EXHIBIT 2.1
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ASSET PURCHASE AGREEMENT
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by and among
DAYTON PARTS, LLC
DAYTON PARTS, INC.
and
JPE, INC.
February 7, 2003
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TABLE OF CONTENTS
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ARTICLE I. CERTAIN DEFINITIONS.................................................................... 1
ARTICLE II. PURCHASE AND SALE OF THE PURCHASED ASSETS.............................................. 5
2.1 Purchased Assets........................................................................... 5
2.2 Excluded Assets............................................................................ 6
ARTICLE III. PURCHASE PRICE; ASSUMPTION OF LIABILITIES.............................................. 6
3.1 Purchase Price............................................................................. 6
3.2 Assumption of Liabilities.................................................................. 7
3.3 Excluded Liabilities....................................................................... 8
3.4 Allocation of Purchase Price and Assumed Liabilities....................................... 9
3.5 Closing Date Balance Sheet................................................................. 10
3.6 Escrow Amount.............................................................................. 10
3.7 Post-Closing Adjustments................................................................... 11
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER.......................................... 11
4.1 Organization and Good Standing............................................................. 11
4.2 Power and Authorization.................................................................... 11
4.3 No Conflicts............................................................................... 12
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER AND...................................... 12
5.1 Organization and Qualification............................................................. 12
5.2 No Conflicts............................................................................... 13
5.3 Subsidiaries............................................................................... 13
5.4 Compliance with Laws....................................................................... 13
5.5 Litigation................................................................................. 13
5.6 Financial Statements....................................................................... 14
5.7 Brokers.................................................................................... 14
5.8 Real Property.............................................................................. 15
5.9 Personal Property.......................................................................... 16
5.10 List of Contracts.......................................................................... 16
5.11 Contracts.................................................................................. 16
5.12 Insurance.................................................................................. 17
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5.13 Trademarks and Intellectual Property....................................................... 17
5.14 Tax Matters................................................................................ 18
5.15 Employee Benefits.......................................................................... 18
5.16 Labor Matters.............................................................................. 19
5.17 Affiliated Agreements...................................................................... 19
5.18 Environmental Matters...................................................................... 19
5.19 Absence of Certain Changes and Events...................................................... 20
5.20 Product Design; Warranties................................................................. 21
5.21 Accounts Receivable and Inventory.......................................................... 21
5.22 Seller's Knowledge......................................................................... 21
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF BUYER................................................ 21
6.1 Organization and Qualification............................................................. 21
6.2 Power and Authorization.................................................................... 21
6.3 No Conflicts............................................................................... 22
6.4 Financial Condition........................................................................ 22
6.5 WARN Act................................................................................... 22
6.6 Investigation and Evaluation............................................................... 22
6.7 Brokers.................................................................................... 23
ARTICLE VII. PRE-CLOSING COVENANTS.................................................................. 23
7.1 Seller's Covenants......................................................................... 23
7.2 Publicity.................................................................................. 25
7.3 Cooperation and Best Efforts; Updated Schedules............................................ 25
7.4 Employee Arrangements...................................................................... 26
7.5 Title to Owned Facility.................................................................... 27
ARTICLE VIII. POST-CLOSING COVENANTS................................................................. 27
8.1 Books and Records.......................................................................... 27
8.2 Compliance with WARN Act................................................................... 27
8.3 Restrictive Covenant....................................................................... 28
8.4 Voluntary Remediation...................................................................... 28
ARTICLE IX. CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE............................................ 28
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9.1 Accuracy of Representations and Warranties; Performance by Seller.......................... 28
9.2 Closing Deliveries......................................................................... 29
9.3 Absence of Litigation...................................................................... 29
9.4 Consents................................................................................... 29
9.5 Satisfaction of Outstanding Indebtedness................................................... 29
9.6 Material Adverse Changes................................................................... 29
9.7 No Environmental Bar to Financing.......................................................... 29
ARTICLE X. CONDITIONS PRECEDENT TO THE SELLER'S PERFORMANCE....................................... 29
10.1 Accuracy of Representations and Warranties; Performance by Buyer........................... 29
10.2 Closing Deliveries......................................................................... 29
10.3 Absence of Litigation...................................................................... 30
10.4 Consents................................................................................... 30
ARTICLE XI. THE CLOSING............................................................................ 30
11.1 The Closing................................................................................ 30
11.2 Deliveries at the Closing.................................................................. 30
ARTICLE XII. TERMINATION............................................................................ 31
12.1 Termination................................................................................ 31
12.2 Rights Upon Breach......................................................................... 32
12.3 Procedure for Termination.................................................................. 32
ARTICLE XIII. INDEMNITY.............................................................................. 33
13.1 Indemnification of Buyer................................................................... 33
13.2 General Indemnification Obligation of Buyer................................................ 34
13.3 Survival; Time Limitations................................................................. 34
13.4 Indemnity Limitations...................................................................... 35
13.5 Method of Asserting Claims, Etc............................................................ 36
13.6 Payment.................................................................................... 37
13.7 Other Remedies............................................................................. 38
ARTICLE XIV. MISCELLANEOUS.......................................................................... 38
14.1 Jurisdiction/Venue......................................................................... 38
14.2 Counterparts............................................................................... 38
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14.3 Assignment................................................................................. 38
14.4 Fees and Expenses.......................................................................... 38
14.5 Notices.................................................................................... 39
14.6 Governing Law.............................................................................. 39
14.7 Further Actions and Assurances............................................................. 40
14.8 Effect of Headings......................................................................... 40
14.9 Severability............................................................................... 40
14.10 Representations............................................................................ 40
14.11 Entire Agreement; Modification; Waiver..................................................... 40
14.12 Disclaimer of Warranties................................................................... 40
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is made and entered into
this 7th day of February, 2003 by and among DAYTON PARTS, LLC, a Delaware
limited liability company ("Buyer"), DAYTON PARTS, INC., a Michigan corporation
(the "Seller"), and JPE, INC., a Michigan corporation (the "Shareholder").
BACKGROUND
This Agreement sets forth the terms and conditions upon which Buyer is
purchasing substantially all of the assets of the Seller (except for the capital
stock of Brake, Axle & Tandem Company Canada, Inc., a corporation organized
under the laws of the Province of Alberta ("BATCO")), in exchange for the
payment by Buyer of the purchase price hereinafter described and the assumption
by Buyer of substantially all of the liabilities of the Seller.
NOW THEREFORE, in consideration of the foregoing premises and the
mutual covenants, agreements, representations and warranties herein contained,
and for other valuable consideration the receipt and sufficiency of which are
hereby acknowledged, Buyer, Seller and Shareholder do hereby agree as follows:
ARTICLE I.
CERTAIN DEFINITIONS
As used in this Agreement, the following terms have the following
meaning unless the context requires otherwise:
"ASSUMED PRODUCTS WARRANTY CLAIMS" as defined in Section 3.2 hereof.
"AUTHORIZATION" means any consent, license, permit, franchise, grant or
authorization of any Governmental Authority.
"BUSINESS" means the after market truck and trailer replacement parts
business conducted by Seller.
"BUYER DISCLOSURE STATEMENT" means the disclosure statement delivered
to Seller and Shareholder by Buyer in connection with the transactions
contemplated by this Agreement.
"BUYER TRANSACTION DOCUMENTS" mean the this Agreement, the Escrow
Agreement and the other agreements, instruments and documents required to be
delivered by Buyer in connection with the transactions contemplated by this
Agreement.
"CLOSING" means the consummation of the transactions described in
Article II of this Agreement in accordance with Article XI of this Agreement.
"CLOSING DATE" means the date defined in Section 11.1 of this
Agreement.
"CONTRACT" means any contract, agreement, license, lease, understanding
or arrangement or other legally binding contractual right or obligation (whether
written or oral).
"DISCLOSURE STATEMENT" or "SELLER DISCLOSURE STATEMENT" means the
disclosure statement delivered to Buyer by the Seller and the Shareholder in
connection with this Agreement.
"DOLLARS" OR "$" means the dollars currency of the United States of
America.
"EFFECTIVE TIME" shall have the meaning ascribed to such term in
Section 11.1 hereof.
"ENCUMBRANCE" means any restriction, mortgage, deed of trust, pledge,
lien, option, right of first refusal, security interest or other similar charge,
claim or encumbrance, including any restriction on use, transfer, voting,
receipt of income or other attribute of ownership.
"ENVIRONMENTAL, HEALTH AND SAFETY LAWS" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976 and the Occupational Safety and Health Act
of 1970, each as amended, together with all other Laws concerning pollution or
protection of the environment, public health and safety or employee health and
safety, including Laws relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants or Hazardous Substances into ambient air,
surface water, ground water or lands, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants or chemical, industrial, Hazardous
Substances or wastes.
"ERISA AFFILIATE" means any entity under common control with the
Seller, within the meaning of Sections 414(b), 414(c), 414(m) or 414(o) of the
Code (as herein defined) or Section 4001(b) of ERISA (as herein defined).
"ESCROW AGENT" means Bank of America or other financial entity mutually
acceptable to Buyer and Shareholder, which shall serve as the escrow agent under
the Escrow Agreement.
"ESCROW AGREEMENT" that certain agreement in the form of Exhibit 3.6,
attached hereto, by and among the Shareholder, the Buyer and the Escrow Agent,
as it may be amended upon the mutual consent of Shareholder and Buyer.
"EXCESS PRODUCTS WARRANTY CLAIMS" as defined in Section 3.3.
"FACILITIES" means the land and improvements used by Seller in the
operation of the Business located at 1300 North Cameron Street, Harrisburg,
Pennsylvania (the "OWNED FACILITY") and 3500 Industrial Road, Harrisburg,
Pennsylvania.
"GOVERNMENTAL AUTHORITY" means any federal, state, local or other
governmental authority, or any political subdivision thereof, and any
governmental, judicial, public or statutory instrumentality, tribunal, agency,
authority, body or entity having legal jurisdiction over any matter or Person in
question.
"HAZARDOUS ACTIVITY" means the distribution, generation, handling,
importing, management, manufacturing, processing, production, refinement,
release, storage, transfer, transportation, treatment or use (including any
withdrawal or other use of groundwater) of a
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Hazardous Substance, pollutant, or contaminant in, on, under, about or from any
of the Facilities or any part thereof into the environment.
"HAZARDOUS SUBSTANCE" means (i) any substance designated or listed as a
"hazardous substance" under Section 101(14) of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 or the regulations adopted
pursuant thereto; (ii) any substance designated or listed as a "hazardous
substance" under Sections 307 or 311 of the Clean Water Act or the regulations
adopted pursuant thereto; (iii) any substance defined, designated or listed as a
"hazardous waste" under Section 1004(5) of the Resource Conservation and
Recovery Act or the regulations adopted pursuant thereto, (iv) petroleum or
petroleum products; (v) any substance defined as a "hazardous substance" by 35
P.S. Section 6020.103 (Hazardous Sites Clean Up Act); or (vi) any substance
defined as a "regulated substance" by 35 P.S. ss. 6026.103 (Land Recycling and
Environmental Remediation Standards Act).
"LAW" means any ordinance, regulation, decree, order, statute,
regulation, permit, license or certificate, or any judgment, order or award, of
any court or other Governmental Authority.
"LEGAL OBLIGATION" means any requirement or duty created by statute or
common law.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
Business or the Purchased Assets or on the Seller's operations, or financial
condition.
"MATERIAL CONTRACT" means any Contract to which the Seller is a party
and which:
(i) involves performance of services or delivery of goods
or materials by Seller of an amount or value in excess of
$75,000 annually;
(ii) involves performance of services or delivery of goods
or materials to Seller of an amount or value in excess of
$75,000 annually;
(iii) was not entered into in the ordinary course of
business and that involves expenditures or receipts of Seller
in excess of $50,000;
(iv) affects the ownership of, leasing of, title to, use
of or any leasehold or other interest in any real or personal
property (except personal property leases and installment and
conditional sales agreements having a value per item or
aggregate payments of less than $50,000);
(v) is with any labor union or other employee
representative of a group of employees relating to wages,
hours and other conditions of employment of employees of
Seller;
(vi) involves a sharing of profits, losses, costs or
liabilities by Seller with any other Person;
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(vii) contains covenants that in any way purport to
restrict Seller's business activity or limit the freedom of
Seller to engage in any line of business or to compete with
any Person;
(viii) contains or provides for an express undertaking by
Seller to be responsible for consequential damages;
(ix) provides for capital expenditures by Seller in excess
of $75,000;
(x) is a written warranty, guaranty and/or other similar
undertaking with respect to contractual performance extended
by Seller other than in the ordinary course of business; and
(xi) was entered into with (1) an officer or director of
Seller, (2) an officer or director of an affiliate of
Shareholder, or (3) an affiliate of Shareholder.
(xii) each amendment, supplement and modification (whether
oral or written) in respect of any of the foregoing.
"NET WORKING CAPITAL" means those accounts receivable and inventory
accounts of the Seller and BATCO reflected on Schedule 3.5 and included in the
Closing Date Balance Sheet or Periodic Pre-Closing Balance Sheet as of a
designated date, less the accounts payable accounts reflected on Schedule 3.5
and included in the similarly dated designated Closing Date Balance Sheet or
Periodic Pre-Closing Balance Sheet.
