AGREEMENT FOR PURCHASE AND SALE OF CERTAIN ASSETS
OF
ROBINSON FOUNDRY, INC.
BY AND AMONG
INTERMET CORPORATION
ALEXANDER CITY CASTING COMPANY, INC.
ROBINSON FOUNDRY, INC.
JOSEPH H. ROBINSON, JR.
AND
BODINE-ROBINSON, INC.
November 15, 1995
TABLE OF CONTENTS*
Page
1. PURCHASE AND SALE OF ASSETS 2
1.1 Purchase and Sale .................................................. 2
1.2 Excluded Assets .................................................... 3
1.3 Purchase Price; Post Closing Adjustment ............................ 3
1.4 Physical Inventory ................................................. 4
1.5 Assumption of Certain Liabilities .................................. 4
1.6 Obligations Not Assumed ........................................... 5
1.7 Sales Taxes ........................................................ 6
1.8 Proration ......................................................... 6
1.9 Allocation ......................................................... 6
1.10 Closing ........................................................... 6
1.11 Transactions and Documents at Closing ............................ 7
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER 8
2.1 Organization and Authority ........................................ 8
2.2 Ownership of Shares ............................................... 8
2.3 Authority; Inconsistent Obligations ............................... 8
2.4 Consents ......................................................... 9
2.5 No Violation; Compliance with Laws ................................ 9
2.6 Financial Statements .............................................. 9
2.7 Title to Properties ............................................... 10
2.8 Inventories ....................................................... 10
2.9 Products Liability ................................................. 10
2.10 Returns and Consignments ......................................... 11
2.11 Personal Property ................................................ 11
2.12 Real Property ................................................... 12
2.13 Authority to Conduct Business and Intellectual
Property Rights .................................................. 12
2.14 Customers and Suppliers .......................................... 13
2.15 Taxes ........................................................... 13
2.16 Employment and Labor Matters ..................................... 14
2.17 Environmental Matters ............................................ 14
2.18 No Defaults ...................................................... 15
2.19 Absence of Changes ............................................... 15
2.20 Solvency ......................................................... 16
2.21 Securities Laws Matters .......................................... 16
2.22 Full Disclosure ................................................... 17
2A. REPRESENTATIONS, WARRANTIES AND COVENANTS OF
SHAREHOLDER 18
2A.1 Authority ......................................................... 18
2A.2 Ownership of Shares; Subsidiaries ................................. 18
______________________________________________
*This Table of Contents does not constitute a part of this Agreement.
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2A.3 Full Disclosure ................................................... 18
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER AND PARENT 19
3.1 Organization ...................................................... 19
3.2 Authorization; No Inconsistent Agreements ......................... 19
3.3 Capitalization .................................................... 19
3.4 SEC Filings ....................................................... 20
3.5 Full Disclosure .................................................... 21
4. ADDITIONAL AGREEMENTS 21
4.1 Access and Inspection .............................................. 21
4.2 Expenses .......................................................... 21
4.3 Brokers ............................................................ 21
4.4 Publicity ......................................................... 22
4.5 Satisfaction of Certain Encumbrances ............................... 22
4.6 Employees ......................................................... 22
4.7 Confidentiality of Lost Foam Technology ........................... 23
4.8 Reimbursement of Certain Expenses ................................. 23
4.9 Removal of Transferred Assets ..................................... 23
5. INDEMNITIES 24
5.1 Indemnification of Purchaser and Parent by Seller
and BRI ........................................................... 24
5.2 Indemnification of Purchaser and Parent by
Shareholder ...................................................... 24
5.3 Indemnification of Seller and Shareholder .......................... 25
5.4 Payment ........................................................... 26
5.5 Defense of Claims .................................................. 26
5.6 Threshold and Limit of Liability .................................. 27
5.7 Indemnification Procedures ....................................... 28
5.8 Contractual Right of Offset ....................................... 28
6 SURVIVAL OF REPRESENTATIONS AND OTHER PROVISIONS 29
6.1 Survival ......................................................... 29
7. POWER-OF-ATTORNEY 30
7.1 Appointment of Agent .............................................. 30
7.2 Liability of Agent ................................................. 30
7.3 Irrevocable; Binding on Successors, Etc. ......................... 31
8. MISCELLANEOUS 31
8.1 Notices ........................................................... 31
8.2 Counterparts ...................................................... 32
8.3 Entire Agreement .................................................. 32
8.4 Governing Law .................................................... 32
8.5 Dispute Resolution ................................................ 32
8.6 Successors and Assigns ............................................ 33
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8.7 Partial Invalidity and Severability ................................ 33
8.8 Waiver ............................................................. 34
8.9 Headings ........................................................... 34
8.10 Number and Gender ................................................ 34
8.11 Time of Performance .............................................. 34
9. CERTAIN DEFINITIONS; INDEX OF DEFINITIONS 34
9.1 Certain Definitions ............................................... 34
9.2 Index to Definitions .............................................. 38
AGREEMENT FOR PURCHASE AND SALE OF
CERTAIN ASSETS OF
ROBINSON FOUNDRY, INC.
THIS AGREEMENT is made and entered into as of the 15th day of
November, 1995, by and among INTERMET CORPORATION, a Georgia
corporation ("Parent"); ALEXANDER CITY CASTING COMPANY, INC., an
Alabama corporation ("Purchaser"); ROBINSON FOUNDRY, INC., an
Alabama corporation ("Seller"); JOSEPH H. ROBINSON, JR., an
individual resident of the State of Alabama ("Shareholder"); and
BODINE-ROBINSON, INC., an Alabama corporation ("BRI").
RECITALS:
A. Seller is engaged in, among other things, the
manufacture, sale and distribution of aluminum castings by the
lost foam process (the "Aluminum Business"). Seller is also
engaged in the manufacture, sale and distribution of aluminum
castings on Disamatic equipment (the "Disa Business") and the
manufacture, sale and distribution of iron castings by the lost
foam process and by other processes (the "Iron Business"). The
Aluminum Business does not include the Disa Business or the Iron
Business.
B. Upon the terms and subject to the conditions contained in
this Agreement, Seller desires to sell, convey, transfer and
assign to Purchaser, and Purchaser desires to purchase and
acquire from Seller, all of the assets of Seller which are used
solely in the conduct and operation of the Aluminum Business,
other than the Excluded Assets.
C. Parent is the sole record and beneficial shareholder of
Purchaser and a portion of the consideration to be paid to Seller
hereunder consists of shares of the common stock of Parent.
D. Shareholder is the majority shareholder of Seller and BRI
and is entering into certain representations, warranties,
covenants, agreements and indemnities contained herein as a
material and essential inducement to Purchaser entering into this
Agreement.
E. BRI is entering into certain representations, warranties,
covenants, agreements and indemnities contained herein as a
material and essential inducement to Purchaser entering into this
Agreement.
NOW, THEREFORE, for and in consideration of the premises and
the mutual covenants and agreements herein contained, and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as
follows:
AGREEMENT:
1. PURCHASE AND SALE OF ASSETS
1.1 Purchase and Sale. Subject to the terms and conditions
contained herein and except as otherwise provided in Paragraph
1.2, Seller agrees to sell, transfer, convey and assign to
Purchaser, and Purchaser agrees to purchase and acquire from
Seller, on the Closing Date (such term and other capitalized
terms used herein being defined in this Agreement in either
Paragraph 9.1 or at the places indicated in Paragraph 9.2), all
of Seller's right, title and interest in and to (i) the Lost Foam
Technology, as it relates to all metals and other materials, and
(ii) all of the assets and properties of Seller described below,
which are used solely in the Aluminum Business (all of such
assets and properties (excluding the Excluded Assets) being
referred to collectively as the "Transferred Assets"):
(a) all of Seller's machinery, parts, toolings, dies,
jigs, molds, supplies, laboratory and testing equipment,
equipment, computers, software, tools and other tangible personal
property, used solely in the Aluminum Business, including without
limitation, all of such assets described and identified in
Schedule 1.1(a);
(b) all of Seller's saleable and useable inventories of
raw materials, work-in-process (whether on hand or in transit
from suppliers), and finished goods or products, in existence at
the close of business on the day immediately preceding the
Closing Date, other than obsolete inventory, that are a part of,
and useable and saleable in connection with the Aluminum
Business, but specifically excluding any such raw materials,
work-in-process, and finished goods or products that are a part
of the Disa Business or the Iron Business (collectively, the
"Inventories");
(c) all of Seller's proprietary and confidential
information directly related to, and a part of, the Aluminum
Business, including without limitation: (i) trade secrets,
capabilities, technical information, know-how, process
technology, designs, processes, procedures, algorithms,
discoveries, patents, patent applications, copyrights, copyright
applications, blueprints, engineering data, patterns, bills of
materials, and drawings and specifications, and all improvements
thereof, (ii) all data, files, books and records, customer lists,
vendor lists, parts lists and order information, (iii) all of
Seller's certifications and approvals issued or granted to Seller
by Seller's customers, but only to the extent transferable, and
(iv) all of Seller's other information and intangible property
rights directly relating to, and a part of, the operation of the
Transferred Assets or the Aluminum Business, including without
limitation and to the extent transferable, all of Seller s
trademarks, service marks and trade names (which shall not
include Seller's corporate name), all registrations and pending
applications therefor, and all goodwill associated therewith
directly relating to, and a part of, the Aluminum Business;
(d) all of Seller's right, title and interest in, to and
under the purchase orders, customer orders, contracts, leases
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licenses and agreements which relate solely to the Aluminum
Business and which are identified on Schedule 1.1(d) and which
remain unfilled, open or incomplete at the Closing Date
(collectively, the "Assigned Contracts"); and
(e) all warranties and guaranties by third parties and
all purchase discounts, in each case solely relating to the
Aluminum Business or the Transferred Assets.
1.2 Excluded Assets. Notwithstanding anything in this
Agreement to the contrary, the Transferred Assets shall not
include the Disa Assets (as described and defined in the Disa
Agreement referred to in Paragraph 6.14 hereof), the businesses,
assets and properties comprising the Disa Business, the
businesses, assets and properties comprising the Iron Business,
any tangible personal property not listed or described in Section
1.1 hereof or Schedule 1.1(a) hereto, and any castings of Seller
in transit or to or in the possession of subcontractors of Seller
for coating or machining prior to delivery to Seller's customers
(the "Excluded Assets").
1.3 Purchase Price; Post Closing Adjustment. (a) Subject to
Paragraphs 1.3(b) and 1.8, the purchase price for the Transferred
Assets (the "Purchase Price") shall be an amount equal to:
(i) $14,550, plus
(ii) Parent will issue ____________________ shares
of its $0.10 par value per share common stock to Seller in the
manner prescribed by Paragraph 1.11(a)(iii) (such shares will
be duly and validly authorized and issued, fully paid, non-
assessable, unregistered shares, and the rights and privileges
of such shares are described in Parent's Articles of
Incorporation); plus
(iii) the estimated amount of the Inventory Component
subject to the post-closing adjustment as herein provided.
(b) For purposes of determining the Purchase Price payable at
the Closing, Seller and Purchaser shall estimate the value of the
Inventories as follows: (i) raw materials (which shall for this
purpose include molten aluminum) shall be valued at their
aggregate direct cost plus associated inbound freight, (ii) work-
in-process, if any, shall be valued at sixty-seven percent (67%)
of their respective direct selling prices (net of freight), and
(iii) finished goods shall be valued at eighty-five percent (85%)
of their respective direct selling prices (net of freight), as
reflected in the books of account and records and purchase orders
on contracts of Seller, as appropriate (as so estimated, the
"Estimated Amount"). For purposes of finally determining the
Inventory Component, the Estimated Amount will be adjusted in
accordance with the provisions of Paragraph 1.3(c).
(c) Within 10 days after the Closing Date, Purchaser and
Seller shall in good faith jointly endeavor to determine the
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actual value of the Inventory as reflected on the Inventory
Quantity Schedule, all of which shall be valued at cost for raw
materials and for all other inventory as historically priced in
the audited annual financial statements of Seller using GAAP. If
Purchaser and Seller agree on such valuation, they shall execute
an inventory component adjustment schedule that shall be final
and binding on the parties. If the inventory component
adjustment schedule reflects a valuation in excess of the
Estimated Amount, Purchaser shall promptly pay over to Seller in
immediately available funds the amount by which the actual
valuation of the Inventory exceeds the Estimated Amount. If the
inventory component adjustment schedule reflects a valuation
lower than the Estimated Amount, Seller shall promptly pay over
to Purchaser in immediately available funds the amount by which
the Estimated Amount exceeds the actual valuation of the
Inventory.
