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Exhibit 2.4
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into by and
between AMERICAN GLASSMITH, INC., an Ohio corporation ("Seller"), and AMERICAN
GLASSMITH ACQUISITION CORPORATION, a Delaware corporation ("Buyer") and AMERICAN
ARCHITECTURAL PRODUCTS CORPORATION, a Delaware corporation ("AAPC"; but only as
to the provisions of Section 11.01(a)(v) of this Agreement).
RECITALS
A. Seller is engaged in the manufacture and sale of decorative glass at
its facilities located in Columbus, Ohio (the "Purchased Business").
B. Buyer desires to purchase from Seller, and Seller desires to sell to
Buyer, substantially all of the assets owned by Seller and used in the Purchased
Business.
PROVISIONS
NOW, THEREFORE, in consideration of the above Recitals and the
provisions contained in this Agreement, Seller and Buyer agree as follows:
ARTICLE I
SALE OF ASSETS
SECTION 1.01. SALE OF ASSETS. Pursuant to the provisions set forth in
this Agreement, at the Closing (as defined in Section 3.01 of this Agreement)
Seller shall sell, convey, transfer, assign and deliver to Buyer, and Buyer
shall purchase and acquire from Seller, all of the assets, properties and rights
(other than the Excluded Assets defined below in Section 1.02 of this Agreement)
owned by Seller and used or held for use solely in the operation of the
Purchased Business of every kind, character and description, whether tangible,
intangible, personal or mixed, and wheresoever located, whether carried on the
books of Seller or not carried on the books of Seller, due to expense, full
depreciation or otherwise (the "Purchased Assets") including, but not limited
to:
(a) all rights, title and interests in, to and under the
leased real property (the "Leased Real Property") listed in Schedule
4.05 of the schedules attached to or accompanying this Agreement and
any supplement to this Agreement (the "Disclosure Schedules");
(b) all machinery and equipment, computer hardware, supplies,
spare parts, tools, jigs, patterns, trade fixtures, dies, molds,
vehicles (whether titled or untitled), furniture, designs and drawings
(the "Equipment");
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(c) cash and cash equivalents on hand in banks, certificates
of deposit, commercial paper and securities (except for the lockbox
account of Seller at First Bank, St. Paul, Minnesota, Account No. 170
2254 7660, which is an Excluded Asset);
(d) all accounts and notes receivable (except for Seller's
intercompany accounts with affiliates (the "Intercompany Accounts")
which are an Excluded Asset);
(e) all inventory, raw materials, components, work-in-process,
finished goods, service parts and supplies, packaging materials and
other similar items (whether new or used) (the "Inventory");
(f) all rights, title and interests in, to and under all
leases of tools, furniture, machinery, supplies, vehicles, equipment
and other items of personal property listed in Schedule 4.06 of the
Disclosure Schedules; provided, however, that to the extent the
assignment of any such lease or any claim or right or any benefit
arising under or resulting from such lease(s) shall require the consent
of another party, this Agreement shall not constitute an assignment of
such lease(s) if an attempted assignment would constitute a breach of
such lease(s) and, in lieu of such consent, Seller shall cooperate with
Buyer in any reasonable arrangement designed to provide Buyer the
benefits under, or any claim or right arising under such lease(s) (the
"Third Party Leases");
(g) all rights in, to and under all contracts, agreements,
purchase orders, customer orders and work orders listed in Schedule
4.09 of the Disclosure Schedules; provided, however, that to the extent
the assignment of, or any claim or right or any benefit arising under
or resulting from, any such contract, agreement, purchase order,
customer order or work order shall require the consent or approval of
another party to such contract, agreement, purchase order, customer
order or work order, this Agreement shall not constitute an assignment,
if an attempted assignment would constitute a breach of such contract,
agreement, purchase order, customer order or work order and, in lieu of
such consent, Seller shall cooperate with Buyer in any reasonable
arrangement designed to provide Buyer with the benefits under such
contract, agreement, purchase order, customer order or work order, or
any claim or right arising thereunder;
(h) all prepaid expenses, deposits and other similar items,
other than prepaid expenses, deposits and other similar items relating
to the Excluded Assets (as defined in Section 1.02 of this Agreement);
(i) to the extent legally assignable, all franchises,
licenses, permits, certificates, approvals and other governmental
authorizations necessary to own or lease and operate the Purchased
Assets and to conduct the Purchased Business as it has been conducted
by Seller;
(j) all of Seller's rights, title and interests in the trade
names, trademarks, trademark applications, service marks, service mark
applications, copyrights, copyright
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applications, patents, patent applications, inventions, trade secrets,
know-how, business plans and strategies, proprietary processes and
formulae, data bases, telephone numbers and all other proprietary
technical information, whether patentable or unpatentable, related to
the products, services or operations of the Purchased Business as
presently conducted;
(k) all books and records including, but not limited to,
property records, production records, engineering records,
environmental compliance records, purchase and sales records, credit
data, personnel and payroll records, accounting records, customer
lists, customer records and information, supplier lists, parts lists,
manuals, correspondence, files and any similar items;
(l) except for the computer software system of Seller provided
by J.D. Edwards and referenced as an Excluded Asset, all computer
programs and a copy of the source code and object code of all such
programs, together with all additions, modifications, updates and
enhancements thereto; all design specifications including, but not
limited to, program descriptions, system flow charts, file layouts,
report layouts, screen layouts and all other computer program
documentation, all user's manuals, training manuals, sales literature
and other system and operations documentation relating to such computer
programs;
(m) all rights, claims and choses in action against third
parties including, but not limited to, all rights against suppliers
under warranties covering any of the Inventory or Equipment;
(n) all stationery, forms, labels, shipping materials,
brochures, art work, photographs, advertising materials and any similar
items;
(o) all other tangible and intangible assets of Seller
relating solely to the Purchased Business, whether or not carried at
value or listed on the books and records of Seller, and whether or not
in the possession of Seller or others.
SECTION 1.02. EXCLUDED ASSETS. Seller shall not sell or deliver to
Buyer, and Buyer shall not purchase or acquire, the following assets owned by
Seller (the "Excluded Assets"):
(a) the minute books and stock records of Seller;
(b) Seller's insurance policies;
(c) all claims and rights to deposits and prepaid expenses
relating to any of the other Excluded Assets;
(d) Seller's lockbox account more particularly described in
Section 1.01;
(e) the Intercompany Accounts; and
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(f) the computer software system of Seller provided by J.D.
Edwards.
SECTION 1.03. ASSUMPTION OF OBLIGATIONS OR LIABILITIES. Buyer shall
assume and agree to pay or perform only the obligations and liabilities of
Seller expressly set forth below (the "Assumed Obligations"). Except for the
Assumed Obligations, Buyer shall not assume and shall not be responsible for any
other obligation or liability of Seller, direct or indirect, known or unknown,
choate or inchoate, absolute or contingent (the "Excluded Liabilities"). The
Assumed Obligations are:
(a) the Current Liabilities (as defined below); and
(b) the obligations or liabilities of Seller in, to and under
the leases, contracts, agreements, purchase orders, customer orders and
work orders included in the Purchased Assets pursuant to Section 1.01
of this Agreement.
"Current Liabilities" as used in the Agreement shall mean all current
liabilities of Seller (including, but not necessarily limited to, accrued
expenses and accounts payable) reflected in the Current Year Financial
Statements.
SECTION 1.04. TRANSFER OF TITLE TO THE PURCHASED ASSETS. The sale,
assignment, conveyance, transfer and delivery by Seller of the Purchased Assets
shall be made at the Closing by such bills of sale, assignments, licenses,
endorsements and other appropriate instruments of transfer as shall be necessary
to vest in Buyer, as of the Closing Date, good and marketable title to the
Purchased Assets, free and clear of any liens, charges and encumbrances, except
for the Assumed Obligations.
ARTICLE II
PURCHASE PRICE
SECTION 2.01. THE PURCHASE PRICE. Subject to the adjustment provisions
of Section 2.03 of this Agreement, as consideration for the purchase of the
Purchased Business, Buyer shall pay to Seller an amount equal to the net book
value of the Purchased Assets, adjusted to the Closing Date, plus Three Hundred
Seventy-Five Thousand Dollars ($375,000.00) (the "Cash Purchase Price"), plus
the assumption of the Assumed Obligations (the "Purchase Price"), allocated as
set forth on Schedule 2.01 of the Disclosure Schedules.
SECTION 2.02. PAYMENT OF THE PURCHASE PRICE. The Purchase Price shall
be paid to Seller as follows:
(a) At the Closing, Seller shall deliver to Buyer a closing
statement as of the Closing Date (which shall be attached to this
Agreement as Schedule 2.02(a)) setting forth
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in detail Seller's good faith estimate of the net book value of the
Purchased Assets as of the Closing Date and the Purchase Price based
thereon.
(b) At the Closing, Buyer shall pay to Seller a cash closing
payment (the "Closing Payment") equal to the Cash Purchase Price.
Payment shall be made by wire transfer at the time of Closing on the
Closing Date.
(c) Within ten (10) business days following the determination
of the Final Purchase Price (as defined in Section 2.03(a) below),
Buyer shall pay to Seller, by wire transfer or other method of payment
acceptable to Seller, an amount equal to the excess, if any, of the
Final Purchase Price over the Closing Payment; provided, however, if
the Final Purchase Price is less than the Closing Payment, Seller shall
pay to Buyer, by wire transfer or other method of payment acceptable to
Buyer, within ten (10) business days, the amount by which the Final
Purchase Price is less than the Closing Payment. If Buyer or Seller, as
the case may be, shall fail to pay the amount due and owing in
accordance with this Section 2.02(c), such unpaid amount shall bear
interest at the rate of twelve percent (12%) per annum from the due
date of such payment until paid in full.
SECTION 2.03. CALCULATION OF THE FINAL PURCHASE PRICE.
(a) Within sixty (60) calendar days of the Closing Date,
Seller shall deliver to Buyer a balance sheet of the Purchased Business
as of November 30, 1997 (the "Final Balance Sheet"), prepared in the
same format as the Current Year Financial Statements. Along with the
Final Balance Sheet, Seller shall deliver to Buyer Sellers' calculation
of the final Purchase Price based upon the Final Balance Sheet, setting
forth the amount of the aggregate net book value of the Purchased
Assets as of the Closing Date, based upon the Final Balance Sheet (the
"Final Purchase Price"). For purposes of determining the Final Purchase
Price, the net book value of the Purchased Assets shall be determined
in a manner consistent with past practices of Seller.
