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EXHIBIT 10.12
ASSET PURCHASE AGREEMENT
DATED
JANUARY 27, ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, INC.,
▇▇▇▇▇ ▇.▇.,
AKEMI, INC.
AND
MAXCO, INC.
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TABLE OF CONTENTS
ARTICLE I
CERTAIN DEFINITIONS ............................. 2
1.01 "Acquired Assets" .................................................. 2
1.02 "Assumed Liabilities"............................................... 3
1.03 "Excluded Assets"................................................... 3
1.04 "Retained Liabilities".............................................. 3
1.05 "Taxes"............................................................. 5
1.06 "Employee Benefit Plan"............................................. 5
ARTICLE II
PURCHASE AND SALE OF ASSETS
AND ASSUMPTION OF LIABILITIES .................... 5
2.01 Purchase and Sale of Assets ........................................ 5
2.02 Consideration....................................................... 5
ARTICLE III
THE CLOSING .......................... 6
3.01 Time and Place ..................................................... 6
3.02 Deliveries by the Seller............................................ 6
3.03 Deliveries by Purchaser............................................. 6
3.04 Further Assurances ................................................. 7
ARTICLE IV
RELATED AGREEMENTS AND TRANSACTIONS...................... 7
4.01 Hold Harmless ...................................................... 7
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4.02 Bulk Sales Laws..................................................... 7
4.03 Mail Received After Closing ........................................ 7
4.04 Access by Seller ................................................... 8
4.05 Change of Name ..................................................... 8
4.06 Allocation Agreement ............................................... 8
4.07 Confidentiality; Competition ....................................... 8
4.08 Purchase of Stock by Parent ........................................ 9
4.09 Parent Loan ........................................................ 9
4.10 ▇▇▇▇▇ Loan.......................................................... 10
4.11 ▇▇▇▇▇'▇ Board of Directors ......................................... 10
4.12 Stockholders' Agreement............................................. 10
4.13 Employee Matters.................................................... 10
4.14 Computer System..................................................... 10
4.15 Lease of Factories and Equipment.................................... 10
4.16 Supply Agreement.................................................... 10
4.17 Certain Agreements.................................................. 10
4.18 Consents and Approvals.............................................. 11
4.19 Employee Benefit Plans; Insurance................................... 11
4.20 Post-Closing Adjustment............................................. 11
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF SELLER ........................... 12
5.01 Due Authorization and Execution; Valid and Binding Agreements;
No Violation ..................................................... 12
5.02 Corporate Organization; Etc......................................... 13
5.03 No Violation ....................................................... 13
5.04 Consents and Approvals of Governmental Authorities; Etc............. 14
5.05 Financial Statements ............................................... 14
5.06 No Undisclosed Liabilities; Etc..................................... 14
5.07 Absence of Certain Changes ......................................... 14
5.08 Title to Properties; Encumbrances................................... 16
5.09 Plant and Equipment ................................................ 16
5.10 Leases ............................................................. 16
5.11 No Condemnation or Expropriation ................................... 16
5.12 Patents, Trademarks, Trade names, Etc............................... 16
5.13 Litigation.......................................................... 17
5.14 Subsidiaries........................................................ 18
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5.15 Toxic and Hazardous Substances and Other Environmental, Health and
Safety Issues .................................................... 18
5.16 Good Title Conveyed, Etc............................................ 19
5.17 Compliance with Law ................................................ 19
5.18 Insurance .......................................................... 20
5.19 Contracts and Commitments........................................... 20
5.20 Akemi GmbH Agreement................................................ 21
5.21 Accounts Receivable................................................. 21
5.22 Personnel........................................................... 21
5.23 Labor Difficulties.................................................. 21
5.24 Customers and Suppliers............................................. 22
5.25 No Product Liabilities.............................................. 22
5.26 Inventory........................................................... 22
5.27 Backlog ............................................................ 23
5.28 Product and Service Warranties...................................... 23
5.29 Disclosure.......................................................... 23
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND ▇▇▇▇▇ ............. 23
6.01 Corporate Organization: Etc......................................... 23
6.02 Authorization, Etc.................................................. 24
6.03 No Violation ....................................................... 24
6.04 ▇▇▇▇▇'▇ Financial Statements........................................ 24
6.05 Power to Issue ▇▇▇▇▇ Stock.......................................... 25
6.06 Capitalization...................................................... 25
6.07 Consents and Approvals of Governmental Authorities; Etc............. 25
6.08 No Undisclosed Liabilities; Etc..................................... 25
6.09 Title to Properties; Encumbrances................................... 25
6.10 Plant and Equipment................................................. 26
6.11 Litigation.......................................................... 26
6.12 Compliance with Law................................................. 26
ARTICLE VII
CONDUCT OF BUSINESS PENDING THE CLOSING ............... 27
7.01 Regular Course of Business ......................................... 27
7.02 Amendments ......................................................... 27
7.03 Capital Changes..................................................... 27
7.04 Organization ....................................................... 27
7.05 General ............................................................ 27
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7.06 Insurance; Property................................................. 27
7.07 No Default.......................................................... 27
7.08 Compliance with Laws................................................ 27
7.09 Inventory........................................................... 27
ARTICLE VIII
OBLIGATIONS PENDING THE CLOSING ..................... 28
8.01 Access ............................................................. 28
8.02 Confidentiality .................................................... 28
8.03 Other Transactions; Etc............................................. 28
8.04 Further Assurances ................................................. 29
8.05 Supplements to Schedules ........................................... 29
8.06 Foam Boards; Waste Drums ........................................... 29
ARTICLE IX
CONDITIONS TO THE OBLIGATIONS OF PURCHASER AND ▇▇▇▇▇ ............ 29
9.01 Representations and Warranties True ................................ 29
9.02 Performance ........................................................ 29
9.03 Investigations; Etc................................................. 30
9.04 No Government Proceeding or Litigation.............................. 30
9.05 Material Adverse Change............................................. 30
9.06 Consents ........................................................... 30
9.07 Related Transactions................................................ 30
9.08 Key Employees....................................................... 30
9.09 Financing........................................................... 30
9.10 Insurance........................................................... 30
9.11 Certificates........................................................ 30
ARTICLE X
CONDITIONS TO THE OBLIGATIONS OF SELLER AND PARENT .............. 31
10.01 Representations and Warranties True ............................... 31
10.02 Performance ....................................................... 31
10.03 Certificates....................................................... 31
ARTICLE XI
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION ...... 31
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11.01 Survival of Representations and Warranties ......................... 31
11.02 Statements as Representations ...................................... 31
11.03 Agreement to Indemnify.............................................. 31
11.04 Indemnification for Claims.......................................... 32
11.05 Accounts Receivable................................................. 33
11.06 Remedies Cumulative................................................. 33
ARTICLE XII
TERMINATION AND REMEDIES ............................. 33
12.01 Termination ........................................................ 33
12.02 Remedies............................................................ 34
ARTICLE XIII
MISCELLANEOUS PROVISIONS ............................. 35
13.01 Commissions and Finders' Fees ...................................... 35
13.02 Amendment and Modification.......................................... 35
13.03 Waiver of Compliance................................................ 35
13.04 Expenses............................................................ 35
13.05 Notices............................................................. 35
13.06 Assignment.......................................................... 36
13.07 Governing Law; Etc.................................................. 36
13.08 Counterparts........................................................ 36
13.09 Effectiveness; Binding Effect....................................... 37
13.10 Headings............................................................ 37
13.11 Entire Agreement.................................................... 37
13.12 Third Parties....................................................... 37
13.13 Mutual Agreement.................................................... 37
13.14 Severability........................................................ 37
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EXHIBITS AND SCHEDULES
EXHIBITS
A Instrument of Assumption
B ▇▇▇▇ of Sale
C ▇▇▇▇▇ Note
D Purchaser Note
E New Factory Lease and Equipment Lease
F Old Factory Lease
G Supply Agreement
SCHEDULES
1.01(a) Tangible Personal Property
1.01(b) Inventory
1.01(c) Receivables
1.01(d) Contracts
1.01(g) Government Permits
1.03 Excluded Assets
4.17 Certain Agreements
5.04 Consents (Seller)
5.07 Certain Changes
5.10 Leases
5.12 Intellectual Property
5.18 Insurance
5.19 Contracts and Commitments
5.22 Personnel
5.24 Customers and Suppliers
5.27 Backlog
5.28 Product Warranties
6.06 Convertible Securities
6.07 Consents (Purchaser)
6.11 Litigation
7.04 Certain Officers
9.08 Key Employees
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT dated January 27, 1997 among ▇▇▇▇▇ North
America, Inc., a Texas corporation ("Purchaser"), ▇▇▇▇▇ ▇.▇., a French societe
anonyme ("▇▇▇▇▇"), ▇▇▇▇▇ Inc., a Michigan corporation ("Seller"), and Maxco,
Inc., a Michigan corporation ("Parent").
This Agreement sets forth the terms and conditions upon which Seller
will sell to Purchaser, and Purchaser will purchase from Seller, certain assets
of Seller.
In consideration of the mutual agreements contained herein, the parties
agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
As used in this Agreement each of the following terms shall have the
following meaning:
1.01 "Acquired Assets" shall mean all right, title and interest
in the businesses currently conducted by Seller (collectively the "Business"),
excluding any liabilities not expressly assumed under this Agreement, and in
all of Seller's assets, other than the Excluded Assets (as hereinafter
defined), including, without limitation, the following:
(a) all machinery, equipment, supplies, tools, spare parts,
vehicles and other items of tangible personal property owned by Seller and all
leasehold interests in tangible personal property held by Seller, all as listed
on Schedule 1.01(a);
(b) all inventories of raw materials, work-in-process,
finished products, supplies, spare parts, goods in transit (i.e. goods ordered
by and invoiced to Seller which have not yet been delivered) and packaging
materials, including those listed on Schedule 1.01(b) (collectively
"Inventory");
(c) all trade accounts and notes receivable, billed or
unbilled (collectively "Receivables"), prepaid expenses and deferred charges,
and security deposits under leases to be assumed by Purchaser including those
listed on Schedule 1.01(c);
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(d) all rights and interest of Seller in, to and under the
contracts, licenses, leases, purchase orders, commitments, letters of intent,
proposals and agreements which are listed on Schedule 1.01(d).
(e) all patents, trademarks, patent and trademark
applications, trade names, licenses, copyrights and inventions of Seller,
including, without limitation, the trade name and trademark "Akemi," any
derivatives thereof and all trademarks and logotypes relating thereto;
(f) all of the books and records of Seller, including,
without limitation, all books of account and records relating to employees to
be hired by Purchaser, the purchase of materials, supplies or services,
production and sale of products or services, and all other existing records of
Seller, catalogs, manuals, promotion materials, and computerized books and
records, together with the related documentation used in connection therewith;
(g) all Federal, state and local governmental licenses,
permits, approvals and authorizations held by Seller, including, without
limitation, those listed on Schedule 1.01(g);
(h) all intangible assets of Seller, including telephone
numbers, customer, prospect and reference lists, trade secrets, formulae,
computer software, processes, technology, innovations, inventions, engineering
drawings, designs, patterns and similar information generally described as
know-how, research, marketing and other data, together with the goodwill
relating thereto and to the Business; and
(i) all of Seller's other rights, properties, assets,
claims, contracts and businesses of every kind, character and
description, whether tangible or intangible, real, personal or mixed, whether
accrued, contingent or otherwise and wherever located, except the Excluded
Assets.
