ASSET PURCHASE AGREEMENT
among
Park-Ohio Industries, Inc.
(Parent)
GAMCO Components Group LLC
(Purchaser)
and
Amcast Industrial Corporation
(Seller)
Dated as of August 23, 2004
TABLE OF CONTENTS
1. AGREEMENT TO SELL AND AGREEMENT TO PURCHASE..............................1
1.1 Assets to be Conveyed..............................................1
1.2 Excluded Assets....................................................3
1.3 Closing............................................................4
2. CONSIDERATION TO BE PAID BY PURCHASER....................................4
2.1 Purchase Price for Acquired Assets; Payment Thereof................4
2.2 Liabilities Assumed by Purchaser...................................5
2.3 Liabilities Not Assumed by Parent or Purchaser.....................5
2.4 Purchase Price Adjustment..........................................6
2.5 Sales Taxes........................................................7
2.6 Price Allocation...................................................7
3. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER...................8
3.1 Organization, Good Standing, Authority and Enforceability..........8
3.2 Agreement Not in Breach of Other Instruments.......................8
3.3 Consents...........................................................8
3.4 Available Funds....................................................8
3.5 No Brokerage Fees..................................................8
3.6 Due Diligence Matters..............................................8
4. REPRESENTATIONS AND WARRANTIES OF SELLER.................................9
4.1 Organization, Good Standing and Authority..........................9
4.2 Authorization of Agreement.........................................9
4.3 Acquired Assets....................................................9
4.4 Financial Statements..............................................10
4.5 Real Property and Leaseholds......................................10
4.6 Tangible Personal Property Other Than Inventory...................11
4.7 Intellectual Property Assets......................................12
4.8 Insurance.........................................................12
4.9 Environmental Matters.............................................12
4.10 Employment Matters................................................13
4.11 Employee Benefit Plans............................................14
4.12 Assumed Contracts.................................................14
4.13 Consents..........................................................15
4.14 Liabilities.......................................................15
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4.15 Disclaimer........................................................15
4.16 Inventory.........................................................15
4.17 Products Liability and Warranty...................................15
4.18 Customers and Suppliers...........................................16
4.19 Litigation........................................................16
4.20 Taxes.............................................................16
4.21 Agreements and Transactions with Related Parties..................16
4.22 Absence of Changes................................................17
4.23 Compliance with Laws..............................................17
4.24 Utilities.........................................................18
4.25 Receivables.......................................................18
4.26 No Broker's Fees..................................................18
4.27 No other Representations and Warranties...........................18
5. CERTAIN UNDERSTANDINGS AND AGREEMENTS OF THE PARTIES....................18
5.1 Reasonable Efforts; Further Assurances............................18
5.2 Covenant Not to Compete...........................................19
5.3 Accounts Receivable...............................................19
5.4 Employees.........................................................19
5.5 Consents..........................................................20
5.6 Use of Business Names by Purchaser................................20
5.7 Bulk Transfer Laws................................................20
5.8 Employee Benefit Matters..........................................20
5.9 Prorations........................................................21
5.10 Access to Records.................................................21
5.11 Tax Matters.......................................................21
5.12 Environmental Matters.............................................21
6. CONDITIONS TO CLOSING...................................................22
6.1 Conditions to Obligations of each Party...........................22
6.2 Conditions to Obligations of Purchaser and Parent.................22
6.3 Conditions to Obligations of Seller...............................23
7. INDEMNIFICATION.........................................................24
7.1 Indemnification by Seller.........................................24
7.2 Indemnification by Parent and Purchaser...........................26
7.3 Determination of Loss.............................................28
7.4 Limitations on Indemnification....................................28
7.5 Indemnification Procedure.........................................34
7.6 Exclusive Remedy..................................................35
8. ADDITIONAL COVENANTS AND AGREEMENTS.....................................35
8.1 Expenses..........................................................35
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8.2 Public Releases...................................................35
9. MISCELLANEOUS...........................................................35
9.1 Entire Agreement..................................................35
9.2 Amendments; Waiver................................................35
9.3 Successors; Assignment............................................36
9.4 Notices...........................................................36
9.5 Severability......................................................37
9.6 No Third Party Beneficiary........................................37
9.7 Applicable Law....................................................37
9.8 Arbitration.......................................................37
9.9 Counterparts......................................................38
9.10 Headings; Construction............................................38
9.11 Consent to Service of Process and Jurisdiction....................38
9.12 Certain Information...............................................39
10. Certain Definitions.....................................................39
10.1 Definitions.......................................................39
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is dated as of August 23, 2004,
among Park-Ohio Industries, Inc., an Ohio corporation ("Parent"), GAMCO
Components Group LLC, an Ohio limited liability company ("Purchaser") and Amcast
Industrial Corporation, an Ohio corporation ("Seller"). Section 10 of this
Agreement defines certain capitalized terms used but not elsewhere defined in
this Agreement.
RECITALS:
A. WHEREAS, Seller is engaged in the business of manufacturing and selling
to original equipment manufacturers and tier-one suppliers in the automotive
industry aluminum castings, produced using gravity and low-pressure production
processes, for suspension and brake systems for use on automobiles and light
trucks as conducted at the Facilities (the "Business").
B. WHEREAS, Parent, primarily through its subsidiaries, is a provider of
supply chain logistics services and a manufacturer of highly engineered
products;
C. WHEREAS, Purchaser is a direct or indirect wholly owned subsidiary of
Parent; and
D. WHEREAS, Purchaser desires to purchase substantially all of the assets
of Seller used exclusively by Seller in or necessary for the operation of the
Business (other than the Facility located in Cedarburg, Wisconsin), and Seller
desires to sell such assets to Purchaser, all upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, for and in consideration of the mutual promises and
covenants herein contained and for other good and valuable consideration, the
receipt and adequacy of which hereby are acknowledged, the parties hereto agree
as follows:
1. AGREEMENT TO SELL AND AGREEMENT TO PURCHASE.
1.1 Assets to be Conveyed. On the terms and subject to the conditions set
forth herein, and except as provided in Section 1.2 hereof, on the Closing Date
(as defined in Section 1.3 hereof), Seller shall convey, sell, transfer, assign
and deliver to Purchaser, and Purchaser shall purchase, acquire and accept from
Seller, the following assets owned by Seller as of the Closing Date but only to
the extent that such assets are used exclusively by Seller in or are necessary
for the operation of the Business at the Facilities (collectively, the "Acquired
Assets"):
(a) All inventories of finished goods, raw materials, work in process,
spare parts, replacement and component parts (collectively, the "Inventory");
(b) All machinery and equipment, including those items listed on Schedule
1.1(b) (the "M&E")
(c) All parts, toolings, dies, jigs, molds, office, maintenance and other
supplies, packaging materials, computers, tools, furniture and other tangible
personal property, including those items listed on Schedule 1.1(c);
(d) The prepaid items, deposits, advance payments, deferred charges and
other similar assets listed on Schedule 1.1(d) hereto (the "Prepaid Expenses");
(e) All accounts and notes receivable and any security held by Seller for
the payment thereof, including those items listed on Schedule 1.1(e) (the
"Accounts Receivable");
(f) All customer lists, computer software and software in progress, sales
brochures, data bases, books and records, correspondence and production records;
(g) All warranties and guaranties by, and rights, choses in action and
claims, known or unknown, matured or unmatured, accrued or contingent against,
third parties;
(h) Seller's right, title and interest in and to all contracts, agreements
and commitments (including unfilled customer and purchase orders) to which
Seller is a party at the Closing Date or by which any of the Acquired Assets is
then bound and, in each case, which are utilized in the conduct of the Business
(all of the foregoing to be assigned to Purchaser pursuant hereto (subject to
Section 5.5), including the Agreement between Amcast Automotive (Richmond Plant)
and United Automobile, Aerospace & Agricultural Implement Workers of America,
UAW and Local 2374 dated October 6, 2000 and the Agreement between Amcast
Automotive (Cedarburg Plant) and Local 185 Glass Molders, Pottery, Plastics &
Allied Workers International Union (AFL-CIO, CLC) dated April 28, 2002
(collectively, the "Union Contracts"), are hereinafter referred to collectively
as the "Assumed Contracts" and individually as an "Assumed Contract");
(i) Motor vehicles listed on Schedule 1.1(i) hereto;
(j) Those leasehold improvements and construction in progress with respect
to the Owned Real Property as set forth on Schedule 1.1(j) hereto;
(k) All intellectual property licenses, patents, patent applications,
copyrights, copyright applications, trademarks, trademark registrations issued
or applied for, trade names, computer programs and formula, including those
items listed on Schedule 1.1(k) (the "Intellectual Property Assets");
(l) The owned real estate described on Schedule 1.1(l), together with all
rights of way, licenses, permits, easements and appurtenances thereto (the
"Owned Real Property");
(m) (i) the Industrial Development Project Lease by and between Amcast and
Richmond Power and Light dated August 31, 1992, (ii) the Lease Agreement by and
between Amcast and Bellevue Partners, LLC, dated October 28, 1999, including
extension dated November 19, 2003, and (iii) the Lease dated March 9, 1994
between Amcast Automotive, Inc. and GALLERIA EQUITIES, LLC, as successor to FCN
Associates, L.L.C., as supplemented by that certain Commencement Date Amendment
dated March 6, 1994 and as amended by a First Amendment to Lease dated November
3, 1998 and a Second Amendment to Lease dated March 26, 2004 (collectively, the
"Real Property Leases");
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(n) All business, proprietary and confidential information, including trade
secrets, capabilities, technical information, know-how, process technology,
ideas, designs, processes, procedures, algorithms, discoveries, inventions,
blueprints, engineering data, patterns, bills of materials, and drawings and
specifications, and all improvements thereof;
(o) All governmental approvals, licenses and permits which are utilized in
the conduct of the Business, including those listed on Schedule 1.1(o) (the
"Transferred Permits"); and
(p) All goodwill associated with the other Acquired Assets.
1.2 Excluded Assets. Notwithstanding anything contained in Section 1.1
hereof to the contrary, Seller is not selling, and Purchaser is not purchasing,
pursuant to this Agreement, any of the following, all of which shall be retained
by Seller (the "Excluded Assets"):
(a) Any cash, investments and other cash equivalents;
(b) Seller's minute books, Tax returns and other organizational documents,
and Seller's financial records and employment records, other than those
employment records pertaining to Employees and allowed to be transferred to
Purchaser under applicable Laws;
(c) Assets of Seller that are not used in or necessary for the operation of
the Business, but as of the Closing Date, are subleased to Affiliates of Seller
or other divisions of Seller, including the assets set forth on Schedule 1.2(c);
(d) All qualifications to transact business as a foreign corporation,
arrangements with registered agents with respect to foreign qualifications, and
taxpayer and other identification numbers;
(e) Any Tax benefits and rights to refunds, including rights to any net
operating losses;
(f) Any contracts or rights relating to borrowed money;
(g) Any contracts, agreements or rights between Seller and any of its
Affiliates, including any Tax-sharing agreements;
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(h) All insurance contracts and policies, insurance refunds from prepaid
insurance, and insurance deposits, recoveries and rights under any current or
prior insurance contracts or policies;
(i) Any pension, profit sharing, welfare or other benefit plans, and any
assets, contracts or rights relating to any such plans;
(j) The trademarks, trade names and business names "Amcast," "Izumi" and
any and all variations thereof and any related goodwill, trademark applications
and registrations, and internet domain names which consist of or incorporate the
names "Amcast" and "Izumi" and any and all variations thereof;
(k) The real property lease described on Schedule 1.2(k) for the Facility
located in Detroit, Michigan;
(l) All tangible assets located at Seller's facilities in Dayton, Ohio and
at the leased Facility in Detroit, Michigan described on Schedule 1.2(k);
(m) Seller's real property located in Cedarburg, Wisconsin together with
all rights of way, licenses, permits, easements and appurtenances thereto (the
"Cedarburg Facility");
(n) Any assets or rights certain benefits of which are provided to
Purchaser pursuant to a mutually acceptable transition services agreement
executed by Seller and Purchaser at Closing (the "Transition Services
Agreement"); and
(o) The assets listed on Schedule 1.2(o).
1.3 Closing. The closing of the transactions herein contemplated (the
"Closing") shall, unless another date, time or place is agreed to by the
parties, take place at the offices of Seller in Dayton, Ohio, at 10 A.M., local
time, simultaneously with the execution of this Agreement and will be effective
as of the date of this Agreement (the "Closing Date").
2. CONSIDERATION TO BE PAID BY PURCHASER.
2.1 Purchase Price for Acquired Assets; Payment Thereof. The purchase price
for the Acquired Assets shall be $10,000,000 (Ten Million Dollars) (the "Initial
Cash Purchase Price"), subject to adjustment pursuant to Section 2.4 below, plus
the assumption of the Assumed Liabilities (as defined in Section 2.2). At the
Closing, Purchaser shall pay, in cash, certified check, wire transfer or other
immediately available funds ("Immediately Available Funds"), (a) $500,000 of the
Initial Cash Purchase Price to an escrow agent designated by Seller and
Purchaser, which amount shall be held and disbursed in accordance with the terms
of a mutually acceptable escrow agreement ("Escrow Agreement") that provides,
among other things, for the escrowed funds to be disbursed to Purchaser to
satisfy any indemnification obligations of Seller under Section 7 of this
Agreement and the balance to be paid to Seller 18 months after Closing, and (b)
the balance of the Initial Cash Purchase Price to Seller, less the $250,000
deposit which Seller previously received from Purchaser and which shall be
retained by Seller at Closing.
