AGREEMENT
THIS AGREEMENT is made on October 27, 1998, between MMC
Manufacturing Corp. f/k/a Milford Manufacturing Corporation, a Michigan
corporation (referred to as "MMC"), and Secom General Corporation, a Delaware
corporation ("Secom"), collectively referred to as "Seller", and Delco Remy
America, Inc., a Delaware corporation ("DRA").
BACKGROUND
MMC owns certain assets located at plants in Milford and Wyandotte,
Michigan and Rochester, Indiana, which produce machined starter motor shafts
(currently known as part #10492416 - "Shaft") for DRA pursuant to blanket
purchase order number DRA 872044, a copy of which is attached as Exhibit "A"
(the "Purchase Order). Notwithstanding the Purchase Order, Seller desires to
sell and DRA desires to purchase the Purchased Assets (as defined below) on
the terms and conditions as set forth in this Agreement and upon completion
of such sale and purchase, to terminate the Purchase Order.
AGREEMENTS
NOW, THEREFORE, in consideration of the Background set forth above
and pursuant to the terms and conditions set forth in this Agreement, Seller
agrees to sell and the DRA agrees to purchase the Purchased Assets as
follows:
1. Assets Purchased. Subject to the terms and conditions of this
Agreement, at Closing, Seller shall sell, assign, convey, transfer, set over,
and deliver to DRA all of Sellers' rights, title and interests of every
conceivable kind or character whatsoever, whether tangible or intangible, in
the machinery, equipment, related fixtures and gages, and inventory
identified below which are used by Seller and/or its subcontractors, or are
otherwise material to the manufacture of Shafts for DRA, (other than the
excluded assets under section 1.2) below (collectively, the "Purchased
Assets"), wherever located, and including without limitation any and all such
assets which are located at the premises of PGK Products, Incorporated,
Modern Materials, Inc., National Induction, Inc., Xxxxxx Industries, Inc.,
and/or Horizon Technology L.L.C. ("Horizon"). The Purchased Assets shall be
transferred from Seller to DRA free and clear of all Encumbrances (as defined
below). At the Closing hereunder, DRA shall purchase the Purchased Assets
from Sellers, upon and subject to the terms and conditions of this Agreement
and in reliance on the representations, warranties and covenants of Sellers
contained herein, in exchange for the Purchase Price.
1.1 Definition of Purchased Assets. For purposes of this
Agreement, the term Purchased Assets shall be defined as
including only the following:
1.1.1 Tangible Personal Property. All equipment,
machinery, tools, goods, supplies, tooling and
other tangible personal property listed in
Schedule 1.1.1
1.1.2 Inventory and Supplies. All Shaft inventory, raw
materials, and work in process listed in Schedule
1.1.2.
1.1.3 Permits. All transferable local, state, and
federal franchises, licenses, permits, and similar
items, if any, pertaining to the Purchased Assets.
1.1.4 Warranties. All assignable third party warranties
and guarantees with respect to any of the
Purchased Assets.
1.1.5 Third Party Claims. All claims of Sellers against
third parties with respect to the Purchased
Assets.
1.2 Excluded Assets. Notwithstanding the foregoing, Seller
shall not sell to DRA and Seller shall retain as its own
property the assets on Schedule 1.2 even though such assets
may have been used by Seller in the manufacture of Shafts.
Excluded Assets shall include perishable tools, supplies,
spare parts, and inventory which DRA declines to purchase
and which are generally described in Schedule 1.2. In
addition, Seller shall not sell to DRA and Seller shall
retain as its own property all of its assets, properties
and rights other than those identified in Section 1.1
above.
1.3 Inadvertently Omitted Assets. If assets are discovered
after Closing that were inadvertently omitted from Schedule
1.1.1 or Schedule 1.1.2, the parties agree to deal with
each other in good faith to effect the transfer of such
asset(s) to DRA and provide for the adjustment and payment
of the Purchase Price (if with respect to Schedule 1.1.2).
2. Liabilities.
2.1 Liabilities Assumed. Subject to the terms and conditions of
this Agreement, at the Closing, Seller will assign and
transfer to DRA the written and fully executed contracts
specifically listed on Schedule 2 attached hereto
(collectively, the "Assigned Contracts"), and DRA will
assume and, in a timely fashion, will perform all of
Seller's obligations and liabilities under the Assigned
Contracts in accordance with the respective terms thereof,
but only to the extent of the written terms thereof
(collectively, the liabilities and obligations described in
this sentence are referred to as the "Assumed
Liabilities").Notwithstanding the preceding, DRA shall not
assume or be responsible for any of Seller's obligations to
DuPouy and Associates, Xxx Xxxxx, and/or Continental Design
on account of: Chrysler-Kokomo, Indiana; Delphi-Anderson,
Indiana, and Dayton Ohio; or New Venture Gear in Troy,
Michigan, Muncie, Indiana, and Syracuse, New York. In
addition, DRA shall not assume or be responsible for any
obligations and liabilities under any Assigned Contract
which arise prior to the Closing Date or arise out of or
result from any oral promises, discussions or other
agreements or arrangements, including any unexecuted drafts
of agreements between Seller and the other parties to any
of such Assigned Contracts. Notwithstanding the foregoing,
DRA shall assume and be responsible for the obligations and
liabilities which arose prior to Closing Date listed on
Schedule 2.1. Except as otherwise specifically provided in
this Agreement, DRA shall not assume or be liable for any
liabilities or obligations of the Seller, whenever arising
and whether primary or secondary, direct or indirect,
absolute or contingent, contractual, tortious or otherwise,
other than the Assumed Liabilities.
