1
EXHIBIT 10.14
ASSET PURCHASE AGREEMENT
Between
KAYDON ACQUISITION CORP. V,
d/b/a Seabee Corporation
And
GOLD STAR MANUFACTURING, INC.
And
AMERICAN CENTRAL INDUSTRIES, INC.
And
XXXXX XXXXXXX and XXXXX XXXXXXX
March 11, 1997
2
TABLE OF CONTENTS
Section Page
------- ----
1. SALE AND PURCHASE OF ASSETS................................................................... 1
1.1 Transfer of Assets................................................................... 1
1.2 Assumed Liabilities.................................................................. 3
1.3 Excluded Assets...................................................................... 4
2. PRICE......................................................................................... 4
2.1 Purchase Price....................................................................... 4
2.2 Allocation of Purchase Price......................................................... 5
2.3 Adjustment to Purchase Price......................................................... 5
3. THE CLOSING .................................................................................. 5
3.1 Time and Place....................................................................... 5
3.2 Transfer of Assets................................................................... 5
4. REPRESENTATIONS AND WARRANTIES OF SELLER...................................................... 6
4.1 Organization, Standing, etc. of Seller............................................... 6
4.2 Authorization; Binding Effect........................................................ 6
4.3 Consents; Defaults; Etc.............................................................. 6
4.4 Machinery and Equipment.............................................................. 6
4.5 Intellectual Property and Processes.................................................. 6
4.6 Employment Matters................................................................... 7
4.7 Permits.............................................................................. 7
4.8 Litigation........................................................................... 7
4.9 Certain Tax Matters.................................................................. 8
4.10 Broker, etc.......................................................................... 8
4.11 Title to Assets...................................................................... 8
4.12 Compliance With Laws................................................................. 8
4.13 No Burdensome Restrictions, etc...................................................... 9
4.14 Disclosure........................................................................... 9
4.15 Accuracy of Financial Statements..................................................... 9
4.16 Absence of Changes................................................................... 10
4.17 Leases and Contracts................................................................. 10
4.18 Condition of Inventory............................................................... 10
4.19 Accounts Receivable.................................................................. 11
4.20 Insurance............................................................................ 11
4.21 Labor Matters........................................................................ 11
4.22 Employee Benefit Plans............................................................... 11
- i -
3
Section Page
------- ----
5. REPRESENTATIONS AND WARRANTIES OF BUYER....................................................... 12
5.1 Organization, Standing and Authority of Buyer........................................ 12
5.2 Authorization; Binding Effect........................................................ 12
5.3 Assumption of Assumed Liabilities.................................................... 12
5.4 Consents, Defaults, etc.............................................................. 13
5.5 Disclosure........................................................................... 13
5.6 Financial Capability to Consummate Transactions...................................... 13
6. COVENANTS OF SELLER........................................................................... 13
6.1 Maintenance of Assets; etc........................................................... 13
6.2 Access to Information................................................................ 14
6.3 Seller's Continuing Responsibility for Environmental Matters......................... 14
6.4 Environmental Report................................................................. 14
6.5 Employment........................................................................... 15
7. COVENANTS OF BUYER............................................................................ 16
7.1 Negative Actions..................................................................... 16
7.2 Assumption of Liabilities............................................................ 16
8. CONDITIONS TO OBLIGATION OF BUYER............................................................. 16
8.1 Accuracy of Representations and Warranties........................................... 16
8.2 Performance by Seller................................................................ 16
8.3 Seller's Certificate................................................................. 16
8.4 Opinion of Seller's Counsel.......................................................... 17
8.5 Corporate Documents.................................................................. 18
8.6 Instruments of Transfer and Title Documents.......................................... 18
8.7 Environmental Report................................................................. 18
8.8 Employee Agreements.................................................................. 18
8.9 Board Approval....................................................................... 19
8.10 Sublease............................................................................. 19
9. CONDITIONS TO OBLIGATION OF SELLER............................................................ 19
9.1 Accuracy of Representations.......................................................... 19
9.2 Performance by Buyer................................................................. 19
9.3 Officer's Certificate................................................................ 19
9.4 Opinion of Buyer's Counsel........................................................... 19
9.5 Corporate Documents.................................................................. 20
10. COVENANT NOT TO COMPETE....................................................................... 20
10.1 Non-competition...................................................................... 20
10.2 Enforcement.......................................................................... 20
10.3 Injunctive Relief.................................................................... 21
- ii -
4
Section Page
------- ----
11. ADDITIONAL COVENANTS OF BUYER AND SELLER...................................................... 21
11.1 Further Assurances................................................................... 21
11.2 Bulk Sales Laws...................................................................... 21
11.3 Rights to Intellectual Property...................................................... 21
11.4 Use of Trade Names................................................................... 22
12. SURVIVAL OF REPRESENTATIONS, WARRANTIES
AND COVENANTS; INDEMNIFICATION; ETC........................................................... 22
12.1 Survival of Representations, Warranties and Covenants................................ 22
12.2 Indemnification by Seller............................................................ 22
12.3 Indemnification by Buyer............................................................. 23
12.4 Indemnification Notice etc........................................................... 23
13. EXPENSES...................................................................................... 24
14. NOTICES....................................................................................... 25
15. AMENDMENTS; TERMINATION....................................................................... 25
16. EFFECT OF THIS AGREEMENT; COUNTERPARTS........................................................ 25
17. GOVERNING LAW AND JURISDICTION................................................................ 25
18. ASSIGNMENTS; SUCCESSORS AND ASSIGNS........................................................... 26
19. PRESS RELEASES AND ANNOUNCEMENTS.............................................................. 26
20. CONSTRUCTION.................................................................................. 26
INDEX TO EXHIBITS............................................................................. 28
-iii-
5
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made and executed as of March 11,
1997, by and between KAYDON ACQUISITION CORP. V, a Delaware corporation doing
business as Seabee Corporation (the "Buyer"), GOLD STAR MANUFACTURING, INC., an
Iowa corporation (the "Seller"), AMERICAN CENTRAL INDUSTRIES, INC., an Iowa
corporation ("ACI"), XXXXX XXXXXXX and XXXXX XXXXXXX (collectively the
"Mefferds"), with reference to the following facts:
Seller is a wholly-owned subsidiary of ACI (the shareholders of which
are the Mefferds) and wishes to sell to Buyer and Buyer wishes to purchase from
Seller all of the business and the assets relating to Seller's cylinder business
located in Laurens, Iowa (the "Business").