1.02 "Assumed Liabilities" shall mean (and are expressly limited to)
all obligations of Seller to be performed or satisfied after the Closing under
all contracts, leases, purchase orders, commitments and agreements of Seller
which are included in the Acquired Assets, but not liabilities or obligations
resulting from any default by Seller thereunder prior to the Closing.
1.03 "Excluded Assets" shall mean the assets of Seller described on
Schedule 1.03 hereof, which are not being transferred to Purchaser at the
Closing pursuant to this Agreement.
1.04 "Retained Liabilities" shall mean all liabilities and
obligations of, or claims against, Seller of whatever nature, whether accrued,
absolute, contingent or otherwise, other than the Assumed Liabilities,
including, without limitation, the following:
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(a) all liabilities and obligations of Seller to pay Taxes
(as hereinafter defined), including all Taxes of whatever nature arising from
the transactions contemplated by this Agreement, except those to be paid by
Purchaser pursuant to Section 13.04;
(b) all liabilities arising from or with respect to any
Employee Benefit Plan (as defined hereinafter) of Seller or Parent;
(c) any liabilities with respect to any alleged or actual
injury or damage allegedly or actually resulting from the use of any product
manufactured or sold by, or services provided by, Seller or any other business
the assets of which have been purchased by Seller prior to the Closing Date;
(d) any liabilities with respect to any actual or alleged
employee or former employee work-related injury which occurred on or prior to
the Closing Date;
(e) any liability of any kind (including, without
limitation, life, medical, accident and other insurance coverage) relating to
any employee or former employee of Seller arising out of or relating to any
event which occurred prior to the Closing Date, including, without limitation,
any liability with respect to accrued vacation through the Closing Date
(whether or not the employee is hired by Purchaser);
(f) any liability of Seller under any litigation,
proceeding or claim of any nature by any person or entity arising out of or
relating to any event which occurred prior to the Closing Date, whether or not
such litigation, proceeding or claim is pending, threatened or asserted before,
on or after the Closing Date;
(g) any liability relating to any Environmental Condition
(as hereinafter defined) which existed or occurred on or prior to the Closing
Date;
(h) any liability resulting from any defect or other
deficiency (whether in design, materials, workmanship, labeling, instruction or
otherwise) with respect to any product manufactured or sold or any service
provided by Seller or any other business the assets of which have been
purchased by Seller prior to the Closing, or any liability relating to any
warranty obligation incurred by Seller or such other business for any such
product or service;
(i) any liability or obligation of Seller to Parent or any
affiliate or associate (as hereinafter defined) of Parent;
(j) all liabilities and obligations of Seller for accounts
payable, whether or not reflected on the Balance Sheet (as hereinafter
defined), except accounts payables relating to goods in transit which shall be
assumed by Purchaser; and
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(k) any liability, obligation or claim of whatever nature,
whether accrued, absolute, contingent or otherwise, which is not specifically
assumed by Purchaser pursuant to this Agreement.
1.05 "Taxes" shall mean all taxes, charges, fees, levies or other
similar assessments or liabilities, including, without limitation, income,
gross receipts, ad valorem, premium, value-added, excise, real property,
personal property, sales, use, transfer, withholding, employment, payroll and
franchise taxes imposed by the United States of America or any state, local or
foreign government, or any agency thereof, or other political subdivision of
the United States or any such government, and any interest, fines, penalties,
assessments or additions to tax resulting from, attributable to or incurred in
connection with any tax or any contest or dispute thereof.
1.06 "Employee Benefit Plan" shall mean any "employee pension
benefit plan" (as defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), any "employee welfare benefit
plan" (as defined in Section 3(1) of ERISA), and any other written or oral
plan, agreement or arrangement involving direct or indirect severance benefits,
disability benefits, deferred compensation, bonuses, stock options, stock
purchase, phantom stock, stock appreciation or other forms of incentive
compensation or post-retirement compensation maintained or contributed by
Seller or Parent.
ARTICLE II
PURCHASE AND SALE OF ASSETS
AND ASSUMPTION OF LIABILITIES
2.01 Purchase and Sale of Assets. Subject to the terms and
conditions of this Agreement and in reliance upon the representations,
warranties and covenants set forth herein, at the Closing, Seller will sell,
transfer, convey, assign and deliver to Purchaser, and Purchaser will purchase,
acquire and accept the Acquired Assets, free and clear of all liens, security
interests, charges, claims, equities or encumbrances of whatever nature.
2.02 Consideration. In consideration of the sale, assignment,
transfer and delivery of the Acquired Assets, Purchaser will deliver to Seller
at the Closing the following:
(a) Subject to adjustment pursuant to Section 4.20,
$2,043,000 in cash, to be paid by certified or official bank check or wire
transfer of funds to an account designated by Seller at least five business
days prior to the Closing; and
(b) an Instrument of Assumption in the form of Exhibit A
hereto, relating to the Assumed Liabilities.
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ARTICLE III
THE CLOSING
3.01 Time and Place. The Closing of the transactions contemplated
by this Agreement will take place at the offices of the Bureau ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇-New York, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at 10:00 A.M. local
time, on the Closing Date (as hereinafter defined). Subject to Section 12.01
hereof, the Closing shall occur as soon as possible after all conditions set
forth in Articles IX and X have been satisfied or waived, on a date specified
in a written notice from Seller to Purchaser, given at least five business days
prior to such date. The date of the Closing is hereinafter sometimes referred
to as the "Closing Date."
3.02 Deliveries by Seller. As a condition to the obligations of
Purchaser and ▇▇▇▇▇ hereunder, Seller will deliver to Purchaser at the Closing
the following:
(a) a duly executed ▇▇▇▇ of Sale in the form of Exhibit B
hereto;
(b) all documents of title necessary to transfer ownership
to Purchaser of any of the assets listed on Schedule 1.01(a);
(c) all other deeds, endorsements, assignments and other
instruments as, in the reasonable opinion of counsel for Purchaser, are
necessary to vest in Purchaser good and marketable title to the Acquired
Assets;
(d) all documents as, in the reasonable opinion of counsel
for Purchaser, are necessary to release and extinguish all liens and
encumbrances on any of the Acquired Assets; and
(e) all other previously undelivered documents required to
be delivered by Seller at or prior to the Closing in connection with the
transactions contemplated by this Agreement.
3.03 Deliveries by Purchaser. As a condition to the obligations of
Seller hereunder, Purchaser will deliver to Seller at the Closing the
following:
(a) the consideration set forth in Section 2.02; and
(b) all other previously undelivered documents required to
be delivered by Purchaser at or prior to the Closing in connection with the
transactions contemplated by this Agreement.
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3.04 Further Assurances. After the Closing, Seller and Parent shall
from time to time, at the request of Purchaser and without further cost or
expense to Purchaser, execute and deliver such other instruments of conveyance
and transfer and take such other actions as Purchaser may reasonably request in
order to more effectively consummate the transactions contemplated hereby and
to vest in Purchaser good and marketable title to the Acquired Assets.
ARTICLE IV
RELATED AGREEMENTS AND TRANSACTIONS
4.01 Hold Harmless.
(a) Seller and Parent, jointly and severally, covenant and
agree to hold Purchaser, ▇▇▇▇▇ and their affiliates and associates harmless
from and defend Purchaser, ▇▇▇▇▇ and their affiliates and associates against
any liability and out-of-pocket expenses, including attorneys' fees and
disbursements, arising out of claims made, or suits or proceedings brought,
against Purchaser, ▇▇▇▇▇ or their affiliates and associates by any party
relating to the Retained Liabilities.
(b) Purchaser and ▇▇▇▇▇, jointly and severally, covenant
and agree to hold Seller, Parent and their affiliates and associates harmless
from and defend Seller, Parent and their affiliates and associates against any
liability and out-of-pocket expenses, including attorneys' fees and
disbursements, arising out of claims made, or suits or proceedings brought,
against Seller, Parent or their affiliates and associates by any party relating
to any Assumed Liabilities.
4.02 Bulk Sales Laws. Seller and Parent, jointly and severally,
covenant and agree to indemnify and hold harmless Purchaser from any and all
claims made by creditors of Seller (other than creditors with respect to the
Assumed Liabilities) relating to provisions of the "bulk sales laws" of any
State or other jurisdiction which may be applicable to the transactions
contemplated hereby and from all reasonable out-of-pocket costs (including
reasonable attorneys' fees) incurred in the defense of any claims made under
such laws.
4.03 Mail Received After Closing. Following the Closing, Purchaser
may receive and open all mail addressed to Seller and deal with the contents
thereof in its discretion to the extent that such mail and the contents thereof
relate to the Acquired Assets or the Assumed Liabilities. Purchaser agrees to
deliver or cause to be delivered to Seller all other mail addressed to Seller
which does not relate to the Acquired Assets or the Assumed Liabilities; and
Seller agrees to deliver or cause to be delivered to Purchaser all mail
received by Seller relating to the Acquired Assets or the Assumed Liabilities.
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4.04 Access by Seller. After the Closing, Purchaser shall afford
Seller, its counsel, accountants and other representatives reasonable access
during regular business hours upon reasonable prior notice to such books and
records of Seller acquired by Purchaser pursuant hereto as may be reasonably
necessary in order for Seller to prepare tax reports and returns required to be
filed by it or to respond to inquiries by governmental authorities or for other
appropriate reasons. Purchaser shall not dispose of any such books or records
of Seller until it has given reasonable notice to Seller of its intention to do
so and given Seller a reasonable opportunity to take possession of such books
and records to be disposed of.
4.05 Change of Name. Promptly following the Closing, Seller shall
amend its Certificate of Incorporation so as to change its name to a name not
including "Akemi" or any derivative thereof. Thereafter, neither Seller nor
any affiliate thereof shall use the name "Akemi" or any derivative thereof.
4.06 Allocation Agreement. At the Closing, Purchaser and Seller
shall enter into an allocation agreement satisfying the requirements of Section
1060 of the Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations promulgated pursuant thereto. Neither Purchaser nor Seller shall
take a reporting position contrary to the allocation agreement.
4.07 Confidentiality; Competition.
(a) The parties acknowledge that the value of confidential
information developed by Seller is attributable substantially to the fact that
such information is maintained by Seller in the strictest confidentiality and
secrecy and is not available to others without the expenditure of substantial
time, effort and money. Seller and Parent acknowledge that Purchaser would be
irreparably damaged if Seller' s or Parent's confidential knowledge of the
business and affairs of Seller were disclosed to or utilized on behalf of
Seller, Parent or any other person, firm, corporation or other business
organization which is in competition in any respect with any line or lines of
business of Seller, and Seller and Parent jointly and severally covenant and
agree that they shall not at any time, and shall ensure that none of their
respective employees, affiliates, associates (as the terms "affiliate" and
"associate" are defined by the rules and regulations promulgated under the
Securities Act of 1933, as amended) or any other person whose behavior can be
controlled by Seller or Parent (a "Controlled Person") shall at any time,
without the prior written consent of Purchaser, disclose or use any such
confidential information.