2.2 Retained Liabilities. Except as otherwise specifically set
forth in Section 2.1 of this Agreement, Seller shall retain
all debts, liabilities or obligations of any kind to third
parties, whether accrued, absolute, contingent, known,
unknown or otherwise, including without limitation, any and
all liabilities arising out of or relating to Seller's
ownership and operation (or operation by its
subcontractors) of the Purchased Assets on or prior to the
Closing Date (the "Retained Liabilities"), it being
understood that Retained Liabilities shall be retained by
Seller and Seller hereby waives and releases DRA from all
Retained Liabilities. Notwithstanding the foregoing, any
debts, liabilities or obligations of Sellers to DRA or its
customers, including without limitation warranty, product
liability, true position issues, surface issues or untimely
delivery claims, including premium freight, which facts
form the basis of any claim which arises prior to the
signing of this Agreement shall not be Retained Liabilities
and shall be fully released under Section 15.9 hereof.
Premium freight necessitated by late deliveries occurring
after the date of this Agreement's execution through
Closing, to the extent that DRA has not caused the
tardiness, shall remain the obligation of Seller. Seller
specifically agrees to retain and be responsible for
Seller's obligations to DuPouy and Associates, Xxx Xxxxx,
and/or Continental Design on account of: Chrysler-Kokomo,
Indiana; Delphi-Anderson, Indiana, and Dayton Ohio; and New
Venture Gear in Troy, Michigan, Muncie, Indiana, and
Syracuse, New York.
3. Purchase Price for Purchased Assets.
3.1 The Purchase Price. The purchase price to be paid by DRA to
Seller for the Purchased Assets shall be $4,200,000, plus
the adjustments as provided in Section 3.2.2 (the "Purchase
Price").
3.2 Payment of Purchase Price. DRA shall pay the Purchase Price
on the Closing Date as follows:
3.2.1 Purchase Price.:
(a) One million five hundred thousand dollars
($1,500,000) payable in four (4) equal
annual principal payments of three hundred
seventy five thousand dollars ($375,000),
commencing September 1, 1999, plus interest
on the outstanding balance of eight and
one-half percent (8.5%) per annum, and a one
time liquidated damages penalty of
$250,000 in the event DRA fails to make
payments when due, pursuant to the
promissory note attached as Exhibit 3.2.1;
and
(b) The remaining adjusted Purchase Price to be
paid by wire transfer of immediately
available funds to the account of GE Capital
in an amount sufficient to pay off Seller's
debt, with any remaining proceeds to be paid
by wire transfer of immediately available
funds to the account of Seller at NBD Bank
N.A., account number 00000000; ABA number
072000326.
3.2.2 Purchase Price Adjustment. At Closing Buyer shall
pay Seller an additional $34,536.10 in cash which the
parties agree reflects the value of certain Seller expenses
for inventory at various stages of the manufacturing
process. The adjustment shall be calculated as shown on
Schedule 3.2.2.
3.3 Allocation of Purchase Price. The Purchase Price shall be
allocated among the Purchased Assets in accordance with
attached Schedule 3.3. DRA and Seller agree to execute IRS
Forms 8594, with an allocation of the Purchase Price in
accordance with this Section 3.3 which is mutually
acceptable to both parties, and to file all other returns
and reports in a manner consistent with the allocations in
this Section.
4. Delivery Free of Encumbrances. At Closing, Seller shall deliver
good and marketable title to the Purchased Assets free and clear of all
liens, claims, demands, charges, options, equity interests, leases,
tenancies, easements, pledges, security interests, and other encumbrances
("Encumbrances"). Seller shall deliver to Buyer at Closing a payoff statement
of Seller's lenders with respect to the Purchased Assets, together with fully
executed UCC-3 termination statements and such other documentation as may be
reasonably requested by DRA, to assure that all Encumbrances have been fully
and finally released by all applicable secured parties.