(b) Unless Buyer shall deliver to Seller a written statement
of Buyer's objections to the Final Balance Sheet or Seller's
determination of the Final Purchase Price (collectively, the "Closing
Information") within sixty (60) calendar days after receipt by it of
the Closing Information, the Closing Information shall be deemed to be
final and binding for all purposes of this Agreement. If Buyer and
Seller are unable to agree upon the Closing Information, each party
shall, within fifteen (15) calendar days after expiration of the sixty
(60) day period referred to above, submit proposed Closing Information
to Deloitte Touche or such other party as the parties may mutually
select (the "Accounting Arbitrator"), together with any other such
documentation each such party determines to be necessary. The
Accounting Arbitrator shall prepare the Closing Information in
accordance with the provisions of this Agreement (and shall not be
constrained by the Closing Information submitted to it by the parties
hereto, except to the extent that the parties have agreed on a
particular matter) within twenty-five (25) calendar days of the
submission of the above materials to it. Any decision
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rendered by the Accounting Arbitrator pursuant hereto shall be final
and binding between the parties for the purpose of determining the
Closing Information (including the Final Purchase Price). The parties
shall equally split the fees and expenses of the Accounting Arbitrator;
provided, however, in the event a party did not pursue its position in
the disputed matter in good faith, the fees and expenses of the
Accounting Arbitrator may be allocated solely to such party acting in
bad faith, at the sole discretion of the Accounting Arbitrator.
(c) The parties to this Agreement, each at its own expense,
shall cooperate fully in any audit performed by the Accounting
Arbitrator in connection with Buyer's review of the Closing Information
and shall make available to the Accounting Arbitrator all working
papers, data and such other information as may be reasonably necessary
or desirable in connection with such audit.
SECTION 2.04. TAXES. Seller shall pay all income and transfer taxes, if
any, arising out of the sale of the Purchased Business to Buyer, if any.
ARTICLE III
CLOSING
SECTION 3.01. THE CLOSING. Subject to the provisions of Article XI of
this Agreement, the consummation of the transactions contemplated by this
Agreement (the "Closing") shall occur at the offices of American Architectural
Products Corporation, c/o 812 Huron Road, East, No. 880, Cleveland, Ohio, on or
before December 15, 1997, or as otherwise agreed to by Buyer and Seller (the
"Closing Date"). Upon mutual agreement of the parties, the Closing may take
place by facsimile; in which case a facsimile signature shall be deemed an
original of such signature. In the event of a facsimile closing, each party
agrees to execute an original counterpart of each Closing document immediately
following the Closing Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
As a material inducement to Buyer to enter into this Agreement and to
consummate the transactions contemplated by this Agreement, Seller represents
and warrants to Buyer as follows:
SECTION 4.01. ORGANIZATION; POWER. Seller is a corporation duly
organized, validly existing, and in good standing under the laws of Ohio and is
qualified as a foreign corporation and in good standing in every other state
where the failure to so qualify would have a material adverse effect on the
financial condition, business, assets or results of operations of the Purchased
Business taken as a whole (a "Material Adverse Effect"). Seller has all of the
requisite corporate power and authority to own, lease and operate its assets and
to carry on its business as it is now being conducted.
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SECTION 4.02. AUTHORITY, NO VIOLATION, ETC.
(a) This Agreement and the other agreements and documents to be
executed and delivered by Seller pursuant to the provisions of this Agreement
constitute legal, valid and binding obligations of Seller, enforceable against
Seller in accordance with their respective provisions, except as enforceability
may be limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws and equitable principles of general
application affecting the rights of creditors and (ii) general principles of
equity affecting the right to specific enforceability of any of the remedies
contained herein and therein. Except as set forth on Schedule 4.02(a) of the
Disclosure Schedules, the execution and delivery of this Agreement, the
consummation of the transactions contemplated by this Agreement and compliance
by Seller with the provisions of this Agreement will not:
(i) result in a default or give rise to any right of
termination, cancellation or acceleration under any of the provisions
of any note, lien, bond, mortgage, indenture, license, lease, agreement
or other instrument or obligation to which Seller is a party or by
which Seller may be bound, except for such breach or default as to
which valid waivers or consents shall be obtained prior to Closing;
(ii) violate any judgment, order, writ, injunction or decree
of any court, administrative agency or governmental body applicable to
Seller; or
(iii) cause, or give any person grounds to cause (with or
without notice, the passage of time or both), the maturity of any
liability or obligation of Seller to be accelerated or increased.
(b) Except as set forth on Schedule 4.02(b) of the Disclosure
Schedules, the execution and delivery of this Agreement by Seller, the
consummation by Seller of the transactions contemplated by this Agreement and
compliance by Seller with the provisions of this Agreement will not:
(i) conflict with or result in a breach of any provision of
the organizational documents of Seller or result in a default or give
rise to any right of termination, cancellation or acceleration under
any of the provisions of any note, lien, bond, mortgage, indenture,
license, lease, agreement or other instrument or obligation to which
the Seller is a party or by which the Purchased Business, any of its
assets or its business may be bound, except for such conflict, breach
or default as to which valid waivers or consents shall be obtained
prior to Closing;
(ii) violate any judgment, order, writ, injunction or decree
of any court, administrative agency or governmental body applicable to
the Purchased Business or the Purchased Assets; or
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(iii) cause, or give any person grounds to cause (with or
without notice, the passage of time, or both), the maturity of any
liability or obligation of the Purchased Business to be accelerated or
increased.
(c) Except as set forth on Schedule 4.02(c), all filings, consents and
approvals of third parties and governmental authorities required in connection
with the execution and delivery by Seller of this Agreement and the consummation
by Seller of the transactions contemplated by this Agreement (including any
consents required under any contracts, agreements, permits, licenses, leases,
notes or other instruments of Seller in connection with the change of ownership
of the Purchased Business resulting from such transactions) have been obtained.
SECTION 4.03. TAX MATTERS. Since March 25, 1996, Seller has accurately
prepared in good faith and has duly filed with the appropriate Federal, state,
local or foreign governmental agencies all tax returns or reports required to be
filed by Seller as relate to the Purchased Business and the Purchased Assets.
Except as set forth on Schedule 4.03 of the Disclosure Schedules, since March
25, 1996, all taxes due and payable by the Seller with respect to the Purchased
Business and the Purchased Assets to any governmental authority for or with
respect to the periods covered by such returns and reports or with respect to
any period (or portions thereof) ending on or before the Closing Date and all
interest, penalties, assessments and deficiencies connected therewith, have been
paid in full or the Seller has adequately reserved for or made accruals with
respect to all taxes due and payable. Except as set forth on Schedule 4.03,
Seller has not executed or filed with any taxing authority any agreement
extending the period for assessment or collection of any such taxes. Except as
set forth on Schedule 4.03, Seller is not a party to any tax sharing agreement
or to any pending action or proceeding nor is any such action or proceeding
threatened by any governmental authority for the assessment or collection of
taxes and no deficiency notices or reports have been received by Seller with
respect to any of the tax returns of Seller. Except as set forth on Schedule
4.03, since March 25, 1996, Seller has not been subject to any Federal, state,
local or foreign tax dispute or audit.
SECTION 4.04. COMPLIANCE WITH LAWS; NO DEFAULT OR LITIGATION.
(a) Seller is not in default or violation under (i) any
contract, agreement, lease, consent, order or other commitment of the
Purchased Business or (ii) any law, rule, regulation, writ, injunction,
order or decree of any court or any foreign, Federal, state, local or
other governmental department, commission, board, bureau, agency or
instrumentality applicable to the Purchased Business or the Purchased
Assets;
(b) there are no actions, suits, claims, investigations or
legal, arbitration or administrative proceedings in progress, pending
or, to the best knowledge of Seller, threatened against the Seller with
respect to the consummation of the transactions contemplated by this
Agreement; and
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(c) no action, suit, or proceeding has been instituted or, to
the best knowledge of Seller, is threatened to restrain or prohibit or
otherwise challenge the legality or validity of the transactions
contemplated by this Agreement.
SECTION 4.05. LEASED REAL PROPERTY. Schedule 4.05 of the Disclosure
Schedules contains a true and complete list and copies of all leases under which
Seller is a lessee of real property (the "Leased Real Property"). The leases
comprising Schedule 4.05 are in full force and effect and there are no defaults
thereunder on the part of Seller or, to the best knowledge of Seller, any other
party thereto, nor has any event occurred which, with notice or lapse of time or
both, would constitute a default thereunder by Seller.
SECTION 4.06. LEASED PERSONAL PROPERTY. Schedule 4.06 of the Disclosure
Schedules contains a true and complete list and copies of all leases and other
agreements under which the Seller is a lessee (including, but not limited to,
tools, furniture, machinery, vehicles, equipment, or other personal property)
owned by any other person (the "Leased Personal Property"). Except as set forth
on Schedule 4.06, each of the leases listed in Schedule 4.06 are in full force
and effect and there are no defaults thereunder on the part of the Seller or, to
the best knowledge of Seller, any other party thereto, nor has any event
occurred which, with notice or lapse of time or both, would constitute a default
thereunder by the Seller.
SECTION 4.07. FINANCIAL STATEMENTS. Seller has furnished to Buyer true
and complete copies of the following financial statements of Seller
(collectively referred to as the "Financial Statements"), copies of which are
attached as Schedule 4.07 of the Disclosure Schedules:
(a) The unaudited internally prepared balance sheets and
income statements of Seller for the period commencing March 25, 1996
through December 31, 1996 (the "Prior Year Financial Statements"). The
Prior Year Financial Statements have been prepared from the books and
records of Seller on a consistent basis with prior periods and fairly
present the revenues and expenses of Seller for the period then ended
(except for usual, recurring year-end adjustments).
(b) The unaudited internally prepared balance sheet and income
statement of Seller as of October 31, 1997, for the ten (10) month
period ended October 31, 1997 (collectively, the "Current Year
Financial Statements"). Except as set forth on Schedule 4.07, the
Current Year Financial Statements have been prepared from the books and
records of Seller on a consistent basis with prior periods and fairly
present the revenues and expenses of Seller (except for normal,
recurring year-end adjustments) and fairly present the results of
operations of Seller for the periods then ended.
Except as set forth on Schedule 4.07, Seller has no liabilities or
obligations, fixed, contingent, accrued or otherwise which should be but are not
reflected in its October 31, 1997 balance sheet, except for liabilities or
obligations incurred since October 31, 1997, in the ordinary
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and normal course of its business consistent with prior practice and which will
not have a Material Adverse Effect.