In consideration of the premises and the mutual covenants contained
herein, Seller, ACI, the Mefferds and Buyer agree as follows:
1. SALE AND PURCHASE OF ASSETS
1.1 Transfer of Assets. In reliance on the representations and
warranties contained herein and subject to the terms and conditions hereof,
Seller shall on the Closing Date (as defined in Section 3 herein), sell, convey,
transfer, assign and deliver, free and clear of all liens, mortgages, security
interests, pledges, charges, agreements, restrictions, claims, defects in title
and encumbrances of any kind or description, except for those items listed on
the attached Exhibit 1.1 (collectively referred to herein as "Claims and
Encumbrances"), and Buyer shall purchase from Seller, all of Seller's right,
title and interest in and to the tangible and intangible assets (the "Assets")
of Seller (excluding the assets relating to Seller's auger line described in
Exhibit 1.3 herein, and, at Buyer's option, any Hazardous Substances or
materials located at Seller's facility), including:
(a) Inventories. All inventory, including, without limitation,
all work in process, finished goods and products and raw materials
("Inventory");
(b) Machinery and Equipment. All machinery, equipment, tools,
vehicles, furniture, tooling, fixtures, molds, dies, and all other
tangible property used in the Business, including, without limitation,
the machinery and equipment described on Exhibit 1.1(b) hereto
("Machinery and Equipment").
1
6
(c) Intangible Personal Property. All intangible personal
property, including (i) all procedures, processes, products, formulae,
scientific, technical and other information, trade secrets, ideas,
licenses, franchises, customer lists, vendor lists, plans,
specifications, designs, drawings, catalogues, manuals, reports,
samples, prototypes, know-how, items in application, development or
other pending status and all similar items which are owned by Seller
and applicable to or used in the operation of the Business
("Intellectual Property"), including, without limitation, the items of
Intellectual Property of Seller described on Exhibit 1.1(c) hereto,
(ii) rights pursuant to all contracts applicable to or used in the
operation of the Business, including, without limitation, the contracts
listed on Exhibit 4.17 hereto, (iii) the leases of real and personal
property applicable to or used in the operation of the Business
described on Exhibit 4.17 hereto, (iv) all computer and automatic
machinery software programs and source disks, program documentation,
tapes, manuals, forms, guides and other materials with respect thereto
applicable to or used in the Business, and (v) to the extent the same
are transferable, all federal, state or local governmental or
regulatory permits, licenses, approvals and franchises which are owned
or have been received by Seller in connection with the operation of the
Business or ownership of the Assets (collectively, "Permits"),
including, without limitation, the Permits which are listed on Exhibit
4.7 hereto;
(d) Patents, Trademarks and Copyrights. All registered and
unregistered trademarks, trademark applications, trade names, service
marks and service names and the goodwill of the Business connected
therewith or symbolized thereby, and all copyrights, patents and patent
applications, including, without limitation, the items listed on the
attached Exhibit 1.1(d).
(e) Records. All accounting information pertaining to the
operations of the Business and all media in which all or any of the
information, knowledge, data or records relating to the Business may be
related or stored, all customer lists, customer files, personnel
records, credit information, pending litigation documents, insurance
documents, pension documents, advertising, promotional and sales
materials, sales data, surveys, account histories, information relating
to sales or servicing of products applicable to, used in or
manufactured by the Business;
2
7
(f) Miscellaneous Assets. All goodwill of the Business and all
information, supplies, shipping containers, vehicles, gross data,
recorded knowledge, and all warranties inuring to the benefit of Seller
in connection with the Business;
(g) Cash. All prepaid expenses and cash, (except that Buyer
shall not assume any negative cash balance).
(h) Accounts Receivable and Notes Receivable. All accounts
receivable and notes receivable, provided, that any accounts receivable
existing on the books of the Seller attributable to sales to ACI or any
of its subsidiaries shall be paid in full by ACI and its subsidiaries
at or prior to the Closing.
1.2 Assumed Liabilities.
(a) At the Closing, Buyer shall assume only the obligations or
liabilities of Seller listed in Exhibit 1.2 attached hereto, in an
aggregate amount not more than that listed in Exhibit 1.2; provided,
however, that Buyer shall not assume any liabilities or mortgage
obligations relating to any of Seller's real property.
(b) Except for the foregoing liabilities, Buyer shall not
assume any obligation, duty or liability of any nature whatsoever,
fixed or contingent, including, without limitation: (i) any liability
of Seller or its predecessors relating to the generation, management,
handling, transportation, treatment, storage, disposal, delivery,
discharge, release or emission of any Hazardous Substances (as defined
in Section 6.4 of this Agreement) or other substance which requires
investigation, removal, transport or remediation under any federal,
state, or local law or regulation; or any other action, omission or
condition affecting the environment arising from the conduct of the
Business or occurrences prior to the Closing Date, including, without
limitation, those conditions specified on Exhibit 4.12 as described
herein; (ii) any tax liabilities or similar assessments arising from
the conduct of the Business or occurrences prior to the Closing Date or
arising from the transfer of the Assets and consummation of the
transactions contemplated hereby, including, without limitation, any
liabilities for sales, bulk sales, use, transfer, stamp or income
taxes, and any filing, recording or similar fees or charges; (iii) any
liabilities for breach or default by Seller under any contract, lease
or agreement assigned to Buyer hereunder, which accrued prior to the
Closing Date; (iv) any liability with respect to any claim, suit,
3
8
action or judicial, administrative or arbitration proceeding made or
pending or commenced against Seller at or prior to the Closing Date, or
made or commenced after the Closing Date in respect of any action,
omission or condition occurring or existing prior to the Closing Date;
(v) any undisclosed liabilities, which accrued prior to the Closing
Date; (vi) any collective bargaining agreement, labor or employment
agreement liabilities, any pension plan withdrawal or other liability,
severance liability, funding deficiency, workmen's compensation,
employee life and health insurance or similar liability to any employee
or former employee of Seller, including, without limitation, any such
liability under any multi-employer or single- employer plan, contract
or arrangement, or obligation described in Section 4.23 herein, or any
other liability in respect of any employee attributable to or in
respect of any period prior to the Closing Date, none of which Buyer
will be obligated to continue and (vii) any liabilities relating to
products manufactured by Seller prior to the Closing. Seller shall
discharge and satisfy, when and if due and payable, all liabilities
which are not specifically assumed by Buyer under this Agreement and
shall, upon request of Buyer, give Buyer evidence of such payment.
1.3 Excluded Assets. The Assets shall not include the assets of Seller
relating to Seller's Truespin auger line, and all related assets and inventory,
as listed in Exhibit 1.3 attached hereto.
2. PRICE
2.1 Purchase Price. The purchase price for the Assets (the "Purchase
Price") based on the list of liabilities (excluding accounts payable) attached
as Exhibit 1.2 hereto shall be the assumption of liabilities described in
Exhibit 1.2 in an amount not to exceed the sum of Four Million Nine Hundred
Thousand Dollars ($4,900,000.00).
2.2 Allocation of Purchase Price. The Purchase Price paid for the
respective Assets will be as shown on an allocation exhibit to be provided by
Buyer to Seller prior to the Closing which shall be approved by Seller.
2.3 Adjustment to Purchase Price. It is expected that the Net Current
Assets, as defined below, will be not less than the sum of One Million Ninety
Five Thousand Seven Hundred Fifty Eight Dollars ($1,095,758.00) (based on
Seller's January 31, 1997 balance sheet) as of the Closing. In the event the Net
Current Assets, as defined below, is less than
4
9
this amount as of the Closing, Seller shall reimburse Buyer for the reduction.