5. Preclosing Actions. Before the Closing:
5.1 Conduct of Business. Seller shall carry on and conduct its
business in the ordinary course consistent with past
practices or as otherwise agreed to in writing in advance
by DRA, and shall use its best efforts to timely deliver
parts to DRA according to DRA's release requirements . In
addition, subject to DRA compliance, Seller will not take
any action which would make any of the representations or
warranties of Seller contained in this Agreement untrue or
incorrect or prevent Seller from performing its obligations
hereunder, including without limitation selling or
otherwise transferring any or all of the Purchased Assets
other than as contemplated herein. Further, DRA shall
continue to carry on and conduct its business with Seller
consistent with past practices.
5.2 DRA's Access. From the date of this Agreement through the
Closing,
Seller shall permit DRA and its representatives to make a
full business, financial, accounting and legal audit of the
Purchased Assets and the Assumed Liabilities. Seller shall
take all reasonable steps necessary to cooperate with DRA
in undertaking this audit.
6. Closing Matters.
6.1 Closing. The closing of the transactions contemplated in
this Agreement (the "Closing") shall take place at the
offices of Xxxxx and Xxxxx, P.C., 0000 Xxxx Xxx Xxxxxx,
Xxxxx 000, Xxxx, Xxxxxxxx or at such other place as the
parties may agree on (the "Closing Date"), but in no event
later than October 26, 1998.
6.2 Certain Closing Expenses; Prorations. Seller shall be
liable for and shall pay all federal, state, and local
sales, use, excise and other taxes, duties, or other like
charges properly payable on and in connection with Seller's
conveyance and transfer of the Purchased Assets to DRA.
Personal property taxes, if any, shall be prorated ratably
as of the Closing Date. To the extent practicable, all such
prorations shall be computed and paid at the Closing, and
to the extent not practicable, as soon as practicable
thereafter.
7. Sellers' Representations and Warranties. As of the date of this
Agreement and as of the Closing, the Seller represents and warrants to DRA,
and acknowledges and confirms, that DRA is relying on these representations
and warranties in entering into this Agreement:
7.1 Organization and Standing. Each Seller is a corporation
duly organized, validly existing, and in good standing
under the laws of the state of their respective
incorporations, and Sellers have all requisite power and
authority (corporate and otherwise) to own their respective
properties and conduct their respective businesses as they
are now being conducted.
7.2 Authorization. Sellers have all requisite power and
authority (corporate and otherwise), and have all requisite
legal capacity (a) to execute, deliver, and perform this
Agreement, to which each is a party and (b) to consummate
the transactions contemplated under this Agreement. Sellers
have taken all necessary corporate action (including the
approval of their boards of directors and shareholders, if
applicable) to approve the due execution, delivery, and
performance of this Agreement to be executed and delivered
by each of them and the consummation of the transactions
contemplated in this Agreement. Sellers have duly executed
and delivered this Agreement. This Agreement, when executed
and delivered, will be a legal, valid, and binding
agreement of the Sellers, enforceable against them in
accordance with its terms, except as such enforcement may
be limited by bankruptcy, insolvency, moratorium, or
similar laws relating to the enforcement of creditors'
rights.
7.3 Existing Agreements and Governmental Approvals. The
execution, delivery, and performance of this Agreement and
the consummation of the
transactions contemplated herein: (i) do not and will not
violate any provisions of law applicable to any of the
Sellers or the Purchased Assets; (ii) do not and will not
conflict with or violate the respective Articles of
Incorporation or By-laws of Sellers; (iii) do not and will
not conflict with, result in the breach or termination of
any provision of, or constitute a default under any
indenture, mortgage, lease, deed of trust, or other
instrument, contract, or agreement or any order, judgment,
arbitration award, or decree to which any Seller is a party
or by which any of them or any of their respective assets
and properties are bound which would not be paid at closing
(including, without limitation, the Purchased Assets); or
(iv) do not and will not result in the creation of any
Encumbrance on any of the Purchased Assets. Except as set
forth on Schedule 7.3, no approval, authority, or consent
of, or filing by, the Seller with, or notification to, any
federal, state, or local court, authority, or governmental
or regulatory body or agency or any other corporation,
partnership, individual, or other entity is necessary to
(i) to authorize the execution and delivery of this
Agreement by Seller, (ii) authorize the consummation of the
transactions contemplated by this Agreement, or (iii)
continue DRA's ownership, use and/or operation of the
Purchased Assets after the Closing Date.
7.4 No Insolvency. No insolvency proceeding of any
character, including, without limitation, bankruptcy,
receivership, reorganization, composition, or arrangement
with creditors, voluntary or involuntary, affecting any
Seller or any of their respective assets or properties is
pending, threatened or contemplated. . Seller (both before
and after giving effect to the transactions contemplated
hereby) is solvent and has assets having a fair value in
excess of the amount required to pay its liabilities on its
existing debts.