SECTION 4.08. INVENTORIES. Except as set forth on Schedule 4.08 of the
Disclosure Schedules or as Seller may have reserved against in the Current Year
Financial Statements, no material portion of the Inventory consists of items
which are not merchantable or which are not suitable and usable for the
production or completion of merchantable products for sale within a reasonable
period of time in the ordinary course of its business as determined in
accordance with GAAP and no material portion of the Inventory consists of any
items which are slow-moving, obsolete or of below-standard quality. The
quantities of all lines of the Inventory are reasonable and appropriate in the
present circumstances of the Purchased Business. The raw materials and component
parts portions of the Inventory are sufficient to satisfy all of the business
needs of the Purchased Business, consistent with the historical sales trends of
the Purchased Business.
SECTION 4.09. MATERIAL CONTRACTS.
(a) Schedule 4.09(a) of the Disclosure Schedules lists and
includes copies (except no copies of purchase orders in an amount less
than Ten Thousand Dollars ($10,000) shall be included) of all
contracts, leases (other than those described in Schedule 4.05 or
Schedule 4.06 of the Disclosure Schedules, which are incorporated by
reference into Schedule 4.09(a)), agreements, commitments, purchase
orders, work orders, customer orders and other arrangements, including
all amendments thereto, to which Seller is a party, except for those
contracts, leases, commitments, purchase orders, work orders and
agreements (i) which were entered into in the ordinary course of
business and (ii) under which the obligations of Seller have been or
shall be fully discharged within ninety (90) days from the date such
obligation was entered into and (iii) which individually involve an
obligation or liability on the part of Seller in any amount less than
Ten Thousand Dollars ($10,000) (the "Material Contracts").
(b) All of the Material Contracts are valid and binding
obligations of Seller and, except as set forth on Schedule 4.02(c), do
not require the consent of any other party thereto to the sale of the
Purchased Business or the Purchased Assets to Buyer hereunder to
continue to be valid and binding, except as enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws and equitable principles of general
application affecting the rights of creditors and (ii) general
principles of equity affecting the right to specific enforceability of
any of the remedies contained therein. Except as set forth in Schedule
4.09(b), (i) none of the payments required to be made by Seller under
any of the Material Contracts has been prepaid more than thirty (30)
days prior to the due date of such payment thereunder and (ii) to the
best knowledge of Seller, there is not any existing default or event
which, with notice or lapse of time or both, would constitute a default
under any of the Material Contracts.
(c) Except as set forth on Schedule 4.09(c), Seller is not a
party to any of the following:
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(i) any indenture, mortgage, note, guaranty, letter
of credit, installment obligation, agreement or other
instrument relating to the borrowing of money or the
guaranteeing of any obligation for the borrowing of money;
(ii) any agreement, contract or other commitment that
would limit the ability of the Purchased Business (or any
manager or officer thereof) to compete in any line of business
or with any person or in any geographic area or otherwise to
conduct the Purchased Business as presently conducted or to
use or disclose any information in the possession of the
Purchased Business;
(iii) any license agreement, including any agreement
with respect to any manufacturing rights granted to or by the
Purchased Business; or
(iv) any joint venture partnership or similar
agreement.
(d) Commencing March 25, 1996, all contracts, leases,
agreements and instruments of Seller have been performed in all
material respects by Seller and the Purchased Business has no material
unfulfilled obligations thereunder.
(e) Commencing March 25, 1996, none of the Material Contracts
which require the production of products or the provision of services
has had or may have associated with it a negative gross or net margin,
as determined in accordance with GAAP.
SECTION 4.10. ACCOUNTS AND NOTES RECEIVABLE. Schedule 4.10 of the
Disclosure Schedules contains a true and complete list of all third party unpaid
accounts and notes receivable of Seller as of October 31, 1997. Except as
otherwise set forth in Schedule 4.10 or as Seller may have reserved against in
the Current Year Financial Statements, all of the accounts and notes receivable
as of the date of this Agreement constitute valid claims which arose in the
ordinary course of the Purchased Business and, except as set forth on Schedule
4.10, there is:
(a) no account or note receivable debtor who has refused or,
to the best knowledge of Seller, threatened to refuse to pay its
obligations for any reason;
(b) no account or note receivable debtor who is, to the best
knowledge of Seller, insolvent, unable to pay its debts as they become
due, or in bankruptcy; and
(c) no account or note receivable pledged to any third party.
SECTION 4.11. CERTAIN TRANSACTIONS; ADVERSE CHANGE. Except as set forth
on Schedule 4.11 of the Disclosure Schedules, since October 31, 1997, the
Purchased Business has been operated in the ordinary course and has not:
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(a) sold or in any way transferred or otherwise disposed of
any of its assets or property, except for sales of inventory in the
ordinary course of its business or the disposition of other assets or
property in the ordinary course of business, consistent with past
practice;
(b) incurred any obligation or liability, absolute, accrued,
contingent or otherwise, whether due or to become due, except
liabilities and obligations incurred in the ordinary course of its
business which will not have a Material Adverse Effect;
(c) suffered any casualty, damage, destruction, loss or any
material interruption in use of any material assets or property
(whether or not covered by insurance) on account of fire, flood, riot,
strike or other hazard or Act of God;
(d) entered into any material agreement or made any material
commitment;
(e) received any notice of termination of any Material
Contract, lease or other agreement;
(f) made or suffered any change in its financial condition,
its assets or any aspect of the business having a Material Adverse
Effect;
(g) waived any right or canceled or compromised any debt or
claim, other than in the ordinary course of the business;
(h) made (or committed to make) capital expenditures in an
amount which exceeds $10,000 in the aggregate;
(i) had any actual or overtly threatened employee strikes,
work stoppages, slow-downs, lock-outs or had any material change in its
relationship with any of its employees, salesmen, distributors, sales
representatives or independent contractors or any other person working
on behalf of the Purchased Business;
(j) made any change in the rate of compensation, commission,
benefits, bonus or other remuneration payable or paid or agreed to pay
any bonus, extra compensation, pension, severance, vacation or other
benefit to any shareholder, director, officer, employee, salesman or
distributor of the Purchased Business, other than regularly scheduled
increases, bonuses or benefits about which Buyer has received prior
written notice;
(k) declared or paid any dividend or made any distribution or
other payment to Seller; or
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(l) without limitation by the enumeration of any of the
foregoing, except for the execution of this Agreement, entered into any
transaction other than in the ordinary course of its business.
SECTION 4.12. CUSTOMERS AND SUPPLIERS. Except as set forth on Schedule
4.12 of the Disclosure Schedules, Seller has no knowledge of any intention of or
indication by a "Significant Customer" (as defined below) or a "Significant
Supplier" (as defined below) to terminate its business relationship with the
Purchased Business or to limit or alter its business relationship with the
Purchased Business in any material respect. As used in this Agreement, (a)
"Significant Customer" means any of the twenty (20) largest customers, by sales
revenue, of the Purchased Business during the twelve (12) month period ending
September 30, 1997, and (b) "Significant Supplier" means any of the fifteen (15)
largest suppliers, by dollar volume, of the Purchased Business during the twelve
month period ending September 30, 1997. Schedule 4.12 of the Disclosure
Schedules contains a true and correct list of all of the Significant Customers
and Significant Suppliers of the Purchased Business as of September 30, 1997.
SECTION 4.13. WARRANTIES. Except as set forth on Schedule 4.13 of the
Disclosure Schedules, Seller has made no oral or written warranties with respect
to the quality or absence of defects of its products or services which are
currently in force. Except as set forth on Schedule 4.13, there are no claims
pending or, to the best of Seller's knowledge, anticipated or threatened against
the Purchased Business with respect to the quality or absence of defects in such
products or services.
SECTION 4.14. LICENSES AND PERMITS.
(a) Seller possesses all franchises, licenses, permits,
certificates, approvals and other authorizations necessary to own or
lease and operate its assets and to conduct the business presently
conducted by the Purchased Business (the "Permits"). Schedule 4.14 of
the Disclosure Schedules contains a true and complete list and copies
of each of the Permits.
(b) Seller has fulfilled and performed its obligations under
each of the Permits in all material respects, and no event has occurred
which constitutes or, after notice or lapse of time or both, would
constitute a breach or default under any of the Permits or would permit
revocation or termination of any of the Permits.
(c) Except as set forth on Schedule 4.02(c), no consent is
required from the issuer of any Permit for such Permit to continue in
full force and effect following the transfer of the Purchased Business
and the Purchased Assets to Buyer.
SECTION 4.15. PROPRIETARY INFORMATION. Seller owns or possesses the
right to use the trade names, trademarks, trademark applications, copyrights,
copyright applications, patents, patent applications, inventions, trade secrets,
proprietary processes and formulae and all other proprietary technical
information, whether patentable or unpatentable, directly or indirectly related
to its products, services or operations or necessary to conduct the Purchased
Business as presently
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conducted (collectively, the "Intellectual Property"). Schedule 4.15 of the
Disclosure Schedules contains a true and complete list and copies of each of the
patents, copyrights, trademarks, tradenames and service marks registrations and
any and all pending applications therefor, owned or licensed by the Seller
(along with a designation as to whether owned or licensed).
Seller has no knowledge of any claim and has no reason to believe that
any third party asserts ownership rights in any of the Intellectual Property of
Seller. Seller has no knowledge of any claim nor has any reason to believe that
use of any of the Intellectual Property by the Purchased Business infringes upon
any right of any third party. Seller has no knowledge nor has any reason to
believe that any third party is infringing upon any of the rights of the
Purchased Business in any of the Intellectual Property.
SECTION 4.16. TITLE TO THE ASSETS OF THE PURCHASED BUSINESS;
COMPLETENESS AND CONDITION OF ASSETS. Except (i) as may be specifically
disclosed in the Current Year Financial Statements, (ii) for any lien for
current taxes not yet delinquent or which are being contested in good faith by
appropriate proceedings and have been adequately reserved for in the Current
Year Financial Statements, (iii) for pledges to secure deposits of states,
municipalities or fiduciary customers undertaken in the ordinary course of the
Purchased Business and (iv) as set forth on Schedule 4.16 of the Disclosure
Schedules, Seller owns the Purchased Assets free and clear of all mortgages,
liens, pledges, charges, security interests, encumbrances, easements,
encroachments, rights of third parties or other interests of any kind or
character (collectively, the "Claims"). Except as disclosed on Schedule 4.16,
the Purchased Assets include all of the assets and properties which are
necessary to conduct the Purchased Business as presently conducted and to
perform, in all material respects, all of the contracts, leases, agreements,
commitments, purchase orders, work orders, customer orders and other
arrangements of the Purchased Business. All of the Equipment regularly used in
the Purchased Business is in good operating condition, ordinary wear and tear
excepted.