Net Current Assets is defined as the sum of accounts receivable and inventory
less assumed accounts payable (listed in Exhibit 2.3 attached hereto), as
determined on the basis of generally accepted accounting principles as of the
end of the day prior to the Closing. Buyer will conduct a final inventory and
prepare a schedule showing its calculation of the Net Current Assets within
fifteen (15) days of the closing and submit the schedule to Seller for review.
Once accepted, any purchase price refund due Buyer will be made within ten (10)
business days. In the event a dispute arises in regard to the Net Current Assets
Schedule, the matter will be referred to a national accounting firm acceptable
to both Buyer and Seller for resolution, whose determination shall be final and
binding, and the fees for which shall be paid by the non-prevailing party.
3. THE CLOSING
3.1 Time and Place. The Closing of the sale and purchase of the
Assets (the "Closing") shall take place at the offices of Buyer at 10:00 a.m. on
March 11, 1997. The delivery of all documents by the parties and the performance
of all acts at the Closing shall be deemed to have occurred simultaneously.
3.2 Transfer of Assets. At the Closing, Seller shall deliver to
Buyer such bills of sale, endorsements, assignments and other good and
sufficient instruments of conveyance and transfer, in form and substance
reasonably satisfactory to Buyer and its counsel, as shall be effective to
convey and transfer to and vest in Buyer title to the Assets, free and clear of
any Claims and Encumbrances, except such Claims and Encumbrances listed on
Exhibit 1.1 attached hereto. Simultaneously with such delivery, Seller shall
take such action as may be necessary or reasonably requested by Buyer to place
Buyer in possession and control of the Assets.
4. REPRESENTATIONS AND WARRANTIES OF SELLER Seller represents and
warrants to Buyer as follows:
4.1 Organization, Standing, etc. of Seller. Seller is duly
organized, validly existing and in good standing under the laws of the State of
Iowa, and has all requisite power to own or lease and to operate its properties
and to carry on the Business as conducted with the Assets.
5
10
4.2 Authorization; Binding Effect. This Agreement has been duly
executed and delivered by Seller and constitutes the legally binding obligation
of Seller in accordance with its terms.
4.3 Consents; Defaults; Etc. Except as set forth on the attached
Exhibit 4.3, neither the execution, delivery or performance by Seller of this
Agreement nor the consummation by Seller of the transactions contemplated hereby
(i) is prohibited by, or requires Seller to obtain or make any consent,
authorization, approval, filing or registration under, any law, rule or
regulation, judgment, order, writ, injunction or decree which is binding upon
Seller, or any of the Assets, or (ii) will violate any provision of, result in
any default or acceleration of any obligations under, result in the creation or
imposition of any lien on any of the Assets pursuant to, or require any consent
under, any indenture, lease, mortgage or other agreement to which Seller is a
party or by which Seller or any of the Assets is otherwise bound.
4.4 Machinery and Equipment. Except as listed in Exhibit 4.4 attached
hereto, all Machinery and Equipment has been maintained so as to be, and all of
the Machinery and Equipment is, in good operating condition and repair (ordinary
wear and tear excepted), and there are no repairs which are required to be made
to the Machinery and Equipment, except as listed in Exhibit 4.4.
4.5 Intellectual Property and Processes. Exhibit 1.1(c) includes all
of the Intellectual Property, and Exhibit 1.1.(d) includes all patents,
trademarks and copyrights owned by, used or necessary for use in the Business.
The formulae, manufacturing procedures, processes, know-how and trade secrets
used or necessary for use in the operation of the business are hereinafter
referred to as the "Processes". The United States trademark and patent
registrations listed on the attached Exhibit 1.1(c) and Exhibit 1.1(d) and the
Intellectual Property, Processes and patents which are owned by Seller are owned
free and clear of any license, sublicense, agreement, right, understanding,
judgment, order, decree or stipulation, and Seller has not infringed on or
misappropriated any intellectual property of third parties. To the best of
Seller's knowledge no third party has infringed or misappropriated any
Intellectual Property, patents, trademarks, copyrights or Processes.
6
11
4.6 Employment Matters. Except as listed on the attached Exhibit 4.6,
there is no claim of any employee or any former employee of Seller for any
unpaid compensation or remuneration of any nature, including, without
limitation, contingent salaries, incentive payments, pension benefits (whether
or not vested), (excluding benefits to be paid in the future from pension trusts
established and administered for such purpose by Seller), medical expense
reimbursement, vacation pay, severance payments and any other awards, interests
and payments.
4.7 Permits. Attached as Exhibit 4.7 hereto is a list of all Permits
Seller has obtained in connection with the operation and ownership of the
Assets, and, except Permits that Buyer designates as not to be transferred in
Exhibit 4.7, or which have been designated as non-transferable or transferable
only with consent from a third party or government or regulatory body on Exhibit
4.7, each of the Permits is transferable by Seller without notice to or consent
from any third party or governmental or regulatory body. Seller shall take all
reasonable steps requested by Buyer to enable Buyer to obtain in its own name
any Permit that is not so transferable. The Permits listed on Exhibit 4.7
constitute all of the Permits required to operate the Business as previously
conducted by Seller. Seller is in full compliance with the terms and conditions
of such Permits and no change in the facts or circumstances reported or assumed
in the application for or granting of such Permits exist. Such Permits are in
full force and effect. Except as listed on attached Exhibit 4.7, there are no
proceedings pending or, to the best of Seller's knowledge, threatened which may
result in the revocation, cancellation or suspension, or any adverse
modification, of any Permit.
4.8 Litigation. Except as listed on the attached Exhibit 4.8, there is
no suit, action, proceeding, investigation or inquiry pending or, to the best of
Seller's knowledge, threatened (or any basis therefor), at law or in equity or
before any governmental department, commission, board, body, agency or
instrumentality, domestic or foreign, against Seller which affects or could have
a material effect on the Assets or involves or could involve the validity or
legality of this Agreement or any action taken or to be taken pursuant hereto.
4.9 Certain Tax Matters. Seller has paid, accrued on its Latest
Financial Statements, or will pay when due all income, sales, use, business,
occupation, personal or
7
12
real property or any similar taxes and all taxes of any kind related to any
period prior to the Closing Date, including without limitation, any tax relating
to the wages, benefits or income of any employee, consultant or commission agent
connected with the Assets, whether owed by Seller or by any such employee,
consultant or commission agent.
4.10 Broker, etc. Seller has not employed a finder, broker, agent or
other intermediary in connection with the negotiation or consummation of this
Agreement or any of the transactions contemplated hereby.
4.11 Title to Assets. Except as set forth on the attached Exhibit
4.11, Seller has undivided marketable title, legal and equitable, in and to all
of the Assets being sold under this Agreement. The Assets are owned by Seller
free and clear of any Claims and Encumbrances, except liens for current taxes
and assessments not yet due and payable and those Claims and Encumbrances
described on the attached Exhibit 4.11. All of the Assets are located in
Laurens, Iowa or such other location listed in Exhibit 4.11. The Assets, taken
as a whole, constitute all of the operating properties and assets which are
reasonably necessary for the conduct of the Business as conducted by Seller.
