ASSET PURCHASE AND SALE AGREEMENT
This Agreement is entered into on March 6, 2000, by
L&S Automotive Products Co., a Delaware corporation
("Purchaser"), and The ▇▇▇▇▇▇ Corporation, an Ohio corporation
("Seller"). In consideration of the mutual promises contained
herein, the parties agree as follows:
1. Purchase and Sale. Purchaser shall purchase from
Seller, and Seller shall sell to Purchaser, at the Closing, all
of the assets and properties of every nature, kind and
description, tangible and intangible, personal or mixed, wherever
located and whether or not carried or reflected on the books and
records of Seller, owned by Seller as of the close of business on
the Inventory Date (as defined in Section 3.1), subject to the
terms and conditions specified in this Agreement, including
without limitation, all the General Intangibles, Fixtures and
Equipment, Inventory, Accounts, Supplies, and Records , all as
hereinafter defined, and excluding only the Retained Assets as
hereinafter defined (collectively, the "Purchased Assets"). The
Purchased Assets shall be conveyed free and clear of all
liabilities, obligations, liens and encumbrances of whatsoever
nature, except for liabilities, obligations, liens and
encumbrances related to the Assumed Liabilities and such liens as
are specifically identified as permitted in the schedules
attached hereto. The Purchased Assets shall not include the
Retained Assets (as defined in Section 1.1(g)).
1.1 As used in this Agreement:
(a) "General Intangibles" shall have the meaning
attributed thereto under the Ohio Uniform Commercial Code
("UCC") and shall include, without limitation, proprietary
rights and information, trademarks and trade names
(including the name The ▇▇▇▇▇▇ Corporation or any derivative
or variation thereof), engineering, service marks,
copyrights, patents, trade secrets, franchise rights,
governmental licenses and permits (to the extent
assignable), other license or use rights, insurance
policies, prepaid items, goodwill, and other nontangible
rights or properties owned by Seller or used by Seller in
the conduct of its business.
(b) "Fixtures and Equipment" shall have the
meaning attributed thereto under the UCC and shall include,
without limitation, any property attached to or located in
any building or real property, or portion thereof, leased or
owned by the Seller (inclusive of Seller's interest in any
tenant improvement to any real property) and all safes, cash
registers, counters, furniture, furnishings, machinery,
equipment, any tangible personal property, any vehicles
(except one car and one truck specifically identified on
Schedule A), computer hardware and software, and any parts
or accessories to any of the foregoing, and shall include,
without limitation, any fixtures and equipment for which
payment has been made on or before the Inventory Date but
has not been delivered as of the close of business on the
Inventory Date, further including but not limited to the
Equipment listed on Schedule A attached hereto and
incorporated herein. Fixtures and Equipment shall not
include racks located at Plant Number 2 and electrical ▇▇▇▇
ducts and disconnects. If Purchaser determines at its
discretion that Purchaser will not move any particular
machinery and equipment from any Real Property (defined
below), then such machinery and equipment may be left in
place, and ownership thereof shall automatically revert to
Seller.
(c) "Inventory" shall have the meaning attributed
thereto under the UCC and shall include, without limitation,
any goods or merchandise held by Seller for resale in the
ordinary course of its business, and shall include, without
limitation, any inventory for which payment has been made on
or before the Inventory Date but has not been delivered as
of the close of business on the Inventory Date, further
including but not limited to the Inventory as observed and
set forth in the Records and/or as set forth on Schedule B
attached hereto and incorporated herein.
(d) "Accounts" shall have the meaning attributed
thereto under the UCC and shall include, without limitation,
all rights of Seller to the receipt of money, whether
evidenced by an account or instrument (as defined in the
UCC), further including but not limited to the Accounts
listed on Schedule C attached hereto and incorporated
herein.
(e) "Supplies" shall include, without limitation,
all goods consumed by Seller in the conduct of its business,
and shall include, without limitation, any supplies for
which payment has been made on or before the Inventory Date
but has not been delivered as of the close of business on
the Inventory Date.
(f) "Records" shall mean all records, financial
or otherwise, in Seller's possession pertaining to the last
three (3) years and the properties, assets, liabilities,
operations and business of Seller and shall include, without
limitation, all purchase orders, purchase commitments, sale
contracts, customer and vendor lists and files, invoices,
relevant items of payment, relevant correspondence, relevant
financial records, any relevant general files, and any books
and records relating to purchases from suppliers and sales
to customers, excluding, however, records pertaining to the
Real Property (as defined herein).
(g) "Retained Assets" shall mean only:
(i) All real property owned by Seller (the
"Real Property"), including, but not limited to, the real
property located at and around ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
Defiance, Ohio ("Pant Number 1"); ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇ ("Plant Number 2"); and ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
#▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
(ii) The automobile and truck identified on
Exhibit 1.
(iii) The storage racks located at Plant
Number 2.
(iv) Records relating to the Real Property,
the corporate minute books of the Company, tax returns and
records relating to workers compensation.
(v) Cash.
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(vi) Electrical ▇▇▇▇ ducts and disconnects.
(vii) Telephone disconnects.
2. Assumption of Specified Liabilities. Purchaser shall
neither assume, nor discharge, nor be liable for any debts,
liabilities or obligations of Seller of any kind whatsoever,
except for the following specifically described liabilities
(collectively, the "Assumed Liabilities"). All schedules shall
be prepared as of November 30, 1999 and updated by ▇▇▇▇▇▇ as of
the date of Closing, provided that the schedule on accounts
payable at Closing shall not be considered inaccurate if it is
within $40,000 of the correct amount in the aggregate, with any
particular payable being correct within $4,000.