(b) To further secure the interests of Purchaser hereunder,
Seller and Parent jointly and severally covenant and agree that for a period of
five (5) years from the Closing Date, neither Seller nor Parent shall, directly
or indirectly, engage (and shall assure that none of their respective
employees, affiliates, associates or Controlled Persons directly or indirectly
engages) in competition with, or directly or indirectly perform services (as
employee, manager, consultant, independent contractor, advisor or otherwise)
for any
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business, or own any equity interest in any enterprise (other than an aggregate
of not more than one percent (1%) of the stock issued by any publicly held
corporation) that engages in competition with the business conducted presently
or at the Closing Date by Seller, Purchaser, ▇▇▇▇▇ or any of its affiliates;
provided, however, that this restriction is not intended to prohibit the
distribution and resale of products purchased under (i) the Supply Agreement
(as hereinafter defined) by Parent's construction distribution supply
subsidiaries, or (ii) Section 8.06. In addition, during such period, neither
Seller nor Parent shall (and shall assure that none of their respective
employees, affiliates, associates or Controlled Persons) directly or indirectly
solicit, raid or entice, or otherwise induce any customer of Purchaser or ▇▇▇▇▇
to cease doing business therewith or to do business with a competitor with
respect to products that are competitive with the products of Purchaser or
▇▇▇▇▇.
(c) To further secure the interests of Purchaser hereunder,
Seller and Parent jointly and severally agree that for a period of five (5)
years from the Closing Date, neither Seller nor Parent shall, directly or
indirectly, solicit for employment, offer employment to, or employ for its own
account or the account of any other person, any person who is on the Closing
Date or thereafter becomes an employee or consultant of Purchaser or ▇▇▇▇▇. For
purposes of this Section 4.07(c), however, no employee of Parent or any
subsidiary of Parent, other than Seller nor any officer of Seller not
compensated by Seller, would be deemed to be a consultant of Seller.
(d) To further secure the interests of Purchaser hereunder,
Seller and Parent jointly and severally agree that neither Seller nor Parent
shall, and shall assure that none of their respective employees, affiliates,
associates or Controlled Persons, at any time disparage the business
reputation, products or services of Purchaser or ▇▇▇▇▇.
(e) Seller and Parent expressly agree that, in addition to any
other rights or remedies which Purchaser may have, Purchaser shall be entitled
to injunctive and other equitable relief to prevent a breach of this Section
4.07 by Seller or Parent including a temporary restraining order or an
injunction from any court of competent jurisdiction restraining any threatened
or actual violation, and Seller and Parent consent to the entry of such an
order and injunctive relief and waive the making of a bond or undertaking as a
condition for obtaining such relief.
4.08 Purchase of Stock by Parent. At the Closing, Parent shall
purchase 8,305 shares of Common Stock of ▇▇▇▇▇ (the "▇▇▇▇▇ Stock") for an
aggregate purchase price of FF 10,505,825.
4.09 Parent Loan. At the Closing, Parent shall make a loan to ▇▇▇▇▇
(the "Parent Loan") in the principal amount of $43,000. The Parent Loan shall
be memorialized by the issuance to Parent of ▇▇▇▇▇'▇ promissory note in the
form annexed hereto as Exhibit C (the "▇▇▇▇▇ Note").
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4.10 ▇▇▇▇▇ Loan. At the Closing, ▇▇▇▇▇ shall lend the proceeds of
the Parent Loan to Purchaser (the "▇▇▇▇▇ Loan"). The ▇▇▇▇▇ Loan shall be
memorialized by the issuance to ▇▇▇▇▇ of Purchaser's promissory note in the
form annexed hereto as Exhibit D (the "Purchaser Note").
4.11 ▇▇▇▇▇'▇ Board of Directors. ▇▇▇▇▇ shall seek the approval of
its stockholders for (a) the election of Parent's nominee to ▇▇▇▇▇'▇ Board of
Directors and (b) the requisite amendment to ▇▇▇▇▇'▇ organizational documents
to permit such election. Subject to receipt of such approval, Parent would be
entitled to nominate one director to ▇▇▇▇▇'▇ Board of Directors for so long as
Parent owns five percent (5%) or more of ▇▇▇▇▇'▇ outstanding Common Stock.
4.12 Stockholders' Agreement. Parent has been provided with a copy
of ▇▇▇▇▇'▇ Stockholders' Agreement dated December 21, 1994, as amended by
amendment dated June 19, 1995 (the Stockholders' Agreement"), together with an
English translation thereof. Parent shall be considered a "financial
stockholder" of ▇▇▇▇▇ for purposes of the Stockholders' Agreement, and, at the
Closing, Parent shall execute and deliver to ▇▇▇▇▇ a counterpart of the French
version of the Stockholders' Agreement.
4.13 Employee Matters. Seller shall be responsible and liable for
any and all severance and other costs and liabilities relating to all
terminations of employees prior to the Closing or any employee who is not
employed by Purchaser following the Closing and Seller shall indemnify and hold
Purchaser harmless with respect to any liability or expense (including
reasonable attorneys' fees) arising from such terminations.
4.14 Computer System. Prior to the Closing, Parent shall take, and
shall cause Seller to take, any and all steps necessary to assure that Seller's
computer systems operate autonomously and independent of Parent's computer
system.
4.15 Lease of Factories and Equipment. At the Closing, Purchaser
and Seller or the affiliate of Parent to whom Seller's two factory properties
are transferred shall enter into Leases with respect to such factories and
certain equipment in the forms annexed hereto as Exhibits E and F, respectively
(the "Leases").
4.16 Supply Agreement. At the Closing, Purchaser and two affiliates
of Parent shall enter into a Supply Agreement in the form annexed hereto as
Exhibit G (the "Supply Agreement").
4.17 Certain Agreements. Schedule 4.17 sets forth an accurate
description of Seller's agreements and course of dealing with Akemi GmbH.
Following the Closing, Purchaser and ▇▇▇▇▇ agree to make a good faith effort to
enter into a written agreement with Akemi GmbH, or its successor, in such form
as may be acceptable to Purchaser and ▇▇▇▇▇. In the event Purchaser and ▇▇▇▇▇
are unable to reach such an agreement with Akemi GmbH, if Purchaser and ▇▇▇▇▇
continue to honor and abide by the terms of the course of dealing
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described in Schedule 4.17, then Seller and Parent shall jointly and severally
indemnify and hold Purchaser and ▇▇▇▇▇ harmless with respect to any liability,
loss, damage, including loss or damage to the stone, wood and marble product
lines acquired from Seller, or expense (including reasonable attorney's fees)
arising from Purchaser's relationship and course of dealing with Akemi GmbH,
including the termination thereof or the restrictive covenant set forth
therein; provided, however, that in no event shall Seller's liability under
this Section 4.17 exceed the total amount of Three Hundred Seventy Five
Thousand Dollars ($375,000); and further provided, however, that in no case
shall Purchaser be entitled to make any claim for indemnification under this
Section 4.17 after the tenth anniversary of the Closing Date; and further
provided, however, that nothing in this Section 4.17 shall limit the liability
of Seller and Parent with respect to any breach of the representation and
warranty set forth in Section 5.20.
4.18 Consents and Approvals. Prior to the Closing, Seller shall
obtain and deliver to Purchaser all consents and approvals required for
consummation of all transactions contemplated by this Agreement from all
government and regulatory authorities and any other person or entity,
including, without limitation, the consent of Comerica Bank and the release of
its liens on the Acquired Assets.
4.19 Employee Benefit Plans; Insurance. Parent shall assist
Purchaser to establish Employee Benefit Plans for the employees of Purchaser
following the Closing. In addition, Parent shall assist Purchaser in obtaining
business insurance coverage following the Closing comparable to that now
carried by Seller. Parent and Seller acknowledge that they will be obligated
to offer coverage under Seller' s group medical plan to the employees of
Seller following termination of their employment pursuant to the provisions of
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
("COBRA"). Purchaser agrees to use its best efforts to obtain health
insurance coverage for its employees comparable to that offered by Seller as
soon as practicable after the Closing. As an interim measure, Purchaser shall
reimburse Parent for the Cost (as hereinafter defined) of such COBRA coverage
for any former employee of Seller hired by Purchaser ("Covered Employees")
within 30 days after invoice from Parent. "Cost" shall mean, with respect to
COBRA coverage extended to Covered Employees, allocable premiums plus the
direct cost actually incurred by Seller (rather than its reinsurer) of all
claims initiated by Covered Employees after the Closing in excess of such
premiums.
4.20 Post-Closing Adjustment (a) Seller has prepared and delivered
to Purchaser an unaudited statement reflecting Seller's Inventory and
Receivables as at the close of business on December 31, 1996 (the "Pre-Closing
Statement"). The parties agree that the purchase price payable at the Closing
is based in part on the Pre-Closing Statement. The parties further agree that
if the sum of Inventory and Receivables on the Closing Statement (as
hereinafter defined) varies (positive or negative) from the sum of Inventory
and Receivables reflected on the Pre-Closing Statement by $20,000 or more, then
the purchase price shall be adjusted in accordance with this Section 4.20.
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(b) As soon as practicable after the Closing, Purchaser shall
prepare and deliver to Seller a statement (the "Closing Statement") of the
Inventory and Receivables as at the close of business on the Closing Date,
valued in a manner consistent with the methodology used in preparing the
Pre-Closing Statement.
(c) Seller shall have 20 days from the date of delivery of the
Closing Statement during which to review and dispute the Closing Statement. In
connection with such review, Seller and its accountants shall be given access
to the work papers of Purchaser. Within such 20-day period, Seller must advise
Purchaser if it disputes the Closing Statement. If Seller does not so timely
advise Purchaser, the Closing Statement shall become final for all purposes of
this Agreement. If Seller so advises Purchaser, the parties shall use their
best efforts to resolve such dispute in good faith. If such dispute is not
resolved by negotiations within 30 days of Purchaser's advice to Seller of the
dispute, the dispute shall be submitted as promptly as practicable to [▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ and Co.] (the "Review Firm"). The decision of the Review Firm shall
be final and binding upon all parties and the Closing Statement, as modified by
the decision of the Review Firm, shall be final for all purposes of this
Agreement. The fees and expenses of the Review Firm shall be borne equally by
Purchaser and Seller.
(d) If the sum of Inventory and Receivables on the Closing
Statement varies (positive or negative) from that reflected on the Pre-Closing
Statement by $20,000 or more, then as soon as practicable, but in no case more
than 10 days after the Closing Statement has become final in accordance with
subsection 4.20(c) above, the parties shall hold a post-closing (the
"Post-Closing"). If the sum of Inventory and Receivables reflected on the
Closing Statement is less than that reflected on the Pre-Closing Statement by
$20,000 or more, then at the Post-Closing Seller shall refund an amount equal
to the entire difference to Purchaser without interest, by certified or
official bank check or wire transfer of funds. If the sum of Inventory and
Receivables reflected on the Closing Statement exceeds that reflected on the
Pre-Closing Statement by $20,000 or more, then at the Post-Closing Purchaser
shall pay an amount equal to the entire excess to Seller without interest, by
certified or official bank check or wire transfer of funds.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF SELLER AND PARENT
Seller and Parent jointly and severally represent and warrant to
Purchaser and ▇▇▇▇▇ as follows:
5.01 Due Authorization and Execution; Valid and Binding Agreements;
No Violation. The execution, delivery and performance by Seller and Parent of
this Agreement have been duly authorized by all necessary corporate action.
The copies of the corporate minutes or records of corporate action of Seller
and Parent authorizing the execution of this
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Agreement and the actions contemplated thereby, heretofore delivered to
Purchaser, are accurate and complete copies of such minutes and records and
such minutes and records reflect in all material respects the corporate actions
of Seller's and Parent's respective boards of directors and shareholders. This
Agreement has been duly executed and delivered by Seller and Parent and
constitutes a valid and binding agreement of Seller and Parent, enforceable in
accordance with its terms. Neither the execution and delivery of this Agreement
by Parent nor the consummation of the transactions contemplated hereby will
violate any provision of the organizational documents of Parent, or violate, or
be in conflict with, or constitute a default under, or cause the amendment,
modification or acceleration of, or gives any party the right to amend, modify
or refuse to perform, or modify the time within which duties are to be
performed or rights or benefits are to be received under, or cause the
acceleration of the maturity of any debt or obligation pursuant to, or result
in the creation or imposition of any security interest, lien or other
encumbrance upon any property or asset of Parent under, any lease, agreement,
understanding, restriction or commitment to which Parent is a party or by which
Parent is bound, or to which the property of Parent is subject, or violate any
statute or law or any judgment, decree, order, regulation or rule of any court
or governmental or regulatory authority or agency.
