. The current addresses of the parties are
as
follows:
|
BUYER
|
SELLER
|
|
Trans
Tech Electric, Inc
0000
Xxxxxxxxx Xxxx
Post
Office Box 3915
|
Delta
Star, Inc.
0000
Xxxxx Xxxxxx Xxxxxx
Xxxxx
Xxxx, Xxxxxxx 00000
|
-00-
|
Xxxxx
Xxxx, Xxxxxxx 00000
|
|
|
Magnetech
Industrial Services
00000
Xxx Xxx Xxxxx
Xxxxxxx,
Xxxxxxx 00000
|
|
|
with
copy to:
|
with
copy to
|
|
Xxxxxxx
X. Xxxxx
Xxxxxx
& Xxxxx, LLP
KeyBank
Building, Suite 200
000
Xxxxx Xxxxxxxx Xxxxxx
Xxxx
Xxxxxx Xxx 0000
Xxxxx
Xxxx, Xxxxxxx 00000-0000
|
Xxxxxxx
X. Xxxxx
Xxxxxx
& Xxxxxxxxx LLP
100
North Michigan
000
0xx
Xxxxxx Xxxx Xxxxxx
Xxxxx
Xxxx, Xxxxxxx 00000
|
14. Indemnification
by Seller. From and after the Closing Date, Seller shall indemnify and hold
harmless Buyer and Buyer's successors, owners, officers and directors from
any
and all damages, liabilities, loss, cost or expense (including reasonable
attorney fees, paralegal fees and fees or costs of investigation) incurred
because of or related to:
(a) Any
misrepresentation of Seller in this Agreement or any information or documents
delivered or to be delivered to Buyer under the terms of this Agreement,
or in
any written materials delivered to Buyer;
(b) Any
breach by Seller or failure by Seller to perform any representation, warranty,
covenant, condition or agreement contained in or made pursuant to this
Agreement; and
(c) Any
liabilities and obligations of Seller not expressly assumed by Buyer under
this
Agreement, including, without limitation, any liabilities or obligations
relating to the operation of Seller's business prior to or on the Closing
Date.
15. Indemnification
by Buyer. From and after the Closing Date, Buyer shall indemnify and hold
harmless Seller and its successors, owners, officers and directors from any
and
all damages, liabilities, loss, cost or expense (including reasonable attorney
fees, paralegal fees and fees or costs of investigation) incurred because
of or
related to:
(a) Any
misrepresentation of Buyer in this Agreement or any information or documents
delivered or to be delivered to Seller under the terms of this Agreement,
or in
any written materials delivered to Seller;
(b) Any
breach by Buyer or failure by Buyer to perform any representation, warranty,
covenant, condition or agreement contained in or made pursuant to this
Agreement; and
(c) Any
obligations or liabilities relating to Seller's business incurred after the
Closing Date.
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16. Right
to Set-off. Either Buyer may set off any amounts to which it (or the other
Buyer) may be entitled under this Agreement against amounts otherwise payable
to
Seller. Either Buyer shall have the right to set off any amounts to which
it may
be entitled under this Agreement against any amounts owed by either Buyer
to
Xxxx Xxxx, Xxxxxx Xxxxxxx, Xxxxx X. Xxxx or Xxxxx Xxxx (the “Seller
Affiliates”). The exercise of such right of set-off by Buyer in good faith,
whether or not ultimately determined to be justified, will not constitute
an
event of default under the document which gives rise to the obligation of
payment by either Buyer. Neither the exercise of or the failure to exercise
such
right of set-off will constitute an election of remedies or limit either
Buyer
in any manner in the enforcement of any other remedies that may be available
to
it. Because of the negative effect a set-off may have on either Buyer's cash
flow, in the event either Buyer has the right to set-off an amount to which
it
is entitled against an amount which is not currently due to Seller or a Seller
Affiliate, then the amount which Buyer may set off against the amount owed
Seller shall accrue interest at a rate of twelve percent until Buyer's
obligation to pay Seller (or the applicable Seller Affiliate) becomes a current
liability, at which time Buyer will actually set-off Seller's obligation
against
the payment Buyer is obligated to make Seller (or Seller's Affiliate). As
an
example, presume that a Buyer has the right to payment from Seller, under
the
terms of this Agreement, in the amount of $10,000, which payment obligation
by
Seller arises on December 1, 2000. Further presume that Seller fails to pay
that
amount to the Buyer, and that the next payment from either Buyer to Seller
arises on May 1, 2001. The $10,000 obligation will accrue interest at a rate
of
12% until May 1, 2001, at which time the Buyer may set off the amount owed
by
Seller, including accrued interest (in this example, $10,000 plus $600 of
interest) against the amount owed to Seller by either Buyer as of May 1,
2001.