"OWNED FACILITY" as defined in the definition of Facilities above.
"PERIODIC PRE-CLOSING BALANCE SHEET" as defined in Section 7.1 hereof.
"PERIODIC PRE-CLOSING FINANCIAL STATEMENTS" as defined in Section 7.1
hereof.
"PERSON" means an individual, corporation, partnership (limited or
general), association, limited liability company, joint stock company, trust,
estate, unincorporated organization or court or other Governmental Authority or
any agency or subdivision thereof, or any other legally recognizable entity.
"SELLER TRANSACTION DOCUMENTS" means this Agreement, the Escrow
Agreement, and the other agreements, instruments and documents required to be
delivered by the Seller and/or the Shareholder in connection with the
transactions contemplated by this Agreement.
"SEVEN RETENTION BONUS AGREEMENTS" means those certain seven Outline of
Completion Bonus letter agreements between the Seller on the one hand and one of
Gary Smalley, Steve Bankos, Paul Anderson, Terry Rishel, Sam Stantial, Terry
Davis or Pamela Kreamer on the other hand, all dated as of January 26, 2000
except for the Outline of Completion Bonus letter agreement with Gary Smalley,
which is dated October 8, 1999.
"SEVEN SEVERANCE AGREEMENTS" means those certain seven Executive
Severance Agreements or Employee Change of Control Agreements between the Seller
on the one hand and
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one of Gary Smalley, Steve Bankos, Paul Anderson, Terry Rishel, Sam Stantial,
Terry Davis or Pamela Kreamer on the other hand.
"TAXES" means any federal, state, county, local or foreign taxes,
charges, fees, levies, or other assessments, including all net income, gross
income, sales and use, ad valorem, transfer, gains, profits, excise, franchise,
real and personal property, gross receipts, capital stock, production, business
and occupation, disability, employment, payroll, license, estimated, stamp,
custom duties, severance or withholding taxes or charges imposed by any
Governmental Authority, and includes any interest and penalties (civil or
criminal) on or additions to any such taxes.
"TAX RETURN" means a report, return or other information required to be
supplied to a Governmental Authority with respect to Taxes.
"TRANSACTION DOCUMENT(S)" means one or more Buyer Transaction Document
or Seller Transaction Document, as applicable.
ARTICLE II.
PURCHASE AND SALE OF THE PURCHASED ASSETS
2.1 PURCHASED ASSETS. Subject to the terms and conditions set
forth in this Agreement, at the Closing, Seller shall sell, convey, assign and
transfer to Buyer, and Buyer shall purchase from Seller, all right, title and
interest of Seller in and to all of the assets of Seller, except the Excluded
Assets (collectively, the "Purchased Assets"), including the following assets,
properties and rights:
(a) all raw material, work in process and finished goods
inventory;
(b) all accounts receivable, prepaid items, security
deposits, unbilled costs and fees, accounts, notes and other
receivables;
(c) all machinery, equipment, vehicles and furniture and
the supplies and spare parts related thereto, subject to any changes in
such items as shall occur in the ordinary course of business between
the date hereof and the Closing;
(d) all of the leasehold and ownership interests, as
applicable, of the Seller in the real property listed in Section 5.8 of
the Disclosure Statement;
(e) all Contracts entered into by Seller in respect of
the Business;
(f) all Authorizations used in connection with the
Business;
(g) rights or choses in action of Seller arising out of
occurrences before the Closing, including without limitation all rights
under express or implied warranties relating to the Purchased Assets,
but excluding claims for income tax refunds to the extent such refunds
relate to periods ending on or prior to the Closing and excluding
rights or choses in action of Seller relating to Excluded Assets and
Excluded Liabilities;
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(h) all existing records, books, ledgers, files,
documents, correspondence, advertising, promotional and marketing
materials, studies and reports; and
(i) all computer software (including documentation and
related object and source codes) used in the Business; all patents,
trademarks, copyrights, tradenames, technologies, methods,
formulations, data bases, trade secrets, know-how, inventions and other
intellectual property used in the Business or under development by the
Seller in connection with the Business and all goodwill associated with
the Business and the Purchased Assets.
2.2 EXCLUDED ASSETS. Expressly excluded from the Purchased Assets
sold by Seller to Buyer pursuant to Section 2.1 hereof are the following assets
of the Seller (collectively, the "Excluded Assets"):
(a) all cash, investment securities, bank accounts, safe
deposit boxes, except security deposits related to the use of any of
the Purchased Assets, including leased real property;
(b) the capital stock of BATCO;
(c) all claims for income tax refunds to the extent such
refunds relate to periods ending on or prior to the Closing;
(d) any and all assets located at the offices of JPE,
Inc. in Auburn Hills, Michigan that may be used from time to time by
Seller;
(e) all corporate seals, articles of incorporation,
minute books, stock books, tax returns and other records having to do
with the corporate organization and capitalization of the Seller and
any predecessor organization;
(f) all rights that accrue or will accrue to the Seller
under this Agreement;
(g) all assets, properties and rights, if any, listed on
Schedule 2.2(g);
(h) rights or choses in action of Seller relating to
Excluded Assets (other than the capital stock of BATCO) and Excluded
Liabilities; and
(i) any inter-company receivables of Seller, including
any receivables from Shareholder.
ARTICLE III.
PURCHASE PRICE; ASSUMPTION OF LIABILITIES
3.1 PURCHASE PRICE. The aggregate purchase price paid to Seller by
Buyer for the purchase of the Purchased Assets shall be Eighteen Million Two
Hundred Thousand Dollars ($18,200,000) (the "Purchase Price"). At the Closing,
Buyer shall pay: (i) to Seller Sixteen Million Three Hundred Fifty Thousand
Dollars ($16,350,000) in immediately available funds by bank wire transfer to an
account designated by Shareholder (the "Closing Date Payment"); and
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(2) One Million Eight Hundred Fifty Thousand Dollars ($1,850,000) to the Escrow
Agent (the "Escrow Amount") in accordance with the terms of the Escrow
Agreement.
The Purchase Price, and the amount of the Closing Date Payment, shall be
subject to adjustment immediately prior to the Closing as follows:
If the Net Working Capital as of the January 31, 2003 Periodic
Pre-Closing Financial Statements provided in accordance with Section 7.1(h)(v)
is less than $9,715,000, then the Closing Date Payment shall be reduced by the
amount of such deficiency. If the Net Working Capital as of the January 31, 2003
Periodic Pre-Closing Financial Statements provided in accordance with Section
7.1(h)(v) is greater than $9,715,000, then the Closing Date Payment shall be
increased by the amount of such excess.
3.2 ASSUMPTION OF LIABILITIES. At the Closing, Buyer shall assume
and agree to pay, discharge or perform, as appropriate, the following
obligations and liabilities of Seller (collectively, the "Assumed Liabilities"):
(a) any liabilities and obligations of Seller reflected
on the Balance Sheet or the Interim Balance Sheet other than Excluded
Liabilities referenced in Section 3.3(a) through (l) hereof;
(b) any liabilities and obligations of Seller to Seller's
customers incurred by Seller in the ordinary course of business for
orders outstanding as of the Effective Time reflected on Seller's books
and records (other than any liability arising out of a customer claim
of a breach that occurred prior to the Effective Time);
(c) any liabilities and obligations of Seller to Seller's
customers arising out of a customer claim of a breach of Seller's
written warranty agreements in the forms disclosed in Schedule 5.20
given by Seller to its customers and of any implied warranties, each in
the ordinary course of business for products of Seller shipped or
manufactured by Seller prior to the Effective Time, provided, however,
that Buyer's assumption of such liabilities and obligations shall be
limited to the first $138,000 of such liabilities and obligations
(measured by the cost of repairs and replacements and the amount of
credit provided to customers for returned, defective or damaged
products and calculated using the same pre-closing methods and
practices as Seller) ("Assumed Products Warranty Claims");
(d) any liabilities and obligations of Seller arising
after the Effective Time under the Contracts of Seller included in the
Purchased Assets (including the Seven Severance Agreements) other than
any liability arising out of or relating to a third party claim of a
breach of contract that occurred prior to the Effective Time; and
(e) any liabilities and obligations of Seller, other than
Excluded Liabilities referenced in Section 3.3(a) through (l) hereof,
incurred after the date of the Interim Balance Sheet in the ordinary
course of business, including all accrued liabilities of Seller that
are or would be customarily reflected as "Accrued Liabilities" under
Current Liabilities on a balance sheet of Seller prepared in accordance
with the accounting
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principles and practices used to prepare the Historic Financial
Statements, consistently applied.
At the Closing, Buyer shall, incident to its assumption of the Seller's
accrued liabilities to employees of Seller under the JPE, Inc. 401(k) Savings
Plan, pay to Seller an amount equal to the Seller's non-delinquent accrued
financial obligation thereunder as of the Effective Time to employees of Seller.
Seller shall promptly apply such payment to satisfy such obligation in
accordance with applicable ERISA laws and regulations. At and after the Closing,
Buyer shall pay other assumed accrued liabilities of Seller as they become due,
including without limitation bonuses that are payable in 2003 to Seller's
employees under the JPE Inc. 2002 Incentive Compensation Plan for Key Employees,
which payments shall be made directly to the applicable employees.
3.3 EXCLUDED LIABILITIES. Notwithstanding Section 3.2, Buyer shall
not assume or become responsible for any of the following liabilities or
obligations of the Seller (collectively, the "Excluded Liabilities"), whether
accrued, absolute or contingent:
(a) any liabilities or obligations for taxes of
Shareholder or any parent entity of Shareholder;
(b) any liabilities or obligations that accrue or will
accrue to the Seller under this Agreement;
(c) any liabilities or obligations to Comerica Bank under
the existing loan documents with Comerica Bank to which Shareholder and
Seller are bound;
(d) any liabilities or obligations under the Seven
Retention Bonus Agreements, and any liabilities or obligations that
arise under ERISA (as herein defined) solely as a result of the Seller
being an ERISA Affiliate of certain other Persons;
(e) any liability or obligations arising out of
proceedings against, or investigations involving or affecting, the
Seller commenced by a third party pending either in court or before any
other Governmental Authority, or before an arbitrator of any kind, as
of the Effective Time (the parties agree for purposes of this Agreement
that the preference claim asserted on January 31, 2003 by the Trustee
for the TransCom USA Liquidating Trust (through its counsel Porter &
Hedges, L.L.P.) -- related to the TransCom USA Management Co. L.P. et
al bankruptcy proceedings in the U.S. Bankruptcy Court for the Southern
District of Texas, Houston Division - will be treated as a liability or
obligation under this Section 3.3(e));
(f) other than as provided in Section 3.3(g) hereof, any
liability or obligations arising from any proceedings against, or
investigations involving or affecting, the Seller or Buyer either in
court or before any other Governmental Authority, or before an
arbitrator of any kind, not instituted based on actions of Buyer or its
affiliates, commenced by a third party after the Effective Time but
relating to the operation or conduct of the Business or the Purchased
Assets prior to the Effective Time;
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(g) other than the Assumed Products Warranty Claims, any
product liability or similar claim by a third party for injury to
person or property, regardless of when made or asserted, which arises
out of or is based upon any express or implied representation,
warranty, agreement or guarantee made by Seller, or alleged to have
been made by Seller, or which is imposed or asserted to be imposed by
operation of law, in connection with any product sold and shipped by,
or leased and shipped by, or on behalf of Seller on or prior to the
Effective Time, including without limitation any claim seeking recovery
for consequential damage, lost revenue or income;
(h) any federal, state or local income tax payable with
respect to the business, assets, properties or operations of Seller for
any period prior to the Effective Time;
(i) any indebtedness incurred by Seller prior to the
Effective Time for borrowed monies or evidenced by a promissory note
issued by Seller and any inter-company indebtedness of Seller;
(j) any liability or obligations of the Seller for any
costs, claims, liability and expenses related to: (1) the presence
prior to the Effective Time of any Hazardous Substance at the
Facilities, or (2) the occurrence prior to the Effective Time of any
Hazardous Activity at the Facilities, or (3) the violation prior to the
Effective Time by the Seller or any possessor of the Facilities prior
to the Effective Time of any Environmental, Health and Safety Laws, or
(4) the disposal or treatment of Hazardous Substances by the Seller
prior to the Effective Time;
(k) any liability or obligation of Seller arising or
incurred in connection with the negotiation, preparation and execution
of this Agreement and the transactions contemplated hereby including
fees and expenses of counsel, accountants and other experts;
(l) liabilities and obligations of Seller to Seller's
customers arising out of a customer claim of a breach of Seller's
written warranty agreements in the forms disclosed in Schedule 5.20
given by Seller to its customers and of any implied warranties, each in
the ordinary course of business for products of Seller shipped prior to
the Effective Time to the extent the amount of such liabilities and
obligations are in excess of the Assumed Products Warranty Claims (the
"Excess Products Warranty Claims"); and
(m) any other liabilities or obligations of Seller that
are not Assumed Liabilities.
Shareholder shall after the Closing, in accordance with and subject to
Sections 13.1(e) and 13.4(a) hereof, pay or otherwise discharge certain of the
Excluded Liabilities.