5.02 Corporate Organization; Etc. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Michigan and has full power and authority to carry on its business as it is now
being conducted and to own the properties and assets it now owns; and is duly
qualified or licensed to do business as a foreign company in good standing in
all jurisdictions in which the ownership of property or the conduct of its
business requires such qualification. The copies of the organizational
documents of Seller and the certificate evidencing its good standing heretofore
delivered to Purchaser are accurate and complete copies of such instruments as
presently in effect. The copies of the corporate minutes or records of
corporate action of Seller heretofore delivered to Purchaser are accurate and
complete copies of such minutes and records and such minutes and records
reflect in all material respects the corporate actions of Seller's board of
directors and shareholders. The copies of the stock transfer books or records
Seller heretofore delivered to Purchaser are accurate and complete copies of
such books and records.
5.03 No Violation. Neither the execution and delivery of this
Agreement by Seller nor the consummation of the transactions contemplated
hereby will violate any provision of the organizational documents of Seller, or
violate, or be in conflict with, or constitute a default under, or cause the
amendment, modification or acceleration of, or give any party the right to
amend, modify or refuse to perform, or modify the time within which duties are
to be performed or rights or benefits are to be received under, or cause the
acceleration of the maturity of any debt or obligation pursuant to, or result
in the creation or imposition of any security interest, lien or other
encumbrance upon any property or assets of Seller under, any lease, agreement,
understanding, restriction or commitment to which Seller is a party or by which
Seller is bound, or to which the property of Seller is subject, or violate any
statute or law or any judgment, decree, order, regulation or rule of any court
or governmental or regulatory authority or agency.
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5.04 Consents and Approvals of Governmental Authorities; Etc.
Except as disclosed on Schedule 5.04, no consent, approval or authorization of,
or declaration, filing or registration with, any governmental or regulatory
authority, or consent or approval of any other person or entity, is required in
connection with the execution, delivery and performance of this Agreement or
the consummation of the transactions contemplated hereby.
5.05 Financial Statements. Seller has heretofore delivered to
Purchaser: (i) a balance sheet of Seller as at March 31, 1995 and 1996 and
statements of income for each of the years then ended; and (ii) an unaudited
balance sheet of Seller as at December 31, 1996 (the "Balance Sheet") and a
statement of income for the seven-month period then ended. Such balance sheets
are true, complete and accurate and fairly present the assets, liabilities and
financial condition of Seller as at the respective dates thereof, and such
statements of income are true, complete and accurate and fairly present the
results of operations for the periods therein referred to; all in accordance
with generally accepted accounting principles, consistently followed throughout
the periods involved.
5.06 No Undisclosed Liabilities; Etc. Seller has no liabilities or
obligations of any nature (absolute, accrued, contingent or otherwise) which
were not fully reflected or reserved against in the Balance Sheet, except for
liabilities and obligations incurred in the ordinary course of business and
consistent with past practice since the date thereof; and the reserves
reflected in the Balance Sheet are adequate, appropriate and reasonable.
5.07 Absence of Certain Changes. Except in the ordinary course of
business consistent with past practice, and except as disclosed on Schedule
5.07, since the date of the Balance Sheet, Seller has not:
(a) Suffered any adverse change in its working capital,
financial condition, assets, liabilities (absolute, accrued, contingent or
otherwise), reserves, business, operations or prospects;
(b) Permitted or allowed any of its property or assets
(real, personal or mixed, tangible or intangible) to be subjected to any
mortgage, pledge, lien, security interest, encumbrance, restriction or charge
of any kind, except for liens for current taxes not yet due;
(c) Written down the value of any inventory or written off
as uncollectible any notes or accounts receivable;
(d) Cancelled any debts or waived any claims or rights of
value;
(e) Disposed of or permitted to lapse any rights to the use
of any patent, trademark, trade name or copyright, or disposed of or disclosed
to any person any trade secret, formula, process or know-how not theretofore a
matter of public knowledge;
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(f) Entered into any employment contracts or granted any
increase in the compensation of officers or employees (including any such
increase pursuant to any bonus, pension, profit-sharing or other plan or
commitment) or any increase in the compensation payable or to become payable to
any officer or employee, and no such increase is required by agreement or
understanding;
(g) Made any change in any method of accounting or
accounting practice;
(h) Made any material change in any purchasing, production
or marketing practice;
(i) Suffered any labor dispute or threatened labor dispute
or commenced any negotiations with labor unions involving terms or conditions
of labor nor has any such negotiation been proposed to Seller by employees or
employee representatives;
(j) Become aware of any actual or threatened disputes with
any significant supplier of Seller or any actual or threatened significant loss
of business from any customers, sales representatives, distributors, dealers or
brokers;
(k) Suffered the cancellation of any purchase order or
letter of intent; or
(l) Sold, transferred, or otherwise disposed of any of its
properties or assets (real, personal or mixed, tangible or intangible), except
sales of inventory in the ordinary course of business and consistent with past
practice;
(m) Made any single capital expenditure or commitment in
excess of $10,000 for additions to property, plant, equipment or intangible
capital assets or made aggregate capital expenditures and commitments in excess
of $10,000 for additions to property, plant, equipment or intangible capital
assets;
(n) Suffered any damage or destruction to its assets,
whether or not covered by insurance;
(o) Paid, loaned or advanced any amount to, or sold,
transferred or leased any properties or assets (real, personal or mixed,
tangible or intangible) to, or entered into any agreement or arrangement with,
any of its officers or directors or any affiliate or associate of any of its
officers or directors, except for compensation to officers at rates not
exceeding the rates of compensation paid during the year ended March 31, 1996;
or
(p) Agreed, whether in writing or otherwise, to take or
suffer to be taken any action described in this Section.
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5.08 Title to Properties; Encumbrances. Seller has good, valid and
marketable title to all its properties and assets (real, personal and mixed,
tangible and intangible), including, without limitation, all the properties and
assets reflected in the Balance Sheet (except for inventory sold in the
ordinary course of business since that date). With the exception of intangible
assets such as good will, all properties and assets have a fair market or
realizable value at least equal to the value thereof as reflected therein, and
none of such properties or assets are subject to any mortgage, pledge, lien,
security interest, encumbrance or charge of any kind except (a) liens shown on
the Balance Sheet as securing specified Assumed Liabilities with respect to
which no default exists and (b) liens for current taxes not yet due. The
rights, properties and other assets presently owned, leased or licensed by
Seller and described elsewhere in this Agreement include all rights, properties
and other assets necessary to permit Seller to conduct its business in the same
manner as its business has been conducted prior to the date hereof.
5.09 Plant and Equipment. The plants, structures and equipment of
Seller are structurally sound with no known defects and in good operating
condition and repair and are adequate for the uses to which they are being put;
and none of such plants, structures or equipment are in need of maintenance or
repairs except for ordinary, routine maintenance and repairs which are not
material in nature or cost. Seller has not received notification that it is in
violation of any applicable building, zoning, anti-pollution, health,
occupational safety or other law, ordinance or regulation in respect of its
plants or structures or their operations and, to the best knowledge of Seller
and Parent, no such violation exists.
5.10 Leases. Schedule 5.10 hereto contains an accurate and complete
list of all leases pursuant to which Seller leases real or personal property,
true and complete copies of which have heretofore been delivered to Purchaser.
All such leases are valid, binding and enforceable in accordance with their
terms, and are in full force and effect; there are no existing defaults
thereunder; no event of default has occurred which (whether with or without
notice, lapse of time or the happening or occurrence of any other event) would
constitute a default thereunder; and all lessors under such leases have
consented (where such consent is necessary) to the consummation of the
transactions contemplated by this Agreement without requiring modification of,
the rights or obligations of the lessee under such leases.
5.11 No Condemnation or Expropriation. Neither the whole nor any
portion of the leaseholds or any other assets of Seller is subject to any
governmental decree or order to be sold or is being condemned, expropriated or
otherwise taken by any public authority with or without payment of compensation
therefor, nor has any such condemnation, expropriation or taking been proposed.
5.12 Patents, Trademarks, Trade names; Etc.
(a) Schedule 5.12(a) lists:
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(i) all patents held by Seller and all
reissues, divisions, continuations, continuations in part and extensions
thereof and all pending patent applications by Seller including for each such
patent the serial or patent number, country, filing and expiration date and
title;
(ii) all registered trademarks of Seller and
pending registrations by Seller of trademarks, including for each such
trademark, the registration number, country, filing and expiration date, ▇▇▇▇
and class;
(iii) all registered copyrights of Seller and
applications by Seller for registration of copyrights, including the
registration number, country and filing and expiration date of each such
copyright; and
(iv) a general description of all know-how
and proprietary information in the nature of trade secrets of Seller.
(b) Schedule 5.12(b) identifies all licenses and other
contracts or commitments to which Seller is a party (either as licensor or
licensee) or otherwise subject relating to patents, trademarks, trade names or
copyrights (or applications for any thereof), trade secrets or other
proprietary know-how or technical information or assistance; and no claims have
been asserted by any person to the use of any such patents, trademarks, trade
names, copyrights, technology, know-how or processes or challenging or
questioning the validity or effectiveness of any such license or agreement, and
there is no valid basis for any such claim.
(c) Seller's use and transfer to Purchaser pursuant to this
Agreement of the trademark and trade name "Akemi" do not infringe or violate
the rights of any other person. To the best knowledge of Seller and Parent,
Seller has not infringed upon any patent, trademark, trade name or copyright or
misappropriated or misused any invention, trade secret or other proprietary
information entitled to legal protection, and Seller has not been alleged to
have infringed upon any patent, etc., except as set forth in Schedule 5.12.
Seller has never asserted any claim of infringement, misappropriation or
misuse.
(d) Each item identified in Schedule 5.12(b) is a valid,
legally binding obligation of all parties thereto, enforceable in accordance
with its terms. With respect to each there is no default (or event which with
the giving of notice and/or passage of time would constitute a default) by any
party thereto.
(e) Except as listed on Schedule 5.12, Seller has not
granted any outstanding licenses or other rights to any copyright, patent,
invention, know-how, technology, trade secret, innovation, formula, process,
trademark or trade name listed on Schedule 5.12(a), nor is Seller under any
obligation to grant the same, nor has Seller given any indemnification for
patent, copyright or trademark infringement as to any equipment, materials or
supplies manufactured, produced or sold by it.
5.13 Litigation. There is no action, suit, claim, counterclaim,
arbitration, proceeding or investigation pending or, to the best knowledge of
Seller or Parent,
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threatened against or involving Seller, or which questions or challenges the
validity of this Agreement or any action taken or to be taken pursuant to this
Agreement or in connection with the transactions contemplated hereby; and
neither Seller nor Parent knows or have any reason to know of any basis for any
such action, proceeding or investigation. Seller is not in default under or in
violation of, nor is there any basis for any claim of default under or
violation of, any material contracts, commitments or restrictions to which it
is a party or by which it is bound. Seller is not subject to any judgment,
order or decree entered in any lawsuit or proceeding.