2.1 Payment for those accounts payable for ordered
Inventory and supplies not delivered before the close of business
on the Inventory Date which are specifically assumed by Purchaser
pursuant to Section 4.2.
2.2 Debt to the State Bank and Trust Company of
Defiance, Ohio (as set forth on Schedule D attached hereto and
incorporated herein).
2.3 Accounts Payable (as set forth on Schedule E
attached hereto and incorporated herein).
2.4 Accrued Liabilities (as set forth on Schedule F
attached hereto and incorporated herein).
2.5 ▇▇▇▇▇▇▇ Note (as set forth on Schedule G attached
hereto and incorporated herein).
2.6 Pension Liability (as set forth on Schedule H
attached hereto and incorporated herein).
2.7 Reserve for Bad Debts and Unknown Liabilities (as
set forth on Schedule I attached hereto and incorporated herein).
2.8 The personal property leases of the Company as set
forth on Schedule J attached hereto and incorporated herein.
2.9 All obligations and liabilities relating to the
termination of employees of Seller at its Defiance, Ohio
locations, provided that Seller fully cooperates with Purchaser
in connection with the timing, manner and means of providing
notice of such termination, and the information required to make
a determination regarding such termination, which, to the
knowledge of Seller, are set forth on Schedule K.
2.10 The Severance Agreements dated December 24, 1998,
by and between the Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇ ▇▇▇▇▇▇ (the "▇▇▇▇▇▇▇▇▇ Agreements"), which Severance
Agreements became effective as of June 1, 1999, provided that the
Severance Agreements with ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇ are
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amended prior to Closing to include only for the continuation of
health insurance and the deletion of the Noncompetition Agreement
and the Separation Package.
3. Purchase Price. The final purchase price to be paid by
Purchaser to Seller for the Purchased Assets (the "Purchase
Price") shall be the amount of $10.00 plus the assumption of the
Assumed Liabilities.
4. Final Evaluation.
4.1 General Procedure. Consistent with Section 4.4,
as of the close of business on the Inventory Date, which shall be
five (5) business days prior to the Closing Date, all of the
Purchased Assets shall be determined by a physical count, listing
and/or evaluation by representatives of both Seller and
Purchaser. The value of the Inventory and supplies for purposes
of the Closing shall be the lower of Seller's standard cost (less
any and all discounts) or fair market value as reflected in
Seller's perpetual inventory listing. The value of the Accounts
shall be determined by the dollar amount of the Accounts less a
reasonable allowance for doubtful accounts. The value of any
other Purchased Assets shall be agreed to by Purchaser and Seller
on or before the Inventory Valuation Date. Purchaser shall have
reasonable access to and the right to inspect all of Seller's
records, invoices, vendor price files and other records affecting
the Inventory, Accounts, or any other Purchased Assets or Assumed
Liabilities.
4.2 Ordered Inventory and Supplies. All Inventory and
supplies ordered but not delivered as of the date of this
Agreement which Purchaser desires to purchase and the cost
therefore is set forth on Schedule B-2. The ordered Inventory
and supplies on Schedule B-2 which has not been delivered as of
the Closing Date and all other Inventory and supplies ordered
hereafter with the written approval of Purchaser but which has
not been delivered as of the Closing Date shall be paid for by
Purchaser in accordance with the terms of purchase agreed to by
Seller and the person to whom the purchase order is issued, but
only to the extent not paid for prior to the Closing Date, and
such Inventory and supplies shall be owned by Purchaser;
provided, however, such ordered Inventory and supplies shall not
be added to the physical inventory for purposes of any balance
sheet to be used in determining the Purchase Price. After the
date of this Agreement, Seller agrees to not order any Inventory
without the prior written approval of Purchaser, other than
Inventory ordered in the ordinary course of business, consistent
with past practices.
4.3 Consigned Inventory. Purchaser shall not purchase
any consigned Inventory and consigned Inventory shall not be
included in the Purchased Assets.
4.4 Final Valuation of Assets and Liabilities. Within
seven (7) days prior to Closing, the Purchaser shall perform a
final valuation of the Purchased Assets and the Assumed
Liabilities ("Final Schedule"). If the difference between the
Purchased Assets and Assumed Liabilities exceeds a total of
$200,000, the parties shall negotiate in good faith to enter into
a mutually agreeable written amendment of this Agreement to
adjust for the difference between the Purchased Assets and
Assumed Liabilities. If the parties are unable to agree to such
amendment, then, notwithstanding anything herein seemingly to the
contrary, this Agreement shall terminate and the parties shall
have no further obligations hereunder.
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5. Representations and Warranties of Seller. Seller
represents and warrants to Purchaser that:
5.1 Incorporation and Qualification. Seller is a
corporation duly organized and validly existing under the laws of
the State of Ohio. Seller has qualified to do business in the
State of Ohio and is in good standing under the laws of the State
of Ohio and the Commonwealth of Pennsylvania and has all
requisite corporate power and authority to own the assets and to
carry on its business as presently being conducted, to enter into
this Agreement and to carry out and perform the terms and
provisions of this Agreement. The nature of the properties and
assets owned or leased by Seller and the character of its
business as presently conducted does not require Seller to
qualify to do business as a foreign corporation in any state or
jurisdiction other than the State of Ohio and the Commonwealth of
Pennsylvania.
5.2 Title and Condition of Purchased Assets. Seller
has and will convey to Purchaser, or will have and will convey to
Purchaser at the Closing, good and marketable title to the
Purchased Assets, held in each case subject to no lease,
mortgage, pledge, lien, charge, security interest, encumbrance or
restriction whatsoever, except with respect to the Assumed
Liabilities and as specifically identified as permitted in the
schedules attached hereto. The Purchased Assets and the Real
Property constitute all of the assets which are material to the
conduct of the Seller's business. Seller operates its business
in the State of Ohio from its principal place of business located
in Defiance, Ohio.