(d) If Purchaser and Seller cannot agree on the inventory
component adjustment schedule within such 10-day period, then
those aspects as to which they cannot agree shall be submitted to
Jackson, Thornton & Company, Montgomery, Alabama, independent
certified public accountants (the "Arbiter"), who shall resolve
the dispute and make a final written determination thereof which
shall be binding and conclusive on the parties. The costs of
such determination by the Arbiter shall be borne equally by
Seller and Purchaser.
(e) The value of the Inventories as so determined pursuant to
Paragraphs 1.3(c) and 1.3(d) is referred to herein as the
"Inventory Component".
1.4 Physical Inventory. Representatives of Purchaser and
Seller have, prior to the date hereof, jointly conducted and
completed a physical inventory of the Inventories. The quantity
of Inventories counted in the physical inventory has been
compiled into a schedule (the "Inventory Quantity Schedule")
which has been signed by Representatives of Purchaser and Seller,
and such Inventory Quantity Schedule is final and binding on the
parties.
1.5 Assumption of Certain Liabilities. (a) Purchaser agrees
to assume, as at the Closing Date, and to pay or perform, in
accordance with their terms, each of the following obligations of
Seller (collectively, the "Assumed Liabilities"):
(i) Seller's accrued obligations for current year
vacation and holiday pay as of the Closing Date as listed on
Schedule 1.5(a)(i), but only in respect of those employees of
the Aluminum Business who accept employment with Purchaser
immediately following the Closing;
(ii) all obligations under the Assigned Contracts
(but specifically excluding any obligation or liability
arising from any default or non-performance by Seller prior to
the Closing Date); and
(iii) those obligations of Seller to be prorated
pursuant to Paragraph 1.8 for which Purchaser is given a
credit against the Purchase Price.
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(b) Nothing contained in this Paragraph 1.5 or in any
instrument of assumption executed by Purchaser at the Closing
shall be deemed to release or relieve Seller or Shareholder from
their respective representations, warranties, covenants,
agreements and indemnities contained in this Agreement or any
certificate, schedule, instrument, document or agreement executed
pursuant hereto or in connection herewith, including without
limitation, the obligations of Seller and Shareholder to provide
indemnification in accordance with the provisions of Article 5.
Notwithstanding such assumption, nothing contained herein or in
any instrument of assumption shall prohibit Purchaser from
contesting, in good faith and at the expense of Purchaser, the
amount, validity or enforceability of any of the Assumed
Liabilities.
1.6 Obligations Not Assumed. Except for the Assumed
Liabilities, Purchaser shall not assume or be liable or
responsible for any obligation or liability of Seller or
Shareholder of any kind or nature whatsoever. Except for the
Assumed Liabilities, Seller shall, and Shareholder shall cause
Seller to, pay, satisfy and perform all of its obligations,
whether fixed, contingent, known or unknown and whether existing
as of the Closing Date or arising thereafter, or which may affect
in any way the Transferred Assets or the Aluminum Business.
Without limiting the generality of the foregoing, under no
circumstances shall Purchaser be deemed to assume any liability
or obligation of Seller or Shareholder for (a) any actual or
alleged tortious conduct of Seller or any of its employees or
agents, any product liability claim relating to products cast
(regardless of whether Seller shall have removed the gating from
such casting) or services rendered by Seller, any claim for
breach of warranty or contract by Seller with respect to any
products cast (regardless of whether Seller shall have removed
the gating from such casting) or services rendered by Seller, any
claim predicated on strict liability or any similar legal theory
with respect to any products cast (regardless of whether Seller
shall have removed the gating from such casting) or services
rendered by Seller, or any other Action relating to the Aluminum
Business, (b) Seller's violation of any Law in effect prior to
the Closing Date, including without limitation, Seller s
violation of or any failure to comply with any Environmental Law
or any liability arising from or in connection with the
possession, use, ownership, handling or disposal of any Hazardous
Material, (c) any business or business activities of Seller which
are not part of the Aluminum Business, (d) any indebtedness for
borrowed money or capitalized lease or purchase money
obligations, including, without limitation, any Company
Indebtedness, other than as specifically set forth herein
respecting the Assigned Contracts, (e) any liability or
obligation arising out of the operation of Seller's Business on
or prior to the Closing Date relating to present or past
employees of Seller, including without limitation, liability for
wages, compensation, overtime, or any employee benefit liability
or obligation not expressly assumed by Purchaser, any liability
or obligation of Seller arising from a violation of any
employment discrimination or other Law by Seller on or prior to
the Closing Date for the protection or benefit of employees of
Seller, any severance or bonus obligation of Seller relating to
the transactions contemplated herein or caused by Purchaser's
failure to employ, or offer to employ, any Person, or any
workers' compensation claims or liabilities in respect to
incidents which occur on or prior to the Closing Date, (f) any
liability arising under any Plans of Seller, (g) any liability or
obligation of Seller to any of its shareholders, (h) any
liability of Seller or Shareholder for expenses or Taxes, if any,
in connection with, resulting from or arising out of this
Agreement or the transactions contemplated hereby (other than for
5
certain transaction taxes which shall be dealt with as provided
for in Paragraph 1.6), (i) any liability of Seller or any of its
shareholders for any Taxes of any kind or character, (j) any
liability of Seller or any of its shareholders under or arising
by reason of this Agreement or the transactions contemplated by
this Agreement except with respect to payments or performance due
for any rights or assets whatsoever to which Purchaser shall be
entitled under any Assigned Contracts, or (k) any liability or
obligation arising out of or relating to the Excluded Assets.
Notwithstanding any other provision of this Agreement, the
obligations of Seller pursuant to this Paragraph 1.5 shall
survive the Closing and consummation of the transactions
contemplated by this Agreement.
1.7 Sales Taxes. Purchaser shall be responsible for the
payment of any and all sales, use, excise, transfer, value added
and similar taxes, and transfer or recording fees, imposed by any
Government in any jurisdiction in connection with the
transactions contemplated herein.
1.8 Proration. There shall be prorated between Purchaser and
Seller as of the close of business on the Closing Date the
following accrued or prepaid items relating to the Aluminum
Business: (a) ad valorem and similar taxes, with respect to the
Transferred Assets, (b) rents, royalties, and other payments due
under the Assigned Contracts, and (c) license fees relating to
any of the Transferred Assets (but only in respect of
transferable licenses actually assumed by Purchaser). The cash
portion of the Purchase Price to be paid hereunder shall be
appropriately decreased by the pro rata amount of any such items
which are accrued but unpaid at the Closing Date, and the cash
portion of the Purchase Price shall be appropriately increased by
the pro rata amount of any such items which have been prepaid by
Seller as of the Closing.
1.9 Allocation. The Purchase Price shall be allocated among
the Transferred Assets in accordance with Schedule 1.9 hereto and
the Evaluation Summary, dated September 5-6, 1995, issued by
AccuVal Associates, Incorporated, all in conformity with Section
1060(b) of the Internal Revenue Code of 1986, as amended (the
Internal Revenue Code"), and the regulations promulgated
thereunder. Purchaser, Seller and Shareholder agree to cooperate
in filing all information required by Section 1060(b) of the
Internal Revenue Code and the regulations thereunder, and to take
no position on or with respect to any income tax return, report
or filing (including without limitation amendments thereto)
inconsistent with such allocation.
1.10 Closing. The consummation of the transactions
contemplated in this Agreement (the "Closing") are taking place
on the date hereof and concurrently with the execution and
delivery of this Agreement at the offices of Kilpatrick & Cody,
1100 Peachtree Street, Suite 2800, Atlanta, Georgia, or at such
other place as shall be mutually agreeable to the parties (the
"Closing Date"). The transactions provided for in this Agreement
are effective as of the opening of business on the Closing Date.
1.11 Transactions and Documents at Closing.
(a) At the Closing:
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(i) Seller shall convey to Purchaser all of the
Transferred Assets, free and clear of any and all Liens,
and in furtherance thereof shall deliver to Purchaser an
Assignment and Bill of Sale in the form of Exhibit A with
respect to the Transferred Assets and such other deeds,
bills of sale, assignments, certificates of title,
documents and other instruments of transfer and
conveyance and certificates as Purchaser and its legal
counsel shall reasonably request;
(ii) upon such delivery by Seller, Purchaser shall
pay the cash portion of the Purchase Price (i) first, by wire
transfer to Bank of immediately available funds in an amount
sufficient to pay all Company Indebtedness due to Bank that is
secured by a Lien on all or a part of the Transferred Assets
(but only to the extent that Seller has not otherwise
satisfied the Company Indebtedness and provided evidence
thereof satisfactory to Purchaser), and (ii) the excess, if
any, next by paying the remaining portion thereof by wire
transfer of immediately available funds to a bank account in
the continental United States as advised in writing by Seller
to Purchaser no less than two Business Days prior to the
Closing Date;
(iii) upon such delivery by Seller, Parent shall
deliver on behalf of Purchaser, certificates representing, in
the aggregate, _________________ duly and validly authorized
and issued, fully paid, non-assessable, unregistered shares of
Parent's $0.10 par value per share common stock (collectively,
the "Shares"); and
(iv) Purchaser shall assume the Assumed Liabilities
by delivering to Seller an Instrument of Assumption in the
form of Exhibit B.
(b) All deliveries, payments and other transactions and
documents relating to the Closing shall be interdependent and
none shall be effective unless and until all are effective.
(c) Each party shall, at the request of any other party
from time to time and at any time, whether on or after the
Closing Date, and without further consideration, execute and
deliver such deeds, assignments, transfers, assumptions, convey-
ances, powers of attorney, receipts, acknowledgments, acceptances
and assurances as may be reasonably necessary to procure for the
party so requesting, and its transferees, successors and assigns,
or for aiding and assisting in collecting and reducing to
possession, any and all of the Transferred Assets or the Assumed
Liabilities, or otherwise to satisfy and perform the obligations
of the parties hereunder.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER
To induce Purchaser and Parent to enter into this Agreement
and to induce Purchaser to purchase the Transferred Assets,
Seller represents and warrants to, and covenants and agrees with,
Purchaser and Parent as follows:
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2.1 Organization and Authority. Seller is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Alabama. Seller's principal office and its
places of business are at the locations specified in Schedule
2.1. Seller has all requisite corporate power and authority and
is entitled to own or lease the Transferred Assets and to carry
on the Aluminum Business, and all of its other businesses, as and
in all places where such business is now conducted and such
properties are owned or leased. Seller is duly authorized,
licensed, qualified or domesticated as a foreign corporation in
the jurisdictions listed in Schedule 2.1, which are all
jurisdictions where the character of the property owned by it or
the nature of the business transacted by it makes such
authorization, license, qualification or domestication necessary,
except where the failure to be so qualified and in good standing
would not have a material adverse effect on the business or
financial condition of Seller. Schedule 2.1 lists (i) all
locations where any Transferred Assets are located, or where
Seller has an office or place of business or maintains any
Inventory, and (ii) all names under which Seller or its
predecessors have operated during the past five years, if
different from its present corporate name.
2.2 Ownership of Shares. Those persons listed in Schedule
2.2 are the record and beneficial owners of all of the issued and
outstanding capital stock of Seller. There are no outstanding
securities convertible into the capital stock or rights to
subscribe for or to purchase, or any options for the purchase of,
or any agreements or arrangements providing for the issuance
(contingent or otherwise) of, or any Actions relating to, the
capital stock of Seller.
2.3 Authority; Inconsistent Obligations. (a) Seller has the
full right, power and authority to execute and deliver and to
perform and comply with this Agreement and each other agreement,
document and instrument contemplated hereby, in each case in
accordance with their respective terms. All proceedings and
actions required to be taken by Seller to authorize the
execution, delivery, and performance of this Agreement have been
properly taken. This Agreement has been duly and validly
executed and delivered on behalf of Seller by its duly authorized
officers. This Agreement constitutes the valid and legally
binding obligation of Seller, enforceable against it in
accordance with its terms.