SECTION 4.17. ENVIRONMENTAL MATTERS. Schedule 4.17 of the Disclosure
Schedules contains (a) a description of (i) all licenses, permits and compliance
schedules and, to the best of Seller's knowledge, all regulatory plans which
relate to the Purchased Business, together with the durations and renewal dates
thereof, and (ii) all litigation, investigations, inquiries and other
proceedings, rulings, orders or citations pending involving the Purchased
Business of which Seller has received notice or, to the best of Seller's
knowledge, threatened by government officials with respect to the Purchased
Business, as the result of any actual or alleged failure of the Purchased
Business to comply with any requirement of any Environmental Laws (as
hereinafter defined) and (b) a complete list of all solid waste dumps and
hazardous waste disposal, treatment and storage facilities which are presently
or, to the best of Seller's knowledge, were used by the Purchased Business at
any time since March 25, 1996 for disposal of hazardous waste as that term is
defined in RCRA (as hereinafter defined).
Except as disclosed on Schedule 4.17:
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(A) Seller has received all material permits and
approvals, kept all material records and made all material
filings required by applicable Federal, state or local laws
with respect to emissions into the environment (including
solids, liquids, and gases) and the proper disposal of such
materials (including solid waste materials);
(B) Seller is not the subject of any Federal, state
or local investigation evaluating whether any Remedial Action
(as hereinafter defined) is needed to respond to a Release (as
hereinafter defined) of any Contaminant (as hereinafter
defined) into the environment;
(C) since March 25, 1996, Seller has not filed, nor
has Seller been required to file, any notice under Federal,
state or local laws indicating past or present treatment,
storage or disposal of a hazardous waste as defined under 40
C.F.R., Parts 260-270, or any state equivalent or reporting a
spill or Release of a Contaminant at, on, under or about any
property leased or used by the Purchased Business;
(D) except for discharges in accordance with
applicable Environmental Laws, since March 25, 1996, Seller
has not disposed of any hazardous waste or substance by
placing it in or on the ground or waters of any property now
or previously owned, leased or used by the Purchased Business;
(E) no underground storage tanks or surface
impoundments are located at, on or under any property now
owned or leased by Seller; and
(F) no lien in favor of any governmental authority
for (1) any liability under any Environmental Laws or (2) to
the best of Seller's knowledge, damages arising from or costs
incurred by such governmental authority in response to a
Release of a Contaminant into the environment has been filed
or attached to the property leased by the Seller.
For purposes of this Agreement:
(a) "Contaminant" means those substances which are regulated
by or form the basis of liability under any Environmental Laws
including, but not limited to, asbestos and polychlorinated biphenyls
("PCBs");
(b) "Environmental Laws" means all applicable Federal, state
and local laws, regulations or ordinances or amendments to such
regulations or ordinances relative to air quality, water quality, solid
waste management, hazardous or toxic substances or the protection of
health or the environment including, but not limited to, the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended (42 U.S.C.
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16
Section 9601, et seq.), the Hazardous Material Transportation Act (49
U.S.C. Section 1801, et seq.), the Federal Water Pollution Control Act
(33 U.S.C. Section 1251, et seq.), the Resource Conservation and
Recovery Act of 1976, as amended (42 U.S.C. Section 6901, et seq.)
("RCRA"), the Clean Air Act, as amended (42 U.S.C. Section 7401, et
seq.), the Toxic Substances Control Act, as amended (15 U.S.C. Section
2601, et seq.), the Federal Insecticide, Fungicide and Rodenticide Act,
as amended (7 U.S.C. Section 136, et seq.), the Clean Water Act of
1977, as amended (33 U.S.C. Section 1251, et seq.), and the National
Environmental Policy Act of 1969, as amended (42 U.S.C. Section 4321,
et seq.) and any analogous state or local statutes and the regulations
promulgated pursuant thereto;
(c) "Release" means any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching
or migration into the environment, including the movement of any
Contaminant or other substance through or in the air, soil, surface
water, groundwater or property or as defined in any Environmental Laws;
and
(d) "Remedial Action" means any action required under any
Environmental Laws to (i) clean up, remove, treat or in any other way
address any Contaminant or other substance in the environment, (ii)
prevent the Release or threat of Release or minimize the further
Release of any Contaminant or other substance so it does not migrate or
endanger or threaten to endanger public health or welfare or the
environment or (iii) perform preremedial studies and investigations and
post-remedial monitoring and care.
SECTION 4.18. EMPLOYEE BENEFIT PLANS.
(a) Schedule 4.18(a) of the Disclosure Schedules contains a
true and complete list and copies of each contract, agreement, plan or
arrangement which is an "employee benefit plan," as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), currently maintained by or on behalf of Seller covering the
employees of the Purchased Business or to which Seller is currently
obligated to contribute (collectively, the "Employee Benefit Plans").
Except as disclosed on Schedule 4.18(a), with respect to each Employee
Benefit Plan:
(i) as to each such Employee Benefit Plan which is a
"pension plan" (within the meaning of ERISA Section 3(2), but
not including a "multi-employer plan" within the meaning of
Section 3(37) of ERISA) (a "Pension Plan"), the Pension Plan
is qualified under Section 401(a) of the Internal Revenue Code
(the "Code"), to the extent it is intended to be so qualified
and complies in all respects with ERISA;
(ii) a determination letter has been received from
the Internal Revenue Service (or an application for such
determination letter is currently pending) with respect to the
tax qualified status of each Pension Plan and Seller has
satisfied all conditions to which each such determination
letter is subject;
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(iii) no Pension Plan has an "accumulated funding
deficiency," whether or not waived, as defined in Section
302(a)(2) of ERISA;
(iv) no "reportable event" within the meaning of
Section 4043(b) of ERISA has occurred with respect to any
Pension Plan;
(v) no notice of intent to terminate any Pension Plan
that is subject to Subtitle B of Title IV of ERISA has been
provided to participants or filed with the Pension Benefit
Guaranty Corporation ("PBGC") under Section 4041 of ERISA, nor
has the PBGC instituted any proceeding under Section 4042 of
ERISA to terminate any Pension Plan, nor has there been, since
January 1, 1976, any termination or partial termination of any
such Pension Plan within the meaning of Section 411(d)(3) of
the Code;
(vi) there has been no non-exempt "prohibited
transaction" within the meaning of Section 4975 of the Code or
Section 406 of ERISA with respect to any such Employee Benefit
Plan; and
(vii) all disclosures and filings respecting each
such plan required under ERISA or the Code has been timely
provided and each Employee Benefit Plan has been administered
in all respects in accordance with its governing documents and
is in compliance with all applicable laws including,
specifically, the Retirement Equity Act of 1984 and the
Consolidated Omnibus Budget Reconciliation Act of 1985.
(b) Except as disclosed on Schedule 4.18(b), with respect to
each Employee Benefit Plan, there are no pending claims, investigations
or causes of action as to which Seller has received notice and, to the
best of Seller's knowledge, no claims are planned or threatened against
any Employee Benefit Plan or fiduciary of any Employee Benefit Plan by
any participant, beneficiary or governmental agency with respect to the
qualification or administration of any Employee Benefit Plan.
(c) Except as disclosed on Schedule 4.18(c), Seller has no
liability, jointly or otherwise, for (i) any pension plan for which
Seller or a member of the Seller's controlled group (within the meaning
of Section 4001(b) of ERISA (a "Controlled Group") is or was a
contributing sponsor that is subject to Subtitle B of Title IV of
ERISA, or (ii) any withdrawal liability demanded or yet to be demanded
under Title IV of ERISA by any multi-employer plan within the meaning
of Section 3(37) of ERISA (a "Multi-Employer Plan") for a complete or
partial withdrawal from such Multi-Employer Plan for any Controlled
Group of which Seller is or was a member.
(d) Except as disclosed on Schedule 4.18(d), Seller has made
no representation to or agreement with any of the employees of the
Purchased Business (whether written or oral) with respect to (i) the
provision of any employee benefits by Buyer or the Purchased
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Business beyond the Closing Date, or (ii) the continuation of any
benefits by Buyer or the Purchased Business beyond the Closing Date
under any of the Employee Benefit Plans.
SECTION 4.19. LITIGATION; PRODUCT LIABILITY; WORKERS' COMPENSATION.
(a) Except as disclosed on Schedule 4.19(a) of the Disclosure
Schedules, there is no litigation, suit, proceeding, action, claim or
investigation against Seller before any governmental authority and
there are no facts known to Seller that might reasonably be expected to
result in any such litigation, suit, proceeding, action, claim or
investigation. Seller is not subject to or in default with respect to
any presently existing order, writ, injunction, decree or written
notice received by Seller from any governmental authority.
(b) Except as disclosed on Schedule 4.19(b) of the Disclosure
Schedules, there have been no material warranty, charge back or product
liability claims made against Seller since March 25, 1996.
(c) Except as disclosed on Schedule 4.19(c) of the Disclosure
Schedules, there are no workers' compensation claims involving the
Purchased Business for which any current or former employee of Seller
is receiving ongoing medical or wage benefits.
SECTION 4.20. EMPLOYEES, CONSULTANTS AND INDEPENDENT CONTRACTORS.
(a) Set forth on Schedule 4.20(a) of the Disclosure Schedules
is a true and complete list of each person employed by Seller as of
October 31, 1997, which identifies each such person by name, social
security number, date of hire, current compensation, date of birth, sex
and status as an hourly or salaried employee. Schedule 4.20(a)
identifies persons who are not actively-at-work as of such date,
describes the date such inactive status commenced, the cause of such
inactive status at the date such inactive status commenced (e.g.
layoff, leave of absence or disability) and lists the employee
benefits, workers' compensation benefits and any other compensation or
benefits applicable to each such person as of the Closing Date. For
purposes of this Schedule 4.20(a), persons absent due to vacation shall
be considered to be actively-at-work.
(b) Schedule 4.18 and Schedule 4.20(b) of the Disclosure
Schedules set forth a true and complete list and copies of all
agreements with any of the current or former employees, consultants and
independent contractors of Seller to which the Seller is a party or by
which it is bound and, in any such case, pursuant to which the
Purchased Business has any continuing obligations.
(c) Schedule 4.20(c) of the Disclosure Schedules sets forth a
true and complete list of all consultants and independent contractors
of Seller who had, during the twelve (12) month period ended September
30, 1997, received remuneration from the Purchased Business in excess
of Twenty Thousand Dollars ($20,000) together with the current
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compensation for each such consultant and independent contractor, other
than legal and accounting.