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2.2 Liabilities Assumed by Purchaser. As further consideration for the
purchase of the Acquired Assets and consummation of the other transactions
contemplated hereby, on the Closing Date, Purchaser shall, and Parent shall
cause Purchaser to, assume and agree to pay, perform and discharge in full, when
due, the following liabilities of Seller with respect to the Business (the
"Assumed Liabilities") by execution and delivery to Seller of an instrument of
assumption reasonably satisfactory to Seller (the "Instrument of Assumption"):
(a) All obligations and liabilities arising under or associated with the
Assumed Contracts, including all obligations and liabilities arising under or
associated with any Assumed Contract requiring the consent of any third party to
be assigned to Purchaser pursuant hereto, regardless of whether such consent is
delivered to Purchaser at or after Closing; provided, however, that the
obligations and liabilities arising under and associated with any Assumed
Contract that is the subject of a Material Consent (as defined in Section
6.2(h)) listed on Schedule 6.2(h) hereto shall be assumed, paid, performed and
discharged by Purchaser if, and only if, such Material Consent is delivered to
Purchaser at Closing; and provided further, however, that the Assumed
Liabilities shall not include any pension or welfare benefit plan liabilities
arising under or associated with the Union Contracts for periods prior to
Closing other than any such welfare benefit plan liabilities that are reflected
on, accrued for or reserved against on the Final Closing Working Capital
Statement, which shall be Assumed Liabilities;
(b) All accounts payable and other liabilities reflected on, accrued for or
reserved against in the Final Closing Working Capital Statement, but only to
such extent, including all accrued payroll, accrued vacation and accrued sick
pay liabilities, medical program liabilities, all accrued payroll Taxes, all
accrued real and personal property Taxes (all such Taxes being assumed by
Purchaser are referred to in this Agreement as the "Affected Taxes"), workers'
compensation claims, and all other current liabilities of Seller with respect to
the Business;
(c) All product repair and product replacement claims that arise under, and
are made pursuant to and consistent with, the terms of Seller's standard
outstanding warranty obligations, which terms are specifically identified on
Schedule 4.17 hereto (but excluding any Product Liability Claims (as defined in
Section 7.1(e)) with respect to any goods manufactured or sold or services
provided by the Business before and after Closing, but only to the extent
reflected on, accrued for or reserved against in the Final Closing Working
Capital Statement; and
(d) The employment and retention obligations of Seller set forth on
Schedule 2.2(d).
2.3 Liabilities Not Assumed by Parent or Purchaser. (a) Except for the
Assumed Liabilities, neither Parent nor Purchaser shall assume or be liable or
responsible for, whether as a successor or otherwise, any obligation or
liability of Seller of any kind or nature whatsoever.
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2.4 Purchase Price Adjustment.
(a) The Initial Cash Purchase Price shall be adjusted by an amount (which
may be a positive or negative number) equal to the difference between the
Working Capital (as defined below) of the Business at Closing as set forth on
the Final Closing Working Capital Statement and $3,625,000 (the "Target Working
Capital").
(b) Seller shall prepare and deliver to Purchaser within 45 days after
Closing an unaudited statement of Working Capital as of the Closing Date in
accordance with the same methodologies, assumptions and accounting practices
used to prepare the Audited Financial Statements (as defined in Section 4.4)
(the "Closing Working Capital Statement") and the methodology used to prepare
the Target Working Capital as set forth in Schedule 2.4(b). Purchaser shall
provide Seller reasonable access to all books, records and other documents and
information requested by Seller to prepare the Closing Working Capital
Statement. Purchaser shall have 45 days from the date on which the Closing
Working Capital Statement is delivered to it to review the Closing Working
Capital Statement (the "Review Period"). During the Review Period Seller shall
provide Purchaser reasonable access to the information used by Seller to prepare
the Closing Working Capital Statement for purposes of Purchaser's review.
Purchaser may dispute items or amounts reflected on the Closing Working Capital
Statement on any reasonable basis consistent with this Agreement and with
Seller's historical accounting methodologies, assumptions and practices, by
delivering to Seller, on or prior to the last day of the Review Period, a notice
of objection setting forth, in reasonable detail, each disputed item or amount
and the basis for Purchaser's disagreement therewith, together with supporting
calculations. If no notice of objection is received by Seller on or prior to the
last day of the Review Period, the Closing Working Capital Statement shall be
deemed accepted by Parent and Purchaser and shall be final, binding and
conclusive on Parent and Purchaser. If Purchaser gives such notice of objection,
then Purchaser and Seller shall use their reasonable efforts to resolve such
dispute. In the event such dispute is not resolved by the parties within fifteen
(15) days of the receipt of notice of such objection by Seller, then the issues
in dispute shall be submitted to BDO Seidman, LLP, certified public accountants
(the "Accountants") and the Accountants shall determine the Working Capital of
the Business at Closing in accordance with the terms of this Agreement,
including the first sentence of this Section 2.4(b), but within the range of
differences between the parties. If issues in dispute are submitted to the
Accountants for resolution, (i) each party shall furnish to the Accountants such
workpapers and other documents and information relating to the disputed issues
and the Closing Working Capital Statement as the Accountants may request
(including a copy of this Agreement) and which are available to that party (or
its independent public accountants), and shall be afforded the opportunity to
present to the Accountants any material relating to the determination and to
discuss the determination with the Accountants; (ii) the determination by the
Accountants, which shall be set forth in a written notice delivered to Seller
and Purchaser as soon as practical by the Accountants, shall be final, binding
and conclusive on the parties for all purposes; and (iii) Parent and Purchaser
shall bear one-half and Seller shall bear one-half of the fees of the
Accountants for such determination. The Closing Working Capital Statement and
Initial Cash Purchase Price, as both are finally adjusted pursuant to this
Section, are referred to in this Agreement as the "Final Closing Working Capital
Statement" and the "Final Cash Purchase Price," respectively.
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(c) No later than five (5) business days after the final determination of
the Working Capital of the Business at Closing, whether by the passing of the
forty-five (45) day objection period without written notice of objection as set
forth in subsection (b) above, or by the resolution of the parties or the
determination of the Accountants, if the Working Capital of the Business at
Closing as finally determined is greater than the Target Working Capital,
Purchaser shall pay such difference to Seller, and if the Working Capital of the
Business at Closing as finally determined is less than the Target Working
Capital, Seller shall pay such difference to Purchaser. Payments must be made in
Immediately Available Funds as requested by the party receiving the funds.
(d) For purposes hereof, the term "Working Capital" shall mean (i) the sum
of Total Receivables, Total Inventory and Total Other Current Assets, less (ii)
the sum of Total Accounts Payable, Total Compensation Accruals, Total
Withholding Accruals, Total Accrued Worker's Compensation, Total Benefits
Accruals, Total Miscellaneous Accruals and Total Accrued Taxes, as these terms
are commonly used as line item categories in the internally prepared balance
sheet for the Business. Notwithstanding the foregoing, for purposes of this
Agreement, Working Capital shall not include (A) bank debt, (B) costs and
expenses associated with the transactions contemplated by this Agreement, or (C)
long-term indebtedness and the current portion of any such long term
indebtedness.
2.5 Sales Taxes. Seller shall be responsible for and duly pay one-half, and
Purchaser shall be responsible for and duly pay one-half, of all sales, use,
excise, transfer, value added and similar Taxes imposed by any Government in any
jurisdiction on the purchase and sale of any of the Acquired Assets.
2.6 Price Allocation. Promptly following the determination of the Final
Cash Purchase Price pursuant to Section 2.4, Purchaser shall cause to be
prepared and delivered to Seller a schedule setting forth the allocation of the
Final Cash Purchase Price and the Assumed Liabilities that are taken into
account for federal income Tax purposes among the Acquired Assets. Such
allocation shall be subject to the review and approval of Seller, which approval
shall not be unreasonably withheld or delayed. The allocation of the Final Cash
Purchase Price and the Assumed Liabilities shall be made in accordance with (i)
the reasonable fair market value of such items and (ii) the provisions of
Section 1060 of the Internal Revenue Code of 1986, as amended (the "Code"), and
the rules and regulations promulgated thereunder, and shall be binding, to the
extent not in conflict with applicable Law, upon Parent, Purchaser and Seller
for all purposes (including financial and regulatory reporting purposes and Tax
purposes). Parent, Purchaser and Seller further agree to file, as applicable,
their respective U.S. federal income Tax returns and Form 8594 and, to the
extent not in conflict with applicable Law, their other Tax returns reflecting
such allocation and any other reports required by Section 1060 of the Code, in
accordance with said allocation. Each party agrees to prepare and timely file
all applicable IRS forms, to cooperate with the other parties in the preparation
of such forms and to furnish the other parties with a copy of such forms
prepared in draft, within a reasonable period before the due date thereof. In
addition, each party agrees to notify the other parties in the event any taxing
authority takes or purports to take a position inconsistent with the agreed-upon
allocations.
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3. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER.
Parent and Purchaser, jointly and severally, represent and warrant to, and
covenant and agree with, Seller that:
3.1 Organization, Good Standing, Authority and Enforceability. Parent is a
corporation duly organized, validly existing and in good standing under the Laws
of the State of Ohio. Purchaser is a limited liability company duly organized,
validly existing and in good standing under the Laws of the State of Ohio. Each
of Parent and Purchaser has all requisite power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. This Agreement
and each other agreement and instrument to be executed by Parent and/or
Purchaser in connection herewith have been (or upon execution shall have been)
duly executed and delivered by Parent and Purchaser, as applicable, have been
duly authorized by all necessary action and constitute (or upon execution shall
constitute) legal, valid and binding obligations of Parent and Purchaser, as
applicable, enforceable against Parent and Purchaser in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other Laws relating to or affecting the rights and remedies of
creditors generally and to general principles of equity (regardless of whether
considered in a proceeding in equity or at law).
3.2 Agreement Not in Breach of Other Instruments. Neither the execution and
delivery of this Agreement by Parent or Purchaser nor the consummation of the
transactions contemplated herein shall result in a violation or breach of, or
constitute a default under (i) any agreement, indenture or other instrument to
which Parent or Purchaser is a party or by which it is bound, (ii) the
organizational and charter documents of Parent or Purchaser, (iii) any judgment,
decree, order or award of any court, Government or arbitrator by which Parent or
Purchaser is bound, or (iv) any Law applicable to Parent or Purchaser.
3.3 Consents. The execution and delivery of this Agreement by Parent or
Purchaser and the consummation of the transactions contemplated by this
Agreement by Parent or Purchaser (i) do not require the consent, approval or
action of, or any filing with or notice to, any Person or Government, except as
specified in Schedule 3.3, and (ii) do not require the consent or approval of
Parent's or Purchaser's respective shareholders or boards of directors, except
such as have been obtained and are in full force and effect.
3.4 Available Funds. Purchaser has readily available to it committed funds
sufficient to allow it to consummate the transactions contemplated by this
Agreement on a timely basis.
3.5 No Brokerage Fees. Neither Parent, Purchaser nor anyone acting on
Parent's or Purchaser's behalf has incurred any liability or obligation to pay
fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which Seller or any of its
Affiliates shall be liable.
3.6 Due Diligence Matters. Parent and Purchaser have carefully evaluated
the risks associated with the Acquired Assets and the operation of the Business
following the Closing. Parent and Purchaser have been given the opportunity to
ask questions and receive answers from Seller concerning the financial condition
of the Business and such other information pertaining to the purchase of the
Acquired Assets as Parent and Purchaser desire, and have been given the
opportunity to obtain additional information necessary to verify the accuracy
thereof. The foregoing shall not serve to diminish any representation or
warranty given by Seller hereunder.
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4. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller represents and warrants to, and covenants and agrees with, Parent
and Purchaser that:
4.1 Organization, Good Standing and Authority. Seller is a corporation duly
organized, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation. Seller has full corporate authority and power
to carry on its business as it is now conducted, and to own, lease or operate
the Acquired Assets. Seller is qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which its failure to obtain or
maintain such qualification or good standing would reasonably be expected to
have a Material Adverse Effect.
4.2 Authorization of Agreement. (a)
(a) Seller has all requisite power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. This Agreement
and each other agreement and instrument to be executed by Seller in connection
herewith have been (or upon execution shall have been) duly executed and
delivered by Seller, have been duly authorized by all necessary corporate or
partnership action and constitute (or upon execution shall constitute) legal,
valid and binding obligations of Seller, enforceable against Seller in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other Laws relating to or affecting
the rights and remedies of creditors generally and to general principles of
equity (regardless of whether considered in a proceeding in equity or at law);
and
(b) Except as set forth in Schedule 4.2, neither the execution and delivery
of this Agreement by Seller nor the consummation of the transactions
contemplated herein shall result in a material violation or breach of, or
constitute a material default under (i) the Articles of Incorporation or By-Laws
of Seller, (ii) any material term or provision of any Assumed Contract or other
contract, indenture, note, mortgage, bond, security agreement, loan agreement,
guaranty, pledge, or other agreement, instrument or document to which Seller is
a party or by which Seller is bound, (iii) any judgment, decree, order or award
of any court, Government or arbitrator by which Seller is bound, or (iv) to
Seller's Knowledge any Law applicable to Seller.
4.3 Acquired Assets. Except as set forth in Schedule 4.3, Seller is, or at
the Closing shall be, the lawful owner of or have the right to use each of the
Acquired Assets owned or used by Seller in the Business, free and clear of all
Liens. Except for Excluded Assets and except as set forth on Schedule 4.3, there
are no assets or properties used exclusively in or necessary for the operation
of the Business and owned by any Person other than Seller that shall not be
leased or licensed to Purchaser under a valid, current lease or license
arrangement included among the Assumed Contracts or other Acquired Assets. The
tangible Acquired Assets shall be in the possession of Seller at Closing or at
such other locations set forth on Schedule 4.3. Except for the Excluded Assets,
there are no assets or properties used exclusively in or necessary for the
operation of the Business as currently conducted by Seller not included in the
Acquired Assets.