5.14 Subsidiaries. Seller has no subsidiaries and does not,
directly or indirectly, own or have the power to vote or to acquire the power
to vote, or to exercise a controlling influence with respect to, equity
interests or any option, right, warrant or other right or instrument
convertible into or exchangeable or exercisable for any such equity interest of
any entity, corporate or otherwise.
5.15 Toxic and Hazardous Substances and Other Environmental, Health
and Safety Issues.
(a) No underground tanks or storage facilities are now
located, or at any time have been located, on the real property used at any
time in the business of Seller or its predecessors in interest and there are no
present or past Environmental Conditions (as hereinafter defined) in any way
relating to the business, property or assets of Seller. "Environmental
Condition" means (i) any environmental pollution, including, without
limitation, any contaminant, irritant or pollutant, from any spill, discharge,
leak, emission, escape, injection, deposit, emanation, dumping or release of
any kind, in any amount whatsoever, or any substance or exposure of any type in
any work place or elsewhere or to any medium, including, without limitation,
air, land, surface waters or subsurface waters or from any generation,
transportation, treatment, discharge, storage or disposal of waste materials,
raw materials, hazardous materials, hazardous constituents, toxic materials or
products of any kind or from the storage, use or handling of any waste, raw,
hazardous, radioactive, infectious or toxic materials or products of any kind
or from the storage, use or handling of any waste, raw, hazardous, radioactive,
infectious or toxic materials or other substances, or (ii) any noncompliance
with any federal, state or local environmental law, rule, regulation or order
as a result of, or in connection with, any of the foregoing. The operation of
the business of Seller does not violate and has not violated any applicable
law, rule, regulation or order, whether state, federal, or local, relating to
air, water, or noise pollution, or the production, storage, labeling,
transportation or disposition of waste or hazardous or toxic substances or
hazardous constituents. Except in compliance with all legal requirements in
the ordinary course of its business as a developer and manufacturer of resins
and polyester, neither Seller nor any other person has stored any chemical
substances, including, without limitation, any waste materials, petroleum,
crude oil, PCB's, asbestos or any "Hazardous Substances," "Pollutants,"
"Hazardous Constituents" or "Contaminants" (collectively, the "Contaminants"),
as such terms are defined in the
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Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended, on, beneath or about any of the properties or assets used at any
time in the business of Seller. Seller has received no notice advising Seller
that it is potentially responsible for response or other costs or remediation
with respect to a release or threatened release of Contaminants, and no facts
exist which might give rise to such responsibility. Except in compliance with
all legal requirements in the ordinary course of its business as a developer
and manufacturer of resins and polyesters, neither Seller nor any employee,
affiliate, associate or Controlled Person of Seller nor any person with whom
Seller arranged for the transport, disposal or treatment of any Contaminants
has transported, buried, dumped or otherwise disposed of any Contaminants on,
beneath or about any other property. Seller has not violated and has no
knowledge of any alleged or potential violation of, any applicable
environmental, zoning or land use ordinance, law, rule, regulation or order
relating to the operation of the business of Seller, or any of the processes
followed or products made thereby.
(b) Seller has not exposed or permitted the exposure of any
of Seller's employees or any of Seller's customers' employees to chemical or
hazardous substances, which exposure could give rise to any liability for
occupational injury or illness which is not covered by insurance.
5.16 Good Title Conveyed, Etc. Seller has complete and unrestricted
power and the unqualified right to sell, assign, transfer and deliver to
Purchaser, and Purchaser is acquiring, good, valid and marketable title to the
Acquired Assets, free and clear of all mortgages, pledges, liens, security
interests, conditional sales agreements, encumbrances, claims or charges of any
kind, except those referred to in Section 5.08 hereof. The ▇▇▇▇ of Sale and
the deeds, endorsements, assignments and other instruments being executed and
delivered to Purchaser by Seller at the Closing are valid and binding
obligations of Seller, enforceable in accordance with their terms, and will
effectively vest in Purchaser good, valid and marketable title to all the
Acquired Assets, subject to the obligations of Seller set forth in Section 3.04
to provide further assurances.
5.17 Compliance with Law. The operations of Seller have been
conducted in accordance with all applicable laws, regulations and other
requirements of all federal and state governmental authorities, and of all
municipalities and other political subdivisions and agencies thereof, having
jurisdiction over Seller, including, without limitation, all such laws,
regulations and requirements relating to antipollution, consumer protection,
environmental, equal opportunity, health, occupational safety, pension and
securities matters. Seller has not received any notification of any asserted
present or past failure by Seller to comply with any law, rule or regulation.
Seller has all permits, governmental licenses, registrations and approvals
necessary to carry out its business as currently conducted and as required by
applicable law or regulation.
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5.18 Insurance. Schedule 5.18 contains an accurate and complete
description of all policies of fire, liability, workmen's compensation and
other forms of insurance owned or held by Seller, including self-insurance
programs. Purchaser acknowledges that Purchaser will not be eligible to
participate in such insurance coverage after the Closing and that Purchaser
will be required to obtain such insurance coverage as it deems necessary
following the Closing.
5.19 Contracts and Commitments. Except as set forth in Schedule
5.19:
(a) Seller has no agreements, contracts, commitments or
restrictions (oral or written) which are for an amount in excess of $5,000 or
are material to its business, operations or prospects;
(b) No purchase contracts or commitments of Seller continue
for a period of more than 12 months or are in excess of the normal, ordinary
and usual requirements of business or in excess of prevailing market prices;
(c) There are no outstanding sales contracts, commitments
or proposals of Seller which will result in any loss to Seller upon completion
or performance thereof, nor are there any outstanding contracts, bids or sales
or service proposals quoting prices which will not result in a normal profit;
(d) Seller has no outstanding contracts with officers,
employees, agents, consultants, advisors, salesmen, sales representatives,
distributors or dealers that are not cancelable by it on notice of not longer
than 60 days and without liability, penalty or premium or any agreement or
arrangement providing for the payment of any bonus or commission based on sales
or earnings;
(e) Seller has no employment agreement, or any other
agreement that contains any severance or termination pay liabilities or
obligations;
(f) Seller has no collective bargaining or union contracts
or agreements;
(g) Seller is not restricted by agreement from carrying on
its business in any geographic location;
(h) Seller is under no liability or obligation with respect
to the return of inventory or merchandise in the possession of wholesalers,
distributors, retailers or other customers;
(i) Seller has not experienced any shortage of raw
materials or other supplies which are used in the operation of any of Seller's
businesses which has interfered with its ability to conduct any such business;
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(j) Seller is not subject to any obligation or requirement
to provide funds to or make an investment (in the form of a loan, capital
contribution or otherwise) in any person or entity; and
(k) Seller has no agreements, commitments or restrictions
which were entered into outside the ordinary course of business.
5.20 Akemi GmbH Agreement. Seller has provided Purchaser with
accurate copies of, and Schedule 4.17 accurately describes the terms and
conditions of, Seller's agreement with Akemi GmbH. Seller's production and
sale of polyester products (other than wood and stone polyester products) is
not restricted by its agreement with Akemi GmbH, and production and sale of
polyester products (other than wood and stone polyester products) does not
require the payment of any royalty to Akemi GmbH and would not be adversely
affected by termination of Seller's agreement with Akemi GmbH.
5.21 Accounts Receivable. All Receivables of Seller, whether
reflected in the Balance Sheet or otherwise, represent sales actually made in
the ordinary course of business, and are current and collectible net of any
reserves shown on the Balance Sheet (which reserves are adequate and were
calculated in a manner consistent with past practice). Subject to such
reserves, each of the Receivables either has been collected in full or will be
collected in full, without any set-off or reduction, within 90 days after the
day on which it became due and payable. It is expressly agreed, however, that
Purchaser is not acquiring any reserves shown on the Balance Sheet relating to
Receivables as Seller and Parent are indemnifying Purchaser with respect to any
uncollected Receivables pursuant to Section 11.05.
5.22 Personnel. Schedule 5.22 sets forth a true and complete list
of:
(a) the names and current salaries of all officers (other
than those compensated solely by Parent) and other salaried employees of
Seller; and
(b) the wage rates for non-salaried and non-executive
salaried employees of Seller by classification.
5.23 Labor Difficulties. (a) Seller is in compliance with all
applicable laws respecting employment and employment practices, terms and
conditions of employment and wages and hours, and is not engaged in any unfair
labor practice; (b) there is no unfair labor practice, wrongful termination or
employment discrimination (age, sex, race or otherwise) charge or complaint
against Seller pending, or to the best knowledge of Seller or Parent,
threatened; (c) there is no labor strike, dispute, slowdown or stoppage
actually pending or threatened against or affecting Seller; (d) no
representation question exists
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respecting the employees of Seller; (e) no grievance or arbitration proceedings
arising out of or under collective bargaining agreements is pending and no
claim therefor exists; (f) no collective bargaining agreement which is binding
on Seller restricts it from relocating or closing any of its operations;
and (g) no organizational effort has been or to the best knowledge of Seller
and Parent is being made by or on behalf of any labor union with respect to any
employees of Seller.
5.24 Customers and Suppliers. Schedule 5.24 sets forth:
(a) a list of the customers of Seller during the last two
fiscal years showing the approximate total sales by Seller to each such
customer during each such fiscal year; and
(b) a list of the suppliers of Seller during the last two
fiscal years, showing the approximate total purchases by Seller from each such
supplier during each such fiscal year. Except to the extent set forth in
Schedule 5.24, Seller has not been advised by any customer or supplier of a
refusal to deal with Seller in the future based upon past actions or
performance of Seller or a refusal to extend credit in accordance with terms
previously extended to Seller due to Seller's past payment history.
5.25 No Product Liabilities. Seller has not incurred nor will it
incur any liability, damage, loss, cost or expense as a result of any defect or
other deficiency (whether of design, materials, workmanship, labeling,
instructions or otherwise) with respect to any product manufactured or sold by
Seller or any other business the assets of which have been acquired by Seller
prior to the Closing, whether such liability, damage, loss, cost or expense is
incurred by reason of any express or implied warranty (including without
limitation any warranty of merchantability or fitness), any doctrine of common
law (tort, contract or other), any statutory provision or otherwise.
5.26 Inventory. All Inventory of Seller, whether reflected in the
Pre-Closing Statement or otherwise, has been acquired in the ordinary course of
business, in the ordinary and customary quantities and amounts, and at
prevailing market prices. The Inventory reflected on the Pre-Closing Statement
has been valued at cost or market, whichever is lower, in accordance with
generally accepted accounting principles, consistently applied; and all damaged
or otherwise unmerchantable Inventory has been written off. All Inventory of
Seller, other than that written off in accordance with the preceding sentence,
is usable and saleable in the ordinary course of business. It is expressly
acknowledged that Purchaser is not acquiring any reserves on the Balance Sheet
with respect to Inventory as the consideration paid by Purchaser for the
Acquired Assets has been established after the write-off of certain damaged or
otherwise unmerchantable Inventory.
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5.27 Backlog. Schedule 5.27 sets forth the dollar amount (i.e.,
amount of payment remaining on the contract assuming full delivery or
performance) of backlog orders by customers for products and services of Seller
as of October 31, 1996, together with a statement as to the shipping schedule
of the backlog orders and seasonal or other material aspects of such backlog
orders. All of such backlog orders are the subject of valid and binding
written agreements enforceable in accordance with their respective terms; and
Seller has received no indication that any such order will be cancelled or
materially altered. All of such outstanding contracts, bids or sales or
service proposals quote prices which exceed all direct costs, including,
without limitation, materials, labor, royalties and commissions.