3.4 ALLOCATION OF PURCHASE PRICE AND ASSUMED LIABILITIES. The
Purchase Price and the Assumed Liabilities shall be allocated among the
Purchased Assets as set forth on Schedule 3.4. The allocation determined
pursuant to this Section shall be conclusive and binding for all purposes, and
each party will file all forms, returns and other documents in a manner
consistent with such allocation.
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3.5 CLOSING DATE BALANCE SHEET.
(a) Within sixty (60) days after the Closing Date,
Shareholder shall prepare and deliver, or cause to be prepared and
delivered, to Buyer the consolidated balance sheet for the Seller and
BATCO as of the close of business on the Closing Date (the "Closing
Date Balance Sheet") which shall be prepared in accordance with the
accounting principles and practices used to prepare the Historic
Financial Statements, consistently applied. The Closing Date Balance
Sheet shall include the information necessary to determine the
consolidated Net Working Capital of the Seller and BATCO. The Buyer
shall permit Transferred Employees (as herein defined) to be reasonably
available to the Shareholder to assist the Shareholder in the
preparation of the Closing Date Balance Sheet.
(b) Unless the Buyer within 30 days after receipt of the
Closing Date Balance Sheet gives the Shareholder a notice objecting
thereto and specifying the basis for such objection and the amount in
dispute ("Notice of Objection"), such Closing Date Balance Sheet shall
be considered accepted and binding upon the Shareholder and Buyer. If
within 20 days after the receipt of the Closing Date Balance Sheet,
Buyer gives a Notice of Objection to the Shareholder, the Shareholder
and Buyer shall negotiate in good faith with a view to resolving any
differences. If such negotiations fail to resolve all disputed items
within 15 days after Notice of Objection was first given by Buyer, the
remaining disputed items shall be submitted to Deloitte & Touche (the
"Nonpartisan Accountants") for final resolution. After affording the
Buyer and its representatives and the Shareholder and its
representatives the opportunity to present their positions as to the
disputed items (which opportunity shall not extend for more than 30
days), the Nonpartisan Accountants shall resolve all disputed items in
writing. Such resolution shall be final and binding upon the parties
and shall be reflected in any necessary revisions to the Closing Date
Balance Sheet. The fees, costs and expenses of the Nonpartisan
Accountants in connection with any such determination shall be divided
evenly between the Shareholder and Buyer. Otherwise, the Shareholder
and Buyer shall each pay its costs in connection with this Section,
including the fees and expenses of their respective attorneys and
accountants, if any. Notwithstanding anything in this Section to the
contrary, Buyer shall not contest any item for which the amount in
disagreement is less than $10,000, provided, however, that Buyer may
contest any disputed item that exceeds $1,000 if the aggregate amount
of disputed items exceeds $25,000.
3.6 ESCROW AMOUNT. Payments, if any, by Buyer to Seller from the
Escrow Amount shall be made as follows:
(a) General. On the twelve month anniversary of the
Closing Date, the Escrow Agent shall pay to Shareholder the amount
equal to the positive remainder, if any, of (i) the original Escrow
Amount plus any net accrued interest earned on the Escrow Amount minus
(ii) the sum of (A) the aggregate amount of all Damages paid from the
Escrow Amount to Buyer Indemnified Persons under Article XIII, and (B)
a reserve for each bona fide claim for indemnification then pending
pursuant to Article XIII. Thereafter, upon settlement or other
disposition of all such pending claims in accordance with this
Agreement, the Escrow Agent shall pay to Shareholder any
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remaining Escrow Amount plus any net accrued interest thereon. Any
payments under this Section 3.6(a) shall be paid in immediately
available funds by bank wire transfer to any account designated by
Shareholder to the Escrow Agent for such purpose in writing.
(b) Definition of Pending Claim. For the purposes of this
Section 3.6, a "pending claim" means an unresolved bona fide claim for
indemnification under Section 13.1 that shall have actually been made
by a Buyer Indemnified Person and shall be the subject of a pending
dispute between or among the Shareholder (as indemnitor), the Buyer
and/or a third party.
3.7 POST-CLOSING ADJUSTMENTS.
(a) If the Net Working Capital as of the Closing Date as
conclusively determined as provided in Section 3.5 (such conclusive
determination is referred to herein as "Certified Net Working
Capital"), is less than the amount of Net Working Capital as of the
January 31, 2003 Periodic Pre-Closing Financial Statements (as
determined in accordance with Section 3.1 hereof), then the Shareholder
shall pay, or cause to be paid, to Buyer the amount of such deficiency.
If the Certified Net Working Capital is greater than the amount of Net
Working Capital as of the January 31, 2003 Periodic Pre-Closing
Financial Statements (as determined in accordance with Section 3.1
hereof), then Buyer shall pay, or cause to be paid, to the Shareholder
the amount of such excess. Any payment pursuant to this Section 3.7(a)
shall be made within five (5) business days following the determination
of Certified Net Working Capital.
(b) Payments made pursuant to this Section 3.7 shall be
made by wire transfer of immediately available funds to an account
designated by the party receiving such payment. Any payment arising
under this Section 3.7 not made when due shall bear interest from the
due date at the rate of six percent (6%) per annum.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER
Shareholder hereby represents and warrants to Buyer as of the date of
this Agreement and as of the Closing Date as follows:
4.1 ORGANIZATION AND GOOD STANDING. Shareholder is a corporation
duly organized, validly existing and in good standing under the Laws of the
State of Michigan and has all requisite corporate power and authority to own,
operate and lease its assets and properties and to carry on its business as
presently conducted.
4.2 POWER AND AUTHORIZATION. Shareholder has full corporate right,
power and authority necessary to enter into and perform its obligations under
this Agreement and under the Seller Transaction Documents to which it is a
party. This Agreement has been and, at the Closing, each Seller Transaction
Document to be executed by Shareholder will have been, duly and validly executed
and delivered by Shareholder. This Agreement constitutes, and each Seller
Transaction Document will constitute when executed and delivered by Shareholder,
Shareholder's legal, valid and binding obligation, enforceable against it in
accordance with its terms.
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4.3 NO CONFLICTS.
(a) Except as set forth in Section 4.3(a) of the
Disclosure Statement, the execution, delivery and performance by
Shareholder of this Agreement and the Seller Transaction Documents to
which it is a party do not and will not:
(i) violate or conflict with the articles of
incorporation or bylaws of Shareholder, or any Law binding
upon Shareholder; or
(ii) violate or conflict with, result in a breach
of or constitute a default under any material Contract of
Shareholder.
(b) Section 4.3(b) of the Disclosure Statement sets forth
each consent or approval of, or registration, notification,
filing and/or declaration with, any Governmental Authority,
creditor, lessor or other Person required to be given or made
by Shareholder in connection with the execution, delivery and
performance by Shareholder of this Agreement and the Seller
Transaction Documents to which Shareholder is a party (the
"Shareholder Consents"). Except as set forth in Section 4.3(b)
of the Disclosure Statement, all Shareholder Consents have
been obtained or made or Shareholder will use reasonable
efforts to have same obtained or made prior to the Closing.
(c) There are no actions, proceedings or investigations
pending or, to the knowledge of Shareholder, threatened that
question any of the transactions contemplated by, or the
validity of, this Agreement or the Seller Transaction
Documents or which, if adversely determined, restrict
Shareholder from entering into or performing its obligations
under this Agreement or the Seller Transaction Documents to
which Shareholder is a party.
(d) Shareholder has not received any request from any
Governmental Authority for information with respect to the
transactions contemplated hereby.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER AND
THE SELLER
The Shareholder and the Seller hereby represent and warrant, jointly
and severally, to Buyer as of the date of this Agreement and as of the Closing
Date as follows:
5.1 ORGANIZATION AND QUALIFICATION. The Seller is duly organized,
validly existing and in good standing under the Laws of the State of Michigan.
The Seller has all requisite corporate power and authority to own, operate and
lease its assets and properties and to carry on its business as presently
conducted. The Seller is duly qualified to do business as a foreign corporation
in each jurisdiction set forth beside its name in Section 5.1 of the Disclosure
Statement and there is no jurisdiction in which Seller is obligated by
applicable law to qualify to do business in which it is not so qualified and
where the failure to be so qualified has had a Material Adverse Effect.
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5.2 NO CONFLICTS.
(a) Except as set forth in Section 5.2(a) of the
Disclosure Statement, the execution, delivery and performance of this
Agreement do not and will not:
(i) violate or conflict with the articles of
incorporation or bylaws of the Seller, or any Law binding upon
the Seller;
(ii) violate or conflict with, result in a breach
of or constitute a default or otherwise cause any loss of
benefit under any Material Contract to which the Seller is a
party, or give to others any rights (including rights of
termination, foreclosure, cancellation or acceleration) in or
with respect to the Purchased Assets; or
(iii) result in, require or permit the creation or
imposition of any Encumbrance upon or with respect to the
Purchased Assets.
(b) Section 5.2(b) of the Disclosure Statement sets forth
each consent or approval of, or registration, notification,
filing and/or declaration with, any Governmental Authority,
creditor, lessor or other Person required to be given or made
by the Seller in connection with the execution, delivery and
performance by the Seller of this Agreement and the Seller
Transaction Documents (the "Seller Consents"). Except as set
forth in Section 5.2(b) of the Disclosure Statement, all
Seller Consents have been obtained or made or Seller will use
reasonable efforts to have same obtained or made prior to the
Closing.
(c) The Seller has not received any request from any
Governmental Authority for information with respect to the
transactions contemplated hereby.
5.3 SUBSIDIARIES. Other than BATCO, the Seller has no
subsidiaries.
5.4 COMPLIANCE WITH LAWS.
(a) Other than with respect to Environmental, Health and
Safety Laws, as to which Seller represents and warrants to Buyer solely
as set forth in Section 5.18, the Seller is in compliance in all
material respects with all Laws applicable to the conduct of its
business.
(b) Other than with respect to Environmental, Health and
Safety Laws, as to which the Seller represents and warrants to Buyer
solely as set forth in Section 5.18: (i) the Seller owns, holds,
possesses or lawfully uses in the operation of its business all
Authorizations that are necessary for it to conduct such business, (ii)
set forth in Section 5.4 of the Disclosure Statement is a list of all
material Authorizations of the Seller, and (iii) the Seller is not in
default in any material respect, nor has the Seller received any
written notice of any claim of default, under any Authorization.
5.5 LITIGATION. Except as set forth in Section 5.5 of the
Disclosure Statement, there are no claims, actions, suits, proceedings
(arbitration or otherwise) or investigations involving
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the Seller pending either in court or before any other Governmental Authority,
or before an arbitrator of any kind. To the knowledge of the Seller, no such
claim, action, suit, proceeding or investigation is presently threatened, which
if adversely determined could reasonably be expected to have a Material Adverse
Effect. There are no unsatisfied judgments, penalties or awards against or
affecting the Seller or its assets or properties.
5.6 FINANCIAL STATEMENTS.
(a) Section 5.6 of the Disclosure Statement includes: (i)
the consolidated balance sheet of the Seller and BATCO as at December
31, 2001 (the "Balance Sheet") and the related consolidated statement
of income for the fiscal year then ended (collectively, the "Historic
Financial Statements"); and (ii) the consolidated balance sheet of the
Seller and BATCO as at December 31, 2002 (the "Interim Balance Sheet"),
and the related consolidated statement of income for the twelve (12)
months then ended (collectively, the "Interim Statements"). The
Historic Financial Statements and the Interim Statements fairly
present, in all material respects, the financial condition and results
of operations of the Seller and BATCO on a consolidated basis as of the
respective dates thereof and for the periods therein referred to, all
in accordance with United States generally accepted accounting
principles ("GAAP"), consistently applied, except for the omission of
footnotes and subject in the case of Interim Statements to year-end
adjustments.
(b) The Balance Sheet and the Interim Balance Sheet
fairly reflect, as of the respective dates thereof, all material
liabilities of the Seller and BATCO of the type required to be
reflected or disclosed in a balance sheet (or the notes thereto)
prepared in accordance with GAAP. Neither the Seller nor BATCO has any
material liabilities or obligations of a nature required to be
reflected in a balance sheet prepared in accordance with GAAP that are
not reflected on the Interim Balance Sheet, except for current
liabilities (within the meaning of GAAP) which have been incurred since
the date thereof in the ordinary course of business consistent with
past practice.
(c) Except as described in the Disclosure Statement,
neither Seller nor BATCO has any liabilities or obligations with
respect to the Business, either direct or indirect, matured or
unmatured or absolute, contingent or otherwise, except:
(i) those liabilities or obligations set forth
on the Interim Balance Sheet and not heretofore paid or
discharged; or
(ii) those liabilities or obligations incurred,
consistently with past business practice, in or as a result of
the normal and ordinary course of business of Seller.
5.7 BROKERS. No Person acting on behalf of the Seller or any of
its affiliates or under the authority of any of the foregoing is or will be
entitled to any broker's or finder's fee or any other commission or similar fee,
directly or indirectly, from any of such parties in connection with any of the
transactions contemplated by this Agreement, other than W.Y. Campbell & Company,
whose fees and expenses shall be paid by the Shareholder.
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5.8 REAL PROPERTY.
(a) "Premises" Defined. All real property (including,
without limitation, all fee simple and leasehold interests in and
rights to the Facilities and any other real property) and improvements
located thereon which are owned or leased by Seller and used in
connection with the Business are listed in Section 5.8 of the
Disclosure Schedule (the "Premises").