4.12 Compliance With Laws. Except as set forth on Exhibit 4.12, the
Business and the Assets are and have been operated and maintained in compliance
with all applicable governmental laws, rules, regulations, environmental
requirements and ordinances, including, without limitation, laws, regulations
and other requirements (a) relating to pricing of products and antitrust, and
(b) imposed by action of, permits or licenses from, or agreements with any
governmental agency or authority relating to the generation, management,
handling, transportation, treatment, storage, disposal, delivery, discharge,
release or emission of any waste, pollutant or toxic, Hazardous Substance as
defined in Section 6.4 of this Agreement or other substance or other action,
omission or condition affecting the environment, air, soil and water, or
relating to pollution, ground water contamination, the handling, storage or
release into the environment of Hazardous Substances or materials, or the
transportation of hazardous materials (collectively "Environmental Laws and
Regulations") and federal and state occupational safety and health laws and
regulations and the Consumer Products Safety Commission laws and regulations;
and Seller has no notice of any failure to comply therewith, except as set forth
on Exhibit 4.12. Exhibit 4.12 lists each offsite disposal site
8
13
used by Seller presently or used by Seller during the previous ten (10) years.
Except as set forth in Exhibit 4.12, all properties and equipment of Seller have
been and now are free of asbestos, PCB's, methylene chloride, trichloroethylene,
1,2-transdichloroethylene, dioxins, dibenzoforans and "extremely hazardous
substances" as that term is defined in the Toxic Substance Control Act.
4.13 No Burdensome Restrictions, etc. There are no judgments, orders,
writs, injunctions, or decrees to which the Assets are subject and to which
Seller is a party, or which materially adversely affect the Assets, except those
set forth on the attached Exhibit 4.13.
4.14 Disclosure. The representations and warranties contained in this
Agreement and the information contained in the Exhibits hereto, written
documents, financial statements (including the Latest Financial Statements)
provided by Seller to Buyer, and other certificates or instruments delivered by
or on behalf of Seller in connection with the purchase and sale of the Assets
are true and correct in all material respects and do not contain any untrue
statement of a material fact or omit to state a fact necessary to make the
statements contained therein and herein not misleading. Except as set forth in
the attached Exhibit 4.14, there is no fact known to Seller which materially
adversely affects the Assets which has not been set forth in this Agreement or
in the other documents, certificates or instruments delivered by Seller or on
behalf of Seller, specifically for use in connection with the transactions
contemplated by this Agreement.
4.15 Accuracy of Financial Statements. The financial statements of
Seller provided to Buyer including, without limitation, Seller's January 31,
1997 financial statements (the "Latest Financial Statements"), and Seller's
annual financial statements dated December 31, 1994, December 31, 1995 and
December 31, 1996) fairly present the financial condition of Seller and the
results of its operations, as of the dates thereof and for the periods indicated
therein, in accordance with generally accepted accounting principles
consistently applied. As of the Closing Date, and except as set forth on the
attached Exhibit 4.15, Seller shall have no liabilities of any nature required
to be reflected in financial statements under generally accepted accounting
principles that were not shown or provided for in the aggregate on the
9
14
financial statements, and all reserves set forth on the financial statements are
adequate in all material respects.
4.16 Absence of Changes. Since the date of the Latest Financial
Statements, Seller has, and until the Closing Date shall have, operated the
Business in the ordinary and usual course, maintained the Assets in good
condition and repair, reasonable wear and use excepted, and not sold, assigned,
transferred, encumbered or otherwise disposed of, or contracted, agreed or
become bound to sell, assign, transfer, encumber or otherwise dispose of any of
the Assets, other than in the ordinary course of business, and except as
otherwise provided in this Agreement. Since such date, there has been no
material adverse change in the Business, Assets or condition, financial or
otherwise, of Seller nor, to the best of Seller's knowledge, has any such change
threatened to occur, nor has there been any damage, destruction or loss, other
than that fully covered by insurance, of a material nature affecting the
Business, properties or financial condition of Seller.
4.17 Leases and Contracts. Exhibit 4.17 attached hereto includes each
lease of real or personal property and each agreement to which Seller is a party
that involves the sum of Five Thousand Dollars ($5,000.00) or more, including
employment agreements and collective bargaining agreements. Each such lease and
agreement (a) is valid, binding and enforceable, and (b) no event has taken
place which with notice or lapse of time would constitute a breach or default,
or permit termination or modification of such lease or contract. Seller has not
received notice of any default, and, to the best of Seller's knowledge, Seller
is not in default in respect of any such lease or agreement to which it is a
party or by which it is bound.
4.18 Condition of Inventory. All inventory, materials and supplies of
Seller are saleable, not obsolete, or slow moving (except as to Seller's
reserves) in good condition and of merchantable quality for such items in the
Business. The inventory reserves described in the Latest Financial Statements
are adequate in all respects.
4.19 Accounts Receivable. Except as set forth on the attached Exhibit
4.19, all of Seller's accounts receivables of any nature are good and
collectible at the aggregate recorded amounts thereof in the usual and ordinary
course of business and without resort to legal proceedings.
10
15
4.20 Insurance. Exhibit 4.20 attached hereto sets forth all insurance
carriers and policy numbers by policy period as to policies to which Seller has
been a party or beneficiary within the past seven (7) years, including, without
limitation, worker's compensation, liability, casualty and property insurance,
and, except as identified in Exhibit 4.20, all such policies are in full force
and effect, and projected costs and obligations associated with any self-insured
plans are reasonable and accurate estimates of actual costs and obligations.
4.21 Labor Matters. Except as set forth on the attached Exhibit 4.21,
Seller is not subject to any labor grievances, claims of unfair labor practices,
or other material collective bargaining disputes. Exhibit 4.21 lists an employee
census of all employees of Seller, and their date of birth, date of hire, annual
compensation or hourly rate, sex, race and job title.
4.22 Employee Benefit Plans.
(a) Employee Plans. Exhibit 4.22 contains a true, correct and
complete list of all pension, 401(k), benefit, profit sharing,
retirement, deferred compensation, welfare, insurance, disability,
bonus, vacation pay, severance pay and other similar plans, programs
and agreements, whether reduced to writing or not, and any
"multiemployer plan" as such term is defined in Section 4001(a)(3) of
ERISA, relating to the Seller's employees (the "Employee Plans").
(b) Post-Employment Benefits. Except as set forth in Exhibit
4.22, no Employee Plan provides health or life insurance benefits for
former employees .
(c) Defined Benefit Plans. Except as set forth in Exhibit
4.22, Seller does not contribute, is not required to contribute, or
since January 1, 1986 has not been required to contribute to any
"defined benefit plan" as such term is defined in Section 3(35) of
ERISA.
(d) Copies of Employee Plans and Related Documents. Prior to
the Closing, Seller shall have delivered to Buyer true, correct and
complete copies of all Employee Plans which have been reduced to
writing and written descriptions of all Employee Plans which have not
been reduced to writing, and all agreements, including trust agreements
and insurance contracts, related to such Employee Plans, and the
summary plan description and all modifications thereto for each
Employee Plan communicated to Seller's employees.