(b) Except as disclosed in Schedule 2.3(b), neither the
execution and delivery of this Agreement nor the consummation of
the transactions contemplated herein will result in a violation
or breach of, or constitute a default under (a) the Articles of
Incorporation or By-Laws of Seller, (b) any material term or
provision of any indenture, note, mortgage, bond, security
agreement, loan agreement, guaranty, pledge, or other agreement,
instrument or document, (c) any material Law, or (d) any other
material commitment or restriction, to which Seller is a party or
by which it or any of the Transferred Assets is subject or bound;
nor will such actions result in (i) the creation of any Lien on
any of the Transferred Assets, (ii) the acceleration or creation
of any material obligation of Seller, or (iii) the forfeiture of
any material right or privilege of Seller.
2.4 Consents. The execution and delivery of this Agreement
by Seller and the consummation of the transactions contemplated
by this Agreement (a) do not require the consent, approval or
action of, or any filing with or notice to, any Person or
Government, except as specified in Schedule 2.4, (b) do not
8
require the consent or approval of any of Seller's shareholders
or Seller's board of directors, except such as have been
obtained, and (c) do not impose any other term, condition or
restriction on Purchaser or the Transferred Assets pursuant to
any business combination, takeover or other similar Law.
2.5 No Violation; Compliance with Laws. Seller is not in
default under or in violation of its Articles of Incorporation or
By-Laws. Seller has complied in all material respects with all
Laws applicable to the Aluminum Business and/or the Transferred
Assets the failure to comply with which may have a materially
adverse effect on the Transferred Assets or the Aluminum
Business. Except as specified in Schedule 2.5, neither Seller
nor Shareholder has received any notification of any asserted
present or past failure by Seller to comply with any such Laws.
2.6 Financial Statements. Prior to the date hereof, Seller
has delivered to Purchaser copies of Seller's Audited Balance
Sheets as at December 31, 1994, and December 31, 1993, and
related Audited Statements of Income for the fiscal years then
ended, together with the audit opinion thereon of Wilson, Price,
Barranco & Billingsley, independent certified public accountants.
Except as disclosed in Schedule 2.6, all of such financial state-
ments (including any related notes and schedules thereto) (the
"Audited Financial Statements") are true and correct and have
been prepared in accordance with GAAP consistently applied and
present fairly the financial condition of Seller as at the
respective dates thereof and the results of its operations for
the respective periods then ended. Seller has also delivered to
Purchaser copies of Seller's unaudited Balance Sheet as at August
31, 1995 (the "Unaudited Balance Sheet"), and unaudited Statement
of Income for the eight-month period then ended (such unaudited
Statement of Income, together with the Unaudited Balance Sheet,
being collectively referred to as the "Unaudited Financial
Statements"). The Unaudited Financial Statements (including any
related notes and schedules thereto) are true and correct, have
been prepared from the books and records of Seller in accordance
with GAAP consistently applied, and present fairly the financial
condition of Seller as at the date thereof and the results of its
operations for the eight-month period then ended subject only to
reasonable and customary year end audit adjustments. Prior to
the date hereof, Seller has delivered to Purchaser copies of
unaudited statements of income for the Aluminum Business for the
period ended August 31, 1995, a copy of which accompanies
Schedule 2.6 (the "Division Financial Statements"). Except as
disclosed in Schedule 2.6, the Division Financial Statements
(including any related notes and schedules thereto) are true and
correct, have been prepared from the books and records of Seller
in accordance with GAAP consistently applied, and present fairly
the results of the operations of the Aluminum Business for the
period then ended.
2.7 Title to Properties. Except for the Excluded Assets and
as described in Schedule 2.7, the Transferred Assets constitute
all of the tangible assets presently used by Seller solely in the
conduct of the Aluminum Business. Except as set forth in
Schedule 2.7, no Person has any Lien on any of the Transferred
Assets. Upon consummation of the transactions contemplated by
9
this Agreement at the Closing, Purchaser will take the
Transferred Assets free and clear of any and all Liens. All
items of tangible personal property constituting a portion of the
Transferred Assets are physically located at Seller's Alexander
City manufacturing facility.
2.8 Inventories. The Inventories (a) if finished goods, are
merchantable, fit for the purpose intended, and conform in all
material respects to all orders, contracts or commitments for
such goods, and (b) if not finished goods, are of a quality and
quantity suitable and useable for the production or completion of
finished goods for sale in the ordinary course of the Aluminum
Business as first quality goods; provided, however, that in the
event of a breach of the foregoing clauses (a) and (b) of this
Paragraph 2.8 Parent and Purchaser shall be entitled to return
such unfit, non-conforming, unsuitable or unusual or obsolete or
below standard quality Inventories to Seller for a prompt refund
of the portion of the Inventory Component attributable thereto,
such Inventory being returned to Seller at Seller's sole cost and
expense. Each item of inventory reflected on the Audited Balance
Sheet is so reflected on the basis of a complete physical count.
Each item of inventory reflected on the Audited Balance Sheet,
the Unaudited Balance Sheet, and the books and records of Seller
is valued at cost for raw materials and for all other inventory
as historically priced in Seller's annual audited financial
statements in accordance with GAAP, and Seller has recognized all
loss resulting from the obsolescence, physical deterioration,
changes in prices, discontinuation of product lines or any other
changes resulting in the valuation of any item of inventory below
cost. All inventories which are reasonably expected to not be
used or sold within the normal operating cycle of the Aluminum
Business have been classified as noncurrent assets and reported
as such in the Audited Financial Statements and Unaudited
Financial Statements, as appropriate. Except as disclosed in
Schedule 2.8, the Inventories, and orders for raw materials and
supplies, are at levels reasonably consistent with Seller s
reasonable past business practices in the Aluminum Business.
2.9 Products Liability. Except as set forth in Schedule 2.9:
(a) there is no Action by or before any Government, Forum or
Person pending, or to the knowledge of Seller threatened, against
or involving Seller in connection with any product relating to
the Aluminum Business (whether or not manufactured or sold as a
part of the Aluminum Business) or Transferred Assets, alleging
that the product has been manufactured, shipped or sold by Seller
and that the product has a defect in manufacture or design, or
alleging any failure to warn of the defect; nor to the knowledge
of Seller is there any reasonable basis therefor; (b) to the
knowledge of Seller, there has not been any Products Liability
Occurrence; (c) since the Reference Date, to the knowledge of
Seller, there has not been any (i) product recall or (ii) product
rework or retrofit (other than in quantities which are normal in
the industry), in either case relating to any product which has
been manufactured, shipped or sold by the Aluminum Business; and
(d) to the knowledge of Seller there are no design defects
resulting in hazardous conditions, nor has there been any failure
to warn of any design defects, involving any product
manufactured, shipped or sold in connection with the Aluminum
Business. For purposes hereof, "Products Liability Occurrence"
means any accident, happening or event caused or allegedly caused
by any hazard or defect or alleged hazard or alleged defect in
the manufacture, design, materials or workmanship, or, any
failure or alleged failure to warn of the hazard, defect or
alleged hazard or alleged defect, of any product or part thereof,
manufactured, sold or distributed by Seller.
10
2.10 Returns and Consignments. No Aluminum Business customer
of Seller has any right to return any goods for credit or refund
pursuant to any agreement, understanding or practice that Seller
will take back goods which are unsold. Without limiting the
generality of the foregoing, and except as disclosed in Schedule
2.10, Seller does not presently have any Aluminum Business goods
in the possession of any customer, subcontractor or dealer on
consignment or on a similar basis.
2.11 Personal Property. (a) Except as set forth in Schedule
2.11(a), all of the machinery, equipment, vehicles and other
items of tangible personal property which constitute part of the
Transferred Assets, or which are leased by Seller pursuant to an
Assigned Contract, are in operating condition and repair, normal
wear and tear excepted, as presently installed at their present
physical location. Except for the Excluded Assets, the
Transferred Assets listed on Schedule 1.1(a) and the Inventory
together constitute all items of tangible personal property owned
or leased by Seller and used solely in the Aluminum Business
except as provided in Schedule 2.7 or Schedule 2.11(a).
(b) Except as set forth in Schedule 2.11(b), to the
knowledge of Seller, all lessors of any machinery, equipment or
other tangible personal property leased to Seller and that relate
solely to the Aluminum Business have performed and satisfied
their respective duties and obligations under such leases, and
Seller has no claims, actions or causes of action against any
such lessor for failure to perform and satisfy its duties and
obligations thereunder.
(c) Schedule 2.11(c) identifies by description or
inventory number all material items of personal property,
equipment and other tangible personal property which, to the
knowledge of Seller, are loaned, bailed or otherwise furnished to
Seller by or on behalf of any Person that (i) solely relate to
the Aluminum Business, (ii) are or were used by Seller solely in
the conduct of the Aluminum Business, and (iii) are or should be
in the possession of Seller (collectively, the "Customer
Furnished Items"). Schedule 2.11(c) identifies each Assigned
Contract pursuant to which each such Customer Furnished Item is
furnished. Seller has complied in all material respects with all
of its obligations relating to the Customer Furnished Items, and,
upon the return thereof to the customer who provided such
Customer Furnished Item in the condition thereof on the date
thereof, Seller would have no material liability with respect
thereto.
(d) No representation or warranty, express or implied, is
made regarding the physical condition or quality of any of the
tangible personal property constituting a part of the Transferred
Assets except as set forth in this Paragraph 2.11 and Paragraphs
2.8 and 2.9. EXCEPT as set forth in Paragraphs 2.11(a), 2.8 and
2.9, SELLER MAKES NO WARRANTY OF MERCHANTABILITY, or quality or
physical condition as to any such tangible personal property or
any item thereof, or as to the workmanship thereof of the absence
of any defects therein. Except as otherwise set forth in this
Paragraph 2.11 or in Paragraph 2.8, it is understood that all
machinery, equipment and vehicles are being conveyed on an "AS IS
- - WHERE IS" basis as to their physical condition in their present
physical location on the Closing Date. In no event shall Seller
11
or Shareholder be liable to Purchaser or Parent for exemplary or
punitive damages in connection with any breach of this Paragraph
2.11, and, Purchaser and Parent hereby expressly waive any and
all right to assert any claim for exemplary or punitive damages
in connection with any claim for breach of the representations
and warranties made in Paragraph 2.11.
2.12 Real Property. Except for Seller's Alexander City
manufacturing facility (a portion of which will be leased to
Purchaser pursuant to the lease and shared services agreement
referred to herein), there are no other real property or
interests in real property (including without limitation leases,
easements, rights of way, licenses, usufructs and other non-fee
simple interests in real property) that are necessary for the
conduct of the Aluminum Business or the operation of the
Transferred Assets as the same are presently conducted and
operated by Seller.
2.13 Authority to Conduct Business and Intellectual Property
Rights. Seller has the means, rights, capabilities and
information required to manufacture, process, sell, offer for
sale and use the items and perform the services as presently
being manufactured, processed, offered for sale, sold, used or
performed by Seller in the Aluminum Business, including without
limitation, the means, rights, capabilities and information
required to manufacture, process, offer for sale, sell and use
all such items and perform all such services without incurring
any liability for license fees or royalties or any claims of
infringement of patents, trade secrets, copyrights, trademark,
service marks or other proprietary rights. Except as disclosed
in Schedule 2.13, Seller owns all rights to the Lost Foam
Technology as it has been used by Seller, and the Lost Foam
Technology as so used and as being sold to Purchaser is not
subject to or in violation of the rights or interests of any
third party. Except as set forth in Schedule 2.13 and to the
knowledge of Seller, there are no rights of third parties with
respect to any patent, patent application, invention, process,
know-how, copyright, copyright application, trademark, service
mark, trade secrets, trade name or device relating to the
operations or prospects of the Aluminum Business.
2.14 Customers and Suppliers. Insofar as relates to the
Aluminum Business, and to the knowledge of Seller, Seller has
substantially complied with the terms and conditions of all
customer purchase orders, all goods delivered pursuant to a
customer purchase order have been delivered in a timely manner,
and all goods delivered pursuant to a customer purchase order
have met all customer specifications and conform with all
applicable express and implied warranties. Except as set forth on
Schedule 2.14, no Aluminum Business customer has made any advance
payment to or for the benefit of Seller with respect to any order
placed by such customer with Seller.