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4.4 Financial Statements. Seller has made available to Parent and Purchaser
copies of Seller's audited consolidated balance sheets as at August 31, 2003 and
August 31, 2002, and related consolidated audited statements of operations,
shareholders' equity and cash flows for each of the three years in the period
ended August 31, 2003 (the "Audited Financial Statements"). The Audited
Financial Statements include the opinion of Ernst & Young LLP, independent
certified public accountants, that such financial statements present fairly, in
all material respects, the consolidated financial position of Seller and
subsidiaries as at their respective dates and the consolidated results of their
operations and cash flows for each of the three years in the period ended August
31, 2003, in conformity with GAAP. Seller also has made available to Parent and
Purchaser copies of the unaudited balance sheet of the Business as at May 31,
2004 (the "Unaudited Balance Sheet"), and the unaudited statement of income of
the Business for the nine-month period then ended (such unaudited statement of
income, together with the Unaudited Balance Sheet, being collectively referred
to as the "Unaudited Financial Statements"). Except for footnotes, normal
year-end adjustments and as set forth in Schedule 4.4, the Unaudited Financial
Statements have been prepared in accordance with the same methodologies,
assumptions and accounting practices used to prepare the Audited Financial
Statements and present fairly, in all material respects, the financial condition
of the Business as at the date thereof and the results of operations of the
Business for the nine-month period then ended. The Audited Financial Statements
and the Unaudited Financial Statements are collectively referred to in this
Agreement as the "Financial Statements."
4.5 Real Property and Leaseholds. Except as set forth in Schedule 4.5:
(a) Seller owns, free and clear of all Liens, the Owned Real Property.
Seller owns the Cedarburg Facility free and clear of all Liens other than Liens
arising under or associated with the Amended and Restated Restructuring
Agreement, dated as of August 23, 2003, among Seller, KeyBank National
Association and certain other lenders party thereto and certain security and
mortgage agreements related to such Amended and Restated Restructuring
Agreement.
(b) The Owned Real Property constitutes all of the real property currently
owned by Seller and used for the operation of the Business as presently
conducted, other than the Cedarburg Facility and Seller's facility in Dayton,
Ohio. The real property leased by Seller under the Real Property Leases
constitutes all of the real property leased, subleased to, or otherwise occupied
(and not owned) by Seller and used for the operation of the Business as
presently conducted, other than the leased real property set forth on Schedule
1.2(k);
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(c) To Seller's Knowledge, each parcel of Owned Real Property, each parcel
of real estate leased by Seller under the Real Property Leases and the Cedarburg
Facility (collectively, the "Real Property") have adequate access to the
existing roads and other public rights of way for the operation of the Business
as presently conducted;
(d) To Seller's Knowledge, the present use, occupancy and operation of the
Real Property, and all aspects of the improvements to the Real Property (the
"Real Property Improvements"), are in compliance in all material respects with
all applicable Laws. To Seller's Knowledge, all Real Property Improvements are
located within the lot lines (and within the mandatory set-backs from such lot
lines established by applicable Law or otherwise) and not over areas subject to
easements or rights of way;
(e) To Seller's Knowledge, all material certificates of occupancy and other
permits and approvals required with respect to the Real Property Improvements
and the use, occupancy and operation thereof have been obtained and paid for and
are currently in effect, and Seller has not received any notices of violations
in connection with such items;
(f) To Seller's Knowledge, no portion of the Real Property is subject to
any classification, designation or determination of any Government or pursuant
to any Law that would reasonably be expected to materially restrict the current
use, occupancy or operation of the Real Property in connection with the Business
as currently conducted;
(g) Seller has made available to Purchaser correct and complete copies of
each Real Property Lease. Each of the Real Property Leases is valid and in full
force and effect, and Seller holds a valid and existing leasehold interest under
each of the Real Property Leases, free and clear of all Liens. Seller is not in
default under the terms of any Real Property Lease, and, to Seller's Knowledge,
no events have occurred and no circumstances exist which, if not remedied, and
whether with or without notice or the passage of time or both, would result in
such a default.
4.6 Tangible Personal Property Other Than Inventory.
(a) Except as set forth in Schedule 4.6, to Seller's Knowledge all of the
M&E and other items of tangible personal property included among the Acquired
Assets (other than the Inventory and office and maintenance supplies), or which
are leased by Seller pursuant to an Assumed Contract, have been operated by
Seller in material conformity with all applicable Laws, manufacturer's operating
manuals, manufacturer's warranties, and insurance requirements.
(b) Except as set forth in Schedule 4.6, to Seller's Knowledge, all lessors
of all M&E and other tangible personal property leased to Seller pursuant to an
Assumed Contract have performed and satisfied in all material respects their
respective duties and obligations under such Assumed Contracts.
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4.7 Intellectual Property Assets. Except as set forth on Schedule 4.7:
(a) To Seller's Knowledge, Seller owns or has the right to use each
Intellectual Property Asset owned or used by Seller, free and clear of all
Liens;
(b) No interference Actions concerning Seller's use of any of its
Intellectual Property Assets are pending with a Government or, to Seller's
Knowledge, threatened;
(c) To Seller's Knowledge, Seller has the right and authority to use the
Intellectual Property Assets owned by it in connection with the conduct of the
Business in the manner presently conducted and, to Seller's Knowledge, such use
does not violate in any respect the legally enforceable rights of any other
Person other than any such violation that would not reasonably be expected to
have a Material Adverse Effect. Except as set forth on Schedule 4.7, Seller has
not received any notice that the use of any Intellectual Property Asset
infringes upon or conflicts with any rights claimed by any other Person; and
(d) Seller has complied in all material respects with the terms of any
Assumed Contract respecting Intellectual Property Assets and, to Seller's
Knowledge, each other party to such Assumed Contract has complied in all
material respects with such terms.
4.8 Insurance. Schedule 4.8 lists each liability, crime, fidelity, fire,
product liability, workers' compensation, life and health insurance policy owned
by Seller with respect to the Business or the Acquired Assets, including for
each policy the name of the insurer, the type of policy and the amount of
coverage. Except as set forth on Schedule 4.8, to Seller's Knowledge, Seller has
not received any written notice from any such insurance company within the 12
months preceding the date hereof canceling or materially amending any insurance
policies applicable to the Business or, except in connection with or as a result
of general market or industry conditions, materially increasing the annual or
other premiums payable under any of such insurance policies, and to Seller's
Knowledge no such cancellation, amendment or material increase of premiums is
threatened.
4.9 Environmental Matters.
(a) Except as set forth on Schedule 4.9, Seller has not stored, treated,
disposed of, managed, generated, manufactured, produced, released (as "release"
is defined in Section 101(22) of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA")), emitted or discharged in any
material respect any toxic, hazardous, explosive or otherwise dangerous
materials, substances, pollutants or wastes (as those terms are used in CERCLA,
the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery
Act of 1976, the Hazardous Materials Transportation Act, the Emergency Planning
and Community Right-to-Know Act or in any other Environmental Law ), petroleum
products, poly-chlorinated biphenyls, urea-formaldehyde foam, or radioactive
materials (all of the above being collectively referred to herein as "Hazardous
Materials") on, to, in, under or from the Real Property.
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(b) Except as set forth in Schedule 4.9, Seller (i) is conducting and,
during all applicable limitations periods, has conducted the Business in
material compliance with all Environmental Laws and has obtained and complied
with in all material respects all permits, licenses, consents, approvals,
registrations and other authorizations required under Environmental Law in order
to operate the Business as currently conducted, and (ii) Seller has not been
notified that it is potentially liable under, or received any written requests
for information or other correspondence under, any Environmental Law concerning
the Real Property.
(c) Except as set forth on Schedule 4.9, Seller has prepared and timely
filed with the appropriate jurisdictions all reports and filings required
pursuant to any Environmental Law applicable to or affecting the Business or the
Acquired Assets, and such reports and filings were accurate in all material
respects.
(d) Schedule 4.9 contains a list of all environmental studies, analyses and
reports prepared during the last five years and in Seller's possession relating
to the environmental condition of the Real Property, and Seller has made
available to Parent and Purchaser copies of all such studies, analyses and
reports, if any.
(e) Except as set forth on Schedule 4.9, no audit or other investigation
has been conducted by Seller or, to Seller's Knowledge, by any governmental
authority as to environmental matters at the Real Property within the past five
(5) years.
(f) Except as set forth on Schedule 4.9, with respect to the Business or
any Acquired Asset, Seller has not sent any Hazardous Material to a site that,
pursuant to any Environmental Law, has been placed on the National Priorities
List or any similar state list or is subject to, or the source of, any written
demand to Seller to take response, removal, corrective, remedial or other
responsive action under or pursuant to any Environmental Law or to pay for the
costs of any such action at the site.
(g) Except as set forth on Schedule 4.9, no Action against Seller to
enforce or impose liability under any Environmental Laws with respect to the
operation of the Business or any Real Property is pending or, to Seller's
Knowledge, threatened.
4.10 Employment Matters.
(a) For each Employee set forth on Schedule 4.10 is such Employee's date of
birth, date of hire, the years of service required under each applicable Plan
for purposes of eligibility, vesting and accrual of benefits, and annual salary
or hourly wage rate, as applicable, and accrued vacation. Seller or an Affiliate
has paid in full to all Employees, or made appropriate accruals for on the books
of account of Seller, all wages, commissions, bonuses and other direct
compensation for all services performed by them. Seller or an Affiliate has
withheld or collected from each payment made to each of the Employees the amount
of all Taxes required to be withheld or collected therefrom, and Seller or an
Affiliate has paid the same when due to the applicable Government agency.
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(b) Except as set forth on Schedule 4.10, (i) there are no pending or, to
Seller's Knowledge, threatened claims by any Employee or former Employee against
Seller with respect to the Business other than for compensation and benefits due
in the ordinary course of employment or workers' compensation claims arising in
the Ordinary Course of Business of the Business, (ii) there are no pending or,
to Seller's Knowledge, threatened claims against Seller with respect to the
Business arising out of any applicable Law relating to employment practices or
occupational or safety and health standards of the Business, (iii) there are no
pending or, to Seller's Knowledge, threatened labor disputes, strikes or work
stoppages against Seller affecting the Business, and (iv) to Seller's Knowledge,
there are no union organizing activities in process involving any of the
Employees with respect to the Business.
(c) Schedule 4.10 lists all union and collective bargaining agency
agreements to which Seller is a party and that relate to the Business.
(d) Schedule 4.10 identifies all Employees and former Employees and their
dependents receiving health benefits, or eligible to receive health benefits, as
required by COBRA. To Seller's Knowledge, notice of the availability of
healthcare continuation coverage for Employees, former Employees and their
respective dependents and qualified beneficiaries, in accordance with the
requirements of COBRA has been provided to all persons entitled thereto, and all
persons electing such coverage are being (or have been, if applicable) provided
such coverage.
4.11 Employee Benefit Plans. Schedule 4.11 hereto lists all plans,
programs, agreements, commitments and arrangements, including any "employee
benefit plan" within the meaning of Section 3(3) of ERISA, maintained by or on
behalf of Seller that provide any present or future benefits or compensation to,
or for the benefit of, any Employee or former Employee of Seller, or under which
Seller has any present or future liability with respect to any Employees (the
"Plans"), complete copies of which have been made available to Parent and
Purchaser. To Seller's Knowledge, except as set forth on Schedule 4.11, each
Plan, and the administration of each Plan, complies with all applicable Laws
(including, in the case of Plans which are intended to be tax-qualified, all
applicable provisions of the Code, including Sections 401(a) and 401(k)), except
for any noncompliance that would not reasonably be expected to have a Material
Adverse Effect. Except as set forth on Schedule 4.11, Seller has not, with
respect to the Business, established, maintained or contributed to or otherwise
participated in a multi-employer retirement plan (as defined in Section 3(37)(A)
of ERISA), any defined benefit plan within the meaning of Section 3(35) of
ERISA, or any other plan which is subject to the provisions of Sections 302 or
Title IV of ERISA or Section 412 of the Code, and Seller and all Affiliates of
Seller have timely made any contributions required by them to any such plan, and
have no unpaid withdrawal liability or termination liability under Title IV of
ERISA with respect to any such plan.
4.12 Assumed Contracts. Schedule 4.12 sets forth each Assumed Contract that
(a) cannot be terminated by Seller within ninety (90) days after the date of
this Agreement without any penalty or premium or (b) provides for annual
payments or receipts in excess of $100,000.00 in the aggregate. Except as set
forth on Schedule 4.12: each Assumed Contract is in full force and effect;
Seller has performed in all material respects its obligations under each Assumed
Contract; to Seller's Knowledge each other party to an Assumed Contract has
performed in all material respects each of its obligations under such Assumed
Contract; and to Seller's Knowledge no event has occurred which, with the giving
of notice or the lapse of time, or both, would constitute a material default or
breach on the part of Seller under any of the Assumed Contracts or on the part
of any other party to the Assumed Contracts.
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4.13 Consents. The execution and delivery of this Agreement by Seller and
the consummation of the transactions contemplated by this Agreement by Seller
(i) do not require the consent, approval or action of, or any filing with or
notice to, any Person or Government, except as specified in Schedule 4.13, and
(ii) do not require the consent or approval of Seller's shareholders or board of
directors, except such as has been obtained and is in full force and effect.
4.14 Liabilities. To Seller's Knowledge, Seller has no liability or
obligation (whether absolute, accrued, contingent or otherwise) with respect to
the Business that is of a nature required by GAAP to be recorded on financial
statements, except (i) those reflected on, accrued for or reserved against in
the Financial Statements or that will be reflected on, accrued for or reserved
against in the Final Closing Working Capital Statement, (ii) current liabilities
incurred in the Ordinary Course of Business of the Business since the date of
the Unaudited Balance Sheet, (iii) relating to transactions disclosed in or
contemplated by this Agreement (including the Schedules hereto), (iv) those that
have not had and would not reasonably be expected to have a Material Adverse
Effect, and (v) as set forth in Schedule 4.14.