7.5 Title to Purchased Assets. Sellers are the sole and
absolute owners of the Purchased Assets and have good and
marketable title to all of the Purchased Assets, all of
which shall be free and clear (at the time of Closing) of
any and all Encumbrances.
7.6 Condition of Purchased Assets. To the best of Seller's
knowledge after due inquiry : (a) the machinery and
equipment included in the Purchased Assets are in good
operating condition and repair, normal wear and tear
excepted; (b) except as indicated on Schedule 7.6, there is
no material expenditure that is presently required to
maintain such condition or state of repair; and (c) such
machinery and equipment is suitable for the purposes for
which they are presently used, are structurally sound and
free from patent defects. . The Inventory of Seller
included in the Purchased Assets consists of items of a
quality and quantity usable, and/or saleable (as to
finished goods inventory) in the ordinary course of
business within a reasonable period of time; the raw
materials and work in process inventory of Seller included
in the Purchased Assets can reasonably be expected to be
consumed in the ordinary course of business within a
reasonable period of time; and the Purchased Assets, except
those described in paragraph 1.2, represent all the
machinery and equipment currently used by Seller, or
Seller's equipment being used by its subcontractors in the
manufacture of the Shaft.
7.7 Litigation. There are no claims, disputes, actions,
suits, proceedings, or investigations of third parties
pending or, to the best knowledge of Seller, threatened
against or affecting Seller or the Purchased Assets before
any court, arbitrator or administrative, governmental or
regulatory authority or body and there is no basis for any
such action, suit, proceeding or investigation other than
trade payables disputes which shall be addressed pursuant
to section 10.6 at Closing. There are currently no
outstanding judgments, decrees or orders of any court,
arbitrator or administrative, governmental or regulatory
authority or body to which Seller is a party against or
affecting Seller or the Purchased Assets.
7.8 Compliance with Laws. Seller has complied with all
laws, orders, regulations, rules, decrees, permits and
ordinances affecting the Purchased Assets and operation of
the Purchased Assets.
7.9 Bulk Transfer Act. At Closing, MMC shall submit a list
of its creditors in compliance with Section 10.6.
7.10 No Brokers. Seller has not engaged, and is not
responsible for any payment to, any finder, broker, or
consultant in connection with the transactions contemplated
by this Agreement.
7.11 Taxes. For the purposes of this Agreement, Tax or
Taxes shall mean all federal, state, county, local, and
other taxes (including, without limitation, income taxes;
premium taxes; single-business taxes; excise taxes; sales
taxes; use taxes; value-added taxes; gross receipts taxes;
franchise taxes; ad valorem taxes; real estate taxes;
severance taxes; capital levy taxes; transfer taxes; stamp
taxes; employment, unemployment, and payroll-related taxes;
withholding taxes; and governmental charges and
assessments), and include interest, additions to tax, and
penalties. Seller has filed on a timely basis all Tax
returns it is required to file under federal, state, or
local law and has paid or established an adequate reserve
with respect to all Taxes for the periods covered by such
returns. No agreements have been made by or on behalf of
Seller for any waiver or for the extension of any statute
of limitations governing the time of assessment or
collection of any Taxes. Seller and its officers have
received no notice of any pending or threatened audit by
the IRS or any state or local agency related to Seller's
Tax returns or Tax liability for any period, and no claim
for assessment or collection of Taxes has been asserted
against Seller. There are no federal, state, or local tax
liens outstanding against any of Seller's assets
(including, without limitation, the Purchased Assets). The
sale by Seller of the Purchased Assets and DRA's
acquisition of such assets will not result in the
imposition of or liability for any sales or use taxes.
7.12 Each of Schedules 2A, 2B, 2C, 2E and 2F attached
hereto reflects a true, correct and complete copy of the
written terms of each of the respective Assigned Contracts
described on Schedule 2 hereof, and there are no other
written agreements of other written provisions relating in
any way to such Assigned Contracts other than as set forth
on such schedules.
7.13 Seller has paid in full, or has had a third party pay
on Seller's behalf, all personal property taxes reflected
on Exhibit B attached hereto; all such taxes reflect taxes
assessed solely on Purchased Assets.
7.14 The list of Seller's vendors attached as Schedule 10.6
and the amounts specified therein to be owing to such
vendors (whether or not due) are true, correct and complete
as of the date hereof. Seller has paid in full, or will
mail a check from closing paying in full, each of the
vendors listed on Schedule 10.6 except as noted thereon.
8. DRA's Representations and Warranties. DRA represents and warrants
to Seller that:
8.1 Organization and Standing. DRA is a corporation duly
organized and validly existing under the laws of the State
of Delaware, and DRA has all the requisite power and
authority (corporate and otherwise) to own its properties
and to conduct its business as it is now being conducted.