2.15 Taxes. Except as disclosed in Schedule 2.15, all taxes
(including without limitation, all income, property, sales, use,
customs, franchise, value added, ad valorem, withholding,
employees' income withholding, and social security and medicare
taxes, and all other taxes imposed on Seller or its income,
properties, sales, franchises, wages and other payments,
operations or Plans or trusts), and all deposits in connection
therewith required by applicable Law imposed by any Government,
and all interest and penalties thereon and additions thereto (all
of the foregoing being hereafter collectively referred to as
12
"Taxes"), which are due and payable by Seller for all periods
through the date hereof have been paid in full, and adequate
reserves for all other Taxes, whether or not due and payable, and
whether or not disputed, have been set up on the books of account
of Seller. From and after the date of this Agreement, Seller and
Shareholder will timely and accurately file all returns and
reports with respect to Taxes, and will timely pay all Taxes
imposed on Seller or Shareholder which directly or indirectly
affect Purchaser's operation of the Aluminum Business or the
Transferred Assets after the Closing Date, or which might create
a Lien on the Transferred Assets, or which could materially and
adversely affect Purchaser's ability to carry on the Aluminum
Business after the Closing Date. There is not now any pending
audit of Seller or any of its shareholders, nor is there any
proposed assessment against Seller or Shareholder for additional
Taxes of any kind. Seller has timely and accurately filed all
federal, state, local and foreign tax returns and reports
(including without limitation, returns for estimated tax), and
all returns and reports of all other Governments having
jurisdiction, with respect to all Taxes, all such returns and
reports show the correct and proper amount due, and all Taxes
shown on such returns or reports and all assessments received by
Seller have been paid to the extent that such Taxes, or any
estimates thereon, have become due. The federal income tax
returns of Seller have been examined by the Internal Revenue
Service through the date set forth in Schedule 2.15, and, except
as set forth therein, all deficiencies proposed and indicated as
a result of the examination of such tax returns have been paid
and settled. Schedule 2.15 sets forth any position taken by
Seller on its federal income tax returns for unexamined years
which is substantially at variance with the published position of
the Internal Revenue Service. For each of its taxable years
beginning on or after January 1, 1987, Seller and its
shareholders have properly elected that Seller be treated as an
"S corporation" for federal and state income tax purposes within
the meaning of the Internal Revenue Code; and Seller and its
shareholders have taken no action nor are they aware of any
action by a third party that would result in the revocation or
termination of the's election.
2.16 Employment and Labor Matters. Seller is not a party to
any collective bargaining agreement or agreement of any kind with
any union or labor organization, and no union or other collective
bargaining unit has been certified or recognized by Seller as
representing any employee, nor, to the knowledge of Seller, is a
union or other collective bargaining unit seeking recognition for
such purpose. There are no controversies pending, or to the
knowledge of Seller threatened, between Seller and any labor
union or collective bargaining unit seeking to represent any of
its employees. Except as disclosed in Schedule 2.16, there has
been no attempt by any union or other labor organization to
organize any of Seller's employees at any time in the past five
years. During the past three years to the knowledge of Seller,
Seller has complied in all material respects with all applicable
Laws relating to wages, hours, health and safety, payment of
social security, medicare, withholding and other taxes,
maintenance of worker's compensation insurance, labor and
employment relations, and employment discrimination, including
without limitation, the Americans with Disabilities Act. Except
as set forth on Schedule 2.16, to the knowledge of Seller,
Seller's operations do not involve any risk unusual to the type
of business conducted by Seller or in Seller's industry to the
health or safety of its employees (including, without limitation,
any risk associated with hazardous airborne contaminants or
hazardous chemicals or waste materials) and, except as disclosed
in Schedule 2.16, no Aluminum Business employee of Seller has
suffered any adverse health consequence or significant personal
13
injury as a result of his or her working conditions or employment
by Seller within the past three years.
2.17 Environmental Matters. (a) Except as set forth on
Schedule 2.17(a), Seller has all permits, licenses, approvals and
operating authorizations, including without limitation, permits
for air emissions, water discharges, and the storage, treatment
and disposal of hazardous waste, that are required pursuant to
all Environmental Laws for (i) the conduct of its businesses,
assets and properties as they are now being conducted, and (ii)
the ownership of its properties and assets. Seller shall use its
reasonable best efforts to convey and arrange, and to transfer to
Purchaser by appropriate instruments all of its transferable
rights, options and privileges existing under any permit,
license, approval or operating authorization, including but not
limited to air emission permits, water discharge permits, and
solid and hazardous waste treatment, storage and disposal permits
reasonably required to operate the Aluminum Business after the
Closing Date. Schedule 2.17(a) contains a true, correct and
complete list of all permits, licenses, approvals and operating
authorizations obtained by or transferred to Seller pursuant to
all Environmental Laws with respect to the Aluminum Business or
the Transferred Assets, and true, correct and complete copies of
such permits, licenses, approvals and operating authorizations
have been delivered to Purchaser. Except as set forth on
Schedule 2.17(a), Seller is in material compliance with all such
permits, licenses, approvals, or operating authorizations and all
are in full force and effect.
(b) Except as set forth on Schedule 2.17(b), Seller has
conducted and is presently conducting the Aluminum Business in
material compliance with all applicable Environmental Laws, and
there are no existing Environmental Laws with a future compliance
date that will require material operational changes or capital
expenditures at the facilities owned or operated by or on behalf
of Seller. Except as set forth on Schedule 2.17(b), no Hazardous
Materials have been stored, treated, disposed of, discharged,
released, deposited or are present in, on or under the real
property on which the Aluminum Business is operated. Except as
set forth on Schedule 2.17(b), no Solid Waste has been stored,
treated, disposed of, discharged, released, deposited or are
present in, on or under the real property on which the Aluminum
Business is conducted in compliance with applicable Law. Seller
has no knowledge of any claims or assertions that Seller or any
of its predecessors in interest arranged for the disposal of
Hazardous Materials at any facility not currently owned or
operated by Seller, except as set forth in Schedule 2.17(b). In
addition, except as set forth on Schedule 2.17(b) and to the
knowledge of Seller neither Seller nor any of its predecessors in
interest have generated, used, stored, treated, disposed of,
discharged, released, or deposited any Hazardous Materials at any
facility not currently owned or operated by Seller. To the
knowledge of Seller, neither Seller nor any of its predecessors
in interest have damaged any natural resources by the release of
any Hazardous Material into the environment. There are no
pending, or to the knowledge of Seller threatened, Actions or any
outstanding Orders against or involving Seller relating to
Hazardous Materials, any Environmental Law, or permits, licenses,
approvals or operating authorizations under any Environmental
Law. All Actions and Orders against or involving Seller which
occurred during Seller's ownership or operation of the real
property upon which the Aluminum Business is operated, relating
to any Environmental Law, are described in Schedule 2.17(b).
Seller has not disposed of, or arranged for the disposal of, any
14
materials from its facilities at any sites listed by the United
States Environmental Protection Agency on the published proposed
or final National Priorities List developed pursuant to 42 U.S.C.
Section 9605(8)(B) of the Comprehensive Environmental Response,
Compensation and Liability Act. Additionally, except as
specified in Schedule 2.17(b), Seller has no knowledge of any
disposal sites utilized by Seller that are presently under
investigation by any Government.
2.18 No Defaults. All of the Assigned Contracts and all
other contracts, agreements, documents, instruments, plans,
leases, policies and licenses which comprise a part of the
Transferred Assets are valid, binding and enforceable in
accordance with their terms and are in full force and effect; to
the knowledge of Seller, there are no existing material defaults
by Seller thereunder; and to the knowledge of Seller, no default
has occurred (whether with or without notice, lapse of time or
the happening or occurrence of any event) which would constitute
an event of default thereunder.
2.19 Absence of Changes. Except as expressly provided for in
this Agreement or as may be set forth in Schedule 2.19, since the
Reference Date, there has been no change, damage, destruction, or
loss in the business, assets, liabilities, results of operations,
financial condition or prospects of the Aluminum Business or in
its relationships with suppliers, customers, employees, lessors
or others, other than changes in the ordinary course of business,
none of which have been or will be, in the aggregate, materially
adverse to the Transferred Assets or the Aluminum Business.
2.20 Solvency. Following the Closing Date and after giving
effect to the transactions contemplated by and provided for in
this Agreement, (i) the then present saleable value of Seller's
assets will exceed its stated liabilities, including, without
limitation, identified contingent liabilities, and (ii) Seller
will be able to pay its stated liabilities, including, without
limitation, identified contingent liabilities, as they mature
during the normal course of business.
2.21 Securities Laws Matters. (a) Seller is familiar with
Section 4(2) of the Securities Act and SEC Rule 144. The Shares
that are being acquired by Seller hereunder are being and will be
acquired for itself and not for other Persons, and the Shares are
not being, and will not be, acquired with a view to the
distribution thereof, except to the extent permitted by the
Securities Act and the Blue Sky Laws.
(b) Seller understands that the Shares have not been
registered under the Securities Act or any Blue Sky Laws and,
therefore, cannot be resold or otherwise transferred unless such
Shares are registered under the Securities Act and the Blue Sky
Laws or unless an exemption from registration is available.
Seller further understands that it must bear the economic risk of
the Shares for an indefinite time. Seller has such knowledge and
experience in financial and business matters that Seller is
capable of evaluating the merits and risks of acquiring the
Shares.
(c) The certificates representing the Shares (and any
certificates issued as replacements therefor) will bear a
restrictive legend in substantially the form set forth below and
an appropriate stop transfer order will be placed against the
15
transfer of the share certificates with the transfer agent of the
Parent Stock, such legend to be in addition to any other legends
which may be required from time to time to be placed upon the
certificates representing the Shares.
"The securities represented by this certificate have been
issued to the registered holder as a result of a
transaction to which the exemption provided by Section 4(2)
under the Securities Act of 1933, as amended (the "1933
Act"), applied. The securities represented by this
certificate have not been issued to such holder pursuant to
an effective registration under the 1933 Act and may not be
sold, transferred or assigned, and the issuer is not
required to give effect to any attempted sale, transfer or
assignment, except (i) pursuant to a current or then
effective registration statement under the 1933 Act or
applicable state securities or "blue sky" laws; (ii) in a
transaction permitted by Rule 144 under the 1933 Act and as
to which the issuer has received satisfactory evidence of
compliance with the provisions of Rule 144 and applicable
state securities and "blue sky" laws; or (iii) upon receipt
of a legal opinion acceptable to the issuer to the effect
that the transaction does not require registration under
the 1933 Act or any state securities or "blue sky laws", or
other evidence satisfactory to the issuer, that such
registration is not required."
(d) Seller also understands that (A) as of the date
hereof, an exemption for any public sale of the Shares under SEC
Rule 144 will not be available for at least two years from the
date the Shares are fully paid for (which will be the Closing
Date); (B) thereafter limited amounts of the Shares can be sold
publicly in unsolicited brokers transactions under SEC Rule 144
if all the conditions of SEC Rule 144 are satisfied and if SEC
Rule 144 is then applicable; (C) SEC Rule 144 is available only
if all its conditions are satisfied and, in particular, if Parent
is making current public disclosures about itself and there is a
trading market for the Shares; and (D) if SEC Rule 144 is not
available, then any public sales of the said shares cannot be
made unless they are registered under the Securities Act or in
compliance with Regulation A issued by the SEC pursuant to the
Securities Act or some other exemption to the registration
requirements of the Securities Act.
(e) Seller has access to, and has reviewed and
understood, all material information, including financial
statements, concerning Parent which it deems necessary or
advisable in order to (i) evaluate the risks and merits of
entering into this Agreement and consummating the transactions
provided for in and contemplated by this Agreement and (ii) to
evaluate the risks and merits of acquiring the Shares. Seller
has such knowledge and experience in financial and business
matters that Seller is capable of evaluating the merits and risks
of acquiring the Shares.
16
2.22 Full Disclosure. No representation, warranty, covenant,
agreement or indemnity of Seller contained in this Agreement or
in any other document, instrument, agreement, paper or other
written statement or certificate delivered by Seller pursuant to
this Agreement, or in connection with the transactions contem-
plated herein, contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not
misleading. The information contained in any of the Schedules to
this Agreement shall be deemed to be part of and qualify only
those representations and warranties contained in Article 2
specifically referenced in such Schedules.