11
16
(e) Claims and Litigation. Except as set forth on Exhibit
4.22, there are no threatened or pending claims, suits or other
proceedings by present or former employees of Seller, plan
participants, beneficiaries or spouses of any of the above, the
Internal Revenue Service, the Pension Benefit Guaranty Corporation, or
any other person or entity involving any Employee Plan including claims
against the assets of any trust, involving any Employee Plan, or any
rights or benefits thereunder, other than ordinary and usual claims for
benefits by participants or beneficiaries including claims pursuant to
domestic relations orders.
(f) Controlled Group. The Seller is not a member of a
"controlled group of corporations" as defined in Section 1563(a) of
the Internal Revenue Code of 1986, as amended.
5. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants as follows:
5.1 Organization, Standing and Authority of Buyer. Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Michigan and has the corporate power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby.
5.2 Authorization; Binding Effect. The execution and delivery by
Buyer of this Agreement and the performance by Buyer of its obligations
hereunder and the consummation by Buyer of the transactions contemplated hereby
have been duly authorized by all necessary action on the part of Buyer. This
Agreement has been duly executed and delivered by a duly authorized officer of
Buyer and constitutes the valid and legally binding obligation of Buyer
enforceable against Buyer in accordance with its terms.
5.3 Assumption of Assumed Liabilities. All of the contracts,
agreements or instruments to be assumed by Buyer pursuant to this Agreement are
valid and binding upon Buyer, and are enforceable against and fully performable
by Buyer in accordance with their terms; and there are no existing facts or
circumstances which would prevent the full and complete performance thereof by
Buyer.
5.4 Consents, Defaults, etc.. Neither the execution, delivery or
performance by Buyer of this Agreement, nor the consummation by Buyer of the
transactions contemplated
12
17
hereby (i) is prohibited by, or requires Buyer to obtain or make any consent,
authorization, approval, filing or registration under, any law, rule or
regulation, judgment, order, writ, injunction or decree which is binding upon
Buyer, or (ii) will violate any provision of, result in any default or
acceleration of any obligations under, or require any consent under, any
indenture, lease, mortgage or other agreement to which Buyer is a party or by
which Buyer is bound.
5.5 Disclosure. The representations and warranties contained in
this Agreement and the information contained in any written documents and other
certificates or instruments delivered by or on behalf of Buyer in connection
with the purchase of the Assets are true and correct in all material respects
and do not contain any untrue statement of a material fact.
5.6 Financial Capability to Consummate Transactions. Buyer has, or
will have on the Closing Date, sufficient financial resources readily available
to enable Buyer to consummate the transactions contemplated in this Agreement on
the terms and conditions contained herein.
6. COVENANTS OF SELLER
Seller covenants and agrees with Buyer that:
6.1 Maintenance of Assets; etc. Seller will, through the Closing
Date, (a) maintain and keep all Machinery and Equipment and other Assets in as
good repair, working order and condition, (b) keep in full force and effect
insurance as necessary to fully insure the Assets, (c) perform in all respects
all its obligations under all of its leases, contracts, commitments and
arrangements, and not amend, alter or modify, other than in the ordinary course
of business of Seller, any provision of any lease, contract, obligation or
commitment to be assumed by Buyer, and (d) do all things reasonably necessary to
avoid any action that would render Seller's representations and warranties
hereunder inaccurate as of the Closing Date.
6.2 Access to Information. Seller will give to Buyer, Buyer's
accountants, counsel, employees and other representatives full access to all of
the properties, books, contracts, commitments, reports and records of Seller
relating to the Business and Assets and will furnish Buyer all such documents,
records and information with respect to the affairs of
13
18
the Business and copies of any working papers relating to that Business as Buyer
shall from time to time reasonably request.
6.3 Seller's Continuing Responsibility for Environmental Matters.
Seller shall at all times retain any and all liabilities arising from the
handling, treatment, storage, transportation, disposal, release or emission of
any Hazardous Substances, toxic materials, pollutants, contaminates or wastes by
Seller or by Seller's agents or contractors. Seller, through and after the
Closing Date, at its sole cost and expense, shall take all actions necessary to
investigate, remove and clean up any substance described in Section 4.12 above
that was released to the environment prior to the Closing at, on or near the
facility at which the Business is located for which an investigative, removal or
cleanup activity is required pursuant to law, rule, regulation, order, agreement
or government action, provided that (i) no such actions shall be taken except
after reasonable advance notice to Buyer; and (ii) any such action shall be
taken in a manner so as to minimize interference with any business conducted at
the facility.
6.4 Environmental Report.
(a) Seller shall prior to closing arrange and pay for a Phase
I environmental assessment of the Seller's real estate that may include
an investigation and analysis of the historical use, storage or
disposal of Hazardous Substances on the real property, and the taking
of samples of soil and groundwater from such locations on the property
as may be selected by Buyer or by an environmental consultant or
engineer acceptable to Buyer (hereinafter "Environmental Report"). The
Environmental Report shall be in form and substance adequate to assess
the environmental condition of Seller's real estate, and shall show
that Seller's real estate contains no Hazardous Substances as defined
herein.
(b) The Environmental Report shall evaluate Seller's real
property for compliance with all federal, state, and local governmental
laws, rules and regulations and shall express an opinion as to
compliance with such laws, rules and regulations and shall state
whether there have been any releases of Hazardous Substances upon,
under, near or adjacent to the real estate. As used in this Agreement
the term "Hazardous Substances" shall mean, without limitation, any
material or substance: (i)
14
19
the presence of which requires investigation, remediation or any other
response under any federal, state or local statute, regulation,
ordinance, order, action, policy, or common law; or (ii) which is or
becomes defined as a "hazardous waste," "hazardous substance,"
"pollutant", or "contaminant" under any federal, state, or local
statute, regulation, rule, or ordinance or amendments thereto
including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. ss.9601 et seq.)
and/or the Resource Conservation and Recovery Act (42 U.S.C. ss.6901 et
seq.); or (iii) which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic, or otherwise
hazardous or dangerous and is or becomes regulated by any governmental
authority, agency, department, commission, board, agency, or
instrumentality of the United States, the State of Iowa or any
political subdivision thereof; or (iv) the presence of which on the
real estate and leased premises causes or threatens to cause a nuisance
or other damage or harm upon the such properties or to other
properties, poses or threatens to pose a hazard to the health or safety
of persons on or about the real estate and leased properties or other
properties, or poses or threatens to pose a harm to the environment or
natural resources wherever they may be located; or (v) the presence of
which on properties other than the real estate and leased premises
could constitute a trespass; or (vi) which contains gasoline, diesel
fuel, or other petroleum hydrocarbons; or (vii) which contains
polychlorinated biphenyls (PCBs), asbestos, urea formaldehyde foam
insulation, radon gas, asbestos or asbestos-containing materials or
lead-based paint.
6.5 Employment. At the Closing, Seller and Buyer shall execute a
Labor Leasing agreement in the form of Exhibit 6.5 attached hereto. The
parties acknowledge that Buyer is not the employer of the employees of Seller
and this Agreement shall not be construed to make Buyer the employer of
Seller's employees. Following termination of the Labor Leasing Agreement,
Seller shall be solely responsible for any obligations relating to severance
pay or other termination compensation.