SECTION 4.21. INSURANCE. Schedule 4.21 of the Disclosure Schedules sets
forth a true and complete list and copies of all policies of liability, theft,
fidelity, fire, product liability, workers' compensation and other forms of
insurance held by Seller, and specifies the insurer, amount of coverage, type of
insurance and policy numbers. Schedule 4.21 also sets forth any pending claims
under such policies. The policies listed in Schedule 4.21 are outstanding and in
full force and effect and all premiums due and payable with respect to such
policies have been paid in full.
ARTICLE V
WARRANTIES AND REPRESENTATIONS OF BUYER
As a material inducement to Seller to enter into this Agreement and to
consummate the transactions contemplated by this Agreement, Buyer represents and
warrants to Seller as follows:
SECTION 5.01. ORGANIZATION; POWER. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of Delaware.
Buyer has all the requisite corporate power and authority to own, lease and
operate its business as it is now being conducted and to enter into this
Agreement.
SECTION 5.02. AUTHORITY, NO VIOLATION, ETC. The execution and delivery
of this Agreement by Buyer and the consummation of the transactions contemplated
by this Agreement have been duly and validly authorized by all necessary
corporate action on the part of Buyer. This Agreement and the other agreements
and documents to be executed and delivered by Buyer pursuant to the provisions
of this Agreement, constitute legal, valid and binding obligations of Buyer,
enforceable against Buyer in accordance with their respective provisions and
conditions, except as enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws and
equitable principles of general application affecting the rights of creditors
and (ii) general principles of equity affecting the right to specific
enforceability of any of the remedies contained herein and therein. The
execution and delivery of this Agreement, the consummation of the transactions
contemplated by this Agreement and compliance by Buyer with the provisions of
this Agreement will not:
(a) conflict with or result in a breach of any provision of
the organizational documents of Buyer or result in a default or give
rise to any right of termination, cancellation or acceleration under
any of the provisions of any note, lien, bond, mortgage, indenture,
license, lease, agreement or other instrument or obligation to which
Buyer is a party or by which Buyer, any of its assets or its business
may be bound, except for such conflict, breach or default as to which
valid waivers or consents have been obtained;
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(b) violate any judgment, order, writ, injunction or decree of
any court, administrative agency or governmental body applicable to
Buyer, its assets or its business; or
(c) cause, or give any person grounds to cause (with or
without notice, the passage of time, or both), the maturity of any
liability or obligation of Buyer to be accelerated or increased.
All filings, consents and approvals of third parties and governmental
authorities required in connection with the execution and delivery by Buyer of
this Agreement and the consummation by Buyer of the transactions contemplated by
this Agreement have been obtained.
SECTION 5.03. NO LITIGATION. No action, suit or proceeding has been
instituted or, to the best knowledge of Buyer, is threatened to restrain or
prohibit or otherwise challenge the legality or validity of the transactions
contemplated by this Agreement.
ARTICLE VI
CERTAIN PRE-CLOSING COVENANTS OF SELLER
Seller covenants and agrees, between the date of this Agreement and the
Closing, except as otherwise consented to by Buyer:
SECTION 6.01. MAINTENANCE OF THE CORPORATE STATUS. Seller shall (i) be
maintained at all times as a corporation validly existing and in good standing
under the laws of Ohio, and duly authorized to do business in each and every
jurisdiction material to the operation of Seller and (ii) timely file all
required reports with every governmental or taxing authority applicable to
Seller.
SECTION 6.02. OPERATION OF THE PURCHASED BUSINESS. Seller shall operate
the Purchased Business in the ordinary course with prior historical practices,
and Seller shall use all commercially reasonable efforts to (i) preserve the
Purchased Business intact and conserve the goodwill related thereto, (ii) keep
available and maintain the services of all employees, agents and representatives
of Seller on the same or substantially the same terms and conditions, (iii)
continue and preserve good relationships with suppliers, customers and others
having business dealings or relationships with Seller, (iv) maintain in full
force and effect all material licenses and permits required for the operation of
the Purchased Business as presently conducted, (v) maintain, consistent with
past practices of Seller, all of Seller's buildings, offices, shops and other
structures, machinery, tools, equipment, fixtures and other properties, (vi) not
knowingly do any act or omit any act or permit any omission to act, reasonably
within its control, which will cause a breach or default under any of the
Material Contracts of Seller, and (vii) neither take any of the actions
described in Section 4.11, nor allow any of such actions to occur.
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SECTION 6.03. ACCESS TO THE PURCHASED BUSINESS. Seller shall make
available to Buyer all information in its possession concerning the Purchased
Business that Buyer shall request. In addition, and without limiting the
generality of the foregoing, Seller shall make available its management team to
provide information to Buyer concerning the Significant Suppliers and
Significant Customers of Seller and shall permit Buyer and its accountants,
attorneys and other authorized representatives to enter upon the Seller's
offices and plant sites upon reasonable advance notice in order to inspect the
books and other records of Seller, to consult with and receive assistance from
employees of Seller, to examine Seller's assets, and to carry out any reasonable
tests and examinations of such assets deemed necessary by Buyer. Seller shall
contact all governmental and other authorities to permit the release of required
information to Buyer.
SECTION 6.04. OBTAINING CONSENTS; NOTICES. Seller shall use
commercially reasonable efforts to promptly obtain all consents and
authorizations of third parties and governmental authorities, to make all
filings, and to give all notices to third parties or governmental authorities
which may be necessary or required in order to effect, and in connection with,
the transactions contemplated by this Agreement.
SECTION 6.05. EXCLUSIVE RIGHT TO ACQUIRE. Seller grants to Buyer the
exclusive right to acquire the Purchased Assets until the Termination Date (as
defined in Section 11.04 of this Agreement), and Seller shall not engage in
discussions or negotiations with any other person or entity prior to the
expiration of the Termination Date relating to the sale, merger or other
disposition by Seller of the capital stock of Seller or the sale or other
disposition by Seller of any of its assets (other than the Inventory in the
ordinary course of the Purchased Business).
ARTICLE VII
CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE
The obligation of Buyer to consummate the transactions contemplated
pursuant to the provisions of this Agreement is subject to the satisfaction,
prior to or at the Closing, of each of the following conditions:
SECTION 7.01. REPRESENTATIONS AND WARRANTIES OF SELLER. Each of the
representations and warranties of Seller contained in this Agreement shall be
true and correct in all material respects at and as of the Closing Date with the
same force and effect as if made at and as of the Closing Date.
SECTION 7.02. COMPLIANCE. Seller shall have performed, complied with
and fulfilled all of the covenants, agreements, obligations and conditions
required by this Agreement to be performed, complied with or fulfilled by Seller
prior to or at the Closing.
SECTION 7.03. LITIGATION. No order, decree or ruling of any
governmental authority or court shall have been entered and no governmental
proceeding or other action, suit, claim or investigation
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shall be pending or, to the best knowledge of Seller, threatened, pertaining to
the transactions contemplated by this Agreement.
SECTION 7.04. CONSENTS. Seller shall have obtained all consents and
authorizations of governmental authorities and other third parties required to
affect the transactions contemplated by this Agreement.
SECTION 7.05. APPROVAL OF THE BOARD OF DIRECTORS OF BUYER. Buyer shall
have received all corporate action necessary to authorize the (i) execution and
delivery of this Agreement and any other agreements or instruments contemplated
by this Agreement to which Buyer is a party and (ii) consummation of the
transactions contemplated and performance of its other obligations under this
Agreement.
SECTION 7.06. FINANCING ADEQUATE. Buyer shall have received a written
commitment for financing adequate to facilitate the acquisition of the Purchase
Business by Buyer on terms acceptable to Buyer, at Buyer's sole discretion.
SECTION 7.07. CLOSING DELIVERIES. Buyer shall have received from Seller
all of the instruments, documents and other items described in Section 9.02, and
the form and substance of all such deliveries shall be satisfactory in all
reasonable respects to Buyer.
ARTICLE VIII
CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE
The obligation of Seller to consummate the transactions contemplated
pursuant to the provisions of this Agreement is subject to the satisfaction,
prior to or at the Closing, of each of the following conditions:
SECTION 8.01. REPRESENTATIONS AND WARRANTIES OF BUYER. Each of the
representations and warranties of Buyer contained in this Agreement shall be
true and correct in all material respects at and as of the Closing Date with the
same force and effect as if made at and as of the Closing Date.
SECTION 8.02. COMPLIANCE. Buyer shall have performed, complied with and
fulfilled all of the covenants, agreements, obligations and conditions required
by this Agreement to be performed, complied with or fulfilled by Buyer prior to
or at the Closing.
SECTION 8.03. LITIGATION. No order, decree or ruling of any
governmental authority or court shall have been entered and no governmental
proceeding or other action, suit, claim or investigation shall be pending or, to
the best knowledge of Buyer, threatened, pertaining to the transactions
contemplated by this Agreement.
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SECTION 8.04. CLOSING DELIVERIES. Seller shall have received from Buyer
all of the instruments, documents and other items described in Section 9.01 and
the form and substance of all such deliveries shall be satisfactory in all
reasonable respects to Seller.
ARTICLE IX
DELIVERIES
SECTION 9.01. DELIVERIES TO SELLER AT THE CLOSING. At the Closing, and
simultaneously with the deliveries to Buyer specified in Section 9.02 of this
Agreement, Buyer shall deliver or cause to be delivered to Seller the following:
(a) a payment equal to the Purchase Price in accordance with
the provisions set forth in Article II of this Agreement, allocated as
set forth on Schedule 2.01;
(b) a duly executed Assumption Agreement in the form of
Exhibit 9.01(b) attached;
(c) Secretary's Certificate certifying authorizing resolutions
for the transactions described in this Agreement and incumbency; and
(d) any other documents or instruments of conveyance and
transfer as Seller may reasonably request for the purpose of assigning,
transferring, granting, conveying and confirming the sale of the
Purchased Business and the Purchased Assets or any part thereof to
Buyer.