2A. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SHAREHOLDER
To induce Purchaser and Parent to enter into this Agreement
and to induce Purchaser to purchase the Transferred Assets,
Shareholder represents and warrants to, and covenants and agrees
with, Purchaser and Parent as follows:
2A.1 Authority. (a) This Agreement has been duly and
validly executed and delivered by Shareholder. Shareholder has
the full right, power and capacity to execute and deliver and to
perform and comply with this Agreement and each other agreement,
document and instrument contemplated hereby, in each case in
accordance with their respective terms. This Agreement
constitutes the valid and legally binding obligation of
Shareholder, enforceable against Shareholder in accordance with
its terms.
(b) Neither the execution and delivery of this Agreement
by Shareholder nor the consummation of the transactions
contemplated herein by Shareholder will result in a violation or
breach of, or constitute a default under (a) any material term or
provision of any indenture, note, mortgage, bond, security
agreement, loan agreement, guaranty, pledge, or other agreement,
instrument or document, (c) any material Law, or (d) any other
material commitment or restriction, to which Shareholder is a
party or by which Shareholder is subject or bound; nor will such
actions result in (i) the acceleration or creation of any
material obligation of Shareholder, or (ii) the forfeiture of any
right or privilege of Shareholder which may materially affect
Shareholder's ability to perform under this Agreement. There are
no unsatisfied judgments against Shareholder.
2A.2 Ownership of Shares; Subsidiaries. Those persons listed
in Schedule 2.2 are the record and beneficial owners of all of
the issued and outstanding capital stock of Seller. Seller does
not have any ownership interest, direct or indirect, and has no
commitment to purchase or otherwise acquire any ownership
interest, direct or indirect, in any other Person.
2A.3 Full Disclosure. No representation, warranty, covenant,
agreement or indemnity of Shareholder contained in this Agreement
or in any other document, instrument, agreement, paper or other
written statement or certificate delivered by Shareholder
pursuant to this Agreement, or in connection with the
17
transactions contemplated herein, contains or will contain any
untrue statement of a material fact or omits or will omit to
state a material fact necessary to make the statements contained
herein or therein not misleading.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER AND PARENT
As an inducement to Seller and Shareholder to enter into this
Agreement and as an inducement to Seller to sell the Transferred
Assets to Purchaser, Purchaser and Parent hereby represent,
warrant and covenant as follows:
3.1 Organization. Parent is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Georgia, and Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Alabama. Each of Parent and Purchaser is qualified to do
business and is in good standing in each jurisdiction where the
character of its property owned or leased or the nature of its
activities makes such qualification necessary, except where the
failure to be so qualified and in good standing would not have a
material adverse effect on the business or financial condition of
Purchaser or Parent.
3.2 Authorization; No Inconsistent Agreements. Each of
Purchaser and Parent has full corporate power and authority to
make, execute and perform this Agreement and the transactions
contemplated hereby. This Agreement and all transactions
required hereunder to be performed by Purchaser and Parent have
been duly and validly authorized and approved by all necessary
corporate action on the part of Purchaser and Parent. This
Agreement has been duly and validly executed and delivered on
behalf of Purchaser and Parent by their respective duly
authorized officers, and this Agreement once so approved shall
constitute the valid and legally binding obligation of Purchaser
and Parent enforceable in accordance with its terms. Neither the
execution and delivery of this Agreement by Purchaser and Parent
nor the consummation by Purchaser and Parent of the transactions
nor compliance by Purchaser and Parent with any of the provisions
hereof will (i) conflict with or result in any breach of the
Articles of Incorporation or Bylaws of Purchaser or Parent, as
appropriate (true and correct copies of which have been provided
to Seller and Shareholder), (ii) result in a violation or breach
of, or constitute (with our without due notice or lapse of time
or both) a default under any material note, bond, mortgage,
indenture, lease, license, contract, agreement or other
instrument or obligation to which Purchaser or Parent is a party
or by which they or any of their respective properties or assets
may be bound, or (iii) violate any Order or Law applicable to
Purchaser or Parent or any of the properties or assets of
Purchaser or Parent.
3.3 Capitalization. Parent's authorized capital stock
consists of (i) 50,000,000 shares of common stock, par value
$0.10 per share (the "Parent Stock"), of which 24,738,374 shares
of the Parent Stock were issued and outstanding as of November
10, 1995, and (ii) 5,000,000 shares of preferred stock, par value
18
$1.00 per share, none of which were issued and outstanding as of
November 10, 1995. All of such issued and outstanding shares of
the Parent Stock have been duly and validly authorized and are
validly issued, fully paid and non-assessable. There are no
preemptive rights to the issuance of the Shares. As of November
10, 1995, there were no outstanding (a) securities of Parent
convertible into or exchangeable for shares of capital stock or
other voting securities of Parent, (b) options or other rights to
acquire shares of capital stock or other voting securities of
Parent from Parent, (c) no other obligation of Parent to issue
any capital stock, voting securities or other ownership interest
in Parent, and (d) obligations of Parent to repurchase, redeem or
otherwise acquire any of its outstanding securities, other than
as disclosed in the SEC Reports and Parent's Articles of
Incorporation (a true, correct and complete copy of which has
been provided to Seller).
3.4 SEC Filings. Parent has heretofore made available to
Seller the following reports, documents and other materials
(collectively, the "SEC Reports"):
(i) its Annual Report on Form 10-K for its fiscal year
ended December 31, 1994;
(ii) its Proxy Statement for its annual meeting of
shareholders held on April 27, 1995, filed pursuant to Section
14 of the Exchange Act;
(iii) its Annual Reports on Form 10-K for its fiscal
years ended December 31, 1993 and December 31, 1992;
(iv) its Quarterly Reports on Form 10-Q for the fiscal
quarters ended April 2, 1995, July 2, 1995 and October 1,
1995;
(v) all Forms 8-K and Registration Statements filed by
Parent on or after January 1, 1995.
As of their respective dates, the SEC Reports did not contain
any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading. All financial statements
included in the SEC Reports have been prepared in accordance with
GAAP applied on a consistent basis (except as disclosed therein
and except for customary year-end adjustments in the case of the
interim statements) and present fairly the consolidated financial
position and the consolidated statements of operations, cash
flows, and changes in shareholders equity (owners deficit) of
Parent and its consolidated subsidiaries as of the date and for
the periods indicated. Parent has filed all reports and other
documents required by Law with the SEC and the Internal Revenue
Service. All of the reports filed by Parent with the SEC, as of
their respective dates, complied in all material respects with
the requirements of the Laws pursuant to which they were filed.
Except as set forth on Schedule 3.4, since November 10, 1995,
there has been no material adverse change in the information set
forth in Parent's Form 10-Q filed in respect of the fiscal
quarter ended October 1, 1995.
19
3.5 Full Disclosure. No representation, warranty or covenant
of Purchaser or Parent contained in this Agreement, or in any
other written statement or certificate (including without
limitation the SEC Reports, which speak only as of their
respective dates) delivered by Purchaser or Parent pursuant to
this Agreement or in connection with the transactions
contemplated herein, contains or will contain any untrue
statement of a material fact or omits or will omit to state a
material fact necessary to make the statements contained herein
or therein not misleading.
4. ADDITIONAL AGREEMENTS
4.1 Access and Inspection. No investigation made heretofore
or hereafter by or on behalf of any party shall limit or affect
in any way the representations, warranties, covenants, agreements
and indemnities of the other parties hereunder, each of which
shall survive any such investigation. Seller shall, and
Shareholder shall cause Seller to make available to Purchaser,
Parent and their respective Representatives all of Seller s
financial records to the extent necessary to allow Parent to
comply with any requirements of the Exchange Act, and copies to
be taken therefrom.
4.2 Expenses. All expenses incurred by Purchaser and Parent
in connection with the authorization, preparation, execution and
performance of this Agreement and the transactions contemplated
hereby, including without limitation, all fees and expenses of
their Representatives, shall be paid by Purchaser and Parent, as
appropriate. All expenses incurred by any or all of Seller and
its shareholders in connection with the authorization,
preparation, execution and performance of this Agreement and the
transactions contemplated hereby, including without limitation,
all fees and expenses of their respective Representatives, shall
be paid by Seller and/or its shareholders.
4.3 Brokers. Seller and Shareholder, jointly and severally,
hereby represents and warrants to Purchaser and Parent that no
broker or finder has acted on behalf of Seller or any of its
shareholders in connection with this Agreement or the
transactions contemplated herein, and each of them agrees,
jointly and severally, to indemnify Purchaser, Parent and their
Affiliates from and against any and all claims or demands for
commissions or other compensation by any broker, finder or
similar agent claiming to have been employed by or on behalf of
such party. Purchaser and Parent, jointly and severally,
represent and warrant to Seller and Shareholder that no broker or
finder other than Abramson & Associates has acted on their behalf
in connection with this Agreement or the transactions
contemplated herein and agree to indemnify Seller and its
shareholders and hold them harmless from and against any and all
claims or demands for commissions or other compensation by
Abramson & Associates or any other broker, finder or similar
agent claiming to have been employed by or on behalf of Purchaser
or Parent. The fees and expenses of Abramson & Associates shall
be paid by Purchaser.
20
4.4 Publicity. Except as may be required by applicable Law,
all press releases and other public announcements respecting the
subject matter hereof shall be made only with the mutual
agreement of Purchaser and Agent.
4.5 Satisfaction of Certain Encumbrances. On the Closing
Date, and as part of the Closing, Seller and Shareholder shall
cause to be released and satisfied of record all Liens on the
Transferred Assets. At the Closing, Seller and Shareholder shall
provide evidence satisfactory to Purchaser of the release and
satisfaction of all such Liens.
4.6 Employees. The employment of all Aluminum Business
employees of Seller shall terminate immediately prior to the
Closing Date. Purchaser shall have no obligation to offer to
employ or to employ any such employees. Notwithstanding anything
else in this Agreement to the contrary, (a) neither Purchaser nor
Parent shall have any responsibility or liability for any
severance obligations to Seller's Aluminum Business employees
resulting from or arising out of the transactions contemplated by
this Agreement, and (b) nothing in this Paragraph 4.6 creates or
is intended to create any rights of any kind or nature in any
third parties, including, without limitation, any rights or
remedies in favor of any of Seller's employees to be employed
after the Closing Date, or respecting the terms of employment,
for any specified period of time. Seller and Shareholder shall
use their respective reasonable efforts to encourage any former
employee of Seller's Aluminum Business to whom Purchaser has
extended an employment offer to accept any such offered
employment, provided that Seller and Shareholder shall be so
obligated only if Purchaser's offer of employment is for cash
wages greater than or equal to the cash wages of such employee as
of the Closing Date and the employee benefits offered are
comparable to those for which such employee is eligible as of the
Closing Date.
21
4.7 Confidentiality of Lost Foam Technology. From and after
the Closing Date, Seller and Shareholder, jointly and severally,
covenant and agree that each of them shall hold and treat the
Lost Foam Technology in confidence, and will not, without the
prior written consent of Parent, use or disclose or give to any
Person any of the Lost Foam Technology (the "Confidential
Information"); provided, however, that any action taken by Seller
or Shareholder that complies with the provisions of Paragraph 3
of that certain License Agreement, of even date herewith, between
Purchaser and Seller (the "License Agreement"), shall not
constitute a violation of this Paragraph 4.7. Seller and
Shareholder agree that the Confidential Information does not
include information which (a) is or becomes generally available
to the public other than as a result of a disclosure by Seller or
Shareholder, (b) has been disclosed by Seller or its
representatives to the parties to the technology transfer
contracts listed on Exhibit A to the License Agreement in strict
accordance with the terms thereof, including, without limitation,
the representatives of such parties, or (c) Seller or Shareholder
is required by applicable law or regulation or by legal process
to disclose. Notwithstanding anything in the foregoing to the
contrary, in the event that Seller or Shareholder becomes legally
compelled to disclose any such Confidential Information, Seller
and Shareholder will provide Company with prompt notice so that
Purchaser may seek a protective order or other appropriate remedy
and/or waive compliance with the provisions of this Agreement.