7. COVENANTS OF BUYER
Buyer covenants and agrees with Seller that:
15
20
7.1 Negative Actions. Between the date hereof and the Closing Date,
Buyer will refrain from taking any action that would render Buyer's
representations and warranties hereunder inaccurate as of the date hereof or the
Closing Date.
7.2 Assumption of Liabilities. Buyer shall execute and deliver to
Seller an instrument of assumption of liabilities in form reasonably
satisfactory to Seller and its counsel pursuant to which Buyer shall agree to
assume and pay the assumed liabilities described in Section 1.2 above.
8. CONDITIONS TO OBLIGATION OF BUYER
The obligation of Buyer to consummate the transactions contemplated
hereby is subject to the satisfaction, or waiver, by Buyer, at or prior to the
Closing, of the following conditions, in the absence of the satisfaction of
which Buyer may terminate this Agreement without liability:
8.1 Accuracy of Representations and Warranties. The representations and
warranties contained herein or otherwise made by or on behalf of Seller in
connection with this Agreement and the transactions contemplated hereby shall
have been true and correct in all material respects on the Closing Date to the
same extent as if made on the Closing Date.
8.2 Performance by Seller. Seller shall have duly performed and
complied in all material respects with all terms, agreements, and conditions
required by this Agreement to be performed or complied with by Seller prior to
or at the Closing.
8.3 Seller's Certificate. Seller shall have delivered to Buyer a
certificate, dated as of the Closing Date, and executed by Seller's executive
officer, to the effect that Seller has duly performed and complied with the
covenants and conditions set forth in Sections 8.1 and 8.2.
8.4 Opinion of Seller's Counsel.
(a) Buyer shall have received from Xxxx & Xxxx, counsel for
Seller and ACI, a favorable opinion, dated as of the Closing Date, and
satisfactory in substance and form to Buyer and its counsel, to the
following effect:
(i) Standing, etc. of the Seller. Seller has all requisite
power and authority to own the Assets and to perform Seller's
obligations hereunder and to consummate the transactions
contemplated hereby.
16
21
(ii) Litigation. There is no suit, action, proceeding,
investigation or inquiry pending or, to the best of such counsel's
knowledge, threatened at law or in equity or before any
governmental department, commission, board, body, agency or
instrumentality, domestic or foreign, which materially affects or
could materially affect the Business or Assets or involves or could
involve the validity or legality of this Agreement or any action
taken or to be taken pursuant hereto, nor has any such suit,
action, proceeding, investigation or inquiry been pending within
the three (3) years preceding the date of this Agreement.
(iii) Execution and Delivery. This Agreement has been duly
executed and delivered by Seller and ACI, and constitutes the
legal, valid and binding obligation of Seller and ACI enforceable
against Seller and ACI in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization and other similar laws relating to or affecting the
rights of creditors generally, and is subject to general principles
of equity, regardless of whether such enforceability is considered
in a proceeding at law or in equity.
(iv) Consents; Defaults, Etc. Neither the execution,
delivery or performance by Seller and ACI of this Agreement, nor
the consummation by Seller and ACI of the transactions contemplated
hereby (i) is prohibited by, or requires Seller or ACI to obtain or
make any consent, authorization, approval, filing or registration
under, any law, rule or regulation, or, under any judgment, order,
writ, injunction or decree which is binding upon Seller or ACI, or
(ii) will violate any provision of, result in any default or
acceleration of any obligations under, result in the creation or
imposition of any lien on any of the Assets pursuant to, or require
any consent (other than consents identified in such opinion and
duly obtained prior to the Closing) under, any indenture, lease,
mortgage or other agreement to which Seller or ACI is a party or is
otherwise bound.
17
22
(v) Conveyance of Assets. The instruments of conveyance,
transfer and assignment executed and delivered to Buyer have been
duly executed by Seller and are valid and effective to vest in
Buyer all of the right, title and interest of Seller in and to the
Assets as contemplated by the Agreement.
8.5 Corporate Documents. Seller and ACI shall have delivered to Buyer
(a) certificates of good standing from their states of incorporation; and (b)
certified resolutions of the Board of Directors and the stockholder of Seller
and ACI's Board of Directors authorizing this transaction.
8.6 Instruments of Transfer and Title Documents. Seller shall execute
and deliver to Buyer the instruments of transfer described in Section 3.2 above.
8.7 Environmental Report. Buyer shall have received the Environmental
Report identified in Section 6.4 hereof which indicates, in the opinion of the
environmental consultant, that the Seller's real property is not contaminated or
affected by any Hazardous Substances at a level exceeding an applicable clean-up
standard or criteria developed under federal, state, or local law.
8.8 Employee Agreements. Xxxxx Xxxxxxx shall have entered into a
consulting and non-competition agreement with Buyer, and Buyer shall have
entered into employment agreements with Xxxxx Xxxxxxx and Xxxxx Xxxxxxx, in the
forms attached as Exhibit 8.9 hereto.
8.9 Board Approval. Buyer's Board of Directors shall have approved
this Agreement and the transaction described in this Agreement.
8.10 Sublease. Buyer and Seller shall have entered into a sublease of
Seller's real property in the form of Exhibit 8.11 attached hereto, and the
landlord of Seller's real property shall have provided its written consent to
the sublease and a release of its landlord's lien on Seller's personal property
in forms acceptable to Buyer. The Mefferds shall pay the accrued dividend charge
of Three Thousand Three Hundred Thirty Three Dollars and 33/100 ($3,333.33) and
the rent delinquency charge of Nine Thousand Six Hundred Thirty Seven Dollars
and 83/100 ($9,637.83) required by the landlord for these consents.
18
23
9. CONDITIONS TO OBLIGATION OF SELLER
The obligation of Seller to consummate the transactions contemplated
hereby is subject to the satisfaction, or waiver, by Seller, at or prior to the
Closing, of the following conditions in the absence of the satisfaction of which
Seller may terminate this Agreement without liability:
9.1 Accuracy of Representations. The representations and warranties
contained in this Agreement shall have been true and correct in all material
respects when made and shall be true and correct in all material respects on the
Closing Date to the same extent as if made on the Closing Date.
9.2 Performance by Buyer. Buyer shall have duly performed and
complied with all terms, agreements and conditions required by this Agreement to
be performed or complied with by it prior to or at the Closing.
9.3 Officer's Certificate. Buyer shall have delivered to Seller a
certificate, dated as of the Closing Date and executed by an officer of Buyer,
to the effect that Buyer has duly performed and complied with the covenants and
conditions set forth in Sections 9.1 and 9.2.