5.3 Authority to Consummate Transaction. The
execution and delivery of this Agreement does not, and the
consummation of the transaction contemplated hereby will not,
violate any provisions of the Articles of Incorporation or the
Code of Regulations of Seller, or any provision in any agreement
affecting the Purchased Assets, Assumed Liabilities, or any
judgment, decree, order, statute or regulation to which Seller is
subject. This Agreement constitutes the valid and binding
agreement of the Seller enforceable against Seller in accordance
with its terms.
5.4 Financial Information. The books, records and
other financial and asset information provided to Purchaser by
Seller, relating to the business of Seller are true and correct
and fairly present the financial position and the results of
operations.
5.5 Contracts. Except as otherwise disclosed herein,
there are no existing contracts and commitments of Seller, which
affect its business in regard to: (a) the Purchased Assets; (b)
the Assumed Liabilities; or (c) the authority of Seller to enter
into this Agreement and consummate the transaction contemplated
hereby.
5.6 Employees/Sales Representatives. Schedule L
attached hereto correctly sets forth the names, addresses, phone
numbers, positions and annual salaries/ compensation of all
employees and sales representatives of Seller as of the date of
this Agreement together with the amounts of bonuses and other
compensation of any nature to be paid to any such employee
pursuant to agreement, custom or present understanding. Other
than the Collective Bargaining Agreement, there is no other union
contract.
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5.7 Compliance with Law; Litigation. All licenses,
certificates and permits necessary for the legal conduct of
Seller's business activities are valid and in full force and
effect. Seller is not subject to any court or administrative
judgment, order or decree. No suit, action, proceeding or other
litigation to which Seller is a party is now pending, and none
will be pending as of the Closing Date, which materially
adversely affects Seller's authority to carry on its business,
convey the Purchased Assets or Assumed Liabilities, or would in
any manner affect the ability or authority of Seller to perform
all of its obligations hereunder. Except as set forth on
Schedule M, Seller has no knowledge of any claims, litigation,
governmental proceeding or investigation involving it, nor has
reason to believe that any such proceeding or investigation is
pending or threatened or that there exists any basis for any such
claim, litigation, proceeding or investigation. There are no
labor disputes to which Seller is a party. Except as set forth
on Schedule M, there are no pending or threatened unfair labor
practice charges or discrimination complaints against Seller.
Seller has no information concerning any potential violation of
any federal, state or local environmental laws which might result
in any future regulatory, civil or criminal action.
5.8 Insurance. Schedule N attached hereto contains a
description of all insurance policies maintained by Seller on its
assets or business, including the insurance carrier, the amount
of premiums thereunder, the type of coverage and limited coverage
of such policies and the expiration dates of the current premium
period thereunder. Seller has paid the premiums on those
policies described on Schedule N in accordance with the terms of
such policies or listed on accounts payable.
5.9 Customers and Suppliers. Except as set forth on
Schedule O, Seller has no information, and is not aware of any
facts, indicating that any customer or supplier of Seller intends
to cease doing business with Seller or with Purchaser as the
successor to Seller's assets hereunder or to materially alter the
amount of business that they are presently doing with Seller or
will do with Purchaser.
5.10 Conflicts of Interest. Except as set forth on
Schedule P, no director or officer or to Seller's knowledge
executive employee of Seller controls or is an employee, officer,
director or agent of any corporation, firm, association,
partnership or other business entity which is a competitor,
supplier or customer of Seller.
5.11 Patents, Trademarks and Proprietary Rights.
Seller has the right and authority to use, and possess title to,
the names "▇▇▇▇▇▇", "The ▇▇▇▇▇▇ Corporation", "AEC," "CMP", and
"Motor Master". Seller has not received any notice of, and has
no knowledge of, any act which conflicts with or infringes upon
the Seller's right to continued exclusive use of the names
"▇▇▇▇▇▇", "The ▇▇▇▇▇▇ Corporation", "CMP", "AEC" or "Motor
Master", in the conduct of its business. Seller shall execute
and shall obtain the execution of any third party on any
documents Purchaser deems necessary or beneficial to Purchaser's
registration of any of Seller's trademarks; provided, however,
such documents shall provide that Seller shall have the right to
purchase, for $100, any trademark that Purchaser no longer
desires to protect or use in its business.
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5.12 No Defective Products. Seller is not aware of any
information which would tend to indicate that there is any defect
in the design or manufacture of any products in Seller's
Inventory or any product which has been sold from Seller's
Inventory and which is currently in the field.
5.13 Ordered Inventory. All the Inventory ordered by
Seller but not delivered as of the date of this Agreement and the
full cost therefore is accurately set forth on Schedule B.2
hereto.
5.14 Seller's Unpaid Creditors. All the unpaid
creditors of Seller and the amounts owed to those creditors as of
the date of this Agreement are accurately set forth in Schedule D-
2; and, any additional creditors of Seller and the amounts owed
to those creditors that may exist as of the Closing will be
accurately listed and provided to Purchaser at Closing, and shall
be accurately reflected in Schedule D-2 (as the same shall be
amended at Closing subject to agreement of Purchaser).
5.15 Employee Benefit Plan. The Employee Benefit Plan's
status is accurately reflected on Schedule Q (as the same shall
be amended at Closing, subject to agreement of Purchaser).
5.16 Disclosure. No representation or warranty by
Seller in this Agreement, or in any writing attached or delivered
pursuant hereto, contains or will contain any untrue statement of
material fact or omits or will omit to state any material fact
required to make the statements herein or therein contained not
misleading.
5.17 Survival. All representations and warranties of
Seller shall be deemed made as of the Closing and shall survive
the Closing for a period of one (1) year.