In the event that such protective order or other remedy is not
obtained, or that Purchaser expressly in writing waives
compliance with the provisions of this Agreement, Seller and
Shareholder will furnish only that portion of the Confidential
Information which Seller and Shareholder are is advised by
opinion of legal counsel is legally required and Seller and
Shareholder will exercise their respective reasonable best
efforts to obtain reliable assurance that confidential treatment
will be afforded the disclosed portion(s) of the Confidential
Information.
4.8 Reimbursement of Certain Expenses. On the Closing Date,
Purchaser shall reimburse Seller in cash for: (i) Seller s
actual cost of the Essex Equipment; and (ii) all reasonable,
direct costs (as evidenced by appropriate receipts, invoices and
the like) actually incurred by Seller in the removal of the Essex
Equipment from Windsor, Ontario, Canada and its transport to, and
reinstallation at, Seller's manufacturing facility in Alexander
City; provided, that such direct costs shall not include any
liability for damages that Seller may cause or incur in the
removal, transport and reinstallation of the Essex Equipment
(which damages shall include without limitation any physical
damage to the Essex Equipment itself). For purposes of this
Agreement, "Essex Equipment" shall mean the equipment described
on Schedule 4.8.
4.9 Removal of Transferred Assets. Within ninety (90) days
of the Closing Date, Purchaser shall at its expense disassemble
and remove, or have disassembled and removed, the tangible
personal property comprising a portion of the Transferred Assets
from Seller's Alexander City manufacturing plant building in
which they are now located (the "Vacate Covenant"). Seller shall
at all times allow Purchaser and its Representatives access to
the manufacturing facility and ingress and egress upon and over
the real property upon which the manufacturing facility is
situated for purposes of such disassembly and removal. In the
event Purchaser breaches or otherwise fails to comply with the
Vacate Covenant, other than as a result or hindrance or delay
caused by an act of God or any action of Seller, (a) none of
Seller, BRI and Shareholder shall have any liability or
22
obligation to Parent or Purchaser for the breach of any
representation or warranty of Seller set forth in this Agreement
regarding environmental matters, including without limitation,
each representation or warranty set forth in Paragraph 2.17
hereof (an "Environmental Warranty"), except for matters known to
Seller or Shareholder but not disclosed to Purchaser or Parent,
and (b) each Environmental Warranty shall automatically and
without further action or notice whatsoever be deemed to be
amended and restated, as of the date hereof, to include the
following qualification: "to the knowledge of Seller."
5. INDEMNITIES
5.1 Indemnification of Purchaser and Parent by Seller and
BRI. In accordance with and subject to the provisions of this
Article 5, Seller and BRI (collectively, "Purchaser Indemnitors")
shall, jointly and severally, indemnify and hold harmless
Purchaser, Parent and their Affiliates, and their respective
officers, directors, agents and employees (collectively,
"Purchaser Indemnitees"), from and against and in respect of any
and all loss, damage, liability, cost and expense, including
reasonable attorneys' fees and amounts paid in settlement
pursuant to Paragraph 5.5(b) (collectively, the "Purchaser
Indemnified Losses"), suffered or incurred by any one or more of
the Purchaser Indemnitees by reason of, or arising out of:
(a) any misrepresentation, breach of warranty or breach
or nonfulfillment of any agreement of Seller contained in this
Agreement, or in any certificate, schedule, document, agreement
or instrument delivered to Purchaser or Parent by or on behalf of
Seller pursuant to the provisions of this Agreement;
(b) all obligations and liabilities of Seller other than
the Assumed Liabilities, whether direct or indirect, fixed or
contingent, known or unknown, including, without limitation, all
obligations and liabilities resulting from or arising out of any
default, performance or non-performance by Seller prior to the
Closing under or with respect to any Assigned Contract; and
(c) any claims, liabilities, obligations, damages, costs
and expenses, known or unknown, fixed or contingent, claimed or
demanded by third parties against Purchaser Indemnitees
(including claims relating to environmental response under 42
U.S.C. 9601 et seq. or any other Law) arising out of or resulting
from Seller's operation of its businesses (including without
limitation Seller's Business) or the Transferred Assets prior to
the Closing, including without limitation, any liability or
obligation described in Paragraph 5.1(b), but excluding the
Assumed Liabilities.
5.2 Indemnification of Purchaser and Parent by Shareholder.
In accordance with and subject to the provisions of this Article
5, Shareholder shall indemnify and hold harmless Purchaser
Indemnitees from and against and in respect of any and all
Purchaser Indemnified Losses suffered or incurred by any one or
more of the Purchaser Indemnitees by reason of, or arising out
of:
23
(a) any misrepresentation, breach of warranty or breach
or nonfulfillment of any agreement of Shareholder contained in
this Agreement, or in any certificate, schedule, document,
agreement or instrument delivered to Purchaser or Parent by or on
behalf of Shareholder pursuant to the provisions of this
Agreement; and
(b) any and all Purchaser Indemnified Losses for which
(i) a Purchaser Indemnitee has admitted in writing that it is
liable and which the Purchaser Indemnitees have failed to satisfy
within fifteen days of such written admission, (ii) a settlement
has been reached among the Purchaser Indemnitees and a Purchaser
Indemnitor and any amounts required to be paid pursuant to such
settlement have not been satisfied by the Purchaser Indemnitors
within fifteen days of any required payment date, or (iii) any
arbitration award has been rendered in accordance with this
Agreement stating that a Purchaser Indemnitor is liable for all
or any portion of the Purchaser Indemnified Losses and the
Purchaser Indemnitors shall have failed to satisfy such
arbitration award within fifteen days of the date of its
issuance, and then only to the extent that the Purchaser
Indemnitors have not satisfied such Purchaser Indemnified Losses.
5.3 Indemnification of Seller and Shareholder. In accordance
with and subject to the provisions of this Article 5, Purchaser
and Parent (collectively, "Seller Indemnitors") shall, jointly
and severally, indemnify and hold harmless Seller, Shareholder
and their Affiliates, and their respective officers, directors,
agents and employees (collectively, "Seller Indemnitees"), from
and against and in respect of any and all loss, damage,
liability, cost and expense, including reasonable attorneys' fees
and amounts paid in settlement pursuant to Paragraph 5.5(b)
(collectively, the "Seller Indemnified Losses"), suffered or
incurred by any one or more of the Seller Indemnities by reason
of, or arising out of:
(a) any misrepresentation, breach of warranty or breach
or nonfulfillment of any agreement of Parent or Purchaser
contained in this Agreement, or in any certificate, schedule,
document, agreement or instrument delivered to Seller or
Shareholder by or on behalf of Parent or Purchaser pursuant to
the provisions of the Agreement;
(b) the failure of Purchaser to pay, perform and
discharge any of the Assumed Liabilities in accordance with their
terms, provided that neither Purchaser nor Parent shall have any
liability hereunder if they are in good faith contesting any such
Assumed Liability;
(c) any claims, liabilities, obligations, damages, costs
and expenses, known or unknown, fixed or contingent, claimed or
demanded by third parties against Seller Indemnitees (including
claims relating to environmental response under 42 U.S.C. 9601 et
seq. or any other Law) arising out of or resulting from
Purchaser's operation of the Aluminum Business or the Transferred
Assets from and after the Closing; and
(d) the ownership or operation of the Transferred Assets
or the conduct of the Aluminum Business after the Closing Date.
24
5.4 Payment. Seller and BRI shall, subject to the provisions
of Paragraph 5.5 and the arbitration provisions of Paragraph 8.5,
reimburse Purchaser Indemnitees, within 10 days of written demand
on Agent, for any Purchaser Indemnified Loss. Parent and
Purchaser shall, subject to the provisions of Paragraph 5.5,
reimburse Seller Indemnitees, within 10 days of written demand on
Purchaser, for any Seller Indemnified Loss.
5.5 Defense of Claims. (a) If any Action by a third party
arises after the Closing Date for which any party hereto may be
liable under the terms of this Agreement, then the party entitled
to indemnification shall notify the indemnifying party within a
reasonable time after such claim or action arises and is known to
the indemnified party, and shall give the indemnifying party a
reasonable opportunity:
(i) to conduct any proceedings or negotiations in
connection therewith and necessary or appropriate to defend
the indemnified party;
(ii) to take all other required steps or proceedings to
settle or defend any such Action; and
(iii) to employ counsel to contest any such Action in
the name of the indemnified party or otherwise.
The expenses of all proceedings, contests or lawsuits with
respect to such Actions shall be borne by the indemnifying party.
If the indemnifying parties wish to assume the defense of such
Action, then the indemnifying party shall give written notice to
the indemnified parties within 30 days after notice from the
indemnified parties of such Action (unless the Action reasonably
requires a response in less than 30 days after the notice is
given, in which event they shall notify the indemnified parties
as soon as possible but in no event less than 10 days prior to
the required response date), and the indemnifying party shall
thereafter assume the defense of any such Action through counsel
reasonably satisfactory to the indemnified parties; provided,
that the indemnified parties may participate in such defense at
their own expense. The defense and settlement of the Action
shall be controlled by the indemnifying party, it being
understood and agreed that the indemnifying party shall use its
best efforts to avoid taking any action that would significantly
prejudice or harm any of the indemnified parties or any of their
businesses, assets or properties.
(b) If the indemnifying parties do not assume the defense
of, or if after so assuming the indemnifying parties fail to
defend, any such Action, then the indemnified parties may defend
against such Action in such manner as they may deem appropriate
(provided that the indemnifying parties may participate in such
defense at their own expense) and the indemnified parties may
settle such Action on such terms as they may deem appropriate,
and the indemnifying parties shall promptly reimburse the
indemnified parties for the amount of all expenses, legal and
otherwise, reasonably and necessarily incurred by the indemnified
parties in connection with the defense against and settlement of
such Action. If no settlement of such Action is made, the
indemnifying parties shall satisfy any judgment rendered with
respect to such Action, before the indemnified parties are
25
required to do so, and pay all expenses, legal or otherwise,
reasonably and necessarily incurred by the indemnified parties in
the defense of such Action.
(c) If a judgment is rendered against any of the
indemnified parties in any Action covered by the indemnification
hereunder, or any Lien in respect of such judgment attaches to
any of the assets of any of the indemnified parties, the
indemnifying parties shall immediately upon such entry or
attachment pay such judgment in full or discharge such Lien
unless, at the expense and direction of the indemnifying parties,
an appeal is taken under which the execution of the judgment or
satisfaction of the Lien is stayed. If and when a final judgment
is rendered in any such Action, the indemnifying parties shall
forthwith pay such judgment or discharge such Lien before any of
the indemnified parties is compelled to do so.
5.6 Threshold and Limit of Liability. (a) Notwithstanding
anything in this Agreement to the contrary, the liability of the
Purchaser Indemnitors and Shareholder under this Article 5 shall
be subject to the limitations set forth in this Paragraph 5.6(a):
(i) with respect to all Purchaser Indemnified Losses
(except for (x) Purchaser Indemnified Losses relating to
Balance Sheet Liabilities and (y) matters actually known by
Purchaser Indemnitors or Shareholder but not disclosed, for
which the liability of the Purchaser Indemnitors and
Shareholder shall not be subject to the $75,000 floor
described below), neither the Purchaser Indemnitors nor
Shareholder shall have any liability to any Purchaser
Indemnitee until the aggregate amount of Purchaser Indemnified
Losses under and pursuant to (A) this Agreement, (B) that
certain Agreement for Purchase and Sale of Certain Assets of
Robinson Foundry, Inc., of even date herewith, among BRI,
Seller, Shareholder, Purchaser and Parent (the "BRI
Agreement") (except with respect to "balance sheet
liabilities" under the BRI Agreement which are likewise not
subject to the $75,000 floor described therein), and (C) that
certain Disa Agreement, of even date herewith between Seller
and Purchaser (the "Disa Agreement") (collectively, the
"Losses") exceeds $75,000, and then only to the extent that
such Losses exceed $75,000; and
(ii) the Purchaser Indemnitors and Shareholder shall
not have any liability with respect to Losses under this
Article 5, the correlative provisions of the BRI Agreement,
and the indemnification provisions of the Disa Agreement in
the aggregate, in excess of the sum of $4,450,000.