(b) Real Property. With respect to the Premises:
(i) Seller has delivered to Buyer a true and
complete copy of the deed pursuant to which Seller acquired
fee simple ownership of the Owned Facility and every lease and
sublease pursuant to which Seller is a tenant or subtenant of
any of the Premises (a "Lease"), and each Lease referenced in
Section 5.8 of the Disclosure Statement is described by
listing the name of the landlord or sublandlord, a description
of the leased premises, the commencement and expiration dates
of the current term, the security deposited by Seller with the
landlord or sublandlord, if any, the monthly rental (including
base and all additional rents), and whether Seller may assign
the Lease to Buyer (if the consent of the landlord or
sublandlord is required for such an assignment, that should be
set forth in Section 5.8 of the Disclosure Statement); and
(ii) each Lease is in full force and effect and
has not been assigned by Seller, or modified, supplemented or
amended except as listed on the Disclosure Statement, and
neither Seller nor, to the Seller's knowledge, the landlord or
sublandlord under any Lease is in material default under any
of the Leases, and, to the knowledge of Seller, no
circumstances or state of facts presently exists which, with
the giving of notice or passage of time, or both, would
entitle the landlord or sublandlord under any Lease to
terminate any Lease;
(c) Zoning. The Premises are, to the Seller's knowledge,
in all material respects, in compliance with all material applicable
zoning and other land use requirements, except where the failure to so
comply has not had a Material Adverse Effect.
(d) Utility Services. To Seller's knowledge, the water,
electric, gas and sewer utility services and the septic tank and storm
drainage facilities currently available to the Premises are (i)
adequate for the present use of the Premises by Seller in conducting
the Business, and (ii) are not being improperly appropriated by Seller,
and to Seller's knowledge, there is no current condition which will
result in the termination of the present access from the Premises to
such utility services and other facilities.
(e) Access. To Seller's knowledge, Seller has obtained
all material Authorizations and rights-of-way, including
proof-of-dedication, which are reasonably necessary to lawfully permit
the present manner of vehicular and pedestrian ingress and egress to
and from the Premises.
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(f) Assessments or Hazards. To Seller's knowledge, the
Seller has not received any written notices from any governmental body
that the assessed value of the Premises has been determined to be
materially greater than that upon which county, township or school tax
was paid for the 2001 tax year applicable to each such tax.
(g) Eminent Domain. To Seller's knowledge, Seller has not
received any written notices that any governmental body having the
power of eminent domain over the Premises has commenced or intends to
exercise the power of eminent domain or a similar power with respect to
all or any part of the Premises.
(h) No Violations. Except as set forth in the Disclosure
Statement, to Seller's knowledge, Seller has not received any written
notices that the Premises and the present uses thereof fail to comply
in all material respects with applicable building, fire & safety, and
electrical codes to which buildings of similar age and similar use as
the Facilities are subject in Daulphin County, Pennsylvania.
(i) Improvements. Except as set forth in Section 5.8 of
the Disclosure Statement, to Seller's knowledge, the improvements
located on the Premises are structurally sound, and all mechanical and
other systems located therein when last used were in operating
condition, subject to normal wear and tear typical of buildings of
similar age and prior use as the Facilities, except that not being in
such condition would only be a breach of this representation if it
would have a Material Adverse Effect.
5.9 PERSONAL PROPERTY. The Seller has good title to all of the
personal property included in the Purchased Assets (including the personal
property reflected as being owned in the Interim Balance Sheet), free and clear
of any Encumbrances, except: (i) such Encumbrances as are reflected in the
Interim Balance Sheet or Section 5.9 of the Disclosure Statement, or (ii) for
sales, dispositions or Encumbrances permitted by Section 7.1(h)(i) hereof; or
(iii) as affected by transactions in the ordinary course of Seller's business.
5.10 LIST OF CONTRACTS. Section 5.10 of the Disclosure Statement
sets forth the following:
(i) each Contract of the Seller for the purchase
or sale of real property;
(ii) each Material Contract of the Seller;
(iii) any guarantee by the Seller of the
obligations of its customers, suppliers, officers, directors,
employees, affiliates or others;
(iv) any agreement which provides for the
incurrence by the Seller of indebtedness for borrowed money;
(v) any mortgage or other form of secured
indebtedness of the Seller.
5.11 CONTRACTS. Except as set forth in Section 5.11 of the
Disclosure Statement, each Material Contract to which the Seller is a party or
by which the Purchased Assets are bound is in full force and effect and is
valid, binding and enforceable against the Seller in accordance with
16
its terms. Except as described in Section 5.11 of the Disclosure Statement, the
Seller has performed in all material respects all obligations required to be
performed by it under each such Material Contract and, to the knowledge of
Seller, all other parties (other than Seller) to a Material Contract have
performed in all material respects all obligations required to be performed by
them under each such Material Contract.
5.12 INSURANCE. (a) The description of the policies and binders of
insurance of the Seller contained in Section 5.12 of the Disclosure Statement
identifies: (i) the respective issuers and expiration dates thereof; (ii)
deductible amounts and amounts of coverage available and outstanding thereunder;
(iii) whether such policies and binders are "claims made" or "occurrences"
policies, (iv) all self-insurance programs or arrangements and (v) any
retrospective premium adjustments of which the Seller has knowledge.
(b) To Seller's knowledge, Section 5.12(b) of the
Disclosure Statement sets forth, by year, for the current policy year
and each of the two preceding policy years:
(i) a summary of the loss experience under each
policy of insurance;
(ii) a statement describing each claim under a
policy of insurance for an amount in excess of $75,000, which
sets forth:
(A) the name of the claimant;
(B) a description of the policy by
insurer, type of insurance and period of coverage;
and
(C) the amount and a brief description
of the claim; and
(D) a statement describing the loss
experience for all claims that were self-insured,
including the number and aggregate cost of such
claims.
(c) Except as set forth in Section 5.12(c) of the
Disclosure Statement, to Seller's knowledge, all policies of insurance
to which Seller is a party or that provide coverage to Seller are
valid, outstanding and enforceable.
5.13 TRADEMARKS AND INTELLECTUAL PROPERTY. Section 5.13 of the
Disclosure Statement sets forth all material patents, tradenames, trademarks,
service marks, brandmarks, brandnames, copyrights or registrations, or other
material intellectual property or licenses thereof or applications therefor or
interests therein, which the Seller presently is using (other than commercially
available software). The Seller owns or has a valid license to use all of the
technology, manufacturing processes and formulations that are material to its
business as presently conducted. To the knowledge of Seller, Seller is not
violating or infringing, and there is no pending or threatened claim of
violation or infringement by the Seller of any industrial property rights,
including without limitation any patents, copyrights, trademarks, tradenames and
trade secrets, owned by any third person.
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5.14 TAX MATTERS. All Tax Returns that are due and required to be
filed by, or with respect to, the Seller have been filed. Seller has in all
material respects paid all Taxes required to be paid in respect of the periods
covered by such Tax Returns. The Seller is not delinquent in any material
respect in the payment of any Tax, assessment or governmental charge. There are
no Tax liens upon the assets of the Seller except liens for Taxes not yet due or
being contested in good faith through appropriate proceedings. No deficiency for
any Taxes has been proposed, asserted or assessed against the Seller that has
not been resolved or paid in full. No audits or other administrative proceedings
or court proceedings are currently pending with regard to any material Tax or
Tax Returns of the Seller. The Seller is not a party to any tax-sharing,
allocation or indemnification agreement with any party.
5.15 EMPLOYEE BENEFITS.
Section 5.15 of the Disclosure Statement identifies each "employee
pension benefit plan" ("Pension Plan"), as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") and
"employee welfare benefit plan" ("Welfare Plan"), as defined in Section 3(1) of
ERISA maintained by or on behalf of the Seller to provide benefits to employees
of the Seller (collectively, "Employee Benefit Plans").
(a) Except as set forth in Section 5.15 of the Disclosure
Statement, each Employee Benefit Plan has been administered in material
compliance with its terms and is in material compliance with the
applicable provisions of ERISA (including, without limitation, the
funding and prohibited transactions provisions thereof) and each
Pension Plan that is intended to be qualified under Section 401(a) of
the Internal Revenue Code of 1986, as amended (the "Code") has been
administered in material compliance with the applicable provisions of
the Code.
(b) To the knowledge of the Seller, there are no
inquiries or proceedings regarding a material amount of assets pending
or threatened by the Internal Revenue Service ("IRS"), the U.S.
Department of Labor, the Pension Benefit Guaranty Corporation, or any
participant or beneficiary, with respect to any Employee Benefit Plan
now or formerly maintained by the Seller or to which the Seller has
contributed (other than routine benefit claims of participants and
beneficiaries).
(c) Except as set forth in Section 5.15 of the Disclosure
Statement, the Seller is not required to contribute to any
"multiemployer plan", as defined in Section 3(37) of ERISA.
(d) Except as set forth in Section 5.15 of the Disclosure
Statement, each Pension Plan which is intended to be qualified under
Section 401(a) of the Code has been determined by the IRS to be so
qualified. Except as set forth in Section 5.15 of the Disclosure
Statement, no Employee Benefit Plan is subject to the minimum funding
requirements of Part 3 of Subtitle I of ERISA or subject to Section 412
of the Code.
(e) Except as set forth in Section 5.15 of the Disclosure
Statement, the Seller is not bound by any collective bargaining
agreement or legally binding arrangement to maintain or contribute to
any Employee Benefit Plan.
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(f) Except as set forth in Section 5.15 of the Disclosure
Statement or as required under applicable law, (i) no Employee Benefit
Plan provides retiree medical benefits to any of its employees or
former employees and (ii) the Seller is not contractually or otherwise
obligated to provide any of its employees or former employees with
medical benefits upon retirement or termination of employment.
(g) Complete and correct copies of the following
documents have been made available or delivered by the Seller to the
Buyer: (i) all current plan documents and insurance contracts (if any),
and amendments thereto, with respect to each of the Employee Benefit
Plans, (ii) for each of the most recently ended two plan years, all IRS
Form 5500 series forms (and any financial statement and other schedules
attached thereto) with respect to any Employee Benefit Plan, (iii) the
most recent IRS determination letter for each Pension Plan (if any),
and (iv) all current summary plan descriptions and subsequent summaries
of material modifications with respect to each of the Employee Benefit
Plans.
(h) Section 5.15 of the Disclosure Statement lists the
name, title, currently annualized salary or hourly wage rate for each
employee of Seller and the amount of severance compensation, if any, to
which each such employee would be entitled if his employment were
terminated by Seller as of the date hereof.
5.16 LABOR MATTERS. None of the employees of the Seller are, or
during the last three years have been, represented by any union or other
bargaining representative, and no application or petition for certification of a
collective bargaining agent at or with respect to the Seller is pending. To the
knowledge of the Seller, during the last three years, no union has attempted to
organize any group of employees of the Seller and no such group has sought to
organize into a union or similar organization for the purpose of collective
bargaining. There are no pending grievances, arbitration proceedings, unfair
labor practice charges or other similar controversies between the Seller and any
of their respective employees.
5.17 AFFILIATED AGREEMENTS. Except as described in Section 5.17 of
the Disclosure Statement, there are no agreements, arrangements or
understandings between the Seller on the one hand and Shareholder and any
affiliates of Shareholder on the other hand that will not be terminated at or
prior to the Closing.
5.18 ENVIRONMENTAL MATTERS. Except as set forth in Section 5.18 of
the Disclosure Statement:
(a) The Seller has not received any written notice of
violation or other written notification from any Governmental
Authority, employee or any third party alleging that the Seller is in
violation of any Environmental, Health and Safety Laws;
(b) The Seller is not the subject of any administrative
or judicial proceedings or investigations pursuant to any
Environmental, Health and Safety Laws;
(c) To the knowledge of the Seller, the Premises do not
contain any Hazardous Substance that, under any Environmental, Health
and Safety Laws currently in effect: (x) imposes or could reasonably be
expected to impose on any Person liability for removal,
19
remediation, or other cleanup, damages to a third party, or damage to
natural resources; or (y) could reasonably be expected to result in the
imposition of an Encumbrance on the Premises or any of the assets of
the Seller;
(d) The Seller has not received any written request for
information from any Governmental Authority or other Person related to
any site which is, or may be, subject to actions for removal, response,
remediation or cleanup of any Hazardous Substances, including, without
limitation, any information request pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, or
similar laws of any state or province where the Seller operates; and
(e) The Seller has not received any order, demand, or
other claim: (x) for removal, response, remediation or cleanup of any
regulated substances; (y) for damage to natural resources; or (z) for
personal injury or property damage related to the release or discharge
of Hazardous Substances.
(f) To the knowledge of Seller, there are no Hazardous
Substances located at the Facilities, including any Hazardous
Substances contained in barrels, aboveground or underground storage
tanks, landfills, land deposits, dumps, equipment (whether movable or
fixed) or other containers, either temporary or permanent, and
deposited or located in land, water, sumps, or any other part of the
Facilities or incorporated into any structure therein or thereon that
would result in material liability pursuant to Environmental, Health
and Safety Laws. To the knowledge of Seller, no Person conducted any
Hazardous Activity with respect to any Facility or any other property
or assets (whether real, personal or mixed) in which Seller has or had
an interest except in compliance in all material respects with all
applicable Environmental, Health and Safety Laws.