6. Representations and Warranties of Purchaser. Purchaser
represents and warrants that:
6.1 Incorporation and Qualification. Purchaser is a
duly organized and existing corporation under the laws of the
State of Delaware and has all corporate power and the authority
to enter into this Agreement and to carry out and perform the
terms and provisions hereof.
6.2 Authority to Consummate Transaction. The
execution and delivery of this Agreement does not, and the
consummation of the transaction contemplated hereby will not,
violate any provisions of the Articles of Incorporation or By-
Laws of Purchaser, or any provision in any judgment, decree,
order, statute, or regulation to which Purchaser is subject.
6.3 Disclosure. No representation or warranty by
Purchaser in this Agreement, or in any writing attached or
delivered pursuant hereto, contains or will contain any untrue
statement of material fact or omits or will omit to state any
material fact required to make the statements herein or therein
contained not misleading.
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6.4 Survival. All representations and warranties of
Purchaser shall be deemed made as of the Closing and shall
survive the Closing for a period of one (1) year.
7. Seller's Employees. Seller acknowledges and agrees that
a) Purchaser shall not operate or control the activities at the
Real Property, and b) Purchaser shall not hire Seller's employees
to work at the Real Property. Seller shall cooperate with
Purchaser to provide the proper notices in connection with the
termination of Seller's employees so that such notice, and the
termination process as a whole, is managed so that the costs,
liabilities and expenses are minimized. This provision shall be
interpreted to allow for the proper execution of Seller's
obligations under a certain Tolling Agreement to be executed by
the parties at Closing.
7.1 Termination. The employment of the employees of
Seller shall be terminated by Seller in accordance with this
Agreement and in a manner consistent with Seller's obligations
under the Tolling Agreement. Seller agrees that any
communication or announcement of such termination, including the
timing and content of such, shall be subject to Purchaser's
review and approval.
7.2 Indemnification. Purchaser shall indemnify and
hold Seller harmless from any and all costs, expenses,
liabilities or obligations arising out of or relating to any
claims of such terminated employees as a result of such
termination by Seller, including, but not limited to, claims
arising under the Ohio Minimum Fair Wage Standards Act, the
federal Worker Adjustment and Retraining Notification Act,
Employee Benefit Plan, or the Collective Bargaining Agreement.
7.3 Employee Benefit Plans. Seller shall fully
cooperate with Purchaser, in Seller's administering or
terminating, at Purchaser's discretion, any Employee Benefit
Plan.
8. Brokerage. There is no broker involved in this
transaction. Seller shall indemnify Purchaser against all loss,
cost, damage, or expense, including attorney's fees, incurred by
Purchaser in any action based upon a claim by a broker that
Seller has employed or otherwise engaged such broker in
connection with the transaction contemplated by this Agreement;
and, Purchaser shall indemnify Seller against all loss, cost,
damage or expense, including attorney's fees, incurred by Seller
in any action based upon the claim of a broker that Purchaser has
employed or otherwise engaged such broker in connection with the
transaction contemplated by this Agreement.
9. Actions of Seller After October 1, 1999, and Pending
Closing. Seller represents and warrants that, from October 1,
1999, to the date of this Agreement, Seller conducted the
business only in the ordinary course of business and has not
taken any action proscribed in Section 8.1. Seller covenants
that from the date of this Agreement through the Closing Date:
9.1 Conduct of Business. Except as set forth on
Schedule R, unless Purchaser shall otherwise consent in writing,
Seller shall with respect to its business:
(a) Conduct its business only in the ordinary
course and refrain from changing or introducing any method
of management or operations other than the implementation of
4th Shift software program;
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(b) Use commercially reasonable efforts to keep
intact its business, keep available its present employees
and preserve the goodwill of all suppliers, customers and
others having business relations with it;
(c) Have in effect and maintain all insurance of
the kind and in the amounts consistent with its normal
business practice;
(d) Maintain its assets on a basis consistent
with that prevailing generally in the industry or trade and
as required by good business practice;
(e) Pay all Assumed Liabilities in accordance
with the terms thereof;
(f) Neither create nor assume any indebtedness
relating to the Purchased Assets other than indebtedness
incurred in the ordinary course of business consistent with
past practices of Seller;
(g) Neither mortgage, pledge, nor otherwise
encumber any of the Purchased Assets;
(h) Neither sell nor otherwise dispose of any of
the Purchased Assets (except for sales of inventory in the
normal course of business);
(i) Not modify existing contracts relating to the
Purchased Assets;
(j) Not enter into any material contract or
commitment of any nature relating to the Purchased Assets;
(k) Not amend its Articles of Incorporation or
Code of Regulations;
(l) Not sell or otherwise dispose of, or grant
any security interest in or encumbrance on, any of the
Purchased Assets;
(m) Not enter into or implement any employee
benefit plan;
(n) Not enter into any employment, consulting or
similar contract for or on behalf of the Seller;
(o) Not increase the compensation, deferred
compensation or benefits payable to any employee or
commissioned agent other than annual compensation increases
for employees, consistent with past practices;
(p) Not take any action, or by inaction, permit
any action to be taken or event to occur, which would cause
any representation or warranty made in or pursuant to this
Agreement to be untrue as of the Closing;
(q) Not enter into any agreement with respect to
any of the foregoing;
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(r) Not remove any assets other than those
recorded in Seller's books and records as a sale in the
ordinary course of business at a fair market value price;
(s) Not take any action that could impair the
collectability of any Accounts that are a part of the
Purchased Assets;
(t) Not to declare any dividends or make any
distribution of cash or other assets to any person; or
(u) Not to loan or advance money to any person,
and not to grant any bonus or similar grant to any person.