SECTION 9.02. DELIVERIES TO BUYER AT THE CLOSING. At the Closing, and
simultaneously with the deliveries to Seller specified in Section 9.01 of this
Agreement, Seller shall deliver or cause to be delivered to Buyer the following:
(a) a duly executed Bill of Sale in the form of Exhibit
9.02(a) attached;
(b) UCC financing statements or similar instruments or
documents duly executed by any lienholders releasing their security
interests, if any, in the Purchased Assets;
(c) a duly executed Transition Services Agreement in the form
of Exhibit 9.02(c) attached;
(d) duly executed Supply Agreement(s) in form and substance
satisfactory to Buyer and Seller;
(e) wire transfer instructions for payment of the Purchase
Price;
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(f) a duly executed Receipt;
(g) a Non-Competition Agreement executed by Seller and
Churchill Industries, Inc., the sole shareholder of Seller in the form
of Exhibit 9.02(g) attached;
(h) Consent to Assignment of Lease regarding the Leased Real
Property;
(i) Secretary's Certificate certifying authorizing resolutions
for the transactions described in this Agreement and incumbency;
(j) Guaranty of Hoffer's Inc. in the form of Exhibit 9.02(j)
attached; and
(k) any other documents or instruments of conveyance and
transfer as Buyer may reasonably request for the purpose of assigning,
transferring, granting, conveying and confirming the sale of the
Purchased Business and the Purchased Assets or any part thereof to
Buyer.
ARTICLE X
ADDITIONAL COVENANTS OF THE PARTIES
SECTION 10.01. FURTHER ASSURANCES. Seller, after the Closing, without
further consideration, shall execute, acknowledge and deliver any further
assignments, conveyances and other assurances, documents and instruments of
transfer, reasonably requested by Buyer, and shall take any other action
consistent with the terms of this Agreement that may reasonably be requested by
Buyer for the purpose of assigning, transferring, granting, conveying and
confirming the Purchased Business or the Purchased Assets or any part thereof to
Buyer.
SECTION 10.02. ACCESS TO RECORDS. For a period of five (5) years after
the Closing Date, Buyer shall retain or cause the Purchased Business to retain
and make the books and records of the Purchased Business available for
inspection by Seller or its duly authorized representatives and Seller and its
representatives shall have reasonable access to (including the right to make
copies), all of such books and records, to the extent that such access may
reasonably be required in connection with matters relating to or affected by the
operation of the Purchased Business or the Purchased Assets prior to the
Closing. Seller shall be solely responsible for any costs or expenses incurred
by it pursuant to this Section 10.02. After such five (5) year period, all such
records may be destroyed by Buyer or the Purchased Business, unless Seller
reasonably requests that such records be retained, at Seller's expense.
SECTION 10.03. PUBLIC STATEMENTS. Except for disclosures required by
applicable law, Buyer and Seller shall mutually agree upon the timing and
content of any and all announcements and public statements relating to the
signing of this Agreement and the transactions contemplated by this Agreement.
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SECTION 10.04. CHECKS AND DRAFTS. Seller shall honor (whether presented
before, on or after the Closing) all checks and drafts drawn by it on or prior
to the Closing to pay trade payables and other liabilities of the Purchased
Business in conducting the Purchased Business in the ordinary course.
SECTION 10.05. EMPLOYEE BENEFIT PLANS.
(a) Effective the day following the Closing Date, those
employees of Seller whose employment with Buyer shall continue after
the Closing Date, which shall not include any employees on lay-off,
leave, disability (work-related or not), until such employees return to
work (the "Continued Employees"), shall cease to be covered under the
employee benefit plans of Seller and shall participate under the
employee benefit plans, programs and policies maintained by Buyer,
without any eligibility periods or conditions or pre-existing condition
limitations. Seller shall remain liable for all benefits accrued or
claims incurred on or prior to the Closing Date under all plans,
programs and policies maintained by Seller and Buyer shall be liable
for all benefits accrued and claims incurred after the Closing Date
under the plans, programs and policies maintained by Buyer.
(b) Seller shall be solely responsible for the provisions of
health care continuation coverage required under COBRA for those former
employees of the Purchased Business and other persons whose entitlement
to continuation coverage occurred on or before the Closing Date. Buyer
shall offer continuation coverage under its group health plans to all
eligible Continued Employees after the Closing Date.
(c) As soon as administratively feasible following the Closing
Date, Seller shall direct the trustee of Seller's 401(k) plan to
transfer to and Buyer shall direct the trustee of Buyer's 401(k) plan
to accept the vested portion of account balances of the Continuing
Employees in a manner that satisfies Section 414(1) and 411(d)(6) of
the Code. Buyer hereby represents and covenants that Buyer's 401(k)
plan has been determined qualified by the Internal Revenue Service, a
copy of the most recent determination letter for Buyer's 401(k) plan
has been provided to Seller and no event has occurred that would affect
the qualification of Buyer's 401(k) plan. Seller and Buyer consent and
agree to take such additional steps as are required bylaw or as may
otherwise be necessary and convenient in order to permit the transfer
of accounts contemplated by this Section 10.05(c).
ARTICLE XI
DEPOSIT; EXTENSION; TERMINATION
SECTION 11.01. DEPOSIT; EXTENSION; EARLY TERMINATION.
(a) Buyer, at its sole discretion, shall be entitled to extend
the Closing Date or terminate this Agreement prior to the Termination
Date, pursuant to the following:
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(i) Upon execution of this Agreement, Buyer shall
remit a Fifty Thousand Dollar ($50,000) deposit to Seller to
be applied to the Purchase Price.
(ii) If Closing does not occur prior to December 16,
1997, the deposit identified in Section 11.01(a)(i) shall be
forfeited to Seller and shall not be considered as a deposit
toward the Purchase Price or otherwise.
(iii) Buyer may extend the Closing Date to January
15, 1998 by remitting to Seller an additional Fifty Thousand
Dollar ($50,000) deposit on December 16, 1997. Such deposit
shall be considered a deposit to be applied to the Purchase
Price. If such payment is not made on December 16, 1997, this
Agreement shall terminate.
(iv) If by January 16, 1998 the Closing does not take
place, the deposit identified in Section 11.01(a)(iii) shall
be forfeited to Seller and this Agreement shall terminate.
(v) For the purposes of this Subsection 11.01(a)(v)
only, AAPC guarantees the deposit identified in Subsection
11.01(a)(iii) above from Buyer to Seller.
SECTION 11.02. TERMINATION BY MUTUAL AGREEMENT. This Agreement may be
terminated by the mutual agreement in writing of the parties at any time prior
to the Closing.
SECTION 11.03. TERMINATION BY BUYER. This Agreement and any obligations
of Buyer under this Agreement (other than its obligations under Sections 14.01
and 14.14) may be terminated by Buyer if, at the Closing, any of the conditions
set forth in Article VII shall not have been satisfied in all material respects
or waived in writing by Buyer.
SECTION 11.04. TERMINATION BY SELLER. This Agreement and any
obligations of Seller under this Agreement (other than its obligations under
Sections 14.01 and 14.14) may be terminated by Seller if, at the Closing, any of
the conditions set forth in Article VIII shall not have been satisfied in all
material respects or waived in writing by Seller.
SECTION 11.05. AUTOMATIC TERMINATION. This Agreement shall
automatically terminate at 11:59 p.m. on January 15, 1998 (the "Termination
Date"), unless the transactions contemplated by this Agreement are completed by
11:59 p.m. on January 15, 1998.
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ARTICLE XII
BULK SALES COMPLIANCE
SECTION 12.01. BULK SALES COMPLIANCE. Each of Buyer and the Purchased
Business waive compliance with the provisions of the applicable statutes
relating to bulk transfers or bulk sales. In accordance with the provisions of
Section 13.01 of this Agreement, Seller shall indemnify and hold Buyer harmless
from and against any and all losses, costs, damages, claims or expenses which
Buyer may sustain by reason of Seller's failure to comply with such bulk
transfer or bulk sales provisions, except with respect to the Assumed
Obligations.
ARTICLE XIII
INDEMNIFICATION
SECTION 13.01. INDEMNIFICATION BY SELLER. Seller shall indemnify,
defend and hold each of Buyer and the Purchased Business and their respective
successors, permitted assigns, shareholders, directors, officers, employees and
other affiliates (collectively, "Buyer's Indemnified Persons") harmless from and
against any loss, damage, liability, claim, action, cause of action, regulatory,
legislative or judicial proceedings or investigations, assessments, levies,
fines, penalties, costs and expenses including, but not limited to, attorneys',
accountants', investigators' and experts' fees and expenses, each reasonably
sustained or incurred in connection with the defense or investigation of any
such claim (collectively "Damages"), arising out of or in any way relating to:
(a) the failure by Seller to perform any of its obligations
under this Agreement;
(b) the failure by Seller to discharge when due any Excluded
Liability;
(c) any misrepresentation in or breach of the representations
and warranties of Seller or the failure of Seller to perform any of its
covenants or obligations contained in this Agreement or in any
instrument or document furnished or to be furnished by Seller pursuant
to this Agreement or in connection with the transactions contemplated
by this Agreement;
(d) except for the Assumed Obligations reflected in the
October 31, 1997 balance sheet and those Assumed Obligations incurred
since October 31, 1997 in the ordinary and normal course of the
Purchased Business consistent with prior practice and disclosed to
Buyer, the operation of the Purchased Business on or prior to the
Closing Date, including all claims and proceedings the facts forming
the basis for which occurred on or prior to the Closing Date, whether
or not disclosed by Seller to Buyer;
(e) any actions, claims, suits or proceedings asserted by
third parties alleging personal injury or property damage due to,
arising out of, or by reason of the design,
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manufacture or use of any products of the Purchased Business on or
prior to the Closing Date;
(f) any workers' compensation claims of any employee or former
employee of the Purchased Business arising from events occurring on or
prior to the Closing Date;
(g) any Environmental Claim (as hereinafter defined) arising
under any of the Environmental Laws or any Remedial Action arising
pursuant to any of the Environmental Laws including, but not limited
to, investigation, remediation or removal of any Contaminant arising
out of or based upon the operation of the Purchased Business on or
prior to the Closing Date (Buyer and Seller agreeing that the
disclosures made pursuant to Schedule 4.17 or any attachment thereto in
no way limit the right of any of Buyer's Indemnified Persons to
indemnification under this Section 13.01);
(h) except for the Assumed Obligations, any and all claims for
compensation and other employee benefits (including, but not limited
to, severance pay, outplacement benefits, disability benefits, health,
retiree medical, workers' compensation, tuition assistance, death
benefits and pension and profit sharing plans and claims relating to
employment or termination of employment) accruing on or prior to the
Closing Date or on or after the Closing Date with respect to the
payment of severance benefits and other welfare benefit payments, if
any, with respect to (i) employees of the Purchased Business who have
ceased employment with the Purchased Business on or prior to the
Closing Date and (ii) employees of the Purchased Business who, on the
Closing Date, are on medical leave, maternity leave, temporary lay-off
or disability and related costs and liabilities, regardless of whether
such claims and related costs and liabilities are made or incurred
before, on or after the Closing Date; or
(i) except for the Assumed Obligations, all claims,
investigations, actions, suits, proceedings, demands, assessments,
judgments, costs and expenses, including reasonable attorneys' fees and
expenses (incurred thereon at trial and upon appeal), incident to the
foregoing.