5.19 ABSENCE OF CERTAIN CHANGES AND EVENTS. Except as set forth in
Section 5.19 of the Disclosure Statement, since the date of the Interim Balance
Sheet, the Seller has conducted its business in the usual and ordinary course
consistent with past practice and there has not been any:
(a) declaration or payment of any dividend or other
distribution or payment in respect of the capital stock of the Seller,
other than any such paid entirely in cash, or any repurchase or
redemption of any capital stock of the Seller, other than for
consideration consisting entirely of cash;
(b) material increase in any compensation payable to any
shareholder, director, officer or employee of the Seller;
(c) adoption of or change in any Employee Benefit Plan,
except as required by Law;
(d) change in the accounting methods, principles or
practices followed by the Seller; or
(e) agreement, whether or not in writing, to do any of
the foregoing.
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5.20 PRODUCT DESIGN; WARRANTIES. Schedule 5.20 includes a copy of
the current standard warranty of the Seller and the Seller's current warranty
policy with respect to products created, manufactured, sold, distributed or
licensed by the Seller, other than any such implied by law. To the knowledge of
the Seller, there are no material design, manufacturing or other defects, latent
or otherwise, with respect to any such products. Except as described on Schedule
5.20, no products have been sold or distributed by the Seller under an
understanding or agreement by the Seller that such products are returnable
except pursuant to such warranties.
5.21 ACCOUNTS RECEIVABLE AND INVENTORY.
(a) All accounts receivable of Seller represent
obligations from sales made or services rendered in the ordinary course
of business. Such receivables, net of reserves for doubtful accounts
reflected on the Interim Balance Sheet, are not, except as set forth in
Section 5.21 of the Disclosure Schedule, subject to any valid dispute,
counterclaims, encumbrances or setoff known to the Seller, or any other
reduction or discount that has been agreed to by Seller.
(b) The inventory of Seller consists of items usable or
salable in the ordinary course of business. The Seller has sufficient
amounts of inventory for the conduct of its business in the ordinary
course.
5.22 SELLER'S KNOWLEDGE. For purposes of this Agreement, "to the
knowledge of the Seller" or words of similar import shall be conclusively deemed
to be only that knowledge actually possessed by the Gary Smalley, Steve Bankos,
Paul Anderson, Terry Rishel, Sam Stantial, Terry Davis, Pamela Kreamer, Scott
Koepke, Robert Naglick, David Treadwell, and Brian Bourne. The Seller shall not
be deemed to have actual or constructive knowledge of any fact, circumstance or
occurrence known to any Person other than as set forth in the preceding
sentence.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to the Shareholder and the Seller
as of the date of this Agreement and as of the Closing Date as follows:
6.1 ORGANIZATION AND QUALIFICATION. Buyer is duly organized,
validly existing and in good standing under the Laws under which it has been
formed and has all requisite entity power and authority to own, operate and
lease its assets and properties and to carry on its business as presently
conducted.
6.2 POWER AND AUTHORIZATION. Buyer has full legal entity, power
and authority necessary to enter into and perform its obligations under this
Agreement and under the Buyer Transaction Documents. This Agreement has been
and, at the Closing, each Buyer Transaction Document will have been, duly and
validly executed and delivered by Buyer. This Agreement constitutes, and each
Buyer Transaction Document will constitute when executed and delivered by Buyer,
Buyer's legal, valid and binding obligation, enforceable against it in
accordance with its terms.
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6.3 NO CONFLICTS.
(a) Except as set forth in Section 6.3(a) of the Buyer
Disclosure Statement, the execution, delivery and performance of this
Agreement and the Buyer Transaction Documents do not and will not:
(i) violate or conflict with the certificate or
articles of organization of Buyer or other organization
documents of Buyer, or any Law binding upon Buyer; or
(ii) violate or conflict with, result in a breach
of, or constitute a default or otherwise cause any loss of
benefit under any material Contract to which Buyer is a party.
(b) Section 6.3(b) of the Buyer Disclosure Statement sets
forth each consent or approval of, or registration, notification,
filing and/or declaration with, any court or other Governmental
Authority, creditor, lessor or other Person required to be given or
made by Buyer in connection with the execution, delivery and
performance of this Agreement and the Buyer Transaction Documents (the
"Buyer Consents"). Except as set forth in Section 6.3(b) of the Buyer
Disclosure Statement, all Buyer Consents have been obtained or made or
Buyer will use reasonable efforts to have same obtained or made prior
to Closing.
(c) There are no actions, proceedings or investigations
pending or, to the knowledge of Buyer, threatened that question any of
the transactions contemplated by, or the validity of, this Agreement or
the Buyer Transaction Documents or which, if adversely determined,
would have an adverse effect upon the ability of Buyer to enter into or
perform its obligations under this Agreement or the Buyer Transaction
Documents.
(d) Buyer has not received any request from any
Governmental Authority for information with respect to the transactions
contemplated hereby.
6.4 FINANCIAL CONDITION. Buyer has equity funding which will
comprise a portion of the payment to Seller of the Purchase Price. Affiliates of
Buyer are experienced in obtaining debt financing on commercially reasonable
terms for transactions similar to the transactions contemplated by this
Agreement and Buyer has obtained a commitment letter for debt financing for the
transactions contemplated by this Agreement. Buyer shall use its best efforts in
good faith to close the debt financing necessary to enable it to consummate the
transactions contemplated by this Agreement.
6.5 WARN ACT. Buyer does not contemplate any "plant closing" or
"employee layoff," as such terms are used in the Worker's Adjustment and
Retraining Notification Act, as amended (the "WARN Act"), on or before the date
is sixty-one (61) days from and after the Closing Date with respect to any
employee of the Seller.
6.6 INVESTIGATION AND EVALUATION. Buyer acknowledges that: (a)
Buyer is experienced in the operation of the type of businesses conducted by the
Seller; (b) Buyer and its
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directors, officers, employees, attorneys, accountants and advisors have been
given the opportunity to (i) examine to the full extent deemed necessary and
desirable by Buyer all books, records and other information with respect to the
Seller and (ii) visit with the Seller and meet with its officers and other
representatives to discuss the business and the assets, liabilities, financial
condition, cash flow and operations of the Seller; (c) Buyer has taken full
responsibility for determining the scope of its investigations of the Seller and
for the manner in which such investigations have been conducted, and has made
its own independent examination, investigation, analysis and evaluation of the
Seller, including Buyer's own estimate of the value of the Purchased Assets; and
(d) Buyer is fully capable of evaluating the adequacy and accuracy of the
information and material obtained by Buyer in the course of such investigations.
6.7 BROKERS. No Person acting on behalf of Buyer or any of its
affiliates or under the authority of any of the foregoing is or will be entitled
to any brokers' or finders' fee or any other commission or similar fee, directly
or indirectly, from any of such parties in connection with any of the
transactions contemplated by this Agreement.
ARTICLE VII.
PRE-CLOSING COVENANTS
7.1 SELLER'S COVENANTS. Seller covenants as follows:
(a) Buyer's Access to Premises and Information. Buyer and
its representatives shall, prior to Closing, have reasonable access
during normal business hours to the properties and business and the
books and records of the Seller. The Seller shall furnish, or cause to
be furnished, Buyer with such financial and operating data and other
information as to the business and properties of the Seller as Buyer
shall from time to time reasonably request and as are reasonably
available to the Seller. Buyer acknowledges that certain of the
information which may be made available to it is proprietary and
includes confidential information. Buyer agrees that all information
provided or made available to it or any of its representatives will be
subject to the Confidentiality Agreement dated October 11, 2002 between
Buyer and W.Y. Campbell & Company (the "Confidentiality Agreement"),
which agreement shall remain in full force and effect until the
Closing.
(b) Conduct of Business in Normal Course. Until the
Closing, the Seller shall carry on its business and activities only in
the ordinary course.
(c) Maintenance of Facilities and Assets. Until the
Closing, the Seller shall maintain the Purchased Assets in
substantially the same state of repair, order and condition as they
were in as the date hereof, reasonable wear and tear excepted.
(d) Preservation of the Business. Until the Closing, the
Seller shall use reasonable efforts to preserve its business, business
relationships and goodwill.
(e) Maintenance of Insurance. Until the Closing, the
Seller shall maintain insurance relating to its business in the amounts
and with the coverages described in Section 5.12 of the Disclosure
Statement, subject to variations in amounts required by the ordinary
operations of such businesses, and will pay all premiums thereon when
due.
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(f) Payment of 2002 Property Taxes. All state, county,
local, municipal or school district taxes assessable against the
Seller's real property or personal property assets for any period prior
to January 1, 2003 shall be paid by the Seller or the Shareholder on or
prior to the Closing Date.
(g) Until such time, if any, as this Agreement is
terminated pursuant to Article XII, Shareholder will not, and will not
permit the Seller or any agents or representatives of the Shareholder
or the Seller to, directly or indirectly solicit, initiate, respond to
or encourage any inquiries or proposals from, discuss or negotiate
with, provide any information to, or consider the merits of any
unsolicited inquiries or proposals from, any Person (other than Buyer
and its affiliates) relating to any transaction involving the sale of
the business or assets of the Seller (other than the disposition of
assets consistent with the provisions of Section 7.1(h)(i) hereof), or
any of the capital stock of Seller or any subsidiary thereof, or any
merger, consolidation, business combination, or similar transaction
involving Seller. Shareholder or Seller shall provide not less than
twenty-four hours prior written notice (by facsimile) to Buyer of the
planned breach by Seller or Shareholder of the provisions of this
Section 7.1(g), in which event Seller shall within twenty-four hours
following such notice pay to Buyer the sum of $150,000. Such a notice
by Seller or Shareholder shall be treated for purposes of Article XII
as a termination by Buyer under Section 12.1(c) hereof and such payment
shall constitute liquidated damages for any such breach. Upon such
notice prior to any breach by Seller or Shareholder of this Section
7.1(g) and the payment by the Seller and/or Shareholder, neither the
Seller and the Shareholder on the one hand nor the Buyer and Gen Cap
America, Inc. on the other hand shall have any further right or
obligation to the other (under Article XII hereof or otherwise), except
that the Buyer shall continue to be bound by the non-disclosure terms
of the Confidentiality Agreement. If, however, Seller or Shareholder
breaches this Section 7.1(g) without first providing prior written
notice to Buyer (followed by the $150,000 payment within 24 hours
thereof) then Buyer shall have the right to terminate this Agreement,
and Seller and Shareholder shall, jointly and severally, be subject to
all legal remedies (for damages and otherwise, including without
limitation the recovery of all of the out of pocket fees and expenses
of Buyer and its affiliates, including reasonable fees and expenses of
counsel, accountants, other experts and prospective lenders) available
to Buyer under applicable law (the limitations of Section 12.2(a) not
being applicable), and, in addition, shall pay to Buyer, upon demand
from Buyer, an additional termination payment to Buyer of $150,000.
(h) Further Covenants. Except as expressly provided
herein, between the date hereof and the Closing, except as may
otherwise be consented to by the Buyer, the Seller shall:
(i) not subject any of the Seller's Purchased
Assets to any Encumbrance, other than Encumbrances disclosed
in the Disclosure Statement, and not dispose of any material
assets other than inventory sold or used, accounts receivable
collected upon and supplies used, in each case in the ordinary
course of business consistent with past practice, and other
than assets not used or useful in the conduct of its business;
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(ii) maintain its books and records on a basis
consistent with prior practice and the provisions herein;
(iii) not:
(A) amend its articles of incorporation
or bylaws in a manner that could have a Material
Adverse Effect; nor
(B) fail to pay or discharge when due
any other of its liabilities or obligations, which
failures may, in the aggregate, have a Material
Adverse Effect;
(iv) comply in all material respects with all
Laws and perform its contractual obligations without default
in any material respect, other than matters contested in good
faith or the noncompliance with which, individually or in the
aggregate, do not and will not have a Material Adverse Effect;
(v) provide to Buyer within 30 days following
the end of each calendar month an unaudited consolidated
balance sheet of the Seller and BATCO as at such calendar
month's end (a "Periodic Pre-Closing Balance Sheet"), and the
related consolidated statement of income of Seller and BATCO
for such monthly period prepared on the same accounting basis
and principles as the Interim Statements (a Periodic
Pre-Closing Date Balance Sheet and the corresponding
consolidated statement of income of Seller and BATCO together
are "Periodic Pre-Closing Financial Statements");
(vi) cooperate with Buyer in obtaining all
necessary consents and approvals required in connection with
the transactions contemplated hereby; and
(vii) pay or discharge, in a timely manner
consistent with its past practice, Seller's liabilities
reflected in the Interim Balance Sheet and Periodic
Pre-Closing Balance Sheets.
7.2 PUBLICITY. Buyer, on the one hand, and Seller, on the other
hand, shall not, except to the extent required by Law or the rules of any
securities exchange on which a party's or its affiliates' securities are traded,
make any public announcement (whether written or oral) or notice to the press
relating to any transaction contemplated by this Agreement without the prior
approval of the other party hereto, which approval shall not be unreasonably
withheld. In the case of any public announcement or other disclosure required by
Law or the rules of any securities exchange on which a party's or its
affiliates' securities are traded, each party shall, insofar as is practicable,
consult with the other party prior to any such disclosure, but the other party's
approval shall not be required.