(b) Notwithstanding anything in this Agreement to the
contrary, no Seller Indemnitor shall have any liability under
this Article 5 until such time as the aggregate amount of Seller
Indemnified Losses (other than for unpaid Assumed Liabilities
hereunder and other than for unpaid "Assumed Liabilities" under
the BRI Agreement, none of which are subject to the $75,000 floor
described below) under and pursuant to (A) this Agreement, (B)
the BRI Agreement, and (C) the Disa Agreement exceed $75,000, and
then only to the extent that the Seller Indemnified Losses exceed
26
$75,000. Further, the Seller Indemnitors shall not have any
liability with respect to Seller Indemnified Losses under (A)
this Agreement, (B) the BRI Agreement, and (C) the Disa
Agreement, in the aggregate, in excess of $4,450,000.
5.7 Indemnification Procedures. Should a claim for
Purchaser Indemnified Losses arise, the Purchaser Indemnitees
shall give written notice thereof to each of Seller, BRI and
Shareholder, and the Purchaser Indemnitees agree that they shall
first request indemnification under this Article 5 from the
Purchaser Indemnitors. The Purchaser Indemnitees shall not seek
to recover any Purchaser Indemnified Losses from Shareholder
unless and until (i) a Purchaser Indemnitor admits in writing
that it is liable for any such Purchaser Indemnified Losses and
the Purchaser Indemnitors fail to satisfy same within fifteen
days thereof, (ii) a settlement has been reached among the
Purchaser Indemnitees and a Purchaser Indemnitor and any amounts
required to be paid pursuant to such settlement have not been
satisfied by the Purchaser Indemnitors within fifteen days of any
required payment date, or (iii) any arbitration award rendered in
accordance with this Agreement shall have been rendered stating
that a Purchaser Indemnitor is liable for all or any portion of
the Purchaser Indemnified Losses and the Purchaser Indemnitors
shall have failed to satisfy such arbitration award within
fifteen days of the date of its issuance, and then only to the
extent that the Purchaser Indemnitors shall not have satisfied
such Purchaser Indemnified Losses. The Purchaser Indemnitees
shall not have any obligation to first request indemnification
from the Purchaser Indemnitors in the event that they are
liquidated, dissolved or merged out of existence. Shareholder
agrees that any notice, demand or request for indemnification
timely served upon or delivered to a Purchaser Indemnitor shall
for all purposes constitute a timely notice, demand or request
for indemnification to Shareholder, and Shareholder acknowledges
and agrees that any written admission of liability by a Purchaser
Indemnitor, any settlement of a claim for indemnification with a
Purchaser Indemnitor, or any arbitration award rendered holding a
Purchaser Indemnitor liable for all or any part of the Purchaser
Indemnified Losses shall be final and binding upon Shareholder
and that Shareholder shall not be entitled, in any Forum or in
any manner, to challenge the validity or finality of any such
written admission or arbitration award. Notwithstanding the
temporal limits set forth in Article 6, the period of time in
which any Purchaser Indemnitee shall have to pursue Shareholder
shall be extended by a period of time equal to the period of time
between (i) the date the related claim for indemnification was
made, and (ii) the date fifteen days after the date (x) upon
which Seller admitted in writing its liability therefor, (y)
after any payment is required to be made pursuant to the
settlement of a claim for indemnification, or (z) upon which any
arbitration award is rendered by the arbitrators with respect to
all or any portion of the related claim for indemnification.
5.8 Contractual Right of Offset. Shareholder acknowledges
and agrees that any Purchaser Indemnitee shall have the right to
offset against, or request that either or both of Purchaser and
Parent offset against, the last payment due and payable on
January 2, 1998 under and pursuant to that certain Management
Agreement (the "Management Agreement"), of even date herewith,
among Purchaser, Parent and Shareholder, the amount of any
Purchaser Indemnified Losses or other amounts due as a result of
Shareholder's indemnification obligations set forth in Paragraph
5.2(a), in an amount up to the $500,000 amount of such payments,
27
for which an indemnification claim is made by a Purchaser
Indemnitee on or before the sixth month anniversary after the
Closing Date and which has not otherwise been fully satisfied (a
"Six Month Unsatisfied Claim"). If the January 2, 1998 payment
shall become due while any Six Month Unsatisfied Claim is
unresolved and/or still subject to a pending litigation or
arbitration proceeding, Purchaser's obligation to make the
January 2, 1998 payment with respect to any amount in dispute
shall be suspended (without constituting a default under or
breach of this Agreement or the Management Agreement).
Shareholder acknowledges and agrees that he shall not be entitled
to object, and shall not object, to the validity or finality of
any Purchaser Indemnified Loss for which offset is sought or
taken hereunder or under the Management Agreement if the Six
Month Unsatisfied Claim for any such Purchaser Indemnified Loss
(i) has not theretofor been disputed by any Purchaser Indemnitor,
(ii) any Purchaser Indemnitor has admitted in writing its
liability therefor, (iii) has been settled in writing with any
Purchaser Indemnitor, or (iv) has been finally determined by
arbitration as evidenced by an arbitration award. If any such
Purchaser Indemnified Loss is unpaid and offset is sought
pursuant to the terms hereof, the amount of any such Purchaser
Indemnified Loss shall bear interest at the rate of 8.75 percent
annually, computed, (i) in the case of a third party claim from
the date that a Purchaser Indemnitee pays or otherwise satisfies
the Purchaser Indemnified Loss or (ii) in the case of other than
a third party claim, from the date that Purchaser Indemnitee
accrues the Purchaser Indemnified Loss on its books of account,
in each case until the amount thereof shall have been satisfied
in full, whether by offset or otherwise.
6. SURVIVAL OF REPRESENTATIONS AND OTHER PROVISIONS
6.1 Survival. The representations and warranties of the
parties contained in this Agreement or in any writing delivered
pursuant to the provisions of this Agreement shall survive any
investigation heretofore or hereafter made by any party or its
Representatives and the consummation of the transactions
contemplated herein and shall continue in full force and effect
for the periods specified below (the "Survival Period");
(i) representations and warranties relating to the
reporting, payment or liability for Taxes and the
representations and warranties relating to or affecting the
title of or to the Transferred Assets, and the related
indemnification obligation, shall survive the closing of the
transactions under this Agreement and the Closing Date
indefinitely;
(ii) all other representations and warranties
hereunder, and the related indemnification obligations shall
be of no further force and effect after the expiration of four
years from and after the Closing Date; and
(iii) except as otherwise provided, all other
covenants and agreements of the parties contained in this
Agreement or in any document, instrument, agreement or other
paper delivered pursuant hereto or in connection herewith
shall survive indefinitely.
28
Anything to the contrary notwithstanding, the Survival Period
shall be extended automatically to include any time period
necessary to resolve, and collect upon, a claim for
indemnification which was made before expiration of the Survival
Period but not resolved prior to its expiration; and provided,
further, that any such extension shall apply only as to claims
asserted and not so resolved within the Survival Period.
Liability for any such item shall continue until such claim shall
have been finally settled, decided or adjudicated.
7. POWER-OF-ATTORNEY
7.1 Appointment of Agent. Seller, BRI and Shareholder, and
each of them, hereby irrevocably constitute and appoint Joseph H.
Robinson, Jr. ("Agent") as their agent and attorney-in-fact to
modify, amend or otherwise change this Agreement or any of its
terms or provisions (including modifications, amendments or
changes subsequent to Closing), to take all actions and to
execute all documents necessary or desirable to consummate the
transactions contemplated by this Agreement, and to take all
actions and to execute all documents which may be necessary or
desirable in connection therewith, to give and receive consents
and all notices hereunder, to negotiate and settle claims for
indemnification under Article 5 hereof, and to perform any other
act arising under or pertaining to this Agreement and the
transactions contemplated hereby. Seller, BRI and Shareholder,
and each of them, agree that service of process upon Agent in any
action or proceeding arising under or pertaining to this
Agreement shall be deemed to be valid service of process upon
Seller, BRI and Shareholder, and each of them, as appropriate,
and any claim by Purchaser, Parent or any Purchaser Indemnitee
against Seller, BRI and Shareholder, or any of them, in respect
to this Agreement may be asserted against, and settled with,
Agent. Agent shall be deemed to have accepted the appointment
herein upon Agent's execution of this Agreement.
7.2 Liability of Agent. Nothing contained herein shall be
deemed to make Agent personally liable (in its capacity as Agent
only, which shall in no way limit or impair Shareholder s
liability hereunder) to Purchaser, Parent, Seller, BRI and
Shareholder, or any of them, solely because of service in Agent's
capacity as agent and attorney-in-fact. In performing any of
Agent's duties hereunder, Agent shall not incur any liability to
Purchaser, Parent, Seller, BRI and Shareholder, or any of them,
for losses, damages, liabilities or expenses, except for his own
willful default (except to the extent that Agent is otherwise
liable for the same as Shareholder).
7.3 Irrevocable; Binding on Successors, Etc.. It is
expressly understood and agreed that this power of attorney and
the agency created hereby is coupled with an interest of the
respective parties hereto and shall be binding and enforceable on
and against the respective heirs, personal representatives,
successors and assigns of Seller, BRI and Shareholder, and each
of them, and this power of attorney shall not be revoked or
terminated by the death, disability, bankruptcy or incompetency
of Seller, BRI and Shareholder, or any of them, but shall
continue to be binding and enforceable by Agent, Purchaser,
Parent and their respective successors and on and against the
heirs, personal representatives, successors and assigns of
Seller, BRI and Shareholder, and any of them, in the manner
provided herein.
29
8. MISCELLANEOUS
8.1 Notices. (a) All notices, demands or other
communications required or permitted to be given or made
hereunder shall be in writing and (i) delivered personally, or
(ii) sent by pre-paid, first class, certified or registered mail,
return receipt requested, or (iii) by priority overnight national
express courier service, or (iv) by facsimile transmission
(followed by a hardcopy by U.S. mail or priority overnight
delivery as aforesaid), to the intended recipient thereof at its
address or facsimile number set out below. Any such notice,
demand or communication shall be deemed to have been duly given
(i) immediately if delivered personally, (ii) three Business Days
after mailing, (iii) the Business Day after delivery to a
national express courier service, or (iv) if given by confirmed
facsimile, immediately if received by recipient during its normal
business hours on a Business Day or, if not, at the beginning of
recipient's business on the next Business Day. In proving same
it shall be sufficient to show that the envelope containing the
same was duly addressed, stamped and posted (or that the envelope
was delivered to the national express courier service), or that
receipt of a facsimile was confirmed by the recipient. The
addresses and facsimile numbers of the parties for purposes of
this Agreement are:
(i) If to Purchaser Intermet Corporation
or Parent: 5445 Corporate Drive
Suite 200
Troy, Michigan 48098
Facsimile No.: (810) 952-1512
Attn: John Doddridge, Chairman & CEO
With a copy to: Kilpatrick & Cody
Suite 2800
1100 Peachtree Street
Atlanta, Georgia 30309-4530
Facsimile No.: (404) 815-6555
Attn: Rupert M. Barkoff, Esq.
(i) If to Seller, BRI or
Shareholder: Robinson Foundry, Inc.
Robinson Road
P.O. Box 1235 (Mail Only)
Alexander City, Alabama 35010
Facsimile No.: (205) 329-0503
Attn: President
30
With a copy to: Burr & Forman
3100 SouthTrust Tower
420 North 20th Street
Birmingham, Alabama 35203
Facsimile No: (205) 458-5100
Attn: Samuel W. Oliver, Jr., Esq.
David D. Dowd, III, Esq.
(b) Any party may change the address or facsimile number
to which notices, demands or other communications to such parties
shall be given or made by giving notice thereof to the other
parties hereto in the manner provided herein.
8.2 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an
original, and all of which shall constitute one and the same
instrument.
8.3 Entire Agreement. This Agreement supersedes all prior
discussions and agreements between the parties with respect to
the subject matter hereof, and this Agreement contains the sole
and entire agreement among the parties with respect to the
matters covered hereby. This Agreement shall not be altered or
amended except by an instrument in writing signed by or on behalf
of the party entitled to the benefit of the provision against
whom enforcement is sought.
8.4 Governing Law. The validity and effect of this Agreement
shall be governed by and construed and enforced in accordance
with the laws of the State of Alabama, without regard to
conflicts of laws principles.