9.4 Opinion of Buyer's Counsel. Seller shall have received from
counsel to Buyer, a favorable opinion, dated as of the Closing Date, and
satisfactory in substance and form to Seller and its counsel, to the following
effect:
(a) Standing etc. of the Buyer. Buyer has all requisite
power and authority to consummate the transactions contemplated in the
Agreement and to perform Buyer's obligations contemplated therein;
(b) Consents, Defaults, etc. Neither the execution, delivery
or performance by Buyer of this Agreement, nor the consummation by
Buyer of the transactions contemplated hereby (i) is prohibited by, or
requires Buyer to obtain or make any consent, authorization, approval,
filing or registration under, any law, rule or regulation, or, to the
best of counsel's knowledge after due inquiry, under any judgment,
order, writ, injunction or decree which is binding upon Buyer, or (ii)
will violate any provision of, result in any default or acceleration of
any obligations under, result or require any consent (other than
consents identified in such opinion and duly obtained prior to the
Closing)
19
24
under any indenture, lease, mortgage or other agreement to which Buyer
is a party or is otherwise bound;
(c) Execution and Delivery. This Agreement has been duly
executed and delivered by Buyer, and constitutes the legal, valid and
binding obligation of Buyer enforceable against Buyer in accordance
with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization and other similar
laws relating to or affecting the rights of creditors generally, and is
subject to general principles of equity, regardless of whether such
enforceability is considered in a proceeding at law or in equity.
9.5 Corporate Documents. Buyer shall deliver to Seller (a) a
certificate of good standing from its state of incorporation; and (b) a
certified resolution of the Board of Directors of Buyer authorizing this
transaction.
10. COVENANT NOT TO COMPETE
10.1 Non-competition. In furtherance of the sale of the Assets to
Buyer, for a period of ten (10) years following the Closing, Seller, ACI and the
Mefferds (and Xxxxx Xxxxxxx, by execution of this Agreement for that purpose
only) shall not, nor permit any person or entity then controlled by Seller, ACI
or the Mefferds, acting alone or in combination, to, directly or indirectly,
engage, participate in (as a partner, shareholder, officer, or director,
employee, consultant, agent or otherwise) any business activity which is the
same as, or similar to, or competitive with, the business conducted by Buyer
utilizing the Assets anywhere in the world, nor shall Seller or ACI directly or
indirectly tamper with or induce any employee, agent, salesperson, contractor,
customer, supplier, manufacturer or dealer of Buyer to leave, to stop selling to
or stop buying from Buyer or otherwise to cease dealing with Buyer.
10.2 Enforcement. The provisions of the covenant contained in this
Section 10 are severable and independent and shall be interpreted and applied
consistently with requirements of reasonableness and equity. If any provision of
the covenant contained in this Section 10 shall be held to be invalid or
otherwise unenforceable, in whole or in part, the remainder of the provisions,
or the enforceable parts thereof, shall not be affected thereby.
20
25
10.3 Injunctive Relief. Buyer, ACI and Seller acknowledge that
compliance by Seller and ACI with the covenant contained in this Section 10 is
necessary to protect the interests of Buyer and that a breach of the covenant
contained in this Section 10 will result in irreparable and continuing damage to
Buyer for which there will be no adequate remedy at law. Seller and ACI hereby
agree, without intending to limit the remedies available to Buyer, that Buyer
and its successors and assigns shall be entitled to injunctive relief (and
attorney fees and costs) with respect to the covenant contained in this Section
10, in addition to such other and further relief as may be appropriate.
11. ADDITIONAL COVENANTS OF BUYER AND SELLER
11.1 Further Assurances. After the Closing, and for no further
consideration, Seller shall perform all other action reasonably requested by
Buyer (including, without limitation, the use of Seller's best efforts) to
enable Buyer to accomplish transfer of registrations, permits, approvals and the
like as contemplated by this Agreement and shall execute, acknowledge and
deliver such assignments, transfers, consents and other documents as Buyer or
its counsel may reasonably request to vest in Buyer, and protect Buyer's right,
title and interest in, and enjoyment of, the Assets intended to be assigned and
transferred to Buyer pursuant to this Agreement.
11.2 Bulk Sales Laws. Buyer waives compliance by Seller and Seller
waives compliance by Buyer with the provisions of any applicable bulk sales,
fraudulent conveyance or other law for the protection of creditors, and Seller
shall indemnify and hold Buyer harmless and reimburse Buyer for, any and all
claims, liabilities or obligations (other than those assumed by Buyer hereunder)
which Buyer may suffer or incur by virtue of noncompliance by Buyer with such
applicable laws under the indemnity provisions of Section 12 herein.
11.3 Rights to Intellectual Property. Seller shall not, at any time
after the Closing Date, use or disclose to any third party any Intellectual
Property or Processes which at such time is not generally known to the public or
recognized as standard practice, or any formulae, scientific and technical
information, manufacturing procedure, know-how, processes, trade secrets or
other confidential information transferred to Buyer pursuant to this Agreement,
without the express prior written consent of Buyer.
21
26
11.4 Use of Trade Names. Seller agrees that Buyer may, at its
discretion, use Seller's name and any trade names used by Seller, or a phrase
similar thereto in connection with marketing products after the Closing Date.
Seller further agrees that Buyer may use containers, forms and other supplies
which have Seller's name printed thereon after the Closing Date. Seller shall
change its name to a dissimilar name as of the Closing and shall file a
certificate of amendment to its articles of incorporation as of the Closing to
effect this change.
12. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
COVENANTS; INDEMNIFICATION; ETC.
12.1 Survival of Representations, Warranties and Covenants. The
representations, warranties and covenants herein and in any Exhibit,
certificate, instrument or document delivered pursuant to this Agreement shall
survive both the Closing and any investigation at any time made for or on behalf
of any party hereto.
12.2 Indemnification by Seller. Seller, ACI and the Mefferds shall,
jointly and severally, indemnify and hold Buyer (and its shareholders,
directors, officers, employees and affiliates) harmless from and against any and
all claims, liabilities (including any strict liabilities with respect to any
Loss specified under clause (iv) below), fines, penalties, natural resource
damages, losses, damages, (including incidental or consequential damages such as
lost profits resulting from any disruption of operation of the Assets), costs
and expenses (including costs and counsel fees) incurred by Buyer from or
related to any of the following (hereinafter called a "Loss" or "Losses"):
(i) any breach by Seller of any representation, warranty,
covenant, obligation or undertaking made by Seller in or pursuant to
this Agreement;
(ii) any claim or liability not arising out of an obligation
assumed by Buyer hereunder and asserted for failure to comply with any
applicable bulk sales, fraudulent conveyance or other laws for the
protection of creditors;
(iii) any product liability claim or other claim for the
breach of any express or implied warranty, and any other claim of
whatever nature, and from all damages resulting therefrom, which may be
made in connection with the sale of products manufactured by Seller
prior to the Closing Date;
22
27
(iv) any claim or liability relating to the operation of the
Business prior to the Closing Date not assumed by Buyer, including,
without limitation, liability under labor, collective bargaining, or
employment agreements and liability relating to pension, retirement or
other employee benefit plans; or
(v) any claim related to a breach of any environmental
covenants, representations or warranties contained in this Agreement,
or arising out of or related to any actual or alleged spills, disposal,
emissions, leaks, leaching, discharging, or release (as those terms are
defined in their broadest sense by any federal, state or local law,
rule or regulation or order pertaining to the protection of the
environment or public health) of Hazardous Substances prior to the
Closing Date, and including any migration or escape of such Hazardous
Substances onto adjacent lands or properties after the Closing Date.