4.15 Disclaimer. EXCEPT AS SPECIFICALLY SET FORTH HEREIN, (i) ALL ACQUIRED
ASSETS ARE BEING CONVEYED HEREUNDER ON AN "AS IS, WHERE IS" BASIS AND (ii)
EXCEPT AS SPECIFICALLY SET FORTH HEREIN, SELLER MAKES NO WARRANTIES OR
REPRESENTATIONS, EXPRESS OR IMPLIED, WITH RESPECT TO THE ACQUIRED ASSETS OR THE
BUSINESS, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE AND WARRANTIES AS TO THE PROSPECTS OF THE BUSINESS AFTER THE CLOSING.
ALL OF SUCH EXPRESS AND IMPLIED WARRANTIES AND REPRESENTATIONS ARE HEREBY
EXCLUDED, EXCEPT AS EXPRESSLY SET FORTH HEREIN.
4.16 Inventory. To Seller's Knowledge, subject to any reserves included in
the Final Closing Working Capital Statement (the "Reserves"), all Inventory
reflected on the Final Closing Working Capital Statement shall be of a quality
and quantity suitable and useable in the Ordinary Course of Business of the
Business, except, subject to Reserves, for excess and obsolete items or items
below standard quality that in each case have been written off or written down
to net realizable value.
4.17 Products Liability and Warranty. (a) Except as set forth on Schedule
4.17, during the prior three years there has not been any, and currently there
is no pending or, to Seller's Knowledge, threatened Action against Seller nor to
Seller's Knowledge any circumstance that would reasonably be expected to result
in the filing of an Action against Seller, relating to, or otherwise involving,
any Product Liability Claims, but excluding any Actions or liability that has
not had and would not reasonably be expected to have a Material Adverse Effect.
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(b) Schedule 4.17 contains a true and complete copy of the terms and
conditions of Seller's standard warranties which are utilized in the Business.
Except as set forth and described on Schedule 4.17, Seller has not modified,
either orally or in writing, any of the terms or conditions of such warranty for
any Person. Schedule 4.17 sets forth an accurate and complete history for the
Business of (i) warranty claims made against Seller during the last three years
that resulted in an economic payment by or against Seller, (ii) all unresolved
warranty claims, and (iii) product returns during the last six months.
4.18 Customers and Suppliers. Schedule 4.18 sets forth the name of the 10
largest customers and suppliers of the Business (by dollar volume) in terms of
purchases and sales for the years ended August 31, 2003 and August 31, 2002. To
Seller's Knowledge, except as set forth in Schedule 4.18, no customer or
supplier set forth on Schedule 4.18 intends to discontinue or substantially and
adversely change its relationship with Seller with respect to the Business.
4.19 Litigation. Except as set forth in Schedule 4.19, there is no Action
pending with a Government or, to Seller's Knowledge, threatened, against or
affecting Seller with respect to the Business or any of the Acquired Assets
that, if adversely decided, would reasonably be expected to have a Material
Adverse Effect.
4.20 Taxes. Except as set forth on Schedule 4.20, all Taxes that are due
and payable by Seller with respect to the Business or the Acquired Assets for
all periods through the date of the Unaudited Balance Sheet have been paid or
accrued for on the Unaudited Balance Sheet and all such Taxes due and payable by
Seller with respect to the Business or the Acquired Assets for all periods
through the Closing Date shall be paid or accrued for on the Final Closing
Working Capital Statement. Seller has timely and accurately filed all federal,
state, local and foreign returns and reports required to be filed with any
Government with respect to all Taxes with respect to the Business and the
Acquired Assets on or before the date of this Agreement, and there is no pending
or, to Seller's Knowledge, threatened, audit of any of those returns by any
Government. Except as set forth on Schedule 4.20, there is not now in force any
extension of time with respect to the date on which any return relating to any
Taxes owed by Seller with respect to the Business or the Acquired Assets was or
is due to be filed by Seller, or any waiver or agreement by Seller for the
extension of time for the assessment of any such Taxes.
4.21 Agreements and Transactions with Related Parties. Except as set forth
in Schedule 4.21, none of the following Persons is a party to any Assumed
Contract with Seller: (i) any Person owning, or formerly owning, beneficially or
of record, directly or indirectly, a ten percent (10.0%) or more beneficial
interest in capital stock of Seller, (ii) any person related by blood, adoption
or marriage to any such Person, or (iii) any director or officer of Seller (any
or all of the foregoing being herein referred to as "Related Parties"). Except
as set forth in Schedule 4.21, the terms of conditions of each Assumed Contract
between Seller and a Related Party are, in all material respects, consistent
with the terms and conditions that would have been obtainable at the time in a
comparable arm's-length transaction. Except as set forth on Schedule 4.21, no
Related Party has received any loans from or is otherwise a debtor, or has made
any loans to or is otherwise a creditor of, Seller, other than any such loans or
debts that will be settled on or before Closing or that are not included in the
Acquired Assets or Assumed Liabilities and other than ordinary advances to
directors and officers of Seller.
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4.22 Absence of Changes. Except as provided for in this Agreement or as set
forth in Schedule 4.22 or any other Schedule to this Agreement, since the date
of the Unaudited Balance Sheet, to Seller's Knowledge:
(a) no event has occurred that has had or would reasonably be expected to
have a Material Adverse Effect;
(b) the Business has been operated in the Ordinary Course of Business;
(c) other than in the Ordinary Course of Business of the Business or as set
forth on Schedule 2.2(d), there has been no (i) increase in the compensation or
in the rate of compensation or commissions payable or to become payable by
Seller to any Employee earning $50,000 or more per annum, (ii) Employee hired at
a salary in excess of $50,000 per annum, or (iii) commitment to pay any new
bonus, profit sharing or other extraordinary compensation to any Employee;
(d) no liability or obligation (whether absolute, accrued, contingent or
otherwise) in excess of $25,000 has been incurred by Seller with respect to the
Business, other than liabilities incurred in the Ordinary Course of Business of
the Business since the date of the Unaudited Balance Sheet or reflected in the
Final Closing Working Capital Statement;
(e) Seller has not (i) paid any judgment in excess of $25,000 resulting
from any Action against Seller relating to the Business or the Acquired Assets
or (ii) made any payment to any Person in excess of $25,000 in settlement of any
Action against Seller relating to the Business or the Acquired Assets;
(f) there has been no sale, transfer, lease or other disposition of any
assets of Seller that are necessary for or used exclusively in the Business,
other than sales of Inventory in the Ordinary Course of Business of the Business
and any other asset that is not material to the current operation of the
Business; or
(g) Seller has not entered into any contract, oral or written, to do or
engage in any of the foregoing after the date hereof.
4.23 Compliance with Laws. Except as set forth on Schedule 4.23, to
Seller's Knowledge, Seller is and during all applicable limitations periods has
been in compliance with all Laws with respect to the operation of the Business,
except where the failure to be in compliance would not reasonably be expected to
have a Material Adverse Effect. Except as set forth on Schedule 4.23, to
Seller's Knowledge, no event has occurred or conditions exists that would
reasonably be expected to give rise to any violation by Seller of any Law in
connection with Seller's operation of the Business, except any violation that
would not reasonably be expected to have a Material Adverse Effect. Except as
set forth on Schedule 4.23, Seller possesses all Transferred Permits that are
necessary for the lawful operation of the Business and is in compliance with all
such Transferred Permits.
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4.24 Utilities. To Seller's Knowledge, except as set forth on Schedule
4.24, each parcel of Real Property at which the Business is conducted has access
to utilities (including electric, natural gas, water, sewer, telephone, and
similar services but excluding electronic data transmission services) adequate
to operate the Business operated at such Facility in the manner currently
conducted.
4.25 Receivables. Subject to any reserves set forth in the Final Closing
Working Capital Statement, (i) all Accounts Receivable represent or shall
represent valid obligations arising from sales actually made or services
actually performed in the Ordinary Course of Business of the Business, and (ii)
to Seller's Knowledge, except as set forth on Schedule 4.25, there is no claim,
or right of set-off, other than returns in the Ordinary Course of Business of
the Business, under any contract with any obligor of an Accounts Receivable
relating to the amount or validity of such Account Receivable.
4.26 No Broker's Fees. Neither Seller nor anyone acting on Seller's behalf
has incurred any liability or obligation to pay fees or commissions to any
broker, finder or agent with respect to the transactions contemplated by this
Agreement for which Parent, Purchaser or any of Affiliate of Parent or Purchaser
shall be liable.
4.27 No other Representations and Warranties. Seller has not made, and
Seller shall not be deemed to have made, any representation or warranty other
than as expressly made by Seller in this Section 4. Without limiting the
generality of the foregoing, and notwithstanding any representations and
warranties made by Seller in this Section 4, Seller makes no representation or
warranty with respect to (i) any projections, estimates or budgets delivered or
made available to Parent, Purchaser or their Representatives at any time with
respect to future revenues, expenses or expenditures or future results of
operations, or (ii) except as expressly covered by a representation and warranty
contained in this Section 4, any other information or documents (financial or
otherwise) made available to Parent, Purchaser or their Representatives before
or after the date of this Agreement.
5. CERTAIN UNDERSTANDINGS AND AGREEMENTS OF THE PARTIES.
5.1 Reasonable Efforts; Further Assurances. Each party shall use its
reasonable efforts to take or cause to be taken all actions necessary, proper or
advisable to fulfill and perform its obligations in respect of this Agreement,
or otherwise to consummate and make effective the transactions contemplated
hereby and to cause its respective conditions set forth in Sections 6.1, 6.2 and
6.3 to be satisfied. Each party shall furnish to the other parties and keep the
other parties informed concerning the status of its filings and its
communications with any Government with respect to its filings. Parent shall
cause Purchaser to timely and fully perform all of its agreements and covenants
made in, and obligations arising under, this Agreement and each other document
executed and delivered by or on behalf of Parent or Purchaser to Seller at
Closing with respect to the transactions contemplated by this Agreement. From
time to time after the Closing, each party shall execute and deliver any
documents and take any other actions that another party reasonably requests to
confirm or effectuate the consummation of the transactions contemplated by this
Agreement.
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5.2 Covenant Not to Compete. Seller covenants and agrees that it shall not,
for the period ending five (5) years after Closing, participate, directly or
indirectly, in the ownership, management, financing or control of, or act as a
consultant or agent to, or furnish services or advice to, any Person that
develops, manufactures or sells Competitive Products to original equipment
manufacturers and tier-one suppliers in the automotive industry (a "Competitive
Business"). For purposes of this Agreement, "Competitive Products" means
aluminum castings, produced using gravity and low-pressure production processes,
for suspension and brake systems. The geographic scope of the foregoing
covenants is worldwide. The covenants set forth in this Section shall not
prohibit Seller or its Affiliates from, directly or indirectly, (i) entering
into any contract, arrangement or other relationship with any Person that is not
for any Competitive Product (by way of example, Seller may enter into an
agreement to sell products that are not Competitive Products to a company that
operates a Competitive Business as a division, subsidiary or other Affiliate),
(ii) making any equity investments in any publicly owned company that conducts a
Competitive Business, provided that the investment does not confer control of
more than 5% of the outstanding voting securities of such company upon Seller,
or (iii) acquiring any Person that conducts a Competitive Business with revenues
of less than $100 million if Seller or the applicable Affiliate divests itself
within 12 months after such acquisition of that portion of the business of the
acquired Person that constitutes a Competitive Business. The parties agree and
intend that the time period, geographic coverage and scope of the covenants set
forth in this Section 5.3 are reasonable. The covenants set forth in this
Section 5.3 will not extend to or bind any purchaser of the assets of the
businesses being retained by Seller and its Affiliates (other than any purchaser
who is an Affiliate of Seller at the time of the purchase).
5.3 Accounts Receivable. Seller agrees to promptly forward to Purchaser any
monies, checks or negotiable instruments received by Seller after the Closing
Date relating to any Accounts Receivable for Purchaser's own account. Seller
hereby appoints Purchaser as its attorney-in-fact to endorse, cash and deposit
any monies, checks and other negotiable instruments so forwarded to Purchaser.
5.4 Employees. On and effective as of the Closing Date, Purchaser shall
offer employment to all of the Employees on substantially the same terms and
conditions, including pay and benefits, as they enjoy on the Closing Date or
those which Purchaser or Parent provides to its similarly situated employees.
Purchaser shall also take all other steps necessary to eliminate any obligation
of Seller or any of its Affiliates under the Worker Adjustment and Retraining
Notification Act and related regulations ("WARN") and any similar Laws to give
notice of the transfer of any operations or the loss of employment or loss of
pay or benefits or to pay any amounts in lieu of such notice. Those Employees
who accept offers of employment are referred to as the "Hired Employees." In
addition, after Closing Parent and Purchaser shall comply with the notice
provisions of WARN and any similar Laws in connection with the termination of
any Hired Employees by Purchaser. Purchaser's commitment to hire all of the
Employees shall not be construed as a contract of employment and all of the
Employees hired by Purchaser shall be employees at will except to the extent
expressly agreed in writing by Purchaser with respect to any individual
Employee. To the extent that any employees or agents of Seller make
recommendations to Parent or Purchaser relating to discontinuation of employment
of any of the Employees, such persons shall be deemed to be acting as agents of
Parent and Purchaser for such purpose. The parties agree that the provisions of
this Section are solely among and for the benefit of the parties hereto and do
not inure to the benefit of or confer rights upon any third party, including any
Employees.