Seller shall only be obligated to indemnify Buyer to the extent the above
amounts exceed the proceeds of insurance, if any, paid to Buyer covering the
claims or recoveries from third parties, and Buyer covenants and agrees to
pursue in good faith and with reasonable diligence any claims available under
applicable insurance policies.
"Environmental Claim" means any notice of any violation, claim, demand,
abatement or other order (conditional or otherwise) by any governmental
authority or any person (other than Buyer's Indemnified Persons) for personal
injury (including sickness, disease or death), tangible or intangible property
damage, damage to the environment, nuisance, pollution, contamination or other
adverse affects on the environment or for fines, penalties or restrictions,
resulting from or based upon (i) the existence or the continuation of the
existence of a Release (including, but not limited to,
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29
sudden or non-sudden, accidental or non-accidental Releases) of, or exposure to,
any substance, chemical, material, pollutant, Contaminant, odor or audible noise
or other release or emission in, into or onto the environment (including, but
not limited to, the air, ground, water or any surface) at, in, by, from or
related to the Purchased Business in amounts in excess of the applicable legal
standards, (ii) the environmental aspects of the transportation, storage,
treatment or disposal of Contaminants or other substances in connection with the
operation of the Purchased Business or (iii) the violation, or alleged
violation, of any presently enacted or pending statutes, ordinances, orders,
rules, regulations, Permits or licenses of or from any governmental authority,
agency or court relating to environmental matters connected with the operation
of the Purchased Business; provided, however, that any of Buyer's Indemnified
Persons shall have the right to pursue an Environmental Claim against Seller in
the event any of them suffer or incur any bona fide personal injury or property
damage.
SECTION 13.02. INDEMNIFICATION BY BUYER. Buyer shall indemnify, defend
and hold Seller and its respective successors, permitted assigns, shareholders,
directors, officers, employees and other affiliates (collectively, "Seller's
Indemnified Persons") harmless from and against any Damages arising out of or in
any way relating to:
(a) any misrepresentation in or breach of the representations
and warranties of Buyer or the failure of Buyer to perform any of its
covenants or obligations contained in this Agreement or in any
instrument or document furnished or to be furnished by Buyer pursuant
to this Agreement or in connection with the transactions contemplated
by this Agreement;
(b) any liabilities, obligations, claims, suits or proceedings
asserted by third parties due to, arising out of, or by reason of the
operation of the Purchased Business after the Closing Date;
(c) the failure to discharge when due the Assumed Obligations,
but not relative to or resulting from Seller's breach of the warranties
or representations regarding the Assumed Obligations;
(d) any actions, claims, suits or proceedings asserted by
third parties alleging personal injury or property damage due to,
arising out of, or by reason of the design, manufacture or use of any
products of the Purchased Business on or prior to the Closing Date;
(e) any workers' compensation claims of any employee or former
employee of the Purchased Business arising from events occurring after
the Closing Date;
(f) any Environmental Claim arising under any of the
Environmental Laws or any Remedial Action arising pursuant to any of
the Environmental Laws including, but not limited to, investigation,
remediation or removal of any Contaminant arising out of or based upon
the operation of the Purchased Business after the Closing Date;
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30
(g) any and all claims for compensation and other employee
benefits (including, but not limited to, severance pay, outplacement
benefits, disability benefits, health, retiree medical, workers'
compensation, tuition assistance, death benefits and pension and profit
sharing plans and claims relating to employment or termination of
employment) accruing after the Closing Date (except for severance
benefits or welfare benefit payments, if any, with respect to (i)
employees of the Purchased Business who have ceased employment with the
Purchased Business on or prior to the Closing Date and (ii) employees
of the Purchased Business who, on the Closing Date, are on medical
leave, maternity leave, temporary lay-off or disability and related
costs and liabilities, regardless of whether such claims and related
costs and liabilities are made or incurred before, on or after the
Closing Date);
(h) any liability of Churchill Industries, Inc. as to that
certain Guaranty dated June 19, 1996 given for the benefit of J.M.J.
Partnership, an Ohio general partnership, pursuant to that certain
lease agreement more particularly described on Schedule 4.05 of the
Disclosure Schedules; or
(i) all claims, investigations, actions, suits, proceedings,
demands, assessments, judgments, costs and expenses, including
reasonable attorneys' fees and expenses (incurred thereon at trial and
upon appeal), incident to the foregoing.
SECTION 13.03. NOTICE. If any person believes that he, she or it has
suffered or incurred any Damages, that person shall so notify the indemnifying
party promptly in writing describing such loss or expense, the amount thereof,
if known, and the method of computation of such Damages, all with reasonable
particularity to permit the indemnifying party to assess the nature and cost of
the claim. If any action at law, suit in equity or administrative action is
instituted by or against a third party with respect to which any person intends
to claim any liability or expense as Damages under this Article IX, such person
shall promptly notify the indemnifying party of such action.
SECTION 13.04. DEFENSE OF CLAIMS. The indemnifying party shall have
thirty (30) calendar days after receipt of either notice referred to in Section
13.03 of this Agreement to notify the indemnified party that it elects to
conduct and control any legal or administrative action or suit with respect to
an indemnifiable claim. If the indemnifying party does not give such notice, the
indemnified person shall have the right to defend, contest, settle or compromise
such action or suit in the exercise of its exclusive discretion, and the
indemnifying party shall, upon request from the indemnified person, promptly pay
the indemnified person in accordance with the other provisions of this Article
XIII the amount of any Damages resulting from its liability to the third party
claimant. If the indemnifying party gives such notice, it shall have the right
to undertake, conduct and control, through counsel of its own choosing at its
sole expense, the conduct and settlement of such action or suit, and the
indemnified person shall cooperate with the indemnifying party in connection
therewith; provided, however, that (a) the indemnifying party shall not thereby
permit to exist any lien, encumbrance or other adverse charge securing the
claims indemnified hereunder upon any asset of the indemnified person, (b) the
indemnifying party shall not thereby consent to the imposition of any injunction
against the indemnified person without the written consent of the indemnified
person,
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31
(c) the indemnifying party shall permit the indemnified person to participate in
such conduct or settlement through counsel chosen by the indemnified person, but
the fees and expenses of such counsel shall be borne by the indemnified person
except as provided in clause (d) below, and (d) upon a final determination of
such action or suit, the indemnifying party shall agree promptly to reimburse to
the extent required under this Article XIII (subject to the provisions of
Section 13.07 of this Agreement) the indemnified person for the full amount of
any Damages resulting from such action or suit and all reasonable and related
expenses incurred by the indemnified person, except fees and expenses of counsel
for the indemnified person incurred after the assumption of the conduct and
control of such action or suit by the indemnifying party. So long as the
indemnifying party is contesting any such action in good faith, the indemnified
person shall not pay or settle any such action or suit. Notwithstanding the
foregoing, the indemnified person shall have the right to pay or settle any such
action or suit, provided that in such event the indemnified person shall waive
any right to indemnity therefor from the indemnifying party and no amount in
respect therefor shall be claimed as Damages under this Article XIII.
SECTION 13.05. ENVIRONMENTAL MATTERS. Seller shall, at its sole expense
and in the manner reasonably determined by Seller, conduct or direct any
environmental clean-up or Remedial Action after the date of Closing for which
Seller is responsible under this Agreement; provided, however, Seller will
provide Buyer with a complete copy of any governmental filing or submission at
the time it is made. Buyer agrees to cooperate with Seller in connection with
any such clean-up or Remedial Action including, without limitation, making
relevant personnel and records available to Seller at all reasonable times at a
reasonable charge to be agreed upon between Buyer and Seller.
SECTION 13.06. COOPERATION. If requested by the indemnifying party, the
indemnified person shall cooperate with the indemnifying party and its counsel
in contesting any claim which the indemnifying party elects to contest or, if
appropriate, in making any counterclaim against the person asserting the claim
or any cross-complaint against any person and further agrees to take such other
action as reasonably may be requested by an indemnifying party to reduce or
eliminate any loss or expense for which the indemnifying party would have
responsibility, but the indemnifying party will reimburse the indemnified person
for any expenses incurred by it in so cooperating or acting at the request of
the indemnifying party.
SECTION 13.07. LIMITATION. Notwithstanding anything to the contrary,
Seller shall have no liability to Buyer's Indemnified Persons for
indemnification under this Article XIII unless and until the aggregate amount of
Damages exceeds Twenty-Five Thousand Dollars ($25,000.00) and only to the extent
greater than Twenty-Five Thousand Dollars ($25,000.00). In the event that the
aggregate Damages exceed the $25,000 threshold, Seller shall have no liability
for indemnification under this Article XIII for any Damages which in the
aggregate exceed the Final Purchase Price with respect thereto.
SECTION 13.08. PAYMENT OF DAMAGES. The indemnifying party shall
promptly pay to the indemnified person in immediately available funds the amount
of any Damages to which the indemnified person is entitled by reason of the
provisions of this Agreement. The parties covenant
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that any payment made pursuant to this Article XIII will be treated by the
parties on their respective tax returns as an adjustment to the Purchase Price.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
SECTION 14.01. EXPENSES. Each of the parties shall pay all costs and
expenses incurred by it in negotiating and preparing this Agreement and in
closing and carrying out the transactions contemplated by this Agreement. In
addition, Seller shall pay all costs and expenses incurred by the Purchased
Business in connection with carrying out the transactions contemplated by this
Agreement.
SECTION 14.02. HEADINGS. The subject headings of the Articles and
Sections of this Agreement are included for purposes of convenience only and
shall not affect the construction or interpretation of any of its provisions.
SECTION 14.03. ENTIRE AGREEMENT. This Agreement, including the
Disclosure Schedules referred to in this Agreement which form a part of this
Agreement, and the instruments and documents to be delivered by the parties
pursuant to the provisions of this Agreement, contain the entire understanding
of the parties with respect to the transactions contemplated by this Agreement.
There are no representations, warranties, covenants or undertakings other than
those expressly set forth or provided for in this Agreement and such other
instruments and documents. This Agreement supersedes all agreements and
understandings between the parties with respect to the transactions contemplated
by this Agreement.