7.3 COOPERATION AND BEST EFFORTS; UPDATED SCHEDULES. Each party
hereto agrees to cooperate with the others in the performance of all obligations
under this Agreement and to use its reasonable best efforts to fulfill its
obligations under this Agreement, and to satisfy or cause to be satisfied, at or
before the Closing, the conditions to its performance under this Agreement that
are under its control. In the event that any of the representations and
warranties
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in Article IV and V of Shareholder or Seller shall become inaccurate prior to
the Closing in any material respect, Seller shall promptly provide to Buyer
corrective supplemental information in writing in the form of one or more
"bring-down letters". The furnishing of such corrective supplemental information
shall not impair Buyer's rights under Articles IX and XII hereunder.
7.4 EMPLOYEE ARRANGEMENTS.
(a) Effective as of the Closing Date, Buyer shall offer
at will employment with Buyer to all of the employees of the Seller. A
list of all employees of Seller and their titles as of the date hereof
is set forth on Schedule 7.4(a). The Seller shall provide Buyer with an
updated Schedule 7.4(a) at the Closing which shall reflect all changes
in such employees that occur between the date hereof and the Closing,
none of which such changes shall be effected other than in the ordinary
course of business. Any offer of employment to such employees by Buyer
shall, subject to Section 8.2, not be construed to limit the ability of
Buyer to terminate any such employee at any time for any reason. Except
as otherwise expressly contemplated by this Section 7.4, all such
offers of employment pursuant to this Section 7.4(a) shall be on an at
will basis on terms and conditions (including severance) which, taken
in the aggregate, are substantially comparable to the terms and
conditions of employment currently in effect for such employees. Each
such employee who accepts, as of the Closing Date, such offer of
employment shall hereinafter be referred to as a "Transferred
Employee."
(b) (i) On and after the Closing Date, Buyer shall
provide the Transferred Employees with substantially similar employee
benefits as such employees were receiving as pre-Closing employees of
Seller (the "Buyer's Employee Benefits"), and shall credit the
Transferred Employees for service with the Seller for purposes of
eligibility and vesting under all of the Buyer's Employee Benefits to
the extent that such service credit is applicable. No exclusions for
pre-existing conditions shall apply to any disability or medical
benefit plan for which Transferred Employees may otherwise be eligible.
Notwithstanding the foregoing, the Buyer shall not have any obligation
to assume, and shall not assume, any obligations of the Seller or of
the Shareholder under any Pension Plan of Seller or Shareholder
(including without limitation the JPE, Inc. 401(k) Savings Plan),
including any obligations of Seller or Shareholder to any Transferred
Employee arising under such Pension Plan or resulting from the
cessation of the Transferred Employees' employment with Seller. Buyer
shall allow any Transferred Employee participating in the JPE, Inc.
401(k) Savings Plan to "roll over" such employee's vested account
balance (including any outstanding loans in such account) in the JPE,
Inc. 401(k) Savings Plan to the pension plan to be established by
Buyer.
(ii) Except as otherwise expressly provided in this
Section 7.4, the Seller, effective as of the Closing, shall give notice
to all Transferred Employees that no additional benefits shall accrue
under the Seller's employee benefit plans and that the Transferred
Employees will commence participation in Buyer's employee benefit
plans.
(c) This Section 7.4 shall not create any right of any
person to remain an employee of Buyer, and no employee of Seller shall
have any right to rely on this Section 7.4 for any purpose whatsoever.
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7.5 Title to Owned Facility. Buyer shall obtain, at Buyer's
expense, an Owner's Title Insurance Policy (ALTA Form B) from a title company
acceptable to Buyer (the "Title Company"), insuring good and marketable fee
simple title of the Owned Facility in Buyer as of the date of recording the
special warranty deed. The standard exceptions in such policy relating to
mechanics' liens, parties in possession and taxes, except for the state, city
and county real property taxes for the year in which the sale is closed, shall
be deleted from such policy. The deletion shall be Seller's responsibility,
except that the Buyer shall pay the cost of preparation of a survey if Seller
does not have a recent survey available. Buyer shall obtain, at its expense, a
commitment for such policy, together with legible copies of all documents
identified therein as exceptions to title no later than five (5) business days
after the execution of this Agreement by both parties. If Buyer has objections
to any exceptions contained in such commitment or in the survey (other than
mortgages or deeds of trust which Seller shall satisfy at Closing) that
materially adversely affect the operation of the Owned Facility in the Business,
Buyer shall so notify Seller in writing within five (5) business days after
receipt of the last to be received of the title commitment or survey. Seller, if
it chooses to, shall be allowed a reasonable time, not in excess of twenty (20)
days of such notice, to remove or attempt to remove any such exceptions or
objections to Buyer's reasonable satisfaction within the time permitted. If
Seller is unwilling or unable to remove such exceptions or objections, Buyer
shall have the right to either waive such exceptions or objections and proceed
to close without any abatement or reduction in the Purchase Price, or to
terminate this Agreement by notice in writing to Seller. If Buyer does not
notify Seller of its objections within the time permitted, Buyer shall be deemed
to have accepted such commitment, and Buyer shall not have any subsequent right
to terminate this Agreement on the basis of an objection to title. Seller shall
promptly notify Buyer at or prior to the Closing of any claims or other
additional title exceptions or encumbrances upon the Owned Facility, or of any
threats or notices of intention to condemn all or any part of the Owned Facility
known or made known to Seller prior to the Closing, which are not specifically
set forth in the title commitment and Buyer shall have the right to waive or
object to any such title exception that materially adversely affect the
operation of the Owned Facility in the Business in the manner provided above,
and if such exception is not removed or waived as provided above, Buyer shall
have the right to terminate the Agreement.
ARTICLE VIII.
POST-CLOSING COVENANTS
8.1 BOOKS AND RECORDS. Buyer will use its best efforts to preserve
all books and records of the Seller received from the Seller, and to provide the
Shareholder or its agents reasonable access to such books and records for a
period of six years following the Closing Date, or until such later date as
preservation of and access to those books and records is no longer required by
any governmental or similar body.
8.2 COMPLIANCE WITH WARN ACT. On and after the Closing Date, Buyer
shall comply in all respects with the WARN Act and shall not take any action
that would subject the Shareholder or the Seller to any liability or obligation,
including, without limitation, any disclosure or announcement obligation, under
the WARN Act.
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8.3 RESTRICTIVE COVENANT.
(a) For a period of five years following the Closing
(except for the ownership of the capital stock of Seller), neither the
Shareholder nor any subsidiary of the Shareholder shall engage in, or
have any significant financial interest in, any business engaged in the
same or substantially similar activities to the Business as conducted
by Seller as of the Closing Date within the United States or Canada.
(b) For a period of four years following the Closing,
neither the Shareholder nor any subsidiary of the Shareholder shall
interfere with the relationship of the Buyer with the Transferred
Employees, including but not limited to, causing or helping another
business to hire, or solicit to hire, any Transferred Employee,
provided that this provision shall not be violated by general
solicitation for hire of employees.
8.4 VOLUNTARY REMEDIATION. Seller is in the process of completing
a voluntary remediation of the Owned Facility for the purpose of obtaining a
release of liability pursuant to the provisions of the Pennsylvania Land
Recycling and Remediation Standards Act (Act 2 of 1995). Buyer covenants to
cooperate with Seller in the completion and submission of a final report to the
satisfaction of the Pennsylvania Department of Environmental Protection ("PA
DEP") for the benefit of Seller and Buyer. Buyer will cooperate if the
imposition of reasonable institutional controls and/or deed notification are
required by PA DEP. If Seller has not completed the foregoing prior to the
Closing Date, then Buyer shall complete such remediation and report submission
and Shareholder shall promptly reimburse Buyer for all reasonable expenses
incurred by Buyer to effect such completion, up to a maximum amount of $15,000.
If the costs to complete the voluntary remediation exceed $15,000, Buyer shall
have the right, but not the obligation, to complete the voluntary remediation at
its sole cost and expense. In no event may Buyer seek indemnification from
Seller or Shareholder under Article XIII for any monies expended by Buyer to
complete the voluntary remediation.
ARTICLE IX.
CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE
The obligation of Buyer to purchase the Purchased Assets from the
Seller under this Agreement is subject to the satisfaction, at or before the
Closing, of all the conditions set forth in this Article IX. Buyer may waive any
or all of these conditions in whole or in part, but only in writing.
9.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES; PERFORMANCE BY
SELLER. The representations and warranties of the Shareholder and the Seller
contained in this Agreement shall be true and correct in all material respects,
except for changes expressly permitted or contemplated by this Agreement on and
as of the time of Closing with the same effect as though such representations
and warranties had been made at and as of such time (except to the extent that
they expressly relate to an earlier date). The Shareholder and the Seller shall
have performed and complied with all material covenants, agreements and
conditions required by this Agreement to be performed or complied with by it
prior to or at the Closing.
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9.2 CLOSING DELIVERIES. Buyer shall have received the deliveries
set forth in Section 11.2(a).
9.3 ABSENCE OF LITIGATION. No action or proceeding before any
court or other Governmental Authority shall have been instituted or threatened
by any Person (other than Buyer or any affiliate thereof) to restrain or
prohibit the transactions contemplated by this Agreement and shall not have been
dismissed or resolved.
9.4 CONSENTS. All material consents, approvals, permits, orders
and actions set forth in Section 4.3 and Section 5.2 of the Seller Disclosure
Statement and Section 6.3(b) of the Buyer Disclosure Statement shall have been
obtained and shall be in full force and effect.
9.5 SATISFACTION OF OUTSTANDING INDEBTEDNESS. At or before the
Closing, the Seller shall have repaid (from the proceeds of the Closing Date
Payment or otherwise) or been released from all outstanding indebtedness for
borrowed money and inter-company indebtedness for which the Seller is liable.
9.6 MATERIAL ADVERSE CHANGES. There shall not have been any
material adverse changes in the operations or financial condition of the
Business since December 31, 2002.
9.7 NO ENVIRONMENTAL BAR TO FINANCING The lender which has issued
a commitment to provide senior debt financing to Buyer shall not have notified
Buyer prior to February 15, 2003 that it is unwilling to enter into definitive
financing documents with Buyer or to close the debt financing transaction with
Buyer for the sole reason of the lender's concern about the actual or alleged
prior or present existence at the Facilities of Hazardous Substances or the
actual or alleged prior or present occurrence of Hazardous Activities at the
Facilities.
ARTICLE X.
CONDITIONS PRECEDENT TO THE SELLER'S PERFORMANCE
The obligation of the Seller to sell and transfer the Purchased Assets
to Buyer under this Agreement is subject to the satisfaction, at or before the
Closing, of all conditions set forth in this Article X. The Seller may waive any
or all of these conditions in whole or in part, but only in writing.
10.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES; PERFORMANCE BY
BUYER. The representations and warranties of Buyer contained in this Agreement
shall be true and correct in all material respects, except for changes permitted
or contemplated by this Agreement, on and as of the time of Closing with the
same effect as though such representations and warranties had been made at and
as of such time (except to the extent that they expressly relate to an earlier
date). Buyer shall have performed and complied with all material covenants,
agreements and conditions required by this Agreement to be performed or complied
with by it prior to or at the Closing.
10.2 CLOSING DELIVERIES. Seller shall have received the deliveries
set forth in Section 11.2(b).
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10.3 ABSENCE OF LITIGATION. No action or proceeding before any
court or other Governmental Authority shall have been instituted or threatened
by any Person (other than Seller or any of their affiliates) to restrain or
prohibit the transactions contemplated by this Agreement and shall not have been
dismissed or resolved.
10.4 CONSENTS. All consents, approvals, permits, orders and actions
set forth in Sections 4.3(b) and 5.2(b) of the Seller Disclosure Statement shall
have been obtained and shall be in full force and effect.
ARTICLE XI.
THE CLOSING
11.1 THE CLOSING. The "Closing Date" refers to the date upon which
the parties consummate the purchase and sale of the Purchase Assets as
contemplated herein, and shall occur on a business day between, and including,
February 10 - 28, 2003, designated by Buyer upon not less than five business
days prior written notice to Shareholder. The consummation of the purchase and
sale of the Purchased Assets (the "Closing") shall take place at the offices of
Drinker Biddle & Reath LLP, One Logan Square, 18th & Cherry Streets,
Philadelphia, Pennsylvania 19103, commencing at 10:00 a.m., local time, on the
Closing Date, and shall be effective as of 12:01 a.m. eastern standard time on
the Closing Date (the "Effective Time"). Subject to Article XII, failure to
consummate the Closing shall not result in the termination of this Agreement or
relieve any Person of any obligation hereunder.
11.2 DELIVERIES AT THE CLOSING. At the Closing, in addition to the
other actions contemplated elsewhere herein:
(a) The Seller shall deliver, or shall cause to be
delivered, to Buyer the following:
(i) the Escrow Agreement duly executed by the
Shareholder;
(ii) a Bill of Sale, Assignment and Assumption
Agreement (the "Bill of Sale and Assumption Agreement"), in
form and substance reasonably satisfactory to counsel for
Buyer and duly executed by the Seller, conveying to Buyer all
of the Seller's right, title and interest in and to the
Purchased Assets;
(iii) a deed, an assignment of lease and such
other instruments of transfer and conveyance, in form and
substance reasonably satisfactory to counsel for Buyer and
duly executed by the Seller, as are required in order to
transfer to Buyer good and marketable title to or a valid
leasehold interest in, as applicable, the Premises;
(iv) a certificate, dated the Closing Date and
signed by the President or any Vice President of the Seller
and the Shareholder, as applicable, to the effect set forth in
Section 9.1.