5.28 Product and Service Warranties. Except as set forth in
Schedule 5.28, neither Seller nor any other business the assets of which have
been purchased by Seller has given any third party any product or service
guaranties or warranties, rights of return or other indemnity relating to
products manufactured or delivered by Seller or any such other business prior
to the Closing or services performed by Seller or such other business.
5.29 Disclosure. Seller and Parent have disclosed to Purchaser all
facts material to the condition, assets, liabilities, businesses, operations
and prospects of Seller. No representations or warranties by Seller or Parent
in this Agreement and no statement contained in any document (including without
limitation, financial statements and exhibits), certificate, or other writing
furnished or to be furnished by Seller or Parent to Purchaser pursuant to the
provisions hereof or in connection with the transactions contemplated hereby,
contains or will contain any untrue statement of material fact or omits or will
omit to state any material fact necessary in order to make the statements
herein or therein not misleading.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND ▇▇▇▇▇
Purchaser and ▇▇▇▇▇ jointly and severally hereby represent and warrant
to Seller and Parent as follows:
6.01 Corporate Organization; Etc. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas and has full corporate power and authority to carry on its business as it
is now being conducted and to own the properties and assets it now owns; and
Purchaser is duly qualified or licensed to do business as a foreign corporation
in good standing in all jurisdictions in which the ownership of property or the
conduct of its business requires such qualification. ▇▇▇▇▇ is a soci#t#
anonyme duly organized, validly existing and in good standing under the laws of
France and has full corporate power and authority to carry on its business as
it is now being conducted and to own the properties and assets it now owns.
The copies of the organizational documents of ▇▇▇▇▇ and the certificate
evidencing its current good standing
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heretofore delivered to Parent are accurate and complete copies of such
instruments as presently in effect.
6.02 Authorization, Etc. Purchaser has full corporate power and
authority to enter into this Agreement and to carry out the transactions
contemplated hereby and thereby. Purchaser has taken all action required by
law, its Certificate of Incorporation, its By-Laws or otherwise to authorize
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and thereby, and this Agreement is a valid and
binding agreement of Purchaser enforceable in accordance with its terms. ▇▇▇▇▇
has full corporate power and authority to enter into this Agreement and to
carry out the transactions contemplated hereby. Subject to approval of the
issuance of the ▇▇▇▇▇ Stock by ▇▇▇▇▇'▇ stockholders, ▇▇▇▇▇ has taken all
corporate action required by law or its organizational documents to authorize
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, and this Agreement is a valid and binding
agreement of ▇▇▇▇▇ enforceable in accordance with its terms. The copies of
corporate minutes or records of corporate action of ▇▇▇▇▇'▇ Board of Directors
authorizing the execution of this Agreement and the actions contemplated hereby
heretofore delivered to Parent are, and the copies of the corporate minutes or
records of corporate action of ▇▇▇▇▇'▇ stockholders authorizing the issuance of
the ▇▇▇▇▇ Stock to be delivered to Parent will be, accurate and complete copies
of such minutes and records and such minutes and records reflect (or will
reflect) in all material respects the corporate actions of ▇▇▇▇▇'▇ Board of
Directors and stockholders.
6.03 No Violation. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
violate any provision of the organizational documents of Purchaser or ▇▇▇▇▇, or
violate, or be in conflict with, or constitute a default under, or cause the
acceleration of the maturity of any debt or obligation pursuant to, or result
in the creation or imposition of any security interest, lien or other
encumbrance upon any property or assets of Purchaser or ▇▇▇▇▇ under any
agreement or commitment to which Purchaser or ▇▇▇▇▇ is a party or to which
Purchaser or ▇▇▇▇▇ is subject, or violate any statute or law or any judgment,
decree, order, regulation or rule of any court or governmental authority.
6.04 ▇▇▇▇▇'▇ Financial Statements. ▇▇▇▇▇ has heretofore delivered
to Parent (i) a balance sheet of ▇▇▇▇▇ as at December 31, 1995 audited by
▇▇▇▇▇'▇ independent accountants (the "▇▇▇▇▇ Balance Sheet") and (ii) an
unaudited statement of income for the nine months ended September 30, 1996.
The ▇▇▇▇▇ Balance Sheet and the notes thereto are true, complete and accurate
and fairly present the assets, liabilities and financial condition of ▇▇▇▇▇ as
at the date thereof, and such income statement is true, complete and accurate
and fairly presents the results of operations of ▇▇▇▇▇ for the period referred
to therein; all in accordance with French generally accepted accounting
principles, consistently followed throughout the periods involved..
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6.05 Power to Issue ▇▇▇▇▇ Stock. ▇▇▇▇▇, upon approval thereof by
its stockholders, will have complete and unrestricted power and the unqualified
right to issue, sell, assign, transfer and deliver to Purchaser good and
marketable title to the ▇▇▇▇▇ Stock, free and clear of all security interests,
liens, claims, pledges, assessments, options, equities, charges, proxies and
encumbrances whatsoever, and with no restriction on the voting rights and other
incidents of record and beneficial ownership pertaining thereto, and there are
no outstanding options, warrants, calls, commitments or rights to purchase or
acquire, or agreements relating to, any of such ▇▇▇▇▇ Stock, except as provided
in the Stockholders' Agreement.
6.06 Capitalization. As of the date hereof, the authorized capital
stock of ▇▇▇▇▇ consist of 103,817 shares of Common Stock, 100FF par value per
share, all of which are issued and outstanding. All issued and outstanding
shares of capital stock of ▇▇▇▇▇ are validly issued, fully paid and
nonassessable. Except as set forth on Schedule 6.06, there are no outstanding
(a) securities convertible into, exchangeable for or evidencing the right to
purchase any registered capital of ▇▇▇▇▇; (b) options, warrants, calls or other
rights to purchase or subscribe to ▇▇▇▇▇'▇ capital stock or securities
convertible into, exchangeable for or evidencing the right to purchase, any
shares of ▇▇▇▇▇'▇ capital stock; or (c) contracts, commitments, agreements,
understandings or arrangements of any kind relating to the issuance of any
capital stock of ▇▇▇▇▇, any such convertible or exchangeable securities or any
such other securities evidencing the right to purchase any such options,
warrants or rights.
6.07 Consents and Approvals of Governmental Authorities; Etc.
Except as set forth in Schedule 6.07, no consent, approval or authorization of,
or declaration, filing or registration with, any governmental or regulatory
authority, or consent or approval of any other person or entity, is required by
Purchaser or ▇▇▇▇▇ in connection with the execution, delivery and performance
of this Agreement or the consummation of the transactions contemplated hereby.
6.08 No Undisclosed Liabilities; Etc. ▇▇▇▇▇ has no liabilities or
obligations of any nature (absolute, accrued, contingent or otherwise) which
were not fully reflected or reserved against in the ▇▇▇▇▇ Balance Sheet, except
for liabilities and obligations incurred in the ordinary course of business and
consistent with past practice since the date thereof, and to the best knowledge
of ▇▇▇▇▇, the reserves reflected therein are adequate, appropriate and
reasonable.
6.09 Title to Properties; Encumbrances. ▇▇▇▇▇ has good, valid and
marketable title to all its properties and assets (real, personal and mixed,
tangible and intangible), including, without limitation, all the properties and
assets reflected in the ▇▇▇▇▇ Balance sheet (except for inventory sold in the
ordinary course of business since that date). All properties and assets
reflected in the ▇▇▇▇▇ Balance Sheet have a fair market or realizable
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value at least equal to the value thereof as reflected therein, and none of such
properties or assets are subject to any mortgage, pledge, lien, security
interest, encumbrance or charge of any kind except (a) the pledge of the shares
of ▇▇▇▇▇'▇ subsidiaries to secure a line of credit, (b) liens shown on the
▇▇▇▇▇ Balance Sheet as securing specified liabilities or obligations with
respect to which no default exists and (c) liens for current taxes not yet due.
The rights, properties and other assets presently owned, leased or licensed by
▇▇▇▇▇ are sufficient to permit ▇▇▇▇▇ to conduct its business in the same manner
as its business has been conducted prior to the date hereof.
6.10 Plant and Equipment. The plants, structures and equipment of
▇▇▇▇▇ are structurally sound with no known defects and are in good operating
condition and repair and are adequate for the uses to which they are being put;
and none of such plants, structures or equipment are in need of maintenance or
repairs except for ordinary, routine maintenance and repairs which are not
material in nature or cost. ▇▇▇▇▇ has not received notification that it is in
violation of any applicable building, zoning, anti-pollution, health,
occupational safety or other law, ordinance or regulation in respect of its
plants or structures or their operations and, to ▇▇▇▇▇'▇ best knowledge, no
such violation exists.
6.11 Litigation. Except as set forth on Schedule 6.11, there is no
action, suit, claim, counterclaim, arbitration, proceeding or investigation
pending or, to ▇▇▇▇▇'▇ best knowledge, threatened against or involving ▇▇▇▇▇,
or which questions or challenges the validity of this Agreement or any action
taken or to be taken pursuant to this Agreement or in connection with the
transactions contemplated hereby; and ▇▇▇▇▇ does not know or have any reason to
know of any basis for any such action, proceeding or investigation. ▇▇▇▇▇ is
not in default under or in violation of, nor is there any basis for any claim
of default under or violation of, any material contracts, commitments or
restrictions to which it is a party or by which it is bound. ▇▇▇▇▇ is not
subject to any judgment, order or decree entered in any lawsuit or proceeding.
6.12 Compliance with Law. The operations of ▇▇▇▇▇ have been
conducted in accordance with all applicable laws, regulations and other
requirements of all national governmental authorities, and of all
municipalities and other political subdivisions and agencies thereof, having
jurisdiction over ▇▇▇▇▇, including, without limitation, all such laws,
regulations and requirements relating to antipollution, consumer protection,
environmental, equal opportunity, health, occupational safety, pension and
securities matters. ▇▇▇▇▇ has not received any notification of any asserted
present or past failure by ▇▇▇▇▇ to comply with any law, rule or regulation.
▇▇▇▇▇ has all permits, governmental licenses, registrations and approvals
necessary to carry out its business as currently conducted and as required by
applicable law or regulation.
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ARTICLE VII
CONDUCT OF BUSINESS PENDING THE CLOSING
Pending the Closing, and except as otherwise consented to or approved
by Purchaser in writing, Seller agrees to do, and Parent agrees to cause Seller
to do, the following:
7.01 Regular Course of Business. Seller shall carry on its business
diligently and substantially in the same manner as heretofore conducted, and
Seller shall not institute any new methods of manufacture, purchase, sale,
lease, management, accounting or operation or engage in any transaction or
activity, enter into any agreement or make any commitment, except in the
ordinary course of business and consistent with past practice.
7.02 Amendments. No change or amendment shall be made in the
organizational documents of Seller.
7.03 Capital Changes. Seller will not issue or sell any shares or
interests of its capital stock or other securities, acquire directly or
indirectly, by redemption or otherwise, any such capital stock, reclassify or
split-up any such capital stock, declare or pay any dividends thereon or make
any other distribution with respect thereto, or grant or enter into any
options, warrants, calls or commitments of any kind with respect thereto.
7.04 Organization. Seller shall use its best efforts to preserve
its legal existence and its business organization intact and to preserve its
relationships with licensors, suppliers, distributors, customers and others
having business relations with it. Except for the officers and key employees
of Seller listed on Schedule 7.04, who are also employees of Parent, Seller
shall use its best efforts to keep available its officers and key employees.