8.2 Authorization. DRA has taken all necessary corporate action
(a) to duly approve the execution, delivery, and
performance of this Agreement, and (b) to consummate any
related transactions. DRA has duly executed and delivered
this Agreement. This Agreement, when executed and delivered
by the parties, will be a legal, valid, and binding
agreement of DRA, enforceable against DRA in accordance
with its terms, except as such enforcement may be limited
by bankruptcy, insolvency, moratorium, or similar laws
relating to the enforcement of creditor's rights
(regardless of whether such enforceability is considered in
a proceeding at law or in equity).
9. Receivables. At or before Closing, DRA shall pay all undisputed
amounts on all outstanding invoices for part shipments from Seller and
related freight regardless of whether such amounts are then due; provided,
however, DRA will pay $50,000 (less DRA's $9,578.45 payment made towards the
freight invoices dated 10/10/97 and 4/24/98) as a full and final settlement
for two (2) freight invoices totaling $76,391.20 (10/10/97 for $36,688.11 and
4/27/98 for $39,703.09). Schedule 9 attached hereto sets forth all of the
foregoing amounts to be paid by DRA at Closing. Further, notwithstanding the
terms of section 3.2.2, DRA will continue to pay $2.70 per shaft to Seller
for product shipped prior to the Closing along with any per part premium
payable to the subcontractors through the Closing date to the extent
specified in the purchase orders between Seller and its subcontractors as
listed on Schedule 2 and/or as described below:
Xxxxxx xxxxx differential of 0.28 (0.86 less 0.58) for 25,476
pieces
10. Conditions Precedent to DRA's Obligations. All obligations of
DRA under this
Agreement are subject to the fulfillment or satisfaction, prior to or at the
Closing, of each of the following conditions precedent:
10.1 Representations and Warranties. The representations and
warranties of Seller contained in this Agreement or in
any schedule, certificate or document delivered by Seller
to DRA shall have been true and correct on the date
hereof and shall be true and correct on the Closing Date,
with the same effect as though such representations and
warranties were made as of such date.
10.2 Compliance with Agreement. Seller shall have performed
and complied with all agreements, covenants and
conditions required by this Agreement to be performed or
complied with by them prior to or at the Closing.
10.3 Officer Certificate. DRA shall have received a
certificate from an officer of Seller dated the Closing
Date, certifying that the conditions specified in
Sections 10.1 and 10.2 hereof have been fulfilled.
10.4 Disputes. On the Closing Date, no third-party suit,
action or other proceeding, or injunction or final
judgment relating thereto, shall be threatened or be
pending before any court or governmental or regulatory
official, body or authority in which it is sought to
restrain or prohibit or to obtain damages or other relief
in connection with this Agreement or the consummation of
the transactions contemplated hereby, and no
investigation that might result in any such suit, action
proceeding shall be pending or threatened. On the Closing
Date, no voluntary or involuntary bankruptcy petition
shall have been filed by or against Seller, no receiver
shall have been appointed of Seller, and there shall have
been no assignment by Seller for the benefit of
creditors.
10.5 Board Approval. Seller shall have received the approval
of the execution and delivery of and performance under
this Agreement and the transactions contemplated hereby
by its Board of Directors.
10.6 Vendor Payments. Seller shall have provided DRA with
written evidence satisfactory to DRA that Seller has made
or shall make at the time of closing all payments to its
vendors with respect to the Purchased Assets, whether or
not then due (any disputed amounts will be paid into an
escrow account with an independent escrow agent and shall
be held in escrow until the matter is resolved, provided
that all such disputed and/or unpaid amounts shall
constitute Retained Liabilities); provided, however, DRA
shall pay the tooling obligations to Xxxxxx Industries
($29,100), National Induction ($6,400) and Aero Grinding
($560) and the amount owing to Canadian Measurement
Technologies ($2,136.43).
10.7 Due Diligence. DRA shall have completed an investigation
of the Purchased Assets and Assigned Contracts which
confirms, to the satisfaction of DRA, the satisfactory
condition of the Purchased Assets and the terms of the
Assigned Contracts.
11. Indemnification.
11.1 Indemnification by Seller. Each Seller (jointly and
severally) shall defend, indemnify, and hold harmless DRA
and its directors, officers, shareholders, affiliates,
agents, successors, and assigns from and against any and
all costs, losses, claims, suits, actions, proceedings
(whether pending or threatened), hearings,
investigations, charges, complaints, demands,
injunctions, judgments, orders, decrees, rulings,
obligations, taxes, liens, fees, including court costs,
assessments, diminution in value, liabilities, fines,
penalties, damages (compensatory, consequential, and
other), expenses, amounts paid in settlement, and
reasonable legal fees in connection with or resulting
from: (a) all debts, liabilities, and obligations of
Seller, whether accrued, absolute, contingent, known,
unknown, or otherwise, including without limitation the
Retained Liabilities, but excluding the Assumed
Liabilities and liabilities which are released pursuant
to Section 15.9; (b) any material inaccuracy in any
representation or a material breach of any agreement or
covenant of Seller contained in this Agreement; (c) the
parties' failure to comply with any bulk sales law and
any other similar laws in any applicable jurisdiction in
respect of the transactions contemplated by this
Agreement, or any action brought or levy made as a result
thereof; and (d) any action by Seller or any trustee in
bankruptcy or receiver or similar person to repossess any
or all of the Purchased Assets for any reason (other than
a failure of DRA to satisfy its payment obligations under
this Agreement) following the Closing Date.