9.2 Availability of Books and Records. Seller shall
make available for inspection and copying by Purchaser, its
agents, accountants and attorneys, at reasonable times, all of
its assets, books and records of accounts, contracts and other
information, documentary or otherwise, as is appropriate to
provide to Purchaser all pertinent information pertaining to or
affecting the Purchased Assets and Assumed Liabilities. No such
examination, however, shall constitute a waiver or relinquishment
by Purchaser of its right to rely on Seller's covenants,
representations and warranties as herein or pursuant hereto.
9.3 Notice of Events. Seller shall promptly give
Purchaser notice of the occurrence of any event relating to the
Purchased Assets or Assumed Liabilities or the occurrence of any
event or change in facts, which cause any of the representations
made by Seller in this Agreement to be inaccurate.
9.4 Satisfactions of Conditions. Seller will use
commercially reasonable efforts, and take such actions as may be
reasonably necessary or appropriate, to cause (i) the
satisfaction of the conditions referred to in Section 11 of this
Agreement, and (ii) the consummations of the transactions
contemplated by this Agreement.
9.5 Confidentiality. Seller will cause all non-public
information with respect to the business, properties, assets and
affairs of Purchaser to be treated confidentially, exercising the
same degree of care as they use to preserve and safeguard their
own confidential information (which undertaking shall survive the
Closing hereunder and continue in full force and effect following
consummation of the transactions provided for herein). Unless
approved in writing by the other party, each party will refrain
from making any announcements to, or with respect to, the
consummation of the transactions provided for herein, unless
required by law or regulation. Any disclosure made to effect
compliance with any applicable bulk sales or similar law shall
not constitute a violation hereof.
10. Non-Competition.
10.1 Seller's Non-Competition. Seller agrees that
until September 30, 2004, it will not, directly or indirectly,
engage in or have any interest in any person, firm, corporation,
or other business (whether as an employee, officer, director,
agent, creditor, consultant, investor, partner or otherwise) that
engages in any activity which is the same as or competitive with
any activity now engaged in as a material part of its business
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within the continental United States. If any of the covenants
set forth in this Section 9.1 is held to be unenforceable by a
court of competent jurisdiction because of the duration or area
covered by such undertakings, it is agreed that the court making
such determination shall have the power to reduce the duration
and/or area of such provision and enforce such provision in its
reduced form. Seller agrees to execute at Closing a Non-
Competition, Assignment and Confidentiality Agreement in the form
attached hereto as Exhibit 2, and to use its best efforts to
obtain the signatures of the other parties to that Agreement.
10.2 Seller's Right to Enforce Non-Competition of
Others. Effective as of the Closing, Seller hereby assigns to
Purchaser all rights it has to enforce any agreement to prevent
any third party from engaging in, or having an interest in any
person, firm, corporation or other business that engages in any
activity which is the same as, similar to or competitive with any
activity in which Seller has been engaged.
11. Possession and Risks of Loss. Possession or the right
to possession of all the Purchased Assets (including related
suppliers, customers and financial records) shall be transferred
by Seller to Purchaser as of the Closing. The risk of loss of
and destruction to any of the Purchased Assets occurring by any
cause whatsoever prior to such transfer shall remain with Seller.
12. Conditions Precedent to Obligations of Seller. Unless
waived, in whole or in part, in writing by Seller, the
obligations of Seller hereunder are subject to the following
conditions:
12.1 Representations and Warranties. The
representations and warranties of Purchaser herein shall be
deemed to have been made again as of the Closing Date and shall
then be true and correct, subject to any changes contemplated by
this Agreement and/or Seller shall not have discovered any error,
misstatement or omission therein; and
12.2 Purchaser's Compliance. All the terms, covenants
and conditions of this agreement required to be complied with and
satisfied by Purchaser at or prior to the Closing Date will have
been duly complied with and satisfied.
12.3 Other Agreements. The conclusion of a
satisfactory Non-Competition Agreement substantially in the form
as attached hereto as Exhibit 3 between the Purchaser and ▇▇▇▇
▇▇▇▇▇▇. The conclusion of a satisfactory Assumption and
Assignment of Severance Agreements substantially in the form as
attached hereto as Exhibit 4 between the Purchaser and ▇▇▇▇
▇▇▇▇▇▇, the Purchaser and ▇▇▇▇▇ ▇▇▇▇▇▇ and the Purchaser and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇. The conclusion of a satisfactory Consulting
Agreement between ▇▇▇▇▇ ▇▇▇▇▇▇ and the Purchaser substantially in
the form as attached hereto as Exhibit 5. The conclusion of a
satisfactory Tolling Agreement between Seller and Purchaser
substantially in the form as attached hereto as Exhibit 6. The
obligations or Purchaser under the amended Severance Agreements
and under the Consulting Agreement with ▇▇▇▇▇ ▇▇▇▇▇▇ shall be
guaranteed by the holding company of Purchaser after Purchaser
has conveyed to a third party purchaser.