(v) a certificate and affidavit of non-foreign
status for the transferor of the Owned Facility;
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(vi) a completed 1099-S request for taxpayer
identification number and certification and acknowledgment;
(vii) an affidavit reasonably required by Buyer's
title insurer that will enable Buyer to obtain title insurance
coverage for the Owned Facility free of any exception for
either mechanics' or materialmen's liens, or parties in
possession;
(viii) a copy of the Seller's articles of
incorporation and bylaws, and all amendments thereof to date,
certified as of a recent date by the Secretary of the State of
Michigan and by the Secretary or an Assistant Secretary of the
Seller, and accompanied by a Certificate of Good Standing as
of a recent date for the Seller, certified by the Secretary of
the State of Michigan; and
(ix) copies of the resolutions of the board of
directors of the Shareholder and the Seller authorizing the
execution, delivery and performance of this Agreement and the
Seller Transaction Documents, certified as of the Closing by
the Secretary or an Assistant Secretary of the Shareholder and
the Seller, as applicable.
(b) Buyer shall deliver, or shall cause to be delivered,
to Seller the following:
(i) immediately available funds in the amount of
the Closing Date Payment by wire transfer to an account
specified by the Shareholder;
(ii) the Escrow Agreement, executed by Buyer and
the Escrow Agent, together with the delivery of the Escrow
Amount to the Escrow Agent thereunder, by wire transfer to an
account specified by the Escrow Agent;
(iii) a certificate, dated the Closing Date signed
by the President or any Vice President of Buyer, to the effect
set forth in Section 10.1;
(iv) a copy of Buyer's articles or certificate of
organization and all amendments thereof to date, certified as
of a recent date by the Secretary of State of Delaware and by
the Secretary or an Assistant Secretary of Buyer, and
accompanied by a certificate of good standing as of a recent
date for Buyer, certified by the Secretary of State of
Delaware; and
(v) a copy of the resolutions of the board of
directors of Buyer authorizing the execution, delivery and
performance by Buyer of this Agreement and the Buyer
Transaction Documents, certified as of the Closing by the
Secretary or an Assistant Secretary of Buyer.
ARTICLE XII.
TERMINATION
12.1 TERMINATION. This Agreement may be terminated prior to the
Closing Date:
(a) by mutual consent of Buyer and Seller; or
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(b) by Buyer or Seller if the transactions contemplated
hereby are not consummated on or before February 28, 2003; provided,
however, that the right to terminate this Agreement shall not be
available to any party whose failure to fulfill any obligation under
this Agreement has been the cause of, or resulted in, the failure of
the Closing to occur on or before such date; or
(c) by Buyer, as provided in Section 7.5, or if any
representation or warranty of the Shareholder or Seller made in or
pursuant to this Agreement is untrue or incorrect in any material
respect or the Shareholder or Seller materially breaches the covenants
or other terms of this Agreement; or
(d) by Seller if any representation or warranty of Buyer
made in or pursuant to this Agreement is untrue or incorrect in any
material respect or Buyer materially breaches the covenants or other
terms of this Agreement.
12.2 RIGHTS UPON BREACH.
(a) In the event of any breach by either Seller or
Shareholder of its obligations under this Agreement prior to Closing
(other than a breach of Section 7.1(g) hereof), whether a knowing or
intentional breach or otherwise, the sole right and remedy of the Buyer
shall be to terminate this Agreement and collect from the Shareholder
and Seller, jointly and severally, all of the out of pocket fees and
expenses, including reasonable fees and expenses of counsel,
accountants and other experts, up to an aggregate maximum of $150,000,
incurred by Buyer in connection with the negotiation, preparation and
execution of this Agreement. Upon such payments by the Seller and/or
Shareholder, neither the Seller and the Shareholder on the one hand nor
the Buyer and Gen Cap America, Inc. on the other hand shall have any
further right or obligation to the other, except that the Buyer shall
continue to be bound by the non-disclosure terms of the Confidentiality
Agreement.
(b) In the event of any breach by Buyer of its
obligations under this Agreement prior to Closing, whether a knowing or
intentional breach or otherwise, the sole right and remedy of the
Shareholder and the Seller shall be to terminate this Agreement and
collect from the Buyer and Gen Cap America, Inc., jointly and
severally, all of the out of pocket fees and expenses, including
reasonable fees and expenses of counsel, accountants and other experts,
up to an aggregate maximum amount of $150,000, incurred by Seller and
Shareholder in connection with the negotiation, preparation and
execution of this Agreement. Upon such payments by the Buyer and/or Gen
Cap America, Inc., neither the Seller and Shareholder on the one hand
nor the Buyer and Gen Cap America, Inc. on the other hand shall have
any further right or obligation to the other except that the Buyer
shall continue to be bound by the non-disclosure terms of the
Confidentiality Agreement.
12.3 PROCEDURE FOR TERMINATION. A party terminating this Agreement
pursuant to Section 12.1 shall give written notice thereof to each other party
hereto, whereupon this Agreement shall terminate and the transactions
contemplated hereby shall be abandoned without further action by any party.
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ARTICLE XIII.
INDEMNITY
13.1 INDEMNIFICATION OF BUYER.
From and after the Closing, Shareholder will indemnify and hold
harmless Buyer, and its successors, owners, officers, directors, and affiliates,
(collectively, the "Buyer Indemnified Persons"), and will reimburse the Buyer
Indemnified Persons for any loss, liability, claim, damage, expense (including
costs of investigation and defense and reasonable attorneys' fees and expenses)
(collectively, "Damages"), arising from or in connection with:
(a) any breach of any representation or warranty made by
Seller or Shareholder in (i) this Agreement, (ii) the Disclosure
Statement, (iii) any transfer instrument or (vi) any other certificate,
document, writing or instrument required to be delivered by Seller or
Shareholder to Buyer as a condition to Closing under this Agreement;
(b) any breach of any covenant or obligation of Seller or
Shareholder in this Agreement or in any other certificate, document,
writing or instrument required to be delivered by Seller or Shareholder
to Buyer as a condition to Closing under this Agreement;
(c) except for Assumed Products Warranty Claims, any
product liability or similar claim by a third party against a Buyer
Indemnified Person for injury to person or property, regardless of when
made or asserted, which arises out of or is based upon any express or
implied representation, warranty, agreement or guarantee made by
Seller, or alleged to have been made by Seller, or which is imposed or
asserted to be imposed by operation of law on a Buyer Indemnified
Person, in connection with any product sold and shipped by, or leased
and shipped by, or on behalf of Seller on or prior to the Effective
Time, including without limitation any claim seeking recovery for
consequential damage, lost revenue or income;
(d) any expense or cost incurred by Buyer to satisfy a
material Legal Obligation related to the presence prior to the
Effective Time of any Hazardous Substance at the Facilities, or the
occurrence prior to the Effective Time of any Hazardous Activity at the
Facilities, or the violation prior to the Effective Time by the Seller
or any possessor of the Facilities prior to the Effective Time of any
Environmental, Health and Safety Laws, or the disposal or treatment of
Hazardous Substances by the Seller prior to the Effective Time,
provided that a Buyer Indemnified Person has received written notice of
such a material Legal Obligation from a Governmental Authority which
could enforce the Legal Obligation or a third party which would have
standing to sue a Buyer Indemnified Person concerning the Legal
Obligation; and
(e) to the extent not otherwise included in the foregoing
subparagraphs (a) through (d) of this Section 13.1, the Excluded
Liabilities described and referenced in subparagraphs (a), (c), (d),
(e), (f), (h), (i), (k) but only in respect to the obligation to pay
33
fees and expenses of counsel, accountants and experts as referenced
therein, and (l) of Section 3.3 hereof.
13.2 GENERAL INDEMNIFICATION OBLIGATION OF BUYER. From and after
the Closing, Buyer will indemnify and hold harmless Shareholder, and its
successors, owners, officers, directors, and affiliates, (collectively, the
"Shareholder Indemnified Persons"), and will reimburse the Shareholder
Indemnified Persons for Damages arising from or in connection with:
(a) any breach of any representation or warranty made by
Buyer in (i) this Agreement, (ii) any transfer instrument, or (iii) any
certificate, document, writing or instrument required to be delivered
by Buyer to Seller or Shareholder as a condition to Closing under this
Agreement;
(b) any breach of any covenant or obligation of Buyer in
this Agreement or in any other certificate, document, writing or
instrument required to be delivered by Buyer to Seller or Shareholder
as a condition to Closing under this Agreement;
(c) any Assumed Liability and any liability or obligation
arising out of the ownership or operation by Buyer of the Purchased
Assets after the Effective Time; or
(d) any expense or cost incurred by Shareholder to
satisfy a material Legal Obligation related to the presence after the
Effective Time of any Hazardous Substance brought on to the Facilities
by Buyer or an agent or affiliate of Buyer or created at the Facilities
by Buyer or an agent or affiliate of Buyer; or the occurrence after the
Effective Time of any Hazardous Activity at the Facilities caused by or
permitted to occur by Buyer or an agent or affiliate of Buyer while the
Facilities are owned or operated by Buyer or an agent or affiliate of
Buyer; or the violation after the Effective Time by the Buyer or an
affiliate or agent of Buyer after the Effective Time of any
Environmental, Health and Safety Laws or the disposal or treatment of
Hazardous Substances by the Buyer or an agent or affiliate of Buyer
after the Effective Time, provided that a Shareholder Indemnified
Person has received written notice of such a material Legal Obligation
from a Governmental Authority which could enforce the Legal Obligation
or a third party which would have standing to sue a Shareholder
Indemnified Person concerning the Legal Obligation; and
(e) any product liability or similar claim by a third
party against a Shareholder Indemnified Person for injury to person or
property, regardless of when made or asserted, which arises out of or
is based upon any express or implied representation, warranty,
agreement or guarantee made by Buyer, or alleged to have been made by
Buyer, or which is imposed or asserted to be imposed by operation of
law on a Shareholder Indemnified Person, in connection with any product
sold and shipped by, or leased and shipped by, or on behalf of Buyer on
or after the Effective Time, including without limitation any claim
seeking recovery for consequential damage, lost revenue or income.
13.3 SURVIVAL; TIME LIMITATIONS.
(a) All representations and warranties in this Agreement
and in any certificate or document delivered pursuant to this Agreement
will survive the Closing through
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the first year anniversary of the Closing Date, except that the
representations and warranties of Shareholder and Seller contained in
Sections 5.1, 5.9, and 5.14 of this Agreement and the representations
and warranties of Buyer contained in Section 6.1 of this Agreement
shall survive until the earlier of (i) the expiration of applicable
statute of limitations, or (ii) December 31, 2005
Provided further that, if prior to the expiration of the survival period with
respect to any claim for indemnity arising from an inaccurate or breached
representation or warranty, the indemnifying parties shall have been notified of
such claim and such claim shall not have been finally resolved before the
expiration of such survival period, any representation, warranty, covenant or
agreement that is the basis for such claim shall continue to survive as to such
claim and shall remain a basis for indemnity as to such claim until such claim
is finally resolved.
(b) Shareholder will have no liability for
indemnification under Section 13.1(b) through (e) hereof unless Buyer
notifies the Shareholder of a claim specifying the factual basis of
that claim in reasonable detail to the extent such detail is then known
by Buyer on or before December 31, 2005.
(c) Buyer will have no liability for indemnification
under Section 13.2(b) through (e) hereof unless the Shareholder
notifies Buyer of a claim specifying the factual basis of that claim in
reasonable detail to the extent such detail is then known by
Shareholder on or before December 31, 2005.
13.4 INDEMNITY LIMITATIONS.
(a) Neither Shareholder nor Buyer will have liability
under this Article XIII until the total of all such liability with
respect to such matters exceeds Three Hundred Thousand Dollars
($300,000), provided, however, that if the total of such liability
exceeds $300,000, the obligated party or parties shall be liable for
the total amount of all such liability, and further provided that this
limitation shall not apply: (1) to any liability imposed on an
indemnifying party arising from such indemnifying party's fraud or
intentional and knowing breach of a representation, warranty or
covenant herein made by such indemnifying party herein with the intent
to deceive the party to which the representation or warranty was made;
or (2) to the Shareholder's obligations under Section 13.1(e) to pay to
Buyer all amounts, if any, of the Excluded Liabilities described and
referenced in the following subparagraphs of Section 3.3 hereof: (c)
[certain obligations to Comerica], (d) [Seven Retention Bonus
Agreements], (e) [pending proceedings], (h) [income taxes], (i)
[borrowed monies/inter-company debt], (k) [certain expenses related to
negotiation and preparation of this Agreement], and (l) [Excess
Products Warranty Claims]; or (3) to the Buyer's obligations under
Section 3.2 and Section 13.2(c) to pay the Assumed Liabilities. If an
indemnity claim arises under Section 13.1(a)(i) from a breach of a
representation or warranty of Shareholder and Seller set forth in
Articles IV or V or under Section 13.2(a)(i) from a breach of a
representation or warranty of Buyer set forth in Article VI, the effect
of the words "material" and "materially" and all "material adverse
effect", "in all material respects", "in any material respects", and
"material adverse change" clauses included in Articles IV, V and VI
shall
35
be disregarded for purposes of determining the applicability of the
limitation of this Section 13.4.