11.2 Indemnification by DRA. DRA shall defend, indemnify, and
hold harmless Sellers and their directors, officers,
shareholders, affiliates, agents, successors, and assigns
from and against any and all costs, losses, claims,
suits, actions, proceedings (whether pending or
threatened), hearings, investigations, charges,
complaints, demands, injunctions, judgments, orders,
decrees, rulings, obligations, taxes, liens, fees,
including court costs, assessments, diminution in value,
liabilities, fines, penalties, damages (compensatory,
consequential, and other), expenses, amounts paid in
settlement, and reasonable legal fees in connection with
or resulting from: (a) any failure by DRA of its
obligations identified as being or becoming the
responsibility of DRA pursuant to the terms and
conditions within this Agreement; (b) any material
inaccuracy in any representation or a material breach of
any agreement or covenant of DRA contained in this
Agreement.
11.3 Third-Party Claims. If any third party shall notify any
party (the "Indemnified Party") with respect to any
matter (a "Third-Party Claim") which may give rise to a
claim for indemnification against the other party (the
"Indemnifying Party") under this Section 11, then the
Indemnified Party shall promptly (and in any event within
five (5) business days after receiving notice of the
Third-Party Claim) notify the Indemnifying Party thereof
in writing, but no failure to give such notice shall
relieve the Indemnifying Party of any liability hereunder
(except to the extent the
Indemnifying Party has suffered actual prejudice
thereby). The Indemnifying Party will have the right,
exercisable by written notice (the "Notice") to the
Indemnified Party within thirty days of receipt of notice
from the Indemnified Party of the commencement of or
assertion of any Third-Party Claim, to assume and conduct
the defense of such Third-Party Claim, using counsel
selected by the Indemnifying Party and reasonably
acceptable to the Indemnified Party; provided, however,
that the Indemnifying Party will not consent to the entry
of any judgment or enter into any settlement with respect
to the Third-Party Claim without the prior written
consent of the Indemnified Party (not to be withheld
unreasonably) unless the judgment or proposed settlement
involves only the payment of money damages and does not
impose an injunction or other equitable relief upon the
Indemnified Party, or if in the reasonable judgment of
the Indemnified Party, such judgment or settlement would
not have a continuing material adverse effect on the
Indemnified Party's business. Unless and until the
Indemnifying Party assumes the defense of the Third-Party
Claim as provided hereinabove, however, the Indemnified
Party may defend against the Third-Party Claim in any
manner it reasonably may deem appropriate. In no event
will the Indemnified Party consent to the entry of any
judgment or enter into any settlement with respect to the
Third-Party Claim without the prior written consent of
the Indemnifying Party (not to be withheld unreasonably)
unless such judgment or settlement involves only
equitable or non-monetary damages.
12. Expenses. Each of the parties shall pay all of the costs that it
incurs incident to the preparation, execution, and delivery of this Agreement
and the performance of any related obligations, whether or not the
transactions contemplated by this Agreement shall be consummated, except that
all such costs and all liabilities of Seller for Encumbrances shall be paid
out of the proceeds of the Purchase Price.
13. Risk of Loss. The risk of loss of or damage to the Purchased
Assets from fire or other casualty shall be on Seller at all times up to the
Closing, and it shall be the responsibility of Seller to repair, or cause to
be repaired, and to restore the property to the condition it was before the
loss or damage.
14. Termination. Excluding the release provisions contained in
paragraph 15.9 which shall survive any termination of this Agreement or
Closing, this Agreement may be terminated at any time before the Closing Date
as follows:
(a) By DRA and Seller jointly in writing.
(b) By DRA or Seller if there has been a material breach of any
of the representations or warranties set forth in this
Agreement on the part of the other, and this breach by its
nature cannot be cured before the Closing.
(c) By DRA or Seller if there has been a breach of any of the
covenants or agreements set forth in this Agreement on the
part of the other, and this breach is not cured within 10
business days after the breaching party or parties receive
written notice of the breach from the other party.