13. Conditions Precedent to Obligations of Purchaser.
Unless waived, in whole or in part, in writing by Purchaser, the
obligations of Purchaser hereunder are subject to each of the
following conditions:
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13.1 Representations and Warranties. The
representations and warranties of Seller herein shall be deemed
to have been made again on the Closing Date and shall then be
true and correct in all respects, subject to any changes
contemplated by this Agreement and/or Purchaser shall not have
discovered any error, misstatement or omission therein;
13.2 Third Party Approvals. Purchaser shall have
received, in form and content satisfactory to it (i) consent to
the transfers herein provided for from any agreement to be
assigned to Purchaser hereunder, and (ii) such approvals required
to be obtained from any governmental agency in order to effect
the transfer, or issuance in lieu of transfer, of all licenses
and permits which Purchaser deems necessary or desirable to
conduct the business conducted by Seller prior to Closing;
13.3 Seller's Compliance. All the terms, covenants and
conditions of this Agreement required to be complied with and
satisfied by Seller at or prior to the Closing Date will have
been duly complied with and satisfied in all material respects;
13.4 Change in Condition. Except as set forth herein,
there has been no change since October 1, 1999, in the Seller's
financial conditions, assets, liabilities, or business other than
changes in the ordinary course of business, none of which has
been materially adverse, no damage, destruction, or loss, whether
or not covered by insurance, materially and adversely affecting
the Purchased Assets or Assumed Liabilities, or business, or any
labor trouble, or any event or condition in any character, which
in the reasonable judgment of Purchaser will adversely affect
Seller's business or profits;
13.5 Conduct of Business. Seller will have continued
the conduct of the business in the ordinary course and in
accordance with this Agreement and past practices and procedures
and shall not have disposed of any assets, except in the ordinary
course of business and will have maintained inventory levels in
accordance with good business practices;
13.6 Other Agreements. The conclusion of a
satisfactory Non-Competition Agreement substantially in the form
as attached hereto as Exhibit 3 between the Purchaser and ▇▇▇▇
▇▇▇▇▇▇. The conclusion of a satisfactory Assumption and
Assignment of Severance Agreements substantially in the form as
attached hereto as Exhibit 4 between the Purchaser and ▇▇▇▇
▇▇▇▇▇▇, the Purchaser and ▇▇▇▇▇ ▇▇▇▇▇▇ and the Purchaser and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇. The conclusion of a satisfactory Consulting
Agreement between ▇▇▇▇▇ ▇▇▇▇▇▇ and the Purchaser substantially in
the form as attached hereto as Exhibit 5. The conclusion of a
satisfactory Tolling Agreement between Seller and Purchaser
substantially in the form as attached hereto as Exhibit 6. The
obligations or Purchaser under the amended Severance Agreements
and under the Consulting Agreement with ▇▇▇▇▇ ▇▇▇▇▇▇ shall be
guaranteed by the holding company of Purchaser after Purchaser
has conveyed to a third party purchaser.
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13.7 Attorney Opinion. On or before the Closing,
Seller has provided Purchaser with an opinion of legal counsel
acceptable to Purchaser in the general form attached hereto as
Exhibit 7 which, among other matters, confirms (a) that Seller
owns all Purchased Assets free and clear of all leases,
mortgages, pledges, liens, charges, security interests,
encumbrances or restrictions whatsoever; (b) that Seller has the
necessary power and authority to enter into this Agreement and to
carry out and perform the terms and provisions of this Agreement;
and (c) that this Agreement constitutes the valid and binding
agreement of the Seller and is enforceable against Seller in
accordance with its terms.
13.8 Due Diligence. Conclusion of due diligence in a
manner satisfactory to Purchaser, at its discretion.
14. Closing.
14.1 Place and Date. The Closing shall be held at the
earliest possible date, on or before March 30, 2000, at 5:00
p.m., unless another time or place is mutually agreed upon by
Purchaser and Seller. The date and time of Closing are referred
to herein as the "Closing Date" under this Agreement. All
transactions to be accomplished on the Closing Date shall be
effective as of the close of business on the business day before
the Closing Date.
14.2 Closing Costs. Purchaser shall pay all closing
costs and expenses incidental to this transaction, provided that
Purchaser's obligations hereunder shall not exceed $5,000.
14.3 Seller's Transfer Instruments. Seller will
execute and deliver such bills of sale, assignments, certificates
of title and other good and sufficient instruments of conveyance
and transfer in form satisfactory to Purchaser, and containing
full warranties of title, as shall be effective to vest in
Purchaser good and marketable title to the Purchased Assets, free
and clear of all liens, charges, encumbrances and restrictions
whatsoever, subject to the Assumed Liabilities. A General ▇▇▇▇
of Sale and Assignment in the form attached hereto as Exhibit 6
shall be executed by Seller and Delivered to Purchaser at Closing
with full, complete and accurate attachments made a part thereof.
From time to time, following Closing, Seller will execute and
deliver to Purchaser such bills of sale, assignments,
certificates of title and other good and sufficient instruments
of conveyance and transfer, and take such other action, as
Purchaser may reasonably require to more effectively convey,
transfer and vest in Purchaser title to any of the Purchased
Assets.
14.4 Corporate Resolutions. Seller shall furnish at
Closing certified copies of the resolutions of its stockholders
and directors approving substantially the form of this Agreement,
the transactions contemplated by this Agreement, the power and
authority of the person executing this Agreement and the
consummation of this Agreement in accordance with the terms
hereof. Purchaser shall furnish at Closing a certified copy of
the resolutions of its directors approving substantially the form
of this Agreement, the transactions contemplated by this
Agreement, the power and authority of the person executing this
Agreement and the consummation of this Agreement in accordance
with the terms hereof.
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14.5 Closing Statement. A statement, in form
satisfactory to both parties, shall be prepared and executed,
which statement shall evidence the monetary terms of the Closing
of this transaction.