7.05 General. Without limiting the generality of the foregoing,
Seller shall not take, or voluntarily suffer to be taken, any of the actions
listed in Section 5.07 hereof.
7.06 Insurance; Property. Seller shall adequately insure all
property, real, personal and mixed, owned or leased by Seller against all
ordinary and insurable risks; and all such property shall be used, operated,
maintained and repaired in a careful and reasonably efficient manner.
7.07 No Default. Seller shall not do any act or omit to do any act,
or permit any act or omission to act, which will cause a breach of any contract
or commitment of Seller, or which would cause the breach of any warranty made
hereunder.
7.08 Compliance With Laws. Seller shall duly comply with all laws
and regulations applicable to it and its properties, operations, business and
employees.
7.09 Inventory. Seller shall not place orders for Inventory which
would be classified as "goods in transit" on the Closing Date.
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ARTICLE VIII
OBLIGATIONS PENDING THE CLOSING
Seller and Parent hereby jointly and severally covenant and agree with
Purchaser and ▇▇▇▇▇, and Purchaser and ▇▇▇▇▇ hereby jointly and severally
covenant and agree with Seller and Parent that:
8.01 Access. Seller shall afford, and Parent shall cause Seller to
afford, to Purchaser and ▇▇▇▇▇, their counsel, accountants and other authorized
representatives, including their environmental consultants, reasonable access
to the plants, offices, warehouses, properties, books and records of Seller in
order that Purchaser and ▇▇▇▇▇ may have full opportunity to make such
investigations as they shall desire to make of the affairs of Seller; and will
cause Seller's officers and accountants to furnish such additional financial
and operating data and other information as Purchaser or ▇▇▇▇▇ shall from time
to time reasonably request.
8.02 Confidentiality. Each party will hold and will cause its
consultants and advisors to hold in strict confidence, unless compelled to
disclose by judicial or administrative process or, in the opinion of its
counsel, by other requirements of law, all documents and information concerning
the other party furnished it by such other party or its representatives in
connection with the transactions contemplated by this Agreement (except to the
extent that such information can be shown to have been (i) previously known by
the party to which it was furnished, (ii) in the public domain through no fault
of such party, or (iii) later lawfully acquired from other sources by the party
to which it was furnished) and each party will not release or disclose such
information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors in connection with this
Agreement. If the transactions contemplated by this Agreement are not
consummated, such confidence shall be maintained except to the extent such
information comes into the public domain through no fault of the party required
to hold it in confidence, and such information shall not be used to the
detriment of, or in relation to any investment in, the other party and all such
documents (including copies thereof) shall immediately thereafter be returned
to the other party upon the written request of such other party. Each party
shall be deemed to have satisfied its obligation to hold such information
confidential if it exercises the same care as it takes to preserve
confidentiality for its own similar information.
8.03 Other Transactions; Etc. From the date hereof until the
earlier of (a) the Closing contemplated hereby or (b) the termination of this
Agreement, (i) Parent shall not (and shall assure that neither Seller nor any
officer, director, employee, agent, or representative of Parent or Seller
shall), directly or indirectly, solicit or entertain offers from, enter into
negotiations with, or furnish information to, other parties with respect to any
sale of assets (except inventory in the ordinary course of business),
securities or control of Seller or any business combination transaction
involving Seller, however structured. The foregoing
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shall not prohibit Parent or Seller from providing information to governmental
authorities if required by law or court order.
8.04 Further Assurances. Each party hereto shall execute and
deliver such instruments and take such other actions as the other party or
parties, as the case may be, may reasonably require in order to carry out the
intent of this Agreement.
8.05 Supplements to Schedules. From time to time prior to the
Closing, Seller shall promptly supplement or amend the Schedules hereto with
respect to any matter hereafter arising which, if existing or occurring at the
date of this Agreement, would have been required to be set forth or described
in a Schedule hereto. For purposes of determining the satisfaction of the
condition set forth in Section 9.01 hereof, the Schedules shall be deemed to
include only the information contained therein on the date hereof, without
regard to any supplement or amendment.
8.06 Foam Boards; Waste Drums. Prior to the Closing, Seller shall
at its own expense: (a) sell or otherwise dispose of all Z-Tech foam products
in its inventory and all foam sign and model boards in its inventory which
Seller has rated B or poorer in quality; and (b) dispose of all drums of waste
on Seller's premises, such that on the Closing Date all such inventory and
drums shall have been removed from Seller's premises. All such disposals shall
comply with all applicable laws, rules and regulations relating thereto.
Seller and its affiliates may continue to sell such inventory after the
Closing, provided they shall not do so under any trademark listed on Schedule
5.12.
ARTICLE IX
CONDITIONS TO THE OBLIGATIONS OF PURCHASER AND ▇▇▇▇▇
Each and every obligation of Purchaser and ▇▇▇▇▇ under this Agreement
to be performed on or before the Closing Date shall be subject to the
satisfaction, on or before the Closing Date, of each of the following
conditions, unless waived in writing by Purchaser and ▇▇▇▇▇:
9.01 Representations and Warranties True. The representations and
warranties of Seller and Parent contained in Article V hereof, the Schedules
hereto and in all certificates and other documents delivered by Seller and
Parent to Purchaser or ▇▇▇▇▇ pursuant hereto or in connection with the
transactions contemplated hereby shall be in all material respects true and
accurate as of the date when made and at and as of the Closing Date as though
such representations and warranties were made at and as of such date.
9.02 Performance. Seller and Parent shall have performed and
complied with all agreements, obligations and conditions required by this
Agreement to be performed or complied with by them on or prior to the Closing
Date.
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9.03 Investigations; Etc. No investigation of Seller by Purchaser
or ▇▇▇▇▇ pursuant to Section 8.01 hereof nor the Schedules hereto or any
supplement thereto, shall have revealed any facts or circumstances which, in
the good faith judgment of ▇▇▇▇▇, reflect in a materially adverse way on the
financial condition, assets, liabilities (absolute, accrued, contingent or
otherwise), reserves, business, operations or prospects of Seller.
9.04 No Government Proceeding or Litigation. No suit, action,
investigation, inquiry or other proceeding by any governmental body or other
person or legal or administrative proceeding shall have been instituted or
threatened which if adversely determined could have a material adverse effect
on the business, prospects, financial condition, working capital, cash flow,
assets, liabilities, reserves or operations of Seller or which questions the
validity or legality of the transactions contemplated hereby.
9.05 Material Adverse Change. From the date of the Balance Sheet to
the Closing Date, Seller shall not have suffered any material adverse change in
its business, prospects, financial condition, working capital, cash flow,
assets, liabilities (absolute, accrued, contingent or otherwise), reserves or
operations.
9.06 Consents. All government and third party consents referred to
in Section 4.18 shall have been obtained.
9.07 Related Transactions. All transactions referred to in Article
IV hereof shall have been consummated.
9.08 Key Employees. No key employee of Seller listed on Schedule
9.08 hereto shall have terminated his or her employment or have indicated an
intention to do so, and Purchaser shall have entered into employment agreements
or arrangements satisfactory to Purchaser with all such key employees,
including provisions to protect the confidential information and trade secrets
of Purchaser and ▇▇▇▇▇.
9.09 Financing. ▇▇▇▇▇ shall have successfully completed
arrangements, satisfactory to ▇▇▇▇▇ in its sole discretion, with banks, other
financial institutions or investors for sufficient equity and/or debt financing
for completion of the acquisition of the Acquired Assets and the external
financing needs of Purchaser after the Closing.
9.10 Insurance. Purchaser shall have obtained insurance coverage
for the Acquired Assets and the business and operations of Purchaser after the
Closing, satisfactory to Purchaser in its sole discretion.
9.11 Certificates. Seller and Parent shall have furnished Purchaser
and ▇▇▇▇▇ with such certificates of Seller and Parent to evidence compliance
with the conditions set forth in this Article IX as may reasonably be requested
by ▇▇▇▇▇.
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ARTICLE X
CONDITIONS TO THE OBLIGATIONS OF SELLER AND PARENT
Each and every obligation of Seller and Parent under this Agreement to
be performed on or before the Closing Date shall be subject to the
satisfaction, on or before the Closing Date, of each of the following
conditions, unless waived in writing by Seller and Parent.
10.01 Representations and Warranties True. The representations and
warranties of Purchaser and ▇▇▇▇▇ contained in Article VI hereof, shall be in
all material respects true and accurate as of the date when made and at and as
of the Closing Date as though such representations and warranties were made at
and as of such date, except for changes expressly permitted or contemplated by
the terms of this Agreement.
10.02 Performance. Purchaser and ▇▇▇▇▇ shall have complied with and
performed all agreements, obligations and conditions required by this Agreement
to be complied with or performed by them on or prior to the Closing Date.
10.03 Certificates. Purchaser and ▇▇▇▇▇ shall have furnished Seller
and Parent with such certificates of its officers to evidence compliance with
the conditions set forth in this Article X as may reasonably be requested by
Seller and Parent.
ARTICLE XI
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
11.01 Survival of Representations and Warranties. All
representations and warranties made by any party in this Agreement or pursuant
hereto, shall survive the Closing hereunder and any investigation at any time
made by or on behalf of any other party for a period of two years following the
Closing; provided, however, that the representations and warranties set forth
in Sections 5.12, 5.20, 5.25, and 5.28 shall survive until the expiration of
the respective statutes of limitations applicable to the subject matter of such
representations and warranties; and further provided, however, that the
representations and warranties set forth in Sections 5.15and 5.16 hereof shall
survive forever.
11.02 Statements as Representations. All statements contained herein
or in any certificate, schedule, list, exhibit, document or other writing
delivered pursuant hereto or in connection with the transactions contemplated
hereby shall be deemed representations and warranties within the meaning of
Section 11.01 hereof.
11.03 Agreement to Indemnify.
(a) Seller and Parent hereby jointly and severally agree to
indemnify, defend and hold harmless Purchaser and ▇▇▇▇▇ and each subsidiary,
affiliate, director, officer,
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employee or agent of Purchaser or ▇▇▇▇▇ from and against all demands, claims,
actions or causes of action, assessments, losses, damages, liabilities,
costs and expenses, including, without limitation, interest, penalties and
attorneys' fees (collectively "Damages"), asserted against or imposed upon or
incurred by Purchaser, ▇▇▇▇▇, or any subsidiary or affiliate, director,
officer, employee or agent of Purchaser or ▇▇▇▇▇ resulting from a breach of any
representation, warranty or covenant of Seller contained in or made pursuant to
this Agreement; provided, however, that Seller and Parent shall have no
liability for Damages unless and until the aggregate amount of such Damages
equals $20,000, in which case Seller and Parent shall be required to pay all
such Damages from the first dollar; and further provided, however, that Seller
and Parent shall not be liable for Damages in excess of $2,100,000 in the
aggregate, except for Damages resulting from a breach of the representations
and warranties set forth in Sections 5.15, 5.16, 5.20, 5.25 and 5.28, as to
which liability of Seller and Parent shall be unlimited.
(b) Purchaser and ▇▇▇▇▇ hereby jointly and severally agree
to indemnify, defend and hold harmless Seller and Parent, and each subsidiary,
affiliate, director, officer, employee or agent of Seller or Parent from and
against all Damages asserted against or imposed upon or incurred by Seller,
Parent or any subsidiary, affiliate, director, officer, employee or agent of
Seller or Parent resulting from a breach of any representation, warranty or
covenant of Purchaser or ▇▇▇▇▇ contained in or made pursuant to this Agreement;
provided, however, that Purchaser and ▇▇▇▇▇ shall have no liability for Damages
unless and until the aggregate amount of such Damages equals $20,000, in which
case Purchaser and ▇▇▇▇▇ shall be required to pay all such Damages from the
first dollar; and further provided, however, that Purchaser and ▇▇▇▇▇ shall not
be liable for Damages in excess of $2,000,000 in the aggregate.