(d) by DRA if all of the conditions precedent set forth in
Section 10 hereof have not been materially met on or before
October 26, 1998 due solely to Sellers conduct or failure
to perform; or
(e) by either party if it reasonably determines that a material
condition to its obligations will not be or is incapable of
being satisfied at or prior to Closing, other than for
causes attributable to such party and its affiliates.
15. Miscellaneous Provisions.
15.1 Representations and Warranties. All representations,
warranties, and agreements made by the parties pursuant
to this Agreement shall survive the consummation of the
transactions contemplated by this Agreement, without
limitation as to time.
15.2 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this
Agreement shall be in writing and shall be deemed given
(a) when personally delivered or upon confirmation of
"good" or "ok" transmission if sent by facsimile
transmission to the party to be given the notice or other
communication or (b) on the business day following the
day such notice or other communication is sent by
overnight courier to the following:
if to Seller Parties: c/o Xxxxxx X. Xxxxx
Xxxxx and Xxxxx, P.C.
0000 Xxxx Xxx Xxxxxx Xxxx
Xxxxx 000
Xxxx, Xxxxxxxx 00000
Tel (000) 000-0000
Fax (000) 000-0000
if to DRA: Delco Remy America, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxx
Tel (000) 000-0000
Fax (000) 000-0000
With a copy to: Delco Remy International, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Tel (765) 000-0 000
Fax (000) 000-0000
or to such other address or facsimile number that the
parties may designate in writing.
15.3 Assignment. No party may assign this Agreement, or any
interest in it, without the prior written consent of the
other parties, such consent not to
be unreasonably withheld; provided, however, that either
party shall have the right to assign this Agreement to an
affiliate or to any of its lenders as collateral security
without the other party's consent. No assignment shall
relieve the assigning party of any obligations or
warranty, including but not limited to obligations under
any promissory note, indemnification, or release
covenants under this Agreement.
15.4 Parties in Interest. This Agreement shall inure to the
benefit of, and be binding on, the named parties and
their respective successors and permitted assigns, but
not any other person.
15.5 Choice of Law. This Agreement shall be governed,
construed, and enforced in accordance with the laws of
the State of Michigan. Seller and DRA shall be jointly
considered the authors and drafters of this Agreement.
15.6 Counterparts. This Agreement may be signed in any number
of counterparts with the same effect as if the signature
on each counterpart were on the same instrument.
15.7 Entire Agreement. This Agreement and all related
documents, schedules, exhibits, or certificates represent
the entire understanding and agreement between the
parties with respect to the subject matter and supersede
all prior agreements or negotiations between the parties.
This Agreement may be amended, supplemented, or changed
only by an agreement in writing that makes specific
reference to this Agreement or the agreement delivered
pursuant to it and that is signed by the party against
whom enforcement of any such amendment, supplement, or
modification is sought.
15.8 Arbitration.
(a) Any dispute, controversy, or claim arising out of or
relating to this Agreement or relating to the breach,
termination, or invalidity of this Agreement, whether
arising in contract, tort, or otherwise, shall at the
request of any party be resolved in binding arbitration.
Any arbitration shall proceed in accordance with Title 9
of the United States Code, as it may be amended or
recodified from time to time ("Title 9"), and the current
Commercial Arbitration Rules (the "Arbitration Rules") of
the American Arbitration Association ("AAA") to the
extent that Title 9 and the Arbitration Rules do not
conflict with any provision of this Section 15.8.
(b) No provision of or the exercise of any rights under this
Section 15.8 shall limit the right of any party to seek
and obtain provisional or ancillary remedies (such as
injunctive relief, attachment, or the appointment of a
receiver) from any court having jurisdiction before,
during, or after the pendency of an arbitration
proceeding under this Section. The institution and
maintenance of any such action or proceeding shall not
constitute a waiver of the right of any party (including
the party taking the action or instituting the
proceeding) to submit a dispute, controversy, or claim to
arbitration under this Section.
(c) Any award, order, or judgment made pursuant to
arbitration shall be deemed final and may be entered in
any court having jurisdiction over the enforcement of the
award, order, or judgment. Each party agrees to submit to
the jurisdiction of any court for purposes of the
enforcement of the award, order, or judgment.
(d) The arbitration shall be held before one arbitrator
knowledgeable in the general subject matter of the
dispute, controversy, or claim and selected by AAA in
accordance with the Arbitration Rules, except that any
arbitration in which the disputed, controverted, or
claimed amount (as reflected on the demand for
arbitration, as the same may be amended) exceeds
$50,000.00 shall be held before three arbitrators, one
arbitrator being selected by DRA, one by the Sellers, and
the third by the other two from a panel of persons
identified by AAA who are knowledgeable in the general
subject matter of the dispute, controversy, or claim.
(e) The arbitration shall be held at the office of AAA
located in Chicago, Illinois (as the same may be from
time to time relocated), or at another place the parties
agree on.