15. Indemnification by Seller. Subject to Section 14.2,
Seller indemnifies and holds Purchaser and its stockholders,
directors, employees, agents, officers and affiliates harmless
against, and to reimburse such persons for, any Purchaser
Damages. The term "Purchaser Damages" for purposes of this
Section 14 means any claims, actions, demands, lawsuits, costs,
expenses, liabilities, penalties and damages (including counsel
fees incidental thereto or incidental to the enforcement by
Purchaser of this Agreement) resulting to Purchaser from: (a)
any material inaccurate representation made to Purchaser in or
pursuant to this Agreement; (b) material breach of any of the
warranties made to Purchaser in or pursuant to this Agreement;
(c) material breach or default in the performance by Seller of
any of its covenants or obligations under this Agreement; (d) any
debts, liabilities or obligations of Seller, which are not
expressly assumed by Purchaser hereunder; (e) any claim by any
third party arising from any alleged default, act or breach by
Seller of any obligation, contract or commitment or resulting
from any act or omission of Seller; (f) any claim by any third
party, including creditors of Seller which are based upon
Seller's execution and performance of this Agreement; (g) any
reasonable protection of Seller's trade name rights from
infringement, use or registration thereof which commenced prior
to the closing date with respect to the names "▇▇▇▇▇▇" or "The
▇▇▇▇▇▇ Corporation"; (h) the ownership, possession, use or
operation of any real property prior to the Closing Date
(including, without limitation, any liability related to any
environmental clean-up, compliance or corrective action); (i) any
claims relating to any products sold prior to the Closing Date
(including, without limitation, any products liability,
negligence, tort, express or implied warranty, statutory or
contract claims) and (j) any claims based on any applicable bulk
sale law.
15.1 Notice and Defense of Claims.
(a) If Purchaser receives notice of any claim or
of the commencement of any action or proceeding by a third
party (a "Third Party Claim") with respect to which Seller
is obligated to provide indemnification pursuant to this
Agreement, Purchaser will with reasonable promptness, give
Seller written notice thereof (a "Claim Notice").
(b) Upon receipt by Seller of a Claim Notice from
Purchaser with respect to any claim for indemnification
which is based upon a Third Party Claim, Seller may assume
the defense of the Third Party Claim with counsel of its own
choosing. The Purchaser will cooperate in the defense of
the Third Party Claim and will furnish such records,
information and testimony and attend all such conferences,
discovery proceedings, hearings, trial and appeals as may be
reasonably required therewith. The Purchaser will have the
right to employ its own counsel with respect to the Third
Party Claim, but the fees and expenses of such counsel will
be at the expense of the Purchaser unless the Seller will
not have promptly employed competent counsel to assume the
defense of the Third Party Claim, in which event such fees
and expenses will be borne by Seller. The Seller will have
the right, in its sole discretion, to satisfy or settle any
Third Party Claim (unless the settlement requires payment,
performance or observance of any commitment binding on the
Purchaser or its property) for which indemnification has
14
been sought and is available hereunder. If the Seller will
fail with reasonable promptness either to reasonably defend
such Third Party Claim or to satisfy and settle the same,
the Purchaser may defend, satisfy or settle the Third Party
Claim at the expense of Seller.
15.2 Limitation on Seller's Indemnification.
Notwithstanding the provisions of Section 14, Seller shall not be
required to indemnify or hold harmless any of the indemnified
parties on account of any loss indemnified under Section 14,
unless liability of Seller in respect of that indemnified loss,
when aggregated with the liability of Seller in respect of all
losses under Section 14, exceeds the threshold amount of $25,000,
whereupon Seller shall be liable for all such indemnified losses
in excess of $25,000, up to but not exceeding the total amount
of $1,000,000.
16. Indemnification by Purchaser. Purchaser indemnifies and
holds Seller and its stockholders, directors, employees, agents,
officers and affiliates harmless against, and to reimburse such
persons for, any Seller Damages. The term "Seller Damages" for
purposes of this Section 15 means any claims, actions, demands,
lawsuits, costs, expenses, liabilities, penalties and damages
(including counsel fees incidental thereto or incidental to the
enforcement by Purchaser of this Agreement) resulting to Seller
from: (a) any material inaccurate representation made to Seller
in or pursuant to this Agreement; (b) material breach of any of
the warranties made to Seller in or pursuant to this Agreement;
(c) material breach or default in the performance by Purchaser of
any of its covenants or obligations under this Agreement; (d) any
debts, liabilities or obligations of Seller, which are expressly
assumed by Purchaser hereunder; (e) any claim by any third party
arising from any alleged default, act or breach by Purchaser of
any obligation, contract or commitment or resulting from any act
or omission of Purchaser; (f) any claim by any third party,
including creditors of Purchaser which are based upon Purchaser's
execution and performance of this Agreement; (g) any liabilities
of the type described in Section 7.2 and (h) any debts,
liabilities or obligations relating to the Purchased Assets or
Assumed Liabilities that accrues after the Closing Date which are
not Purchaser Damages.
16.1 Notice and Defense of Claims.
(a) If Seller receives notice of any claim or of
the commencement of any action or proceeding by a third
party (a "Third Party Claim") with respect to which
Purchaser is obligated to provide indemnification pursuant
to this Agreement, Seller will with reasonable promptness,
give Purchaser written notice thereof (a "Claim Notice").
(b) Upon receipt by Purchaser of a Claim Notice
from Seller with respect to any claim for indemnification
which is based upon a Third Party Claim, Purchaser may
assume the defense of the Third Party Claim with counsel of
its own choosing. The Seller will cooperate in the defense
of the Third Party Claim and will furnish such records,
information and testimony and attend all such conferences,
discovery proceedings, hearings, trial and appeals as may be
reasonably required therewith. The Seller will have the
right to employ its own counsel with respect to the Third
Party Claim, but the fees and expenses of such counsel will
be at the expense of the Seller unless the Purchaser will
not have promptly employed competent counsel to assume the
15
defense of the Third Party Claim, in which event such fees
and expenses will be borne by Purchaser. The Purchaser will
have the right, in its sole discretion, to satisfy or settle
any Third Party Claim (unless the settlement requires
payment, performance or observance of any commitment binding
on the Seller or its property) for which indemnification has
been sought and is available hereunder. If the Purchaser
will fail with reasonable promptness either to reasonably
defend such Third Party Claim or to satisfy and settle the
same, the Seller may defend, satisfy or settle the Third
Party Claim at the expense of the Purchaser.