17. Documents
to be Delivered by Seller at Time of Closing. The Seller agrees to deliver,
or cause to be delivered, the following on the Closing Date:
(a) Xxxx
of Sale. A Xxxx of Sale and any other instruments or documents as may be
reasonably requested by the attorney for Buyer to accomplish the purposes
of
this Agreement so as to convey and transfer to Buyer good and merchantable
title
to the Assets, including but not limited documents transferring to MIS the
exclusive rights to the Electromagnet Patent, free and clear of any liens,
encumbrances or other rights to the Patent.
(b) Corporate
Resolutions. Copies of properly authorized corporate resolutions certified
by the secretary of the Seller confirming the proper authorization of this
Agreement and all action provided hereunder,
(c) Lease.
Lease for the real estate where Seller's business activities are currently
being
conducted and for which Seller is purchasing pursuant to a land contract,
which
lease will include
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an
option
to cause the Seller to purchase the real estate outright and transfer such
property to MIS or its designee at Seller's actual purchase cost.
(d) Guaranty.
Guaranty by the shareholders of Seller of all of Seller's obligations under
this
Agreement.
(e) Non-competition
Agreement. A non-competition agreement executed by Seller and its
shareholders in a form reasonably acceptable to Buyer.
18.
Documents
to be Delivered by TransTech at Time of Closing. TransTech agrees to deliver
the
following on the Closing Date:
(a) Cash.
The cash portion of the TransTech Purchase Price, as described in paragraph
3(a).
(b) Corporate
Resolutions. Copies of properly authorized corporate resolutions certified
by the secretary of TransTech confirming the proper authorization of this
Agreement and all action provided hereunder.
19. Documents
to be Delivered by MIS at Time of Closing. TransTech agrees to deliver the
following on the Closing Date:
(a) Cash.
The cash portion of the MIS Purchase Price, as described in paragraph
3(b).
(b) Promissory
Note.
Note as
provided in paragraph 3(b).
(c) Corporate
Resolutions.
Copies
of properly authorized corporate resolutions certified by the secretary of
Buyer
confirming the proper authorization of this Agreement and all action provided
hereunder.
(d) Lease.
Lease
as provided in paragraph 17(c).
20. General
Provisions.
(a) Assignment.
This
Agreement may not be assigned by any party hereto.
(b) Counterparts.
This
Agreement may be executed simultaneously in two or more counterparts, each
of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(c) Entire
Agreement.
This
Agreement (including the schedules and exhibits hereto and the lists, schedules
and documents delivered pursuant hereto, which are a part hereof) is intended
by
the parties to and does constitute the entire agreement of the parties with
respect to the transactions contemplated by this Agreement. This Agreement
supersedes any and all prior understandings, written or oral, between the
parties hereto.
-13-
(d) Governing
Law.
This
Agreement shall be construed in accordance with and governed by the laws
of the
State of Indiana.
(e) Headings.
The
paragraph headings contained in this Agreement are for reference purposes
only
and shall not affect in any way the meaning or interpretation of this
Agreement.
(f) Successors.
This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns, but nothing herein,
express or implied, is intended to or shall confer any rights, remedies or
benefits upon any person other than the parties hereto and their successors
and
permitted assigns.
(g) Survival.
All
representations and warranties contained in or make pursuant to the Agreement
shall survive the Closing.
(h) No
Waiver.
The
failure of any party to enforce at any time or for any period of time any
of the
provisions of this Agreement shall not be construed as a waiver of any such
provision or the right of the party to enforce such provision. The waiver
of any
default or the failure to exercise any right shall not be deemed a waiver
of any
subsequent default or waiver of the right to exercise any other
right.
Seller
and Buyer now execute this Agreement this 9th
day of
August, 2000.
|
TRANSTECH,
INC.
|
DELTA
STAR ELECTRIC, INC.
|
||||||
|
/s/
Xxxx X. Xxxxxxx
|
/s/
Xxxx Xxxx
|
||||||
|
By:
|
Xxxx
X. Xxxxxxx
|
By:
|
Xxxx
Xxxx
|
||||
|
Its:
|
Vice
President
|
Its:
|
President
|
||||
|
MAGNETECH
INDUSTRIAL SERVICES, INC.
|
|||||||
|
/s/
Xxxx X. Xxxxxxx
|
|||||||
|
By:
|
Xxxx
X. Xxxxxxx
|
||||||
|
Its:
|
President
|
||||||
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