(f) In any arbitration proceeding under this Section 15.8,
subject to the award of the arbitrator(s), each party
shall pay all its own expenses, an equal share of the
fees and expenses of the arbitrator, and, if applicable,
the fees and expenses of its own appointed arbitrator.
The arbitrator(s) shall have the power to award recovery
of costs and fees, reasonable attorney fees as permitted
within paragraphs 11.1 and 11.2 of this Agreement,
administrative and AAA fees, and arbitrators' fees among
the parties as the arbitrators determine to be equitable
under the circumstances.
15.9 Release.
(a) Except for matters arising under this Agreement, the
enforcement of this Agreement and the liabilities of the
parties hereunder, including without limitation the
indemnities provided hereunder and the assumption of the
Assumed Liabilities by DRA and the retention of the
Retained Liabilities by Seller, the parties in
consideration of their mutual promises, covenants and
considerations made herein, do hereby expressly release,
waive, acquit and forever discharge the other and the
other's respective subsidiaries, divisions, affiliates,
directors, officers, shareholders, employees, parents,
agents, legal representatives, successors, predecessors
and assigns from, and hereby waives, any and all claims,
demands, actions, causes of action, suits, debts,
contracts, agreements, damages (including attorney's
fees) costs, expenses, liabilities, obligations,
including without limitation claims of economic duress
and controversies whatsoever, whether known or unknown,
now existing or hereafter arising, absolute, contingent
or otherwise, in law or in equity, that either party,
their representatives or executors had or now have
against the other party and its respective subsidiaries,
divisions, affiliates, parents directors, officers,
shareholders, employees, agents, legal representatives,
successors, predecessors and
assigns for, upon or by reason of any matter, cause or
thing whatsoever, from the beginning of time to the date
of the signing of this Agreement.
(b) Notwithstanding the above, it is specifically agreed,
however, that if either party shall breach any of the
terms and conditions of this Agreement, the other party
may bring a claim in arbitration to enforce this
Agreement, and if said party is successful in enforcing
the Agreement, said party will not only be entitled to
the benefits previously available and withheld contrary
to this Agreement, but also all actual attorney fees and
litigation costs incurred. Further, should any party
bring an action in contradiction to this release, such
party shall be responsible to indemnify and hold the
other party harmless from any and all costs, including
actual attorney fees, if the party bringing the suit is
not successful in voiding this release
(c) Except for the enforcement of the terms and conditions of
the Agreement, this release is intended to be a full,
final and complete release of all claims by either party
against the other to the extent set forth in Section
15.9(a) and the terms contained herein are not mere
recitals.
(d) The parties covenant with each other that as part of this
release they will not xxx each other for any matter
released by Section 15.9 and its subparts.
(e) The releases contained within this paragraph shall
survive any termination of this Agreement or Closing.
(f) The parties represent and acknowledge that they have been
advised by their respective counsel, are aware of their
rights, including the right to pursue claims of economic
duress, and acknowledge that this release under section
15.9 is a knowing, legal, valid and binding release.
15.10 Press Releases. Neither party to this Agreement shall
issue any press release or make any public announcement
relating to the subject matter of this Agreement 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 applicable law or
any listing or trading agreement concerning its publicly
traded securities, or required to be made to its
shareholders, in which case the disclosing party will use
reasonable efforts to advise the other party prior to
making the disclosures and to provide the other party
with a copy of the anticipated disclosure.
15.11 Setoff. Notwithstanding anything to the contrary
contained herein, DRA shall have the right to setoff
against the promissory note delivered to Seller pursuant
to Section 3.2.1, any and all liabilities or obligations
of Seller to DRA to the extent that Seller and DRA have
agreed in a writing, separate from any document signed at
Closing, on the amount of the liability or obligation
which is owing to DRA, , or if such liabilities or
obligations have been finally adjudged to be due and
owing by an arbitration panel whose award is enrolled
with a court of competent jurisdiction pursuant to a
final non- appealable
order, or by the judgment of a court of competent
jurisdiction pursuant to a final non- appealable order.
Nothing in this Section shall give DRA the right to delay
or defer its payment obligations required under this
Agreement or the Promissory Note in anticipation of any
right of setoff.
WHEREFORE, the parties have executed this Agreement on the date set
forth on the first page of this Agreement.
SELLER:
MMC Manufacturing Corp. f/k/a
Milford Manufacturing Corporation Secom General Corporation
By: /s/ Xxxx Xxxxxxxx By: /s/ Xxxxxx Xxxxxxxx
--------------------- -------------------
Its: Chairman Its: Chairman
----------------- -------------------
Dated: 10/27/98 Dated: 10/27/98
DRA:
Delco Remy America, Inc.
By: /s/ Xxxx Xxxxxxx
----------------
Its: Vice President of Purchasing & Logistics
------------------------------------------
Dated: 10/27/98