17. General.
17.1 Notices. All notices required or permitted herein
must be in writing and shall be sufficient if delivered
personally or mailed by certified or registered mail, return
receipt requested, postage and charges prepaid, to the other
party at the addresses set forth on the signature page of this
Agreement, or to such other addresses as any party hereto may
designate to the other from time to time for this purpose. All
notices shall be deemed received when delivered personally or, if
mailed, within three (3) days (excluding Sundays and holidays and
any other days on which mail is not delivered) after being
mailed.
If to Purchaser: L&S Automotive Products Co.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: L&S Automotive Products Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Seller: ▇▇▇▇▇▇ Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
17.2 Integrated Agreement. This instrument contains
and constitutes the entire agreement between the parties herein
and supersedes all prior agreements and understandings between
the parties hereto relating to the subject matter hereof and
there are no agreements, amendments, understandings,
restrictions, warranties or representations among the parties
hereto relating to the subject matter hereof and there are no
agreements, understandings, restrictions, warranties or
representations among the parties relating to the subject matter
hereof other than those set forth herein. All exhibits attached
hereto are hereby incorporated herein and made a part of this
Agreement. This instrument is not intended to have any legal
16
effect whatsoever, or to be a legally binding agreement, or any
evidence thereof, until it has been signed by both parties
hereto.
17.3 Choice of Law, Venue, and Construction. This
Agreement shall be construed, enforced and governed in accordance
with the laws of the State of Ohio, and the parties hereto
consent to and accept the jurisdiction of the State and Federal
courts within the Northern District of the State of Ohio with
respect to the determination of any claim, dispute or
disagreement which may arise from the interpretation,
performance, or breach of this Agreement or with respect to any
matter involved herein or relating to this Agreement. All
pronouns and any variations thereof shall be deemed to refer to
the masculine, feminine or neuter gender thereof or to the
plurals of each, as the identity of the person or persons or the
context may require. The descriptive headings contained in this
Agreement are for reference purposes only and are not intended to
describe, interpret, define or limit the scope, extent or intent
of this Agreement or any provision contained herein.
17.4 Invalidity. If any provision contained in this
Agreement shall for any reason be held to be invalid, illegal,
void or unenforceable in any respect, such provision shall be
deemed modified so as to constitute a provision conforming as
nearly as possible to such invalid, illegal, void or
unenforceable provisions while still remaining valid and
enforceable, and the remaining terms or provisions contained
herein shall not be affected thereby.
17.5 Binding Effect. This Agreement shall be binding
upon, inure to the benefit of and be enforceable by the parties
hereto and their respective legal representatives, successors and
assigns. The rights of Purchaser under this Agreement may be
assigned in whole or in part to any third party provided
Purchaser remains liable for the obligations hereunder of any
such assignee.
17.6 Litigation Expenses. In any action brought by a
party hereto to enforce the obligations of any other party
hereto, the prevailing party shall be entitled to collect from
the other parties to such action such action such party's
reasonable attorneys' fees, court costs and other expenses
incidental to such litigation.
17.7 Counterpart Execution. This Agreement may be
executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute
but one and the same instrument.
17.8 Amendment and Waiver. This Agreement may be
amended at any time, but only by an instrument in writing
executed by both parties hereto. A party hereto may waive any
requirement to be performed by the other party provided that such
waiver shall be in writing and executed by the party waiving the
requirement. No waiver of any particular requirement to be
performed by the other party shall act as a waiver of any other
requirement for that party.
17.9 Authorization. Each party for itself, its legal
representatives, successors and assigns hereby represents and
warrants that it has the full capacity and authority to enter
into, execute, deliver and perform this Agreement, and that such
execution, delivery and performance does not violate any
contractual or other obligation by which it is bound.
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17.10 Further Agreement. For a period of five (5)
years after the Closing (or such longer period as may be required
by any governmental agency or ongoing litigation or in connection
with any administrative proceeding):
(a) Purchaser shall not dispose of or destroy any of
the Records and files with respect to the Purchased Assets. If
Purchaser wishes to dispose of or destroy such records and files
after that time, it shall first give thirty (30) days' prior
written notice to Seller and Seller shall have the right, at its
option and expense, upon prior written notice to Purchaser within
such 30-day period, to take possession of the records and files
within sixty (60) days after the date of the Seller's notice to
Purchaser.
(b) Purchaser shall allow the Seller and its
representatives reasonable access to all Records and files with
respect to the Company or the Purchased Assets pertaining to
periods prior to the Closing to the extent such Records and files
reasonably relate to a reasonable business purpose disclosed by
the Seller to Purchaser, during regular business hours and upon
reasonable notice at Purchaser's principal places of business or
at any location where such Records are stored, and Seller shall
have the right, at its own expense, to make copies of any such
Records and files; provided, however, that any such access or
copying shall be had or done in such a manner so as not to
unreasonably interfere with the normal conduct of Purchaser's
business and operations.
[The remainder of this page intentionally left blank.]
18
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement on the day and year set forth below.
"SELLER":
THE ▇▇▇▇▇▇ CORPORATION,
an Ohio corporation
ATTEST: By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
___________________________
President
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
____________________________
Witness
____________________________
Date: March 6, 2000
_______________________
"PURCHASER":
L&S AUTOMOTIVE PRODUCTS CO.,
a Delaware corporation
ATTEST: By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
________________________________
President
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
____________________________
Date: March 6, 2000
_______________________
agrmnt\lsapde\zeller_00.apa.doc
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