12.3 Indemnification by Buyer. Buyer shall indemnify and hold
Seller harmless from and against any and all claims, liabilities, losses,
damages, costs and expenses (including reasonable counsel fees) from or related
to (a) any breach by Buyer of any representation, warranty, covenant, obligation
or undertaking made by Buyer in or pursuant to this Agreement, (b) matters
arising solely from the operation of the Business after the Closing Date, other
than liabilities retained by Seller hereunder, and (c) any product liability
claim for injury to persons or property which may be made in connection with the
sale of products manufactured by Buyer after the Closing Date.
12.4 Indemnification Notice, etc.
(a) If any action, suit or proceeding shall be commenced, or
any claim or demand shall be asserted, in respect of which a party
entitled to indemnification pursuant to this Agreement (the
"Indemnitee") demands indemnification under this Section 12, the party
from which such indemnification is demanded under this Section 12 (the
"Indemnitor") shall be notified to that effect with reasonable
promptness and shall have the right to assume entire control of its
defense (including the selection of counsel), subject to the right of
the Indemnitee to participate (with counsel of its choice) in, the
defense, compromise or settlement thereof.
23
28
(b) The fees and expenses of any counsel chosen by Indemnitee
following acceptance by Indemnitor of its indemnity obligations shall
be at the expense of the Indemnitee unless (i) the employment of such
counsel by the Indemnitee has been specifically authorized by the
Indemnitor, or (ii) the named parties to any such action (including any
impleaded parties) include both the Indemnitor, and the Indemnitee
shall have been advised by its counsel that there may be one or more
good faith legal defenses available to it which are different from or
additional to those available to the Indemnitor.
(c) The Indemnitee shall cooperate fully in all respects with
the Indemnitor in any such defense, compromise or settlement,
including, without limitation, by making available all pertinent
information under its control to the Indemnitor. The Indemnitor will
not compromise or settle any such action, suit, proceeding, claim or
demand without the prior written consent of the Indemnitee; provided,
however, that in the event such consent is withheld, then the
liabilities of the Indemnitor shall be limited to the total sum
representing the amount of the proposed compromise or settlement and
the amount of counsel fees accumulated at the time such consent is
withheld. The Indemnitor shall not be liable for any settlement by
Indemnitee of any action, suit, proceeding, claim or demand, unless the
Indemnitee obtains the prior written consent of the Indemnitor.
13. EXPENSES. Each party hereto shall bear its own expenses, including
the fees of any attorneys, accountants or other engaged by such party, incurred
in connection with
14. NOTICES. All notices, requests, demands and other communications
made hereunder shall be in writing and shall be deemed duly given if and when
delivered by hand, with receipt duly acknowledged, or sent by registered or
certified mail, postage prepaid, as follows, or to such other address or person
as any party may designate by notice to the other party or parties hereunder:
this Agreement and the transactions contemplated hereby, it being understood
that Seller's expenses shall not be paid from the Assets.
24
29
If to Seller and ACI: Gold Star Manufacturing, Inc.
Xxxxxxx 00 Xxxx
XX Xxx 000
Xxxxxxx, Xxxx 00000
ATTENTION: Xx. Xxxxx Xxxxxxx
If to Buyer: Kaydon Acquisition Corporation V
19345 XX 00 Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
ATTENTION: Xx. Xxxxxxx Xxxxxx
15. AMENDMENTS; TERMINATION. This Agreement cannot be changed or
terminated orally and no waiver of compliance with any provision or condition
hereof and no consent provided for herein shall be effective unless evidenced by
an instrument in writing duly executed by the proper party.
16. EFFECT OF THIS AGREEMENT; COUNTERPARTS. This Agreement (including
the Exhibits hereto) sets forth the entire understanding of the parties and
supersedes any and all prior agreements, arrangements and understandings
relating to the subject matter hereof. The section headings of this Agreement
are for convenience of reference only and do not form a part hereof and do not
in any way modify, interpret or construe the intentions of the parties. This
Agreement may be executed in two or more counterparts, and all such counterparts
shall constitute one and the same instrument.
17. GOVERNING LAW AND JURISDICTION. This Agreement has been made and
entered into under the laws of the State of Iowa and its laws shall control the
interpretation thereof. The parties hereto agree to submit to the personal
jurisdiction of the courts in the State of Iowa to address any suit, action or
proceeding related to this Agreement.
18. ASSIGNMENTS; SUCCESSORS AND ASSIGNS. This Agreement may not be
assigned without the written consent of the other party, except that Buyer may
assign this Agreement to an affiliate in which event Buyer shall remain liable
for the obligations incurred hereunder. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors, legal
representatives and assigns.
25
30
19. PRESS RELEASES AND ANNOUNCEMENTS. No party shall issue any
press release or announcement relating to the subject matter of this Agreement
(prior to the Closing) without the prior written approval of the other party;
provided, however, that any party may make any public disclosure it believes in
good faith is required by law or regulation (in which case the disclosing party
will advise the other party prior to making the disclosure).
20. CONSTRUCTION. The language used in this Agreement will be deemed to
be the language chosen by the parties to express their mutual intent, and no
rule of strict construction shall be applied against any party. Any reference to
any federal, state, local, or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless the context
requires otherwise.
IN WITNESS WHEREOF, each party hereto has executed this Agreement by
its respective duly authorized officer as of the day and year first above
written.
KAYDON ACQUISITION CORP. V
By /s/ Xxxxxxx X. Xxxxxx
---------------------------------------------
Xxxxxxx X. Xxxxxx
Its Treasurer
- Buyer
GOLD STAR MANUFACTURING, INC.
By /s/ Xxxxx X. Xxxxxxx
--------------------------------------------
Its President
--------------------------------------------
- Seller
AMERICAN CENTRAL INDUSTRIES, INC.
By /s/ Xxxxx X. Xxxxxxx
---------------------------------------------
Its President
--------------------------------------------
26
31
/s/ Xxxxx Xxxxxxx
----------------------------------------------------
Xxxxx Xxxxxxx
/s/ Xxxxx Xxxxxxx
----------------------------------------------------
Xxxxx Xxxxxxx
/s/ Xxxxx Xxxxxxx
----------------------------------------------------
Xxxxx Xxxxxxx (as to non-competition agreement only)
27
32
INDEX TO EXHIBITS
Exhibit Description
------- -----------
1.1 Claims and Encumbrances
1.1(b) Machinery and Equipment
1.1(c) Intellectual Property
1.1(d) Patents
1.2 Latest Financial Statements
1.3 Excluded Assets
2.3 Assumed Accounts Payable
4.3 Consents
4.4 Machinery and equipment requiring repairs
4.6 Employee claims
4.7 Permits
4.8 Litigation
4.11 Title to Assets
4.12 Non-compliance with laws
4.13 Burdensome restrictions
4.15 Unbooked liabilities
4.17 Leases and agreements
4.19 Uncollectible accounts receivable
4.20 Insurance
4.21 Labor matters
4.22 Employee benefit plans
6.5 Labor Leasing Agreement
8.9 Employment and Consulting Agreements
8.11 Sublease
28