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5.5 Consents. Each party shall use its reasonable efforts to cooperate with
the other party to obtain any necessary consent to assignment and transfer of
the Acquired Assets to Purchaser at Closing. If consent to a particular Acquired
Asset is not obtained or if such assignment is not permitted regardless of
consent, Seller shall use its reasonable efforts to cooperate with Purchaser (at
Purchaser's cost) in any reasonable arrangement designed to provide Purchaser
all material benefits of that Acquired Asset.
5.6 Use of Business Names by Purchaser. To the extent the trademarks,
service marks, brand names or trade, corporate or business names of Seller that
are not included in the Acquired Assets but are used by the Business on
stationery, signage, invoices, receipts, forms, packaging, advertising and
promotional materials, product, training and service literature and materials,
computer programs or like materials included in the Acquired Assets ("Marked
Materials") or appear on Inventory at the Closing, Purchaser shall remove,
"sticker over" or obscure such trademarks, service marks, brand names or trade,
corporate or business names to the extent commercially feasible and, to the
extent not commercially feasible, may use such Marked Materials or sell such
Inventory after the Closing for a period of 90 days without altering or
modifying such Marked Materials or Inventory, or removing such trademarks,
service marks, brand names, or trade, corporate or business names, but Purchaser
shall not thereafter use such trademarks, service marks, brand names or trade,
corporate or business names in any other manner without the prior written
consent of Seller. Neither Parent nor Purchaser shall otherwise use, attempt to
register or otherwise seek protection for, or challenge Seller's ownership of,
such trademarks, service marks, brand names or trade, corporate or business
names. Any rights in and to such trademarks, service marks, brand names or
trade, corporate or business names that may accrue to Parent or Purchaser and/or
are deemed to accrue to Parent or Purchaser subsequently by operation of Law or
otherwise shall inure to the benefit of Seller.
5.7 Bulk Transfer Laws. Parent and Purchaser hereby waive compliance with
any bulk transfer Laws applicable to the transactions contemplated by this
Agreement.
5.8 Employee Benefit Matters. At Closing, or as soon as practicable
thereafter, Purchaser shall cause a defined contribution plan sponsored by
Parent, Purchaser or one of their Affiliates and which, to the knowledge of
Parent and Purchaser, is in all material respects qualified under Section 401(a)
of the Code and otherwise organized and operated in compliance with applicable
Law to accept rollovers of amounts distributed from qualified plan accounts of
Hired Employees maintained in any qualified plan sponsored by Seller. Any such
rollover shall be accomplished in accordance with applicable Law, and the
parties agree to reasonably cooperate to accomplish such rollovers. With respect
to any amounts so rolled over, Seller shall have no, and disclaims all,
fiduciary or other responsibilities for acts and omissions occurring after such
rollover under any plan maintained by Parent, Purchaser or any of their
Affiliates, and Parent and Purchaser shall have no, and disclaim all, fiduciary
or other responsibilities for acts and omissions occurring prior to such
rollover under any qualified retirement plans maintained by Seller.
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5.9 Prorations. All personal and real property Taxes affecting the Acquired
Assets that are not included in the Assumed Liabilities shall be prorated to the
Closing Date on a due date basis as if paid in advance (regardless of the
practice of the applicable taxing authority). Unless otherwise an Assumed
Liability and except for any installments payable by any lessor under the Real
Property Leases and except as otherwise provided under the Cedarburg Lease,
Seller shall pay all installments of special assessments with respect to the
Real Property that come due on or before the Closing Date, and Purchaser shall
pay all such installments that come due after the Closing Date. Except to the
extent included in the Assumed Liabilities, all water, sewer, utility and other
similar charges, and all prepaid rent and other similar credits, affecting the
Real Property shall be prorated to the Closing Date (with Closing Date meter
readings as appropriate). The foregoing prorations shall be paid by Purchaser to
Seller, insofar as feasible, at the Closing, or to the extent not feasible,
within 30 days following the Closing, by Immediately Available Funds. Any errors
or omissions in computing prorations at the Closing, or any re-computations
required as a result of facts that become known after the Closing, shall be
corrected (and paid as specified above) as soon as practicable thereafter.
5.10 Access to Records. Each party shall preserve for six years after
Closing all business records relating to the Business and shall provide each
other party and its Representatives, during reasonable business hours and upon
reasonable advance notice, access to and the right to copy (at the other party's
own expense) such records for any legitimate business purpose, including a Tax
audit or governmental inquiry, and each party to whom the records are disclosed
hereby agrees to keep confidential any confidential or proprietary information
included in those records and to use the records for no other purpose.
5.11 Tax Matters. The parties shall cooperate in the preparation of all
federal, state, local and foreign Tax returns and reports for which one party
could reasonably require the assistance of another party, including providing
any information reasonably requested by another party to assist in the
preparations of any such returns.
5.12 Environmental Matters. With respect to the Cedarburg Facility, as soon
as reasonably practicable after Closing, Seller shall:
.........(a) Revise the Cedarburg Facility's Spill Prevention Control and
Countermeasures Plan so that it accurately reflects current facility conditions,
is certified by a professional engineer and otherwise complies with applicable
Environmental Law; and
.........(b) Revise the Cedarburg Facility's Storm Water Pollution
Prevention Plan in accordance with applicable Environmental Law.
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Purchaser acknowledges and agrees that after Closing Purchaser (and not Seller)
shall have the obligation to comply with the plans referenced in Sections
5.12(a) and (b) above (the "Environmental Plans") and to update or amend the
Environmental Plans in accordance with applicable Environmental Law, provided,
however, that Seller acknowledges and agrees that Seller (and not Purchaser)
shall have the obligation to construct and install, at Seller's sole cost and
expense, any improvements required in order to bring the Environmental Plans
into compliance with applicable Environmental Law as of the Closing Date.
6. CONDITIONS TO CLOSING.
6.1 Conditions to Obligations of each Party. (a) As a condition to the
obligations of Parent, Purchaser and Seller to consummate the transactions
contemplated hereby (which condition may be waived by any party and which shall
be deemed to have been waived in whole if the Closing occurs), all consents,
approvals and authorizations of, and any filings with or notices to, any
Government, as well as any consents under Sellers' credit facilities, that are
necessary for the consummation of the transactions contemplated by this
Agreement must have been received and must be in full force and effect.
6.2 Conditions to Obligations of Purchaser and Parent. As an additional
condition to the obligation of Parent and Purchaser to consummate the
transactions contemplated hereby (which condition may be waived by Parent, as to
itself and Purchaser, in whole or in part, and which shall be deemed to have
been waived in whole if the Closing occurs), Parent and Purchaser must have
received the following documents, dated the Closing Date:
(a) A copy, certified by an authorized officer of Seller, of resolutions of
the board of directors of Seller authorizing the execution, delivery and
performance of this Agreement and all other agreements, documents and
instruments relating hereto and the consummation of the transactions
contemplated hereby;
(b) A bill of sale for the Acquired Assets and such other bills of sale and
assignments, in form and substance reasonably satisfactory to counsel for
Purchaser, covering items of tangible and intangible personal property included
in the Acquired Assets;
(c) Certificates of title to the motor vehicles identified on Schedule
1.1(i) hereto, duly endorsed, completed and acknowledged for transfer;
(d) General warranty deeds to the Owned Real Property and the Real Property
Improvements;
(e) The Transition Services Agreement;
(f) The Escrow Agreement;
(g) A lease, on terms acceptable to Purchaser and Seller, under which
Purchaser leases the Cedarburg Facility from Seller (the "Cedarburg Lease");
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(h) The consents set forth on Schedule 6.2(h) (the "Material Consents");
(i) One or more instruments assigning the Real Property Leases to Purchaser
and providing for the assumption by Purchaser of Seller's obligations thereunder
pursuant to the Instrument of Assumption (collectively, the "Lease Assignment");
and
(j) Such further documents and instruments of sale, transfer, conveyance,
assignment or delivery covering the Acquired Assets or any part thereof as
Purchaser may reasonably require to assure the sale and assignment of the
Acquired Assets as contemplated by this Agreement.
6.3 Conditions to Obligations of Seller. The obligation of Seller to
consummate the transactions contemplated hereby shall be subject to the
fulfillment, at or prior to the Closing Date, of the following additional
conditions (any of which condition may be waived, in whole or in part, by Seller
in writing and shall be deemed to be waived in whole if the Closing occurs):
(a) Tender of Purchase Price. Purchaser must have tendered the Initial Cash
Purchase Price for the Acquired Assets in Immediately Available Funds pursuant
to Section 2.1 of this Agreement; and
(b) Additional Closing Documents of Purchaser. Seller must have received at
the Closing the following documents, each dated the Closing Date:
(i) Copies, certified by the respective Secretaries of Parent and
Purchaser, of resolutions of the respective boards of directors of Parent and
Purchaser authorizing the execution and delivery of this Agreement and all other
agreements, documents or instruments relating hereto and the consummation of the
transactions contemplated hereby;
(ii) The Instrument of Assumption, duly executed by Parent and Purchaser,
pursuant to Section 2.2 hereof;
(iii) The Transition Services Agreement;
(iv) The Escrow Agreement;
(v) The Cedarburg Lease;
(vi) The Lease Assignment; and
(vii) Such further documents and instruments reasonably requested by Seller
to assure the assumption of the Assumed Liabilities as contemplated by this
Agreement.
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7. INDEMNIFICATION.
7.1 Indemnification by Seller. Subject to the terms hereof, irrespective of
any investigation (including any environmental investigation or assessment or
any due diligence review or investigation) conducted with respect to, or any
knowledge acquired (or capable of being acquired) at any time before or after
the execution and delivery of this Agreement, with respect to the accuracy or
inaccuracy of or compliance with any representation, warranty, covenant or
obligation of Seller in this Agreement, Seller agrees to defend, indemnify and
hold Parent, Purchaser and their directors, officers, Affiliates and
Representatives (the "Purchaser Indemnified Parties") harmless from and against
any claim, liability, expense, loss or other damage (including reasonable
attorneys' fees and expenses) (collectively, "Claims") asserted against, imposed
upon or incurred by any Purchaser Indemnified Party by reason of, resulting from
or arising out of:
(a) any breach by Seller of any representation or warranty made by Seller
in Section 4 of this Agreement or in the Cedarburg Lease or any other any
document executed and delivered by or on behalf Seller to Purchaser at Closing
with respect to the transactions contemplated by this Agreement;
(b) any breach or non-performance by Seller of any covenant or agreement
made by Seller in this Agreement or in the Cedarburg Lease or any other document
executed and delivered by or on behalf of Seller to Purchaser at Closing with
respect to the transactions contemplated by this Agreement;
(c) failure to comply with any bulk sale statutes applicable to the
transactions contemplated by this Agreement;
(d) any Plan liabilities of Seller or any other benefit liabilities of
Seller or any Affiliate of Seller (other than any such Plan or other benefit
liabilities included in the Assumed Liabilities);
(e) any injury or damage alleged to have been caused by or the result of
any product sold, distributed or otherwise placed in the stream of commerce by
or on behalf of Seller in the Business on or prior to the Closing, or
manufactured by or on behalf of Seller in the Business on or prior to the
Closing, but not including any Claims solely for product repair or product
replacement that arise under, and are made pursuant to and consistent with, the
terms of Seller's standard outstanding warranty obligations, which terms are
specifically identified on Schedule 4.17 (collectively, the "Product Liability
Claims"). For purposes of clarification, if a Claim is made by a third party
solely for product repair or replacement arising under and made pursuant to and
consistent with, the terms of Seller's standard outstanding warranty obligations
(a "Warranty Claim"), Seller shall have no obligation to indemnify the Purchaser
Indemnified Parties for such Warranty Claim pursuant to this Section 7.1(e).
However, if a third party pursues two claims, one of which is a Warranty Claim,
and the other of which is brought as a result of injury or damage alleged to
have been caused by or as the result of a product sold, manufactured,
distributed or otherwise placed in the stream of commerce by or on behalf of
Seller in the Business on or prior to the Closing, Seller shall have no
obligation to indemnify the Purchaser Indemnified Parties for the Warranty Claim
pursuant to this Section 7.1(e), however Seller shall indemnify the Purchaser
Indemnified Parties for the Claim brought as a result of injury or damage
alleged to have been caused by or as the result of a product sold, manufactured,
distributed or otherwise placed in the stream of commerce by or on behalf of
Seller in the Business on or prior to the Closing pursuant to this Section
7.1(e);
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(f) each of the following matters:
(i) any violation of or non-compliance with any Environmental Law by Seller
with respect to the operation of the Business occurring before or existing as of
the Closing Date;
(ii) any generation, treatment, storage, transport, management, use,
handling, disposal, leakage, spill or release of any Hazardous Material on,
under or from the Real Property on or before Closing;
(iii) any disposal or arrangement for disposal of any Hazardous Material
from the Real Property directly or indirectly arranged for by or on behalf of
Seller on or before the Closing Date;
(iv) any Recognized Environmental Condition (as defined in ASTM E1527-00,
Standard Practice for Environmental Site Assessments: Phase I Environmental Site
Assessment Process) or any Hazardous Materials which existed on or before the
Closing Date on the Real Property;
(v) any PCB Contamination (and for purposes of this Section 7.1(f)(v),
there shall be a rebuttable presumption that any PCB Contamination that was
present in the environment at, on or emanating from the Real Property or present
in any equipment or machinery included in the Acquired Assets located thereon
was present prior to the Closing Date);
(vi) any failure of Seller to comply with the AOC or with Seller's
covenants under Section 5.12 of this Agreement;
(vii) any bodily injury (including illness, disability and death,
regardless of when any such bodily injury occurred, was incurred or manifested
itself), personal injury, property damage (including trespass, nuisance,
diminution in property value, wrongful eviction and deprivation of the use of
real property) or other damage of or to any Person, property (real or personal)
or any Acquired Assets arising from or related to any Hazardous Material that
was (A) present on or before the Closing Date on or at the Real Property (or
present on any other property, if such Hazardous Material emanated from any Real
Property and was present on any Real Property, on or prior to the Closing Date)
or (B) released by any Person on or at any Real Property or any Acquired Assets
at any time on or prior to the Closing Date;
(viii) any and all necessary and reasonable costs and expenses, including
costs of environmental studies, field investigations, remedial design and work
and any and all necessary remediation related to the matters set forth in
clauses (i) through (vii) of this Section 7.1(f); and
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(ix) any entry by Seller or its Representatives onto any affected Real
Property in connection with the performance of any Work under Section 7.4(j) of
this Agreement;
(g) any brokerage or finders' fees arising out of the transaction
contemplated hereby owing to any party engaged by Seller;
(h) any Tax liability of Seller that is not included in the Assumed
Liabilities or that is not the responsibility of Parent or Purchaser under
Section 2.5 above;
(i) any sale-success fees payable to any employees of Seller in connection
with the closing of the transaction contemplated by this Agreement in excess of
$160,000 in the aggregate;
(j) (i) any recall by a third party of a product of such third party which
utilizes a product of Seller sold, distributed or otherwise placed in the stream
of commerce by or on behalf of Seller in the Business on or prior to the
Closing, or manufactured by or on behalf of Seller in the Business on or prior
to the Closing, for purposes of repair or replacement of such product of Seller
(a "Product Recall"), but excluding any Claims with respect to the Product
Recall to the extent that they are solely for product repair or product
replacement that arise under, and are made pursuant to and consistent with, the
terms of Seller's standard outstanding warranty obligations, and (ii) any Claims
solely for product repair or product replacement of any product of Seller sold,
distributed or otherwise placed in the stream of commerce by or on behalf of
Seller in the Business on or prior to the Closing, or manufactured by or on
behalf of Seller in the Business on or prior to the Closing in excess of the
amount reflected on, accrued for or reserved against in the Final Closing
Working Capital Statement, regardless of whether such Claims arise under
Seller's standard outstanding warranty obligations; and
(k) the enforcement of the indemnification rights under this Section 7.