(b) Neither Shareholder nor Buyer will have liability
under this Article XIII in the aggregate amount in excess of Eleven
Million Dollars ($11,000,000), provided, however, that this limitation
shall not apply to any liability imposed on an indemnifying party
arising from such indemnifying party's fraud or intentional and knowing
breach of a representation or warranty herein made by such indemnifying
party herein with the intent to deceive the party to which the
representation or warranty was made.
(c) No party hereto shall be deemed to have breached any
representation, warranty, or covenant if (i) such party shall have
notified the other party hereto in writing, on or prior to the Closing
Date, of the breach of, or inaccuracy in, or of any facts or
circumstances constituting or resulting in the breach of, or inaccuracy
in, such representation, warranty or covenant and (ii) such other party
has permitted the Closing to occur, in which case such other party
shall be deemed to have waived such breach or inaccuracy. In no event
shall the Shareholder be liable under Section 13.1(a) or 13.1(b) for
Damages if Buyer had actual knowledge on or prior to the Closing Date
of the misrepresentation, breach of warranty or nonperformance or
breach of covenant giving rise to such Damages.
(d) Under no circumstances shall Damages include any
losses, claims, liabilities, damages, obligations, costs or expenses to
the extent they affect or relate to any business or operation of Buyer,
including, without limitation, the financial condition, prospects or
operations thereof, other than the continuation (by the Buyer) of the
Business from and after the Closing.
(e) Notwithstanding any other provision hereof, the
Shareholder shall have no liability in respect of any claim for
indemnification under Section 13.1:
(i) if and to the extent that such claim arises
or is increased as a result of any change in legislation
enacted after the Effective Time that takes effect
retrospectively;
(ii) if and to the extent that such claim occurs
or is increased as a result of any increase in the rate of
taxation in force at the date hereof;
(f) Under no circumstances shall any party hereto be
liable for any special, consequential, indirect or punitive damages for
any misrepresentation or breach of any provision of, or any other
matter arising pursuant to, this Agreement or any Transaction Document.
13.5 METHOD OF ASSERTING CLAIMS, ETC.
(a) In case any claim is made, or any suit or action is
commenced by a third party against Buyer in respect of which
indemnification under Section 13.1 may be sought by it hereunder, or
the Shareholder in respect of which indemnification under Section 13.2
may be sought by it hereunder, the indemnified party (the "Indemnitee")
36
shall promptly give the indemnifying party (the "Indemnifying Party")
notice thereof and the Indemnifying Party shall be entitled to control
the defense thereof. The Indemnitee may (but need not) retain its own
counsel, but the fees and expenses of such counsel shall be at the
expense of the Indemnitee. The Indemnifying Party may at any time
notify the Indemnitee of its intention to settle or compromise any
claim, suit or action against the Indemnitee, and the Indemnifying
Party may settle or compromise any such claim, suit or action unless
the Indemnitee notifies the Indemnifying Party in writing (within ten
(10) business days after the Indemnifying Party has given written
notice of its intention to settle or compromise) that the Indemnitee
intends to conduct or to continue to conduct the defense of such claim,
suit or action. Unless the Indemnitee gives the notice referred to in
the foregoing sentence with respect to settlements or compromises, any
such settlement or compromise of, or (notwithstanding any notice from
the Indemnitee referred to in the foregoing sentence) any final
judgment or decree entered on or in respect of any claim, suit or
action shall be binding upon, the Indemnitee as fully as if the
Indemnitee had assumed and controlled the defense thereof and a final
judgment or decree had been entered in such suit or action, or with
regard to such claim, by a court of competent jurisdiction for the
amount of such settlement, compromise, judgement or decree. If the
Indemnitee conducts or continues the conduct of the defense of any
claim, suit or action as aforesaid, it shall do so at its own cost and
expense, holding the Indemnifying Party harmless from all costs, fees,
expenses, debts, liabilities and charges in connection with such
defense.
(b) If an Indemnitee is entitled to be indemnified
hereunder other than in respect of a claim made or action commenced
against Buyer or the Shareholder as referred to in Section 13.5(a), the
Indemnifying Party shall be given written notice thereof promptly by
the Indemnitee, which notice shall specify the amount and nature of the
amounts to be indemnified and include the request of the Indemnitee for
indemnification of such amount. The Indemnifying Party shall within
twenty (20) days pay to the Indemnitee the amount so specified, or
deliver to the Indemnitee written notice setting forth in reasonable
detail that Indemnifying Party is not obligated to pay such amount, in
which event the parties shall use good faith efforts to resolve any
disputed matters.
(c) Notwithstanding any other provision of the Agreement
to the contrary, with respect to any claim for indemnification arising
under Section 13.1(d) or 13.2(d), the Indemnitee and the Indemnifying
Party may pursue claims against, and seek to enforce the obligations,
if any, of others (including TRW, Inc.) who have or are reasonably
believed to have, liability under Environmental, Health and Safety Laws
with respect to any of the Facilities.
13.6 PAYMENT. Upon the determination of liability under this
Article XIII, the appropriate party shall pay to the other, as the case may be,
within ten days after such determination, the amount of any claim for
indemnification made hereunder. Any liability of the Shareholder under Article
XIII shall first be paid from the Escrow Amount. Upon the payment in full of any
claim, the entity making payment shall be subrogated to the rights of the
indemnified party against any Person with respect to the subject matter of such
claim.
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13.7 OTHER REMEDIES. Except for fraud, including an intentional
misrepresentation made with intent to deceive, the rights and remedies of the
Buyer for money damages under this Article XIII are exclusive and in lieu of any
and all rights and remedies that the Buyer may have under this Agreement or
under applicable law for any Damages.
ARTICLE XIV.
MISCELLANEOUS
14.1 JURISDICTION/VENUE. Any action or proceeding seeking to
enforce any provision of, or based on any right arising out of, this Agreement
shall be brought in the United States District Court, Middle District of
Pennsylvania, Harrisburg Division, if such Court has or can acquire
jurisdiction. If such United States District Court does not have or cannot
acquire jurisdiction, such action or proceeding may be brought against any of
the parties in the Court of Common Pleas for Harrisburg, Pennsylvania. Each of
the parties consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the world. Prior to
initiating a judicial proceeding against another party to this Agreement, a
party shall first seek in good faith to negotiate for 30 days a resolution of
the dispute with such other party, unless the initiating party in good faith
determines that such a delay will materially impair or adversely affect such
party's rights or remedies available under this Agreement or applicable law. The
non-prevailing party of any judicial proceeding shall bear all of the expenses
of the prevailing party for any such proceeding initiated to seek enforcement of
any provision of, or any rights or remedies arising under, this Agreement,
including the reasonable attorneys fees of the prevailing party. The parties
shall seek the designated court's determination as to which party is the
non-prevailing party.
14.2 COUNTERPARTS. This Agreement may be executed simultaneously in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. Photostatic or
facsimile reproductions of this Agreement may be made and relied upon to the
same extent as originals.
14.3 ASSIGNMENT. This Agreement shall be binding on, and shall
inure to the benefit of, the parties to it and their respective heirs, legal
representatives, successors, and assigns, but this Agreement shall not be
assignable by a party without the prior written consent of the other party,
except that Buyer may assign this Agreement to an affiliate of Buyer, but in
such event the original signatory hereto as well as the affiliate assignee shall
be jointly and severally liable for the obligations of Buyer hereunder.
14.4 FEES AND EXPENSES. The Shareholder shall pay all the expenses,
fees and costs (including without limitation legal and accounting expenses)
incurred or to be incurred by Shareholder and Seller in negotiating and
preparing this Agreement and in closing and carrying out the transactions
contemplated by this Agreement. The Buyer shall pay all the expenses, fees and
costs (including without limitation legal and accounting expenses) incurred or
to be incurred by it in negotiating and preparing this Agreement and in closing
and carrying out the transactions contemplated by this Agreement, including the
premiums for a title insurance policy respecting the Owned Facility. The
Shareholder and the Buyer shall equally divide the costs of the state and
38
local transfer taxes to be incurred incident to the recordation in Dauphin,
County, Pennsylvania of the conveyance deed transferring the Owned Facility from
Seller to Buyer.
14.5 NOTICES. All notices, waivers and other communications under
this Agreement must be in writing and will be deemed to have been duly given (i)
when delivered by hand (with written confirmation of receipt), (ii) when sent by
facsimile (with written confirmation of successful transmission) or, (iii) two
business days following deposit thereof (with all postage and other fees paid)
with a nationally recognized overnight delivery service, in each case to the
appropriate addresses and facsimile numbers, as applicable, set forth below (or
to such other addresses and facsimile numbers as a party may designate by notice
to the other parties):
Buyer: Dayton Parts, LLC
40 Burton Hills Blvd, Suite 420
Nashville, TN 37215
Facsimile: 615-256-2487
Attn: Barney D. Byrd, President
With a Copy to: Stites & Harbison, PLLC
Suite 1800, SunTrust Center
Nashville, Tennessee 37219
Facsimile: 615-782-2371
Attn: B. Riney Green
Seller: Dayton Parts, Inc.
3500 Industrial Road
P.O. Box 5795
Harrisburg, PA 17110-0795
Facsimile: 717-255-8568
Attn: Gary Smalley, President
Shareholder: JPE, Inc.
1030 Doris Road
Auburn Hills, Michigan 48326-2613
Facsimile: 248-232-1199
Attn: Scott Koepke, President & COO
With a Copy to: Drinker Biddle & Reath LLP
1000 Westlakes Drive, Suite 300
Berwyn, PA 19312
Facsimile: 610-993-8585
Attn: Neil K. Haimm
14.6 GOVERNING LAW. This Agreement shall be construed in accordance
with, and governed by, the internal Laws of the Commonwealth of Pennsylvania
without regard to the principles of conflicts of Laws thereof.
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14.7 FURTHER ACTIONS AND ASSURANCES. Each of the parties hereto
shall use such party's reasonable best effort to take such action as may be
necessary or reasonably requested by the other parties hereto to carry out and
consummate the transactions contemplated by this Agreement. From time to time,
at Buyer's request, whether at or after the Closing and without further
consideration, the Shareholder and the Seller shall execute and deliver such
further instruments of assignment, conveyance and transfer and take such other
actions as Buyer may reasonably request to convey and transfer more effectively
to Buyer any of the Purchased Assets. Buyer shall, after the Closing, from time
to time, promptly execute, acknowledge and deliver any other assurances or
documents reasonably requested by the Shareholder. In addition, Buyer shall, at
the reasonable request of Shareholder, make the Transferred Employees reasonably
available to assist Shareholder in preparation of its financial statements and
tax returns for the period prior to the Closing to the extent they relate to the
information about Seller and its subsidiary and to assist, at Shareholder's
expense, Shareholder in the defense of any claims for which Shareholder has
responsibility hereunder.
14.8 EFFECT OF HEADINGS. The subject headings of the articles and
sections of this Agreement are included for purposes of convenience only, and
shall not affect the construction or interpretation of any of its provisions.
14.9 SEVERABILITY. The invalidity or unenforceability of any
particular provision, or part of any provision, of this Agreement shall not
affect the other provisions or parts hereof, and this Agreement shall be
construed in all respects as if such invalid or unenforceable provisions or
parts were omitted.
14.10 REPRESENTATIONS. No representation or warranty in this
Agreement shall be deemed violated if the information required to be disclosed
by a party in any such representation or warranty is disclosed by such party in
or in response to any other representation or warranty of such party in this
Agreement.
14.11 ENTIRE AGREEMENT; MODIFICATION; WAIVER. This Agreement,
together with the other agreements referred to herein constitute the entire
agreement between the parties pertaining to the subject matter contained in it
and supersedes all prior agreements, representations, and undertakings of the
parties hereto. No supplement, modification, or amendment of this Agreement
shall be binding unless executed in writing by all the parties. No waiver of any
of the provisions of this Agreement shall be deemed, or shall constitute, a
waiver of any other provision, whether or not similar, nor shall any waiver
constitute a continuing waiver. No waiver shall be binding unless executed in
writing by any party making the waiver.
14.12 DISCLAIMER OF WARRANTIES. Except for representations and
warranties expressly set forth in this Agreement or any transfer instrument or
certificate delivered as a condition to Closing hereunder, no party has made any
representations or warranties on which any other party may rely.
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IN WITNESS WHEREOF, the parties to this Agreement have duly executed it
on the day and year first above written.
JPE, INC.
By:________________________________
Name:
Title:
DAYTON PARTS, INC.
By:________________________________
Name:
Title:
DAYTON PARTS, LLC
By:________________________________
Name:
Title:
For good and valuable consideration, and intending to be legally bound, the
undersigned agrees to guarantee and act a surety for the timely payment of the
obligations of Buyer under Section 12.2(b) of this Agreement.
GEN CAP AMERICA, INC.
By:_________________________________
Name:
Title:
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