11.04 Indemnification for Claims. The obligations and liabilities of
the party owing the indemnity under Section 11.03 hereof ("Indemnitor") to the
party to whom an indemnity is owed ("Indemnitee") with respect to claims for
Damages resulting from the assertion of liability by third parties ("Claims"),
shall be subject to the following terms:
(a) Indemnitee will give Indemnitor prompt notice of any
Claim asserted against or imposed upon or incurred by Indemnitee, and the
Indemnitor shall undertake the defense thereof by representatives of its own
choosing. Failure by Indemnitee to give any such notice shall not affect the
obligations of Indemnitor to indemnify hereunder.
(b) In the event that Indemnitor, within a reasonable time
after notice of any such Claim, fails to defend, Indemnitee, then Indemnitee
will (upon further notice to Indemnitor) have the right to undertake the
defense, compromise or settlement of such Claim for the account of the
Indemnitor, subject to the right thereof to assume the defense of such Claim at
any time prior to settlement, compromise or final determination thereof.
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(c) Anything in this Section 11.04 to the contrary
notwithstanding, (i) if there is a reasonable probability that a Claim may
materially and adversely affect Indemnitee, then Indemnitee shall have the
right to defend, compromise or settle such Claim, and (ii) Indemnitor shall
not, without Indemnitee's prior written consent, settle or compromise any Claim
or consent to entry of any judgment which does not include as an unconditional
term thereof the release by the claimant or the plaintiff of Indemnitee from
all liability in respect of such Claim.
11.05 Accounts Receivable. Notwithstanding the foregoing provisions
of this Article XI, Seller and Parent shall jointly and severally indemnify,
compensate and save harmless Purchaser and ▇▇▇▇▇ with respect to Receivables of
Seller, as follows:
(a) Purchaser shall use commercially reasonable efforts to
collect the Receivables. If any Receivable has not been collected within 90
days after said Receivable became due and payable, Parent, upon written notice
from Purchaser, shall pay Purchaser the amount of said Receivable within five
days after receiving notice thereof and Purchaser shall assign said Receivable
to Parent and promptly deliver to Parent the records relating thereto. After
such assignment, Purchaser agrees that upon receipt of any payment on the
assigned Receivable, Purchaser will immediately remit the same to Parent.
Parent may employ all commercially reasonable means to collect the assigned
Receivables.
(b) The provisions of subsection (a) to the contrary
notwithstanding, Parent shall only be obligated to pay Purchaser with respect
to the Receivables listed on Schedule 11.05 to the extent the same have not
been collected by Purchaser within 30 days after the Closing Date.
(c) All payments received by Purchaser with respect to its
Receivables shall be deemed to have been made with respect to the earliest
accruing receivables from such customer, except to the extent the customer
specifies otherwise with respect to any such payment.
11.06 Remedies Cumulative. The remedies provided herein shall be
cumulative and shall not preclude a party from asserting any other rights or
seeking any other remedies against the other party or its successors or
assigns.
ARTICLE XII
TERMINATION AND REMEDIES
12.01 Termination. Anything in this Agreement to the contrary
notwithstanding:
(a) Mutual Consent. This Agreement may be terminated by
the mutual consent of the parties hereto.
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(b) Default. In the event that a party hereto shall,
contrary to the terms of this Agreement, intentionally fail or refuse to
consummate the transactions contemplated herein or to take any other action
referred to herein necessary to consummate the transactions contemplated
herein, then the non-defaulting party, after affording the defaulting party a
10-day period after notice in which to cure such breach or default, shall have
the right, in addition to the other rights specified in Section 12.02 below, to
terminate this Agreement by written notice given to the other party hereto.
(c) Upset Date. In the event that the Closing shall not
have occurred on or prior to February 28, 1997, then, unless otherwise agreed
to in writing between the parties hereto, this Agreement shall terminate on or
following such date (as such date may be postponed pursuant hereto), upon
written notice given by one party to the other, unless the absence of such
occurrence shall be due to the failure or refusal of the party seeking to
terminate this Agreement of the type described in Section 12.01(b).
(d) Legal Restraint. Either party may, by written notice
to the other party, terminate this Agreement if at the time the written notice
of termination is given, there is in effect a preliminary or permanent
injunction enjoining consummation of the transactions contemplated hereby.
12.02 Remedies.
(a) Specific Performance. Subject to compliance with the
terms of Section 12.02(d) hereof, any party desiring to proceed with the
Closing despite any failure or refusal of the other party hereto of the type
described in Section12.01(b) hereof shall have the right to pursue the remedy
of specific performance.
(b) Damages. Subject to compliance with the terms of
Section 12.02(d) hereof, any party terminating this Agreement pursuant to
Section 12.01(b) hereof shall, if the failure or refusal referred to in Section
12.01(b) hereof constituted a material breach of this Agreement, have the right
to ▇▇▇ for damages and all reasonable out-of-pocket costs and expenses
theretofore suffered and sustained by the non-defaulting party; provided, that
no party shall be liable to the other for special, consequential or punitive
damages by reason of such breach.
(c) Effect of Termination. Except as set forth in Section
12.02(b) above, any termination of this Agreement by any party hereto shall
have the effect of causing this Agreement to thereupon become void and of no
further force or effect whatsoever, and thereupon no party hereto will have any
rights, duties, liabilities or obligations of any kind or nature whatsoever
against any other party hereto based upon either this Agreement or the
transactions contemplated hereby, except in each case the obligations of each
party for its own expenses incurred in connection with the transactions
contemplated by this Agreement as provided in Section 13.04 and the obligations
of each party with respect to confidentiality set forth in Section 7.02 hereof.
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(d) Cure Period. Any party seeking any form of relief
referred to in Sections 12.02(a) or (b) hereof shall, as a condition to the
right to seek such relief, afford the defaulting party hereto with a 10-day
period to effect reasonable cure of such breach or default.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.01 Commissions and Finders' Fees. Each of the parties represents
that the negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on by Seller directly with Purchaser in
such manner as not to give rise to any claims against any of the parties hereto
for a brokerage commission, finders' fee or other like payment. Insofar as any
such claims are made which are alleged to be based on an agreement or
arrangements made by, or on behalf of, a party, such party agrees to indemnify
and hold the other party harmless from and against all liability, loss, cost,
charge or expense, including reasonable counsel fees, arising therefrom.
13.02 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified and supplemented by written agreement of
Purchaser and Seller with respect to any of the terms contained herein.
13.03 Waiver of Compliance. Any failure of Seller or Parent, on the
one hand, or Purchaser or ▇▇▇▇▇, on the other, to comply with any obligation,
covenant, agreement or condition herein may be expressly waived in writing by
▇▇▇▇▇ or Parent, respectively, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.
13.04 Expenses. Each of the parties hereto will pay its own expenses
incurred by it or on its behalf in connection with this Agreement or any
transaction contemplated by this Agreement, whether or not such transaction
shall be consummated, including, without limitation, all fees of its counsel.
In addition, Seller shall bear the expense of any transfer tax or sales tax
applicable to the transactions contemplated hereby, except that Purchaser shall
bear any stock transfer tax or sales tax applicable to the purchase of the
▇▇▇▇▇ Stock by Parent [and any applicable vehicle transfer tax].
13.05 Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given if delivered by hand or mailed, certified or
registered mail with postage prepaid or delivered by express delivery or
facsimile transmission (with copy by mail):
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(a) If to Seller or Parent, to:
Maxco, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
or to such other person or address as Seller or Parent shall furnish to ▇▇▇▇▇
in writing.
(b) If to Purchaser or ▇▇▇▇▇, to:
▇▇▇▇▇ ▇▇
▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
Attn: President
or to such other person or address as Purchaser or ▇▇▇▇▇ shall furnish to
Parent in writing.
13.06 Assignment. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any
party hereto without the prior written consent of the other party, except that
Purchaser may assign this Agreement to an affiliate of ▇▇▇▇▇.
13.07 Governing Law; Etc. (a) This Agreement and the legal relations
among the parties hereto shall be governed by and construed in accordance with
the laws of the State of Delaware without regard to its conflicts of law
doctrine. In the event of a breach of this Agreement by Seller or Parent on
the one hand, or Purchaser or ▇▇▇▇▇ on the other hand, the non-breaching party
shall be entitled to recover its costs, and expenses (including reasonable
legal fees) incurred in enforcing this Agreement.
(b) The parties hereto, acting for themselves and for their
respective successors and assigns, without regard to domicile, citizenship or
residence, hereby expressly and irrevocably consent and subject themselves to
the exclusive jurisdiction of the United States District Court for the District
of Delaware or any Delaware state court in respect of any and all matters
arising under or in connection with this Agreement and service of process,
notices and demands of any such court and any other notices or the
communications required or permitted under this Agreement may be made upon any
of them by personal service at any place where they may be found or by mailing
copies of such process, notices, demands and communications by certified or
registered mail, postage prepaid and return receipt requested, to the addresses
hereinabove set forth
13.08 Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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13.09 Effectiveness; Binding Effect. This Agreement shall become
effective as to each party hereto when and only when this Agreement shall have
been executed by such party; provided, however, that this Agreement shall be
null and void ab initio as to each party hereto in the event that both parties
hereto shall not have executed this Agreement within five (5) days of the date
upon which any party hereto shall have executed this Agreement.
13.10 Headings. The headings of the Sections and Articles of this
Agreement are inserted for convenience only and shall not constitute a part
hereof.
13.11 Entire Agreement. This Agreement including the Exhibits and
Schedules hereto and other documents and certificates delivered pursuant to the
terms hereof, set forth the entire agreement and understanding of the parties
hereto in respect of the subject matter contained herein, and supersedes all
prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer,
employee or representative of any party hereto.
13.12 Third Parties. Except as specifically set forth or referred to
herein, nothing herein expressed or implied is intended or shall be construed
to confer upon or give to any person or entity other than the parties hereto
and their successors or assigns, any rights or remedies under or by reason of
this Agreement.
13.13 Mutual Agreement. This Agreement embodies the arm's-length
negotiation and mutual agreement among the parties hereto and shall not be
construed against any party as having been drafted by it.
13.14 Severability. If in any jurisdiction, any provision of this
Agreement or its application to any party or circumstance is restricted,
prohibited or unenforceable, such provision shall, as to such jurisdiction, be
ineffective only to the extent of such restriction, prohibition or
unenforceability without invalidating the remaining provisions hereof and
without affecting the validity or enforceability of such provision in any other
jurisdiction or its application to other parties or circumstances. In
addition, if any one or more of the provisions contained in this Agreement
shall for any reason in any jurisdiction be held to be excessively broad as to
time, duration, geographical scope, activity or subject, it shall be construed,
by limiting and reducing it, so as to be enforceable to the extent compatible
with the application law of such jurisdiction as it shall then appear.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
each by its duly authorized officer, all as of the day and year first above
written.
▇▇▇▇▇ NORTH AMERICA, INC.
By: Lionel Puget
----------------------------
Lionel Puget
President
▇▇▇▇▇, ▇.▇.
By: Lionel Puget
-----------------------------
Lionel Puget
President Directeur General
AKEMI, INC.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
MAXCO, INC.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President - Finance
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