Seller's obligation to defend, indemnify and hold the Purchaser Indemnified
Parties harmless from and against any Claims pursuant to Sections 7.1(b)-(k) is
made notwithstanding, and shall not be affected or diminished in any way by, any
disclosure contained in or on this Agreement or the Schedules.
7.2 Indemnification by Parent and Purchaser. Subject to the terms hereof,
irrespective of any investigation (including any environmental investigation or
assessment or any due diligence review or investigation) conducted with respect
to, or any knowledge acquired (or capable of being acquired) at any time before
or after the execution and delivery of this Agreement, with respect to the
accuracy or inaccuracy of or compliance with any representation, warranty,
covenant or obligation of Parent or Purchaser in this Agreement, Parent and
Purchaser, jointly and severally, agree to defend, indemnify and hold Seller and
its directors, officers, Affiliates and Representatives (the "Seller Indemnified
Parties") harmless from and against any Claim asserted against, imposed upon or
incurred by any Seller Indemnified Party by reason of, resulting from or arising
out of:
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(a) the Assumed Liabilities;
(b) excluding matters addressed in Sections 7.2(c), Parent's or Purchaser's
conduct of the Business or use of the Acquired Assets after Closing;
(c) (i) any Tax liability of Parent or Purchaser that is not the
responsibility of Seller under Section 2.5 above, (ii) any injury or damage
caused by or the result of any product sold, distributed or otherwise placed in
the stream of commerce by or on behalf of Parent or Purchaser in the Business
after Closing (other than any such product that was manufactured by or on behalf
of Seller on or before Closing), or manufactured by or on behalf of Parent or
Purchaser in the Business after Closing, (iii) any recall by a third party of a
product of such third party which utilizes a product sold, distributed or
otherwise placed in the stream of commerce by or on behalf of Parent or
Purchaser in the Business after Closing (other than any such product that was
manufactured by or on behalf of Seller on or before Closing), or manufactured by
or on behalf of Parent or Purchaser in the Business after Closing, (iv) any
pension or other employee benefit liability of Parent or Purchaser, and (v) any
failure by Seller, Purchaser or their respective Affiliates to comply, in
connection with the transactions contemplated by this Agreement, with the Union
Contracts, or with the National Labor Relations Act and any other Laws relating
to labor or employment with respect to the Union Contracts, Employees covered by
the Union Contracts or the applicable unions under the Union Contracts, but with
respect to Seller and its Affiliates only to the extent that any such Claims
result from or arise out of any failure to provide proper and timely notice of
the transactions contemplated by this Agreement to the applicable unions under
the Union Contracts and any failure to afford such unions the opportunity to
bargain about the effects of such transactions; provided, however, this shall
not result in any indemnification of Seller by Purchaser or Parent of any Plan
liabilities that are not Assumed Liabilities.
(d) [Reserved];
(e) any brokerage or finders' fees arising out of the transaction
contemplated hereby owing to any party engaged by Parent or Purchaser;
(f) any breach by Parent or Purchaser of any representation or warranty
made by Parent or Purchaser in Section 3 of this Agreement or in the Cedarburg
Lease or any other document executed and delivered by or on behalf of Parent or
Purchaser to Seller at Closing with respect to the transactions contemplated by
this Agreement;
(g) any breach or non-performance by Parent or Purchaser of any covenant or
agreement made by Parent or Purchaser in this Agreement or in the Cedarburg
Lease or any other document executed and delivered by or on behalf of Parent or
Purchaser to Seller at Closing with respect to the transactions contemplated by
this Agreement; and
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(h) the enforcement of the indemnification rights under this Section 7.
Parent's and Purchaser's obligation to defend, indemnify and hold the Seller
Indemnified Parties harmless from and against any Claims pursuant to Sections
7.2(a)-(e) and Sections 7.2(g)-(h) is made notwithstanding, and shall not be
affected or diminished in any way by, any disclosure contained in or on this
Agreement or the Schedules.
7.3 Determination of Loss. Indemnification pursuant to this Section 7 shall
be payable with respect to any Claim described herein as subject to
indemnification upon the happening of the earlier of the following:
(a) Resolution of such Claim by mutual agreement of Seller, Parent and
Purchaser; or
(b) The issuance of a final, non-appealable judgment, award, order or other
ruling by an arbitrator pursuant to Section 9.8 hereof or by a court of
competent jurisdiction.
7.4 Limitations on Indemnification.
(a) Seller shall not have any liability under this Section 7 until the
aggregate amount of all Claims described in Section 7.1 exceeds $150,000 (the
"Threshold Amount"), and then only for the amount by which such Claims exceed
the Threshold Amount. Upon reaching the Threshold Amount, Seller shall be liable
to the Purchaser Indemnified Parties with respect to Claims described in Section
7.1 in excess of the Threshold Amount up to an aggregate amount of $2,500,000
(the "Cap"). Notwithstanding anything contained herein to the contrary, the
limitations set forth in this Section 7.4(a) will not apply to a Claim (i) for a
breach of a representation or warranty contained in Section 4.2(a) or the first
sentence of Section 4.3, (ii) under Sections 7.1(b)-(j), (iii) under Section
7.1(k) except to the extent the Claim relates to enforcement of indemnification
rights under Section 7.1(a) (in which case the Claim, to the extent otherwise
applicable hereunder, will be subject to the Threshold Amount and the Cap), or
(iv) for fraud.
(b) Neither Parent nor Purchaser shall have any liability under this
Section 7 until the aggregate amount of all Claims described in Section 7.2
exceeds the Threshold Amount, and then only for the amount by which such Claims
exceed the Threshold Amount. Upon reaching the Threshold Amount, Parent and
Purchaser shall be liable to the Seller Indemnified Parties with respect to
Claims described in Section 7.2 in excess of the Threshold Amount up to an
aggregate amount equal to the Cap. Notwithstanding anything contained herein to
the contrary, the limitations set forth in this Section 7.4(b) will not apply to
a Claim (i) under Sections 7.2(a), 7.2(c)-(e), and 7.2(g), (ii) under 7.2(h)
except to the extent the Claim relates to enforcement of indemnification rights
under Sections 7.2(b) or 7.2(f) (in which case the Claim, to the extent
otherwise applicable hereunder, will be subject to the Threshold Amount and the
Cap), or (iii) for fraud.
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(c) No Claim may be made by any Purchaser Indemnified Party or Seller
Indemnified Party under Sections 7 unless the indemnifying party shall have
received a written claim for indemnification from the person seeking such
indemnification as provided herein on or before the expiration of eighteen (18)
months following the Closing Date (the "Indemnity Period"); provided, however,
that:
(i) with respect to Claims for indemnification under Section 7.1(a) or
7.2(f), as applicable, for a breach of the representations and warranties in
Sections 3.1, 3.2, 4.1, 4.2, 4.3 (as it relates to good title to the Acquired
Assets), 4.11 (with respect to the last two sentences thereof) and 4.20, the
Indemnity Period shall be thirty (30) days following the expiration of the
applicable statute of limitations for the assertion by third parties of claims
that would give rise to indemnification under Sections 7.1(a) or Section 7.2(f)
for the breach of such representations and warranties;
(ii) with respect to Claims for indemnification under Section 7.1(a) for a
breach of Section 4.9 or Claims for indemnification under Section 7.1(f), the
Indemnity Period shall be the expiration of ten (10) years following the Closing
Date except with respect to Claims for indemnification under Section 7.1(a) for
a breach of Section 4.9 or Claims for indemnification under Section 7.1(f) that,
in each case, directly or indirectly relate to the Cedarburg Facility, in which
case the Indemnity Period shall have no expiration following the Closing Date;
(iii) with respect to Claims for indemnification under Sections 7.1(b) or
7.2(g), the Indemnity Period shall be thirty (30) days following the expiration
of the applicable statute of limitations for the assertion of a claim for the
breach of the covenant or agreement for which indemnification is sought;
(iv) with respect to Claims for indemnification under Sections 7.1(c)-(e),
Sections 7.1(h)-(j), or under Section 7.2(c), the Indemnity Period shall be ten
(10) years after the Closing Date;
(v) with respect to Claims for indemnification under Sections 7.1(g) or
7.2(e), the Indemnity Period shall be three (3) years after the Closing Date;
(vi) with respect to Claims for indemnification under Section 7.2(a), the
Indemnity Period shall have no expiration following the Closing Date; and
(vii) with respect to Claims under Sections 7.1(k) or 7.2(h) for the
enforcement of indemnification rights, the Indemnity Period shall be the same as
the Indemnity Period that applies to the indemnification rights being enforced.
For example, if Purchaser seeks indemnification against Seller under 7.1(a),
then the Indemnity Period applicable to the Claim under 7.1(a) shall be the
Indemnity Period for the assertion of a related Claim under Section 7.1(k).
(d)
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......... (i) Except with respect to Claims under Section 7.1(f), to the
extent that recovery from a third party is available to any Purchaser
Indemnified Party to cover any item for which indemnification may be sought
hereunder, Parent and Purchaser shall exhaust, and cause each other Purchaser
Indemnified Party to exhaust, all available remedies or causes of action to
recover the amount of its claim as may be available from such other third party
and shall only seek indemnification against Seller in the event that any
Purchaser Indemnified Party fails to obtain such reimbursement from a third
party or if such reimbursement is insufficient to satisfy the claim (and in the
latter instance shall only seek indemnity for the amount of such deficiency).
......... (ii) To the extent Seller indemnifies any Purchaser Indemnified
Parties on any Claim (including any Claim under Section 7.1(f)), Parent and
Purchaser shall, and shall cause each other Purchaser Indemnified Party to,
assign to Seller, to the fullest extent allowable, their rights and causes of
action with respect to such Claim against third parties, or in the event
assignment is not permissible, Seller shall be allowed to pursue such Claim in
the name of Parent and Purchaser and each other Purchaser Indemnified Party, as
applicable, at Seller's expense. Seller shall be entitled to retain all
recoveries for its own accounts made as a result of any such action. Parent and
Purchaser shall provide, and shall cause each other Purchaser Indemnified Party
to provide, at no expense to themselves, to Seller reasonable assistance in
prosecuting such Claim, including making their books and records relating to
such Claim available to Seller and making their employees available for
interviews and similar matters. If Parent, Purchaser or any other Purchaser
Indemnified Party recovers from a third party any part of a Claim that had been
paid by Seller pursuant to its indemnification obligations hereunder, Parent and
Purchaser shall, and shall cause each other Purchaser Indemnified Party to,
promptly remit to Seller the amount of such recovery without regard to the time
limitations described in Section 7.4(c).
(e) In computing the amount of any indemnification to which any Purchaser
Indemnified Party may be entitled under this Section 7 by virtue of a breach of
Sections 4.4 or 4.14, if the amount of any liability has been understated or
unrecorded, on one hand, but on the other hand the amount of any other
liabilities has been overstated or any assets understated, only the net effect
(benefits or detriment as the same are determined in accordance with GAAP) of
such errors shall be taken into account.
(f) Any amounts recoverable by any Purchaser Indemnified Party from Seller
under this Section 7 shall be treated as an adjustment to the Final Cash
Purchase Price or Assumed Liabilities, as appropriate.
(g) No Purchaser Indemnified Party shall be entitled to any indemnity (i)
on account of consequential, incidental or indirect damages or losses (unless
such damages or losses are asserted against any Purchaser Indemnified Party by a
third party) and, in particular, no "multiple of profits" or other items shall
be applied in calculating any indemnity amount, or (ii) in respect of any claim
to the extent that the matter that is the subject of the claim is reflected on,
accrued for or reserved against or otherwise provided for in the Final Closing
Working Capital Statement (but only up to the amount for which the matter is
reflected on, accrued for or reserved against or otherwise provided for in the
Final Closing Working Capital Statement).