SECTION 14.04. MODIFICATION AND WAIVER. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by all
the parties. The party for whose benefit a warranty, representation, covenant or
condition is intended may in writing waive any inaccuracies in the warranties
and representations contained in this Agreement or waive compliance with any of
the covenants or conditions contained in this Agreement and so waive performance
of any of the obligations of the other party to this Agreement and any defaults
under this Agreement; provided, however, that such waiver shall not affect or
impair the waiving party's rights with respect to any other warranty,
representation or covenant or any default under this Agreement, nor shall any
waiver constitute a continuing waiver.
SECTION 14.05. COUNTERPARTS. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
SECTION 14.06. DISCLOSURE SCHEDULES. All Disclosure Schedules attached
to this Agreement are incorporated in this Agreement and made a part of this
Agreement in the same manner as if such schedules were set forth at length in
the text of this Agreement. For purposes of determining
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33
compliance by Seller with its obligations under this Agreement, an event, matter
or thing described in any one Disclosure Schedule shall satisfy any requirement
that such event, matter or thing is to be disclosed in any other Disclosure
Schedule.
SECTION 14.07. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon, and shall inure to the benefit of, the parties and their respective
successors and assigns; provided, however, (a) neither this Agreement nor any of
the obligations under this Agreement may be assigned by Seller without the prior
written consent of Buyer and (b) Buyer may assign its rights under this
Agreement to an affiliate of Buyer and to one or more lenders of Buyer or the
Purchased Business for collateral security purposes. No such assignment shall
relieve Buyer of any of its obligations under this Agreement.
SECTION 14.08. NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made by any party to this Agreement or
pursuant to this Agreement and the indemnification rights and obligations with
respect thereto set forth in Article XIII of this Agreement shall survive the
Closing Date for a period of one year, at which time such representations,
warranties and indemnification rights and obligations with respect thereto shall
expire; provided, however, notwithstanding the foregoing, (a) the rights and
obligations with respect to indemnification as provided in Article XIII shall
continue with respect to any matter for which indemnification had been properly
sought in writing prior to the expiration of such survival period, (b) all
representations and warranties as to the title of the Purchased Assets set forth
in Section 4.16 of this Agreement and the indemnification rights and obligations
with respect thereto shall survive without any expiration and (c) all
representations and warranties as to environmental matters set forth in Section
4.17 of this Agreement and the indemnification rights and obligations with
respect thereto set forth in Article XIII of this Agreement shall survive the
Closing Date for a period of two (2) years.
SECTION 14.09. NOTICES. All notices, requests, demands and other
communications to be given under this Agreement shall be in writing and shall be
deemed given (a) on the date of service if served personally on the party to
whom notice is to be given, (b) on the date of receipt if delivered by telecopy
or nationally recognized overnight courier or (c) on the third (3rd) business
day after deposit in the U.S. mail if mailed to the party to whom notice is to
be given by certified or registered mail, return receipt required, postage
prepaid and properly addressed as follows:
If to Buyer: American Glassmith Acquisition Corporation
_ American Architectural Products Corporation
South Bridge Executive Center
755 Boardman-Canfield Road, Building G - West
Boardman, Ohio 44512
Attn: Frank J. Amedia, Chief Executive Officer
Telecopy No.: (330) 965-9915
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34
with a copy to: American Commercial Industries, Inc.
812 Huron Road, East, No. 880
Cleveland, Ohio 44115
Attn: James E. Phillips, Esq.
Telecopy No.: (216) 687-6740
if to Seller: American Glassmith, Inc.
_ Churchill Industries, Inc.
3100 Metropolitan Centre
333 South 7th Street
Minneapolis, Minnesota 55402
Attn: Otto W. Seidenberg
President and Chief Executive Officer
Telecopy No.: (612) 673-6703
with a copy to: The Churchill Companies
3100 Metropolitan Centre
333 South 7th Street
Minneapolis, Minnesota 55402
Attn: Kevin C. Dooley, Esq.
Telecopy No.: (612) 673-6615
SECTION 14.10. GENDER. Any reference to the masculine, feminine or
neuter gender shall be deemed to include each other gender unless the context
otherwise requires.
SECTION 14.11. KNOWLEDGE OF SELLER. As used in this Agreement, the
phrase "to the knowledge of Seller" or phrases of like import shall mean and be
construed as the knowledge of the employee of Seller identified on Schedule
14.11 of the Disclosure Schedules.
SECTION 14.12. GOVERNING LAW; CHOICE OF FORUM: SERVICE OF PROCESS; JURY
TRIAL WAIVER.
(a) The validity, interpretation and enforcement of this
Agreement, all Transactions contemplated by this Agreement and any
dispute arising out of the relationship between the parties hereto,
whether in contract, tort, equity or otherwise, shall be governed by
the internal laws of the State of Ohio (without giving effect to
principles of conflicts of law).
(b) Seller and Buyer irrevocably consent and submit to the
non-exclusive jurisdiction of the state courts located in Franklin
County, Ohio and the United States District Court for the Southern
District of Ohio and waive any objection based on venue or forum non
conveniens with respect to any action instituted therein arising under
this Agreement or in any way connected with or related or incidental to
the dealings of the parties hereto in
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respect of this Agreement or the transactions related to this
Agreement, in each case whether now existing or hereafter arising, and
whether in contract, tort, equity or otherwise, and agree that any
dispute with respect to any such matters shall be heard only in the
courts described above.
(c) Seller and Buyer hereby waive personal service of any and
all process upon them and consent that all such service of process may
be made by certified mail (return receipt requested) directed to their
respective addresses set forth in Section 14.09 of this Agreement and
service so made shall be deemed to be completed five (5) days after the
same shall have been so deposited in the U.S. mails, or, by service in
any other manner provided under the rules of any such courts. Within
thirty (30) days after such service, the party to whom such process is
brought shall appear in answer to such process, failing which such
party shall be deemed in default and judgment may be entered for the
amount of the claim and other relief requested.
(d) SELLER AND BUYER EACH HEREBY WAIVE ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER
THIS AGREEMENT OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS
AGREEMENT OR THE TRANSACTIONS RELATED HERETO WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT EQUITY OR OTHERWISE.
SELLER AND BUYER EACH HEREBY AGREE AND CONSENT THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT SELLER AND BUYER MAY FILE AN ORIGINAL
COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
SECTION 14.13. SEVERABILITY. In the event that any of the provisions of
this Agreement are determined to be unenforceable by any court of competent
jurisdiction, the parties to this Agreement shall consider such provisions
amended and modified so as to eliminate such invalidity or unenforceability and
all other provisions shall remain in full force or effect as originally written.
SECTION 14.14. CONFIDENTIAL NATURE OF INFORMATION. Each party shall
treat in confidence all documents, materials, and other information which it has
and shall have obtained regarding the other party during the course of the
negotiations leading to the consummation of the transactions contemplated by
this Agreement (whether obtained before or after the date of this Agreement) and
the preparation of this Agreement and other related documents. The obligation of
each party to treat such documents, materials and other information in
confidence shall not apply to any information which (a) such party can
demonstrate was already lawfully in its possession prior to the disclosure
thereof by the other party, (b) is known to the public and did not become so
known through any violation of a legal obligation, (c) became known to the
public through no fault of such party, (d) is later lawfully acquired by such
party from other sources, (e) is required to be disclosed under the
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provisions of any Federal, state or local statute or regulation issued by a duly
authorized agency, board or commission thereof or (f) is required to be
disclosed by a rule or order of any court of competent jurisdiction. Each party
agrees, if it breaches any of the terms of this Section 14.14, it will consent
to the issuance of a temporary and/or permanent injunction by any court of
competent jurisdiction enjoining such party from continuing to breach the terms
of this Section 14.14.
IN WITNESS WHEREOF, each of the parties to the Agreement has executed
this Agreement this 10th day of December, 1997.
AMERICAN GLASSMITH, INC.
By: /s/ Otto W. Seidenberg
----------------------------------
Name: Otto W. Seidenberg
--------------------------------
Title: CEO
-------------------------------
AMERICAN GLASSMITH ACQUISITION CORPORATION
By: /s/ Frank J. Amedia
----------------------------------------
Frank J. Amedia, President
AMERICAN ARCHITECTURAL PRODUCTS CORPORATION*
By: /s/ Frank J. Amedia
----------------------------------------
Frank J. Amedia, Chief Executive Officer
* Only a signatory so as to be bound by the
provisions of Section 11.01(a)(v) of this
Agreement.
- 36 -
37
LIST OF DISCLOSURE SCHEDULES
The following schedules to the Asset Purchase Agreement have been omitted
from this Exhibit 2.4. The Company agrees to furnish supplementally a copy of
any omitted schedule to the Securities and Exchange Commission upon request.
Exhibit 9.01(a) Form of Assumption Agreement
Exhibit 9.02(a) Form of Bill of Sale and Assignment of Interests
Exhibit 9.02(c) Form of Transition Services Agreement
Exhibit 9.02(g) Form of Non-Competition Agreement
Exhibit 9.02(j) Form of Guaranty
Schedule 2.01 Allocation of Purchase Price
Schedule 2.02(a) Seller's Good Faith Estimate of Net Book Value of Purchased Assets
Schedule 4.02(a) Conflicts; Defaults; Etc. of Seller
Schedule 4.02(b) Conflicts; Defaults; Etc. of the Purchased Business
Schedule 4.02(c) Required Consents
Schedule 4.03 Tax Matters
Schedule 4.05 Leased Real Property
Schedule 4.06 Leased Personal Property
Schedule 4.07 Financial Statements
Schedule 4.08 Inventories
Schedule 4.09(a) Material Contracts
Schedule 4.09(b) Prepayments; Defaults under Material Contracts
Schedule 4.09(c) Certain Agreements
Schedule 4.10 Accounts and Notes Receivable
Schedule 4.11 Certain Transactions; Adverse Change
Schedule 4.12 Customers and Suppliers
Schedule 4.13 Warranties
Schedule 4.14 Licenses and Permits
Schedule 4.15 Proprietary Information
Schedule 4.16 Title to the Assets of the Purchased Business
Schedule 4.17 Environmental Matters
Schedule 4.18(a) Employee Benefit Plans
Schedule 4.18(b) Claims re: Employee Benefit Plans
Schedule 4.18(c) Multi-Employer Plans
Schedule 4.18(d) Post-Closing Agreements re: Employee Benefit Plans
Schedule 4.19(a) Litigation
Schedule 4.19(b) Product Liability
Schedule 4.19(c) Workers' Compensation Claims
Schedule 4.20(a) List of Employees and Benefits
Schedule 4.20(b) Agreements with Employees; Independent Contractors
Schedule 4.20(c) Compensation
Schedule 4.21 Insurance
Schedule 14.11 Employee of Seller with Knowledge