8.5 Dispute Resolution. (a) Any controversy, claim or
dispute arising out of or in any way relating to this Agreement
or its breach or the transactions contemplated hereby including
without limitation any claim that this Agreement or any of its
parts is invalid, illegal or otherwise voidable or void, shall be
submitted to arbitration before and, unless otherwise provided
herein, in accordance with the Commercial Arbitration Rules of
the American Arbitration Association (the "AAA").
Notwithstanding any provision of this Agreement relating to which
state laws govern this Agreement, all issues relating to
arbitrability or the enforcement of the agreement to arbitrate
contained herein shall be governed by the Federal Arbitration Act
(9 U.S.C. Section 1 et seq.) and the federal common law of
arbitration.
(b) Judgment upon an arbitration award may be entered in
any court having competent jurisdiction and shall be final,
binding and non-appealable. The parties hereby waive to the
fullest extent permitted by Law any right to or claim for any
punitive or exemplary damages against the other and agree that in
the event of a dispute between them, each shall be limited to the
recovery of only the actual damages sustained.
31
(c) The arbitration provisions of this Paragraph 8.5 are
self-executing and shall remain in full force and effect after
the expiration or termination of this Agreement. If either party
fails to appear at any properly noticed arbitration proceeding,
an award may be entered against such party by default or
otherwise, notwithstanding such failure to appear. Unless
otherwise agreed to in writing by the parties, such proceeding
shall take place in Atlanta, Georgia. With respect to any
dispute involving $100,000 or more, arbitration proceedings shall
be conducted before three (3) neutral arbitrators. With respect
to any dispute involving less than $100,000, arbitration
proceedings shall be conducted by a single arbitrator in
accordance with the Expedited Rules of the AAA.
(d) The obligation herein to arbitrate shall not prevent
any party from seeking temporary restraining orders, preliminary
injunctions or other procedures in a court of competent
jurisdiction to obtain interim relief when deemed necessary by
such court to preserve the status quo or prevent irreparable
injury pending resolution by arbitration of the actual dispute.
8.6 Successors and Assigns. No party may assign all or any
part of its rights, duties or obligations under or pursuant to
this Agreement. Except as otherwise provided, this Agreement
shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, executors, legal
representatives, successors and permitted assigns.
8.7 Partial Invalidity and Severability. All rights and
restrictions contained herein may be exercised and shall be
applicable and binding only to the extent that they do not
violate any applicable Laws and are intended to be limited to the
extent necessary to render this Agreement legal, valid and
enforceable. If any term of this Agreement, or part thereof, not
essential to the commercial purpose of this Agreement shall be
held to be illegal, invalid or unenforceable by a court of
competent jurisdiction, it is the intention of the parties that
the remaining terms hereof, or part thereof, shall constitute
their agreement with respect to the subject matter hereof and all
such remaining terms, or parts thereof, shall remain in full
force and effect. To the extent legally permissible, any
illegal, invalid or unenforceable provision of this Agreement
shall be replaced by a valid provision which will implement the
commercial purpose of the illegal, invalid or unenforceable
provision.
8.8 Waiver. Any term or condition of this Agreement may be
waived at any time by the party which is entitled to the benefit
thereof, but only if such waiver is evidenced by a writing signed
by such party. No failure on the part of any party hereto to
exercise, and no delay in exercising any right, power or remedy
created hereunder, shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power or remedy by
any such party preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. No waiver by
any party hereto of any breach of or default in any term or
condition of this Agreement shall constitute a waiver of or
assent to any succeeding breach of or default in the same or any
other term or condition hereof.
32
8.9 Headings. The headings of particular provisions of this
Agreement are inserted for convenience only and shall not be
construed as a part of this Agreement or serve as a limitation or
expansion on the scope of any term or provision of this
Agreement.
8.10 Number and Gender. Where the context requires, the use
of the singular form herein shall include the plural, the use of
the plural shall include the singular, and the use of any gender
shall include any and all genders.
8.11 Time of Performance. Time is of the essence.
9. CERTAIN DEFINITIONS; INDEX OF DEFINITIONS
9.1 Certain Definitions. For purposes of this Agreement, the
following capitalized terms shall have the meanings specified
with respect thereto below (all terms used in this Agreement
which are not defined in this Article 9 but defined elsewhere in
this Agreement, shall have for purposes of this Agreement the
meanings set forth elsewhere in this Agreement):
"ADA" shall mean the Americans with Disabilities Act of 1990.
"Action" shall mean any action, suit, complaint, claim,
counter-claim, petition, set-off, inquiry, investigation,
administrative proceeding, arbitration, or private dispute
resolution proceeding, whether at law, in equity, by contract or
agreement, or otherwise, and whether conducted by or before any
Government, any Forum, or other Person.
"Affiliate" of any Person shall mean any other Person directly
or indirectly controlling, controlled by, or under direct or
indirect common control with the former Person. A Person shall
be deemed to control another Person if such Person possesses,
directly or indirectly, the power to direct or cause the
direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or
otherwise.
"Balance Sheet Liabilities" shall mean all liabilities that
are required to be reflected in financial statements properly
prepared in accordance with GAAP (excluding contingent
liabilities other than those which meet the standards enunciated
in Statement of Financial Accounting Standards No. 5, "Accounting
For Contingencies").
"Blue Sky Laws" shall mean all state securities and "blue sky"
Laws regulating or governing the offer, offer for sale, issuance,
or sale of securities.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which commercial banks in either Birmingham,
Alabama, or Atlanta, Georgia, are required or authorized to be
closed.
33
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"Environmental Laws" shall mean all federal, state and local
laws, including but not limited to all statutes, ordinances,
rules, regulations, and common law, relating to pollution or
protection of the environment, including laws relating to
emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or
hazardous substances or wastes into the environment (including
without limitation ambient air, surface water, ground water or
land), or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or wastes, and any and all
regulations, codes, plans, orders, decrees, judgments,
injunctions, consent agreements, stipulations, provisions and
conditions of permits, licenses and other operating
authorizations, notices or demand letters issued, entered,
promulgated or approved thereunder.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and all rules and regulations promulgated pursuant
thereto.
"Forum" shall mean any federal, state, local or municipal
court, governmental agency, administrative body or agency,
tribunal, private alternative dispute resolution system, or
arbitration panel.
"GAAP" shall mean generally accepted accounting principles,
consistently applied.
"Government" shall mean any federal, state, local or municipal
government or any department, commission, board, bureau, agency,
instrumentality, unit, or taxing authority thereof.
"Hazardous Material" shall mean any substance, material or
waste designated as hazardous or toxic under any applicable
Environmental Laws including, without limitation, petroleum and
petroleum products, and any substance which is (i) designated as
a "toxic pollutant" pursuant to the Federal Water Pollution
Control Act, as amended, 33 U.S.C. Section 1317; (ii) defined as
a "hazardous substance" pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act, as
amended, 42 U.S.C. Section 9601 et seq.; or (iii) defined as a
"hazardous waste" pursuant to the Federal Resource Conservation
and Recovery Act, as amended, 42 U.S.C. Section 6901 et seq.
"Hereof," "herein," "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and
"article", "paragraph", "Schedule", "Exhibit" and like references
are to this Agreement unless otherwise specified.
"Known," "to the knowledge of," "to the best knowledge of,"
"aware" or words of similar import employed in this Agreement
with reference to (i) Seller, shall be conclusively presumed to
34
mean the actual knowledge of Shareholder, Tom Moore (Executive
Vice President), Dennis Wolny (Vice President of Sales &
Marketing), Jim Koeppen (Vice President of Quality Assurance and
Technical Development), Jerry Carter (Vice President of
Manufacturing), and Larry McGuire (Assistant Secretary), or any
of them, and (ii) Purchaser or Parent, shall be conclusively
presumed to mean the actual knowledge of the Chairman of the
Board and Chief Executive Officer, and Vice President - Finance
of Parent.
"Law" shall mean all federal, state, local or municipal
constitutions, statutes, rules, regulations, ordinances, acts,
codes, legislation, conventions and similar laws and legal
requirements, as in effect from time to time.
"Lien" shall mean any mortgage, pledge, hypothecation,
security interest, encumbrance, lien or charge of any kind, or
any rights of others, however evidenced or created (including any
agreement to give any of the foregoing, any conditional sale or
other title retention agreement, any lease in the nature thereof,
and the filing of or agreement to give any financing statement
under the Uniform Commercial Code of any jurisdiction).
"Lost Foam Technology" shall mean all technology, processes,
know-how, technical information, trade secrets, procedures and
other intellectual property and proprietary information related
to the casting process known variously in Seller's industry as
"expendable pattern casting process," "evaporative pattern
casting," or "lost foam casting."
"Orders" shall mean all applicable orders, writs, judgments,
decrees, rulings and awards of any court, tribunal, agency,
administrative or governmental body.
"Person" shall mean and include an individual, a partnership,
a joint venture, a corporation, a limited liability company, a
trust, an unincorporated association or organization, and a
Government.
"Representative" of a party shall mean such party's directors,
officers, partners, employees, agents, accountants, lenders,
lawyers, investment bankers, and other financial or professional
advisors or consultants.
"SEC" shall mean the Securities and Exchange Commission or any
successor Person(s) having similar responsibilities.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and all rules and regulations promulgated pursuant
thereto.
"Solid Waste" shall have the meaning as defined pursuant to
the Federal Resource Conservation and Recovery Act, as amended,
42 U.S.C. Section 6901 et seq.
35
9.2 Index to Definitions. The definitions for the following
defined terms used in this Agreement can be found as follows:
Defined Term Paragraph or Section
------------ --------------------
AAA 8.5
Agent 7.1
Aluminum Business Recitals
Arbiter 1.3(d)
Assigned Contracts 1.1(d)
Assumed Liabilities 1.5(a)
Audited Financial Statements 2.6
BRI Agreement 5.6(a)(i)
Closing 1.10
Closing Date 1.10
Company Indebtedness 4.5
Confidential Information 4.7
Customer Furnished Items 2.11(c)
Disa Agreement 5.6(a)(i)
Disa Business Recitals
Division Financial Statements 2.6
Environmental Warranty 4.9
Essex Equipment 4.8
Estimated Amount 1.3(b)
Excluded Assets 1.2
Internal Revenue Code 1.9
Inventories 1.1(b)
Inventory Component 1.3(e)
Inventory Quantity Schedule 1.4
Iron Business Recitals
License Agreement 4.7
Losses 5.6(a)(i)
Management Agreement 5.8
Parent Preamble
Parent Stock 3.3
Products Liability Occurrence 2.9
Purchase Price 1.3(a)
Purchaser Preamble
Purchaser Indemnified Losses 5.1
Purchaser Indemnitees 5.1
Purchaser Indemnitors 5.1
SEC Reports 3.4
Seller Preamble
Seller Indemnified Losses 5.3
36
Seller Indemnitees 5.3
Seller Indemnitors 5.3
Shareholder Preamble
Shares 1.11(a)(iii)
Six Month Unsatisfied Claim 5.8
Survival Period 6.1
Taxes 2.15
Transferred Assets 1.1
Unaudited Balance Sheet 2.6
Unaudited Financial Statements 2.6
Vacate Covenant 4.9
37
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
PARENT:
INTERMET CORPORATION
By: /s/ John Doddridge
John Doddridge, Chairman and CEO
PURCHASER:
ALEXANDER CITY CASTING COMPANY, INC.
By: /s/ C. James Peterson
C. James Peterson, President
SELLER:
ROBINSON FOUNDRY, INC.
By: /s/ Joseph H. Robinson, Jr.
Joseph H. Robinson, Jr.
President
BRI:
BODINE-ROBINSON, INC.
By: /s/ Joseph H. Robinson, Jr.
Joseph H. Robinson, Jr.
President
[Signatures Continued on Following Page]
[Signatures Continued from Preceding Page]
SHAREHOLDER:
/s/ Joseph H. Robinson, Jr.
_________________________(SEAL)
JOSEPH H. ROBINSON, JR.
AGENT:
/s/ Joseph H. Robinson, Jr.
_________________________(SEAL)
JOSEPH H. ROBINSON, JR.
For purposes of accepting the
appointment as "Agent" pursuant
to Paragraph 7.1 only