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(h) Seller shall have no liability for indemnification with respect to any
claim for indemnification that relates to the passing of, or any change in,
after the Closing Date, any Law or any accounting policy, principle or practice
or any increase in Tax rates in effect on the Closing Date, even if the change
or increase has retroactive effect or requires action at a future date.
(i) With respect to any claim for indemnification relating to environmental
matters in which Parent, Purchaser or any other Purchaser Indemnified Party is
required under applicable Environmental Law to initiate or conduct a response
action (a "Response Action"), Seller shall only be responsible to provide
indemnification with respect to the most economically reasonable Response Action
required under applicable Environmental Law. A claim arising out of off-site
disposal that is resolved through agreement, settlement or consent among a group
of potentially responsible parties with the appropriate Government shall be
deemed economically reasonable as long as consistent with that affecting other
similarly situated Persons. Seller shall have the option to supervise and
perform any Response Action. Parent and Purchaser shall, and shall cause each
other Purchaser Indemnified Party to, reasonably cooperate with Seller and its
Representatives in connection with any Response Action.
(j) In connection with any Response Action performed by Seller, any action
required to be performed by Seller under the AOC ("AOC Work") and any action
performed by Seller under Section 5.12 ("Compliance Action") ("Response Action,"
"AOC Work" and "Compliance Action" shall be referred to herein collectively as
the "Work"), subject to the Cedarburg Lease and the Real Property Leases, Parent
and Purchaser shall, and shall cause each other Purchaser Indemnified Party to,
provide Seller and its Representatives reasonable access to any affected Real
Property to supervise and perform the Work, subject to the following:
(i) Seller and its Representatives shall promptly commence and diligently
and expeditiously perform the Work to completion in a good and workmanlike
manner, in compliance with all applicable Laws and Purchaser's reasonable health
and safety requirements. The Work shall be performed by competent, licensed
contractors, under the supervision of a competent, licensed consultant;
(ii) Purchaser grants to Seller and its Representatives a revocable
temporary permission to enter any affected Real Property in order to supervise
and perform any Work (the "Access"). Access may be exercised by Seller and its
Representatives for the sole purpose of supervising and performing the Work.
Access shall continue until ten (10) days after completion of the Work, except
that Access shall continue to the extent necessary to monitor the affected Real
Property;
(iii) Not later than ten (10) days after termination of Access, Seller and
its Representatives shall remove any tools, equipment or materials placed on the
affected Real Property by Seller or its Representatives and shall repair any
damage to any affected Real Property caused by Seller or its Representatives;
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(iv) Seller and its Representatives shall use their reasonable efforts to
minimize any interference with Purchaser's activities at any affected Real
Property in connection with performance of the Work by or on behalf of Seller or
its Representatives;
(v) The grant of Access provided herein is intended to be and shall be
construed only as temporary permission to Seller and its Representatives to
supervise and perform the Work on any affected Real Property and shall not be
construed as a grant of easement or other interest in such Real Property. Seller
and its Representatives shall have Access only to such areas of the affected
Real Property as are necessary to supervise and perform the Work;
(vi) Seller shall give Purchaser reasonable advance notice before any entry
by Seller or its Representatives onto any affected Real Property in connection
with the supervision or performance of any Work;
(vii) Purchaser shall have the right, at its own cost, to have one or more
of its Representatives present during any activities conducted by or for Seller
in connection with any Response Action pursuant to this Section 7.4(j) or the
AOC Work. Purchaser shall also have the right, at its own cost, to receive a
"split" of any sample taken by or for Seller or its Representatives on or from
any affected Real Property in connection with any Response Action or the AOC
Work;
(viii) Seller shall give Purchaser reasonable advance notice of any meeting
to be held with any Government having jurisdiction over any Response Action and
the right to attend and participate in any such meeting. With respect to the AOC
Work, to the extent reasonably practicable in light of applicable Law and the
requirements of any Government, Seller shall provide to Purchaser a copy of any
work plan at least ten (10) days in advance of submittal to any Government and
shall revise such work plan to incorporate any reasonable comments made by
Purchaser;
(ix) Seller shall keep Purchaser reasonably informed of the progress of any
Response Action performed pursuant to this Section 7.4(j) and the AOC Work. All
information (including information from samples, measurements or tests) and all
documentation (including copies of field documentation, chain-of-custody
documents, laboratory records and reports and quality assurance/quality control
documentation) collected or created by or for Seller or its Representatives in
connection with performing any Response Action or the AOC Work shall be provided
to Purchaser as soon as practicable after it comes into Seller's possession. All
reports submitted to any Government by, to or for Seller or its Representatives
concerning any Response Action or the AOC Work shall be provided to Purchaser no
later than ten (10) days after completion of such reports;
(x) Seller shall be solely and fully responsible for the handling, storage
and disposal of any Hazardous Materials created, collected or otherwise
generated in connection with any Work performed by Seller or its
Representatives;
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(xi) Seller shall keep any affected Real Property free and clear of any and
all Liens which may result from acts or omissions of Seller and its
Representatives in connection with any Work and shall cause all such Liens to be
bonded or otherwise discharged of record within thirty (30) days after their
filing;
(xii) Purchaser may refuse or terminate Access for failure, or reasonable
threat of failure, by Seller or its Representatives to comply with applicable
safety, health or Environmental Laws in connection with the performance of the
Work;
(xiii) If, after Seller's receipt of written notice that Parent, Purchaser
or any other Purchaser Indemnified Party is required under applicable
Environmental Law to initiate or conduct a Response Action or Compliance Action
that is subject to Seller's indemnity obligations under this Section 7, Seller
fails to commence and thereafter to prosecute diligently to conclusion the
Response Action or Compliance Action, Purchaser shall be entitled to do so. If
Seller fails to commence and diligently prosecute to conclusion such Response
Action or Compliance Action and Purchaser elects to conduct the Response Action
or Compliance Action as provided in the preceding sentence, then, provided that
Purchaser conducts (and Purchaser hereby agrees to conduct) the Response Action
or Compliance Action in accordance with the requirements of Section 7.4(j) to
the same extent that those requirements would be applicable to Seller if Seller
performed the Response Action or Compliance Action, then (A) such Response
Action or Compliance Action performed by Purchaser shall be deemed to have been
approved by, and shall be binding on, Seller, as though Seller had assumed the
obligation to supervise and perform the Response Action or Compliance Action,
and (B), in accordance with and subject to the indemnification provisions of
this Section 7, Seller shall pay any cost reasonably incurred by Purchaser in
connection with conducting the Response Action or Compliance Action within
fifteen (15) business days after receiving evidence reasonably substantiating
the incurring of such expense. If Purchaser elects to conduct the Response
Action or Compliance Action, (A) Purchaser shall give Seller reasonable advance
notice of any sampling or any other on-site activities (other than such other
activities that are not material to the Response Action or Compliance Action (an
"Immaterial Activity")) performed in connection with such Response Action or
Compliance Action, (B) Seller shall have the right to have one or more of its
Representatives present during such sampling or other on-site activities (other
than Immaterial Activities) and to obtain a "split" of any sample taken by or
for Purchaser in connection with such Response Action or Compliance Action, and
(C) Seller shall have the same rights as Purchaser would have under Sections
7.4(j)(viii)-(ix) if Seller had conducted the Response Action or Compliance
Action;
(k) Notwithstanding anything contained herein to the contrary, to the
extent that any facts or circumstances give rise to a Claim under (i) Section
7.1(a) and (ii) any of Sections 7.1(d)-(j), the liability of the Seller for such
Claim under Sections 7.1(d)-(j), as applicable, shall control.
(l) Notwithstanding anything contained herein to the contrary, to the
extent that any facts or circumstances give rise to (i) a Claim under this
Section 7 and (ii) a purchase price adjustment to the Initial Cash Purchase
Price under Section 2.4, such facts or circumstances shall first be resolved
under the purchase price adjustment mechanism pursuant to Section 2.4. To the
extent that the Initial Cash Purchase Price has been adjusted pursuant to
Section 2.4 and Purchaser is paid in connection therewith, neither Purchaser nor
any other Purchaser Indemnified Party shall not be entitled to a "second"
payment under Section 7 for any facts or circumstances which could have also
given rise to a Claim under Section 7.
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7.5 Indemnification Procedure.
(a) Third-Party Claims.
(i) Promptly after receipt by a party entitled to be indemnified under this
Section 7 (an "Indemnified Party") of notice of the commencement of any Action
for which the Indemnified Party intends to assert a claim for indemnification
against another party (an "Indemnifying Party") under this Section 7, the
Indemnified Party shall give notice to the Indemnifying Party of the
commencement of such Action with reasonable promptness (so as to not prejudice
the Indemnifying Party's rights).
(ii) The Indemnifying Party shall be entitled to participate in any Action
described in Section 7.5(a)(i) above and, to the extent that it wishes, to
assume the defense of such Action with counsel reasonably satisfactory to the
Indemnified Party. Following the assumption of defense by an Indemnifying Party,
the Indemnifying Party shall not be liable for any subsequent fees of legal
counsel or other expenses incurred by the Indemnified Party in connection with
the defense of such Action, and the Indemnified Party shall have the right to
participate in the defense with its own counsel at its own expense. No
compromise or settlement of any claims in an Action shall be binding on an
Indemnifying Party for purposes of the Indemnifying Party's indemnity
obligations under this Agreement without the Indemnifying Party's express
written consent. The Indemnifying Party may not compromise or settle any claims
in an Action without the Indemnified Party's express written consent, which
shall not be unreasonably withheld, unless the compromise or settlement involves
only the payment of money (which is paid by the Indemnifying Party) and does not
include any admission of liability by the Indemnified Party.
(iii) A party granted the right to direct the defense of any Action under
this Section 7.5 shall (A) keep the other parties hereto informed of material
developments in the Action, (B) promptly submit to the other parties copies of
all pleadings, responsive pleadings, motions and other similar legal documents
and papers received in connection with the Action, (C) permit the other parties
and their counsel, to the extent practicable, to confer on the conduct of the
defense of the Action, and (D) to the extent practicable, permit the other
parties and their counsel an opportunity to review all legal papers to be
submitted prior to their submission. The parties shall make available to each
other and each other's counsel and accountants all of their books and records
relating to the Action, and each party shall provide to the others such
assistance as may be reasonably required to insure the proper and adequate
defense of the Action. Each party shall use its good faith efforts to avoid the
waiver of any privilege of another party. The assumption of the defense of any
Action by an Indemnifying Party shall not constitute an admission of
responsibility to indemnify or in any manner impair or restrict the Indemnifying
Party's rights to later seek to be reimbursed its costs and expenses if
indemnification under this Agreement with respect to the Action was not
required.
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(iv) Other Claims. A claim for indemnification for any matter not involving
a third-party claim may be asserted by written notice of the claim, setting
forth in reasonable detail the factual and contractual bases for the claim, to
the party from whom indemnification under this Section 7 is sought.
7.6 Exclusive Remedy. Except as provided in Section 2.4, this Section 7
constitutes the sole and exclusive remedy of Purchaser and Seller for money
damages with respect to any matters arising under or with respect to this
Agreement or any document executed and delivered by any party to another party
at Closing, and Parent, Purchaser and Seller hereby irrevocably waive and
release the others from any and all claims and other causes of action, including
claims for contribution, relating to such matters. No party shall be entitled to
rescind this Agreement following the Closing in the event of a breach of any
representation, warranty or covenant made by another party in this Agreement.
8. ADDITIONAL COVENANTS AND AGREEMENTS.
8.1 Expenses. Except as otherwise set forth in this Agreement, each party
hereto shall bear and pay all costs and expenses incurred by it in connection
with the transactions contemplated by this Agreement, including fees, costs and
expenses of its own Representatives.
8.2 Public Releases. Parent, Purchaser and Seller shall agree with each
other as to the form and substance of any press release related to this
Agreement or the transactions contemplated hereby, shall consult with each other
as to the form and substance of other public disclosures related thereto, and
shall not make any such press release or such other disclosures prior to such
agreement or consultation; provided, however, that nothing contained herein
shall prohibit any party hereto from making any disclosure which it deems
necessary in light of applicable Law, after notice to the other parties with the
opportunity to comment to the extent that delay of the disclosure is permitted
under such Law.
9. MISCELLANEOUS.
9.1 Entire Agreement. Except for the Confidentiality Agreement dated
January 26, 2004 executed by Parent, this Agreement (including all Schedules,
Exhibits and other documents executed and delivered pursuant hereto) supersedes
any and all other agreements, oral or written, among the parties hereto with
respect to the subject matter hereof, and contains the entire agreement among
the parties with respect to the transactions contemplated hereby.
9.2 Amendments; Waiver. This Agreement may be amended, modified, superseded
or canceled and any of its provisions may be waived only by a written instrument
executed by all of the parties or, in the case of a waiver, by or on behalf of
the party waiving compliance. The failure of any party at any time to require
performance of any provision of this Agreement shall in no manner affect the
right of that party at a later time to enforce the same or a different
provision. No waiver by any party of any condition or of any breach of any
provision of this Agreement, in any one or more instances, shall be deemed to be
or construed as a further or continuing waiver of any such condition or of any
breach of the same or a different provision. If any party expressly waives in
writing an unsatisfied condition, representation, warranty, undertaking,
covenant or agreement (or portion thereof) set forth herein, the waiving party
shall thereafter be barred from recovering, and thereafter shall not seek to
recover, any Claims from the other parties in respect of the matter or matters
so waived.
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9.3 Successors; Assignment. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted transferees and assignees. Neither this Agreement nor any interest
herein may directly or indirectly be transferred or assigned by any party, in
whole or in part, without the written consent of the other parties, except that
Purchaser may effect any such assignment to any Affiliate, but any such
assignment shall not relieve Parent or Purchaser of its duties and obligations
contained in this Agreement.
9.4 Notices. Any notice, request, demand or other communication to be given
pursuant to the terms of this Agreement must be in writing and shall be deemed
to have been duly given on the day it is delivered by hand, on the day it is
sent by facsimile with confirmation of receipt by the transmitting facsimile
machine, on the next business day after it is sent by a nationally recognized
overnight mail service (delivery charge prepaid), or on the third business day
after it is mailed first class, postage prepaid, in each case to the following
addresses:
If to Seller: Amcast Industrial Corporation
7887 Washington Village Drive
Dayton, Ohio 45499-3959
Attention: Joseph R. Grewe, President
and Chief Executive Officer
Facsimile: 937-291-7007
with copies to: Barnes & Thornburg LLP
601 Campau Square Plaza
99 Monroe Ave., NW
Grand Rapids, Michigan 49503
Attention: R. Paul Guerre, Esq.
Facsimile: 616-742-3999
If to Parent or Purchaser: Park-Ohio Industries, Inc.
23000 Euclid Ave.
Cleveland, Ohio 44117
Attention: Robert D. Vilsack, Esq.
Facsimile: 216-692-6877
Calfee, Halter & Griswold LLP
with copies to: 1400 McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114
Attention: Douglas A. Neary, Esq.
Facsimile: 216-241-0816
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or to such other address or to such other person as any party shall have last
designated by written notice provided to the other parties in the manner set
forth in this Section.
9.5 Severability. If any provision of this Agreement or any application
thereof shall be invalid or unenforceable, the remainder of this Agreement and
any other application of such provision shall not be affected thereby.
9.6 No Third Party Beneficiary. This Agreement is for the benefit of, and
may be enforced only by, Seller, Parent and Purchaser and their respective
successors and permitted transferees and assignees, and is not for the benefit
of, and may not be enforced by, any third party.
9.7 Applicable Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Ohio without regard to
conflict of law principles.
9.8 Arbitration. Subject to the indemnification provisions set forth in
Section 7 above:
(a) The parties agree that any and all disputes, claims or controversies
arising out of or relating to this Agreement or the breach, termination,
enforcement, interpretation or validity thereof, including the determination of
the scope or applicability of this agreement to mediate and arbitrate, shall be
mediated before a mediator agreeable to both parties or, if they cannot agree,
then before JAMS, or its successor. The mediation shall be conducted at a
mutually agreeable location or, if they cannot agree, then at the JAMS office in
Chicago, Illinois. Any party may commence mediation by providing to the other
parties a written request for mediation, setting forth the subject of the
dispute and the relief requested. The parties shall cooperate with one another
in selecting a mediator and in scheduling the mediation proceedings. The parties
covenant that they shall participate in the mediation in good faith, and that
they shall share equally in its costs. All offers, promises, conduct and
statements, whether oral or written, made in the course of the mediation by any
of the parties or their Representatives, and by the mediator or any JAMS
employees, are confidential, privileged and inadmissible for any purpose,
including impeachment, in any arbitration or other Action involving the parties,
provided that evidence that is otherwise admissible or discoverable shall not be
rendered inadmissible or non-discoverable as a result of its use in the
mediation.
(b) Any party may initiate arbitration with respect to the matters
submitted to mediation by filing a written demand for arbitration at any time
following the initial mediation session or 45 days after the date of filing the
written request for mediation, whichever occurs first. The mediation may
continue after the commencement of arbitration if the parties so desire. Unless
otherwise agreed by the parties, the mediator shall be disqualified from serving
as arbitrator in the case. Arbitration may be enforced by any court of competent
jurisdiction, and the party seeking enforcement shall be entitled to an award of
all costs, fees and expenses, including reasonable attorneys fees, to be paid by
the party or parties against whom enforcement is ordered.
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(c) Any arbitration shall be conducted at a mutually agreeable location or,
if the parties cannot agree, in Chicago, Illinois. The arbitration shall be
before a sole arbitrator mutually selected by the parties or, if they cannot
agree, then before a retired judge to be selected by JAMS pursuant to its
Comprehensive Arbitration Rules and Procedures, who shall thereafter administer
the arbitration, provided however that JAMS shall identify the preceding ten
(10) arbitrations conducted by each arbitrator candidate and the lawyers
involved in the arbitration. The arbitration shall be conducted pursuant to the
foregoing rules except as set forth herein. The parties to the dispute shall be
permitted to conduct pre-hearing discovery in the form of depositions and
document production requests subject to the control of the arbitrator. The award
of the arbitrator shall be a reasoned award specifying all essential findings of
fact and conclusions of law necessary to support the award. Judgment on the
award may be entered in any court of competent jurisdiction. In any proceeding
to confirm the award, the court also shall have jurisdiction to review the award
for errors of law.
(d) The cost of the arbitration shall initially be borne equally by the
parties. In the award the arbitrator shall allocate, consistent with Section 7
hereof, all of the costs of the arbitration (and the mediation, if applicable),
including the fees of the arbitrator and the reasonable attorneys' fees of the
prevailing party, against the party or parties who did not prevail.
9.9 Counterparts. This Agreement may be executed in two or more
counterparts and by the parties on separate counterparts, all of which shall be
considered one and the same instrument, and each of which shall be deemed an
original. Each of the parties hereto (i) has agreed to permit the use, from time
to time, of faxed or otherwise electronically transmitted signatures in order to
expedite the consummation of the transactions contemplated hereby, (ii) intends
to be bound by its respective faxed or otherwise electronically transmitted
signature, (iii) is aware that the other parties hereto shall rely on the faxed
or otherwise electronically transmitted signature, and (iv) acknowledges such
reliance and waives any defenses to the enforcement of the documents effecting
the transaction contemplated by this Agreement based on the fact that a
signature was sent by fax or otherwise electronically transmitted.
9.10 Headings; Construction. The headings of the sections and paragraphs in
this Agreement have been inserted for convenience of reference only and shall
not restrict or otherwise modify any of the terms or provisions of this
Agreement. Unless otherwise expressly provided, the words "including" or
"includes" whenever used in this Agreement do not limit the preceding words or
terms. With regard to all dates and time periods set forth or referred to in
this Agreement, time is of the essence.
9.11 Consent to Service of Process and Jurisdiction. If it becomes
necessary for any party to enforce the provisions of Section 9.8 of this
Agreement or any arbitration award obtained pursuant to Section 9.8 of this
Agreement by legal action, the parties hereby consent that suit may be brought
hereunder in any court of appropriate jurisdiction in Montgomery County, Ohio,
U.S.A., or in the United States District Court for the Southern District of
Ohio, regardless of the state, county or country in which any party may reside
or have such party's domicile (corporate or individual) at the time of any such
action. Parent, Purchaser and Seller consent to service of process and other
notices given or required in any proceedings submitted to arbitration by either
party pursuant to the provisions of Section 9.8 by personal delivery or by
registered mail addressed to such party at the addresses set out in Section 9.4.
However, any party may serve legal process in any other manner permitted by Law
or the rules of the American Arbitration Association.
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9.12 Certain Information. Neither the specification of any dollar amount in
the representations and warranties contained in this Agreement nor the inclusion
of any item in any Schedule to this Agreement is intended, or will be construed
or offered in any dispute among the parties as evidence of, the material nature
of such dollar amount or item, nor shall it establish any standard of
materiality upon which to judge the inclusion of any other items in any
Schedules to this Agreement. The information contained in this Agreement and the
Schedules to this Agreement is disclosed solely for the purposes of this
Agreement, and no information contained herein or therein shall be deemed to be
an admission by any party to any Person of any matter whatsoever, including of
any violation of Law or breach of any contract.
10. Certain Definitions.
10.1 Definitions. For purposes of this Agreement, the following capitalized
terms shall have the meanings given to them below, and all other capitalized
terms used in this Agreement that are not defined in this Section 10 but defined
elsewhere in this Agreement shall have for purposes of this Agreement the
meanings set forth elsewhere in this Agreement:
"Action" means any action, suit, complaint, claim, counter-claim, petition,
set-off, inquiry, investigation, administrative proceeding, arbitration, or
private dispute resolution proceeding, whether at law, in equity, by contract or
agreement, or otherwise, and whether conducted by or before any Government, any
Forum, or other Person.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with the
former Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise.
"AOC" means the Administrative Order on Consent issued by U.S. EPA on
February 28, 2003 in the case styled In the Matter of Cedar Creek, Amcast
Industrial Corp., Cedarburg, Wisconsin, Docket No. V-W-'03-C-737, and any
amendments thereto.
"Employee" or "Employees" means the persons listed on Schedule 4.10.
"Environmental Law" means any and all Laws in effect as of the date of this
Agreement relating to pollution or protection of human health or the environment
(including ambient air, indoor air, surface water, ground water, land surface,
or subsurface strata), including: (i) CERCLA, (ii) the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. ss.ss.6901, et seq. ("RCRA"), (iii) the
Clean Air Act, 42 U.S.C. ss.ss. 7401 et seq.; (iv) the Clean Water Act, 33
U.S.C. ss.ss.1251, et seq., (v) the Emergency Planning and Community
Right-to-Know Act, 42 U.S.C. ss.ss. 11011, et seq., (vi) the Oil Pollution Act
of 1990, 33 U.S.C. ss.ss. 2701, et seq., (vii) the Hazardous Materials
Transportation Act, 49 U.S.C. ss.ss. 1801, et seq., (viii) the Toxic Substances
Control Act, 15 U.S.C. ss.ss. 2601, et seq., (ix) the Occupational Safety and
Health Act, 29 U.S.C. ss.ss.651, et seq., (x) any state or local Law similar to
the Laws listed in parts (i) - (ix) of this paragraph, (xi) any amendments to
the statues, laws or ordinances listed in parts (i) - (ix) above, in existence
on the date hereof, and (xii) any other Law in effect as of the date of this
Agreement relating to emissions, discharges, releases, threatened releases,
generation, management, handling, control, use, treatment, storage, disposal,
transport, removal, remediation or recovery of any Hazardous Material.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Facilities" means Seller's facilities located in Richmond, Indiana,
Detroit, Michigan, Southfield, Michigan, Wapakoneta, Ohio and Cedarburg,
Wisconsin at which the Business is conducted.
"Forum" means any federal, state, local or municipal court, governmental
agency, administrative body or agency, tribunal, private alternative dispute
resolution system, or arbitration panel.
"GAAP" means United States generally accepted accounting principles.
"Government" means any court, tribunal, arbitrator, authority, agency,
commission, official or other instrumentality of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision.
"Law" means all federal, state, local or municipal constitutions, statutes,
rules, regulations, ordinances, acts, codes, legislation, conventions and
similar laws and legal requirements, as in effect on the date of this Agreement.
"Lien" means any mortgage, pledge, hypothecation, security interest,
encumbrance, lien or charge of any kind, however evidenced or created, but
excluding any of the foregoing (i) disclosed in this Agreement (including any
Schedule to this Agreement), (ii) for water, sewage and similar charges and
current Taxes and assessments not yet due and payable or being contested in good
faith, (iii) relating to mechanics', carriers', workers', repairers',
materialmen's, warehousemen's and other similar liens arising or incurred in the
Ordinary Course of Business of the Business, (iv) arising or resulting from any
action taken by Purchaser or its Affiliates, (v) relating to easements, rights
of way, restrictions and other similar liens that do not materially interfere
with the ordinary conduct of operations, (vi) relating to imperfections or
defects in title that do not materially adversely affect the value or use of the
applicable asset, (vii) consisting of purchase money security interests created
in the Ordinary Course of Business, (viii) arising under Law in favor of
landlords, and (ix) to which Purchaser consents in writing.
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"Material Adverse Effect" means an actual, material adverse effect on the
financial condition of the Business considered as a whole, but shall be deemed
to exclude (i) any changes resulting from general economic, regulatory or
political conditions, (ii) acts attributable to, omissions by or circumstance
affecting Parent, Purchaser or their Affiliates, (iii) circumstances that affect
the industries in which the Business operates generally, or (iv) any changes
resulting from the announcement or pendency of the transactions contemplated by
this Agreement.
"Ordinary Course of Business" means an action taken by a Person that is
consistent with the past practices of such Person and is taken in the ordinary
course of the normal day-to-day operations of such Person.
"PCB Contamination" means any polychlorinated biphenyls ("PCBs") that are
or were: (i) present on or before the Closing Date on or at any Real Property or
any equipment or machinery located thereon (or present on any other property, if
such PCBs emanated or allegedly emanated from any Real Property or any equipment
or machinery located thereon and was present on any Real Property or any
equipment or machinery located thereon, on or prior to the Closing Date), or
(ii) released (as "release" is defined in Section 101(22) of CERCLA) on or at
any Real Property or any equipment or machinery located thereon on or prior to
the Closing Date.
"Person" means and includes an individual, a partnership, a joint venture,
a corporation, a limited liability company, a trust, an unincorporated
association or organization, and a Government.
"Representative" means with respect to a particular Person, any director,
officer, manager, member, employee, agent, consultant, advisor or other
representative of such Person, including legal counsel, lenders, accountants and
financial advisors.
"Seller's Knowledge" shall means the actual knowledge of Joseph Grewe,
Francis Drew, Kenneth Stakas, Chuck Frothingham, Jagan Nath and Jim Moran.
"Taxes" shall mean all income, property, sales, use, customs, franchise,
value added, ad valorem, withholding, employees' income withholding, and social
security and Medicare taxes imposed by any Government, and all interest and
penalties thereon.
* * * * *
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Parent, Purchaser and Seller have caused this Asset Purchase Agreement to
be duly executed as of the date first set forth above.
PARENT:
PARK-OHIO INDUSTRIES, INC.
By:
------------------------
Its:
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PURCHASER:
GAMCO COMPONENTS GROUP LLC
By:
------------------------
Its:
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SELLER:
AMCAST INDUSTRIAL CORPORATION
By:
------------------------
Its:
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