EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
DATED AS OF MARCH 24, 1998
BETWEEN
MARGATE INDUSTRIES, INC.
AND
▇▇▇▇▇▇ INDUSTRIES, INC.
INDEX
-----
SECTION
1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
2. PURCHASE AND PURCHASE PRICE. . . . . . . . . . . . . . . . . . . . .2
2.1 PURCHASE OF THE SELLER SHARES. . . . . . . . . . . . . . . . .2
2.2 PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . .2
3. CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
3.1 CLOSING DATE . . . . . . . . . . . . . . . . . . . . . . . . .3
3.2 ACTIONS TO BE TAKEN AT THE CLOSING . . . . . . . . . . . . . .3
4. THE SELLER'S REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . .5
4.1 ORGANIZATION; POWER AND AUTHORITY; AUTHORIZATION;
DUE EXECUTION; NO CONFLICTS. . . . . . . . . . . . . . . . . .5
4.2 CAPITALIZATION.. . . . . . . . . . . . . . . . . . . . . . . .6
4.3 GUARANTEES . . . . . . . . . . . . . . . . . . . . . . . . . .6
4.4 RELATED PARTIES. . . . . . . . . . . . . . . . . . . . . . . .6
4.5 BROKERS. . . . . . . . . . . . . . . . . . . . . . . . . . . .7
4.6 INDEPENDENT DECISION.. . . . . . . . . . . . . . . . . . . . .7
5. BUYER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. . . . . . . . . .7
5.1 ORGANIZATION; POWER AND AUTHORITY. . . . . . . . . . . . . . .7
5.2 AUTHORIZATION; DUE EXECUTION; NO CONFLICTS.. . . . . . . . . .7
5.3 BROKERS. . . . . . . . . . . . . . . . . . . . . . . . . . . .7
5.4 INVESTMENT INTENT. . . . . . . . . . . . . . . . . . . . . . .8
5.5 NEW BYLAWS.. . . . . . . . . . . . . . . . . . . . . . . . . .8
5.6 COMMISSION AGREEMENT.. . . . . . . . . . . . . . . . . . . . .8
6. SURVIVAL OF OBLIGATIONS AND REPRESENTATIONS AND WARRANTIES.. . . . .8
7. CONDITIONS PRECEDENT TO THE PARTIES' OBLIGATION TO CLOSE.. . . . . .8
7.1 BUYER'S CONDITIONS PRECEDENT.. . . . . . . . . . . . . . . . .8
7.2 THE SELLER'S CONDITIONS PRECEDENT. . . . . . . . . . . . . . .9
7.3 MUTUAL CONDITION PRECEDENT.. . . . . . . . . . . . . . . . . .9
8. DEFAULT; TERMINATION OF AGREEMENT
8.1 DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . .9
8.2 TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . 10
8.3 EFFECT OF TERMINATION. . . . . . . . . . . . . . . . . . . . 10
i
9. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . 10
9.1 INDEMNIFICATION BY THE SELLER. . . . . . . . . . . . . . . . 10
9.2 INDEMNIFICATION BY BUYER . . . . . . . . . . . . . . . . . . 11
9.3 CLAIMS FOR INDEMNIFICATION . . . . . . . . . . . . . . . . . 11
9.4 THIRD-PARTY CLAIMS . . . . . . . . . . . . . . . . . . . . . 11
10. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
10.1 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
10.2 NO WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . . 13
10.3 SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . 13
10.4 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . 13
10.5 ENTIRE AGREEMENT; AMENDMENT. . . . . . . . . . . . . . . . . 13
10.6 COST OF LITIGATION . . . . . . . . . . . . . . . . . . . . . 14
10.7 INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . 14
10.8 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . 14
10.9 APPLICABLE LAW; CHOICE OF VENUE. . . . . . . . . . . . . . . 14
10.10 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . 14
10.11 FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . . . 14
Exhibits
--------
Exhibit 2.2 - Form of Seller Note
Exhibit 3.2(b)(2) - Form of Pledge Agreement
Exhibit 3.2(b)(5) - Form of Opinion of Buyer's Counsel
Exhibit 3.2(c) - Form of Opinion of the Seller's Counsel
Exhibit 5.5 - Form of New Bylaws
ii
STOCK PURCHASE AGREEMENT
------------------------
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made as of March 24,
1998, between ▇▇▇▇▇▇ Industries, Inc., a Michigan corporation ("BUYER"),
and Margate Industries, Inc., a Delaware corporation (the "SELLER").
RECITALS
--------
A. The Seller is the beneficial owner of an aggregate of 29,682
shares of the Common Stock (the "SELLER SHARES") of New Haven Foundry, a
Michigan corporation (the "CORPORATION"), which constitute 45% of the
issued and outstanding capital stock of the Corporation.
B. Buyer is the beneficial owner of an aggregate of 36,960 shares of
the Common Stock (the "▇▇▇▇▇▇ SHARES") of the Corporation, which constitute
55% of the issued and outstanding capital stock of the Corporation. Buyer
purchased the ▇▇▇▇▇▇ Shares from Seller in July of 1990, pursuant to the
terms of a Stock Purchase Agreement, dated December 29, 1989 (the "1989
Purchase Agreement"), between Margate Ventures, Inc. (n/k/a Margate
Industries, Inc.), Buyer and the Corporation.
C. As part of the transactions contemplated by the 1989 Purchase
Agreement, (1) the Seller and Buyer entered into a Shareholder's Stock
Restriction and Option Agreement, dated July 1, 1990 (the "SHAREHOLDER
AGREEMENT"), (2) the Seller, Buyer and the Corporation entered into a
Commission Agreement, dated July 1, 1990 (as amended, the "COMMISSION
AGREEMENT"), and (3) the Seller and the Corporation entered into a Castings
Cleaning Agreement, dated July 1, 1990 (as amended, the "CLEANING
AGREEMENT").
D. Buyer wishes to purchase from the Seller and the Seller wishes to
sell to Buyer, upon the terms and conditions hereinafter provided, all of
the Seller Shares.
E. In connection with this Agreement, (1) the Seller and Buyer have
agreed to enter into a new Cleaning Contract; (2) the Seller, Buyer and the
Corporation have agreed to terminate the Shareholder Agreement, Commission
Agreement and the former Cleaning Agreement; and (3) the parties have
agreed to take certain other actions, all as described in this Agreement
and in the Related Agreements.
THEREFORE, the parties agree as follows:
1. DEFINITIONS. As used in this Agreement the capitalized terms
listed below shall have the following meanings:
"CLOSING" is defined in Section 3.1 of this Agreement.
"CLOSING DATE" is the date on which the Closing takes place.
"FEES AND COSTS" means reasonable legal (including attorneys' and
legal assistants') fees, disbursements and costs; reasonable fees,
disbursements and costs of third party consultants and experts; court
costs; and similar items.
"LAWS" means all applicable federal, state, local or foreign
laws, zoning and other ordinances, rules, regulations, building and other
codes, court or administrative orders, judgments or decrees and common law
and equitable doctrines, whether now existing or hereafter enacted or
amended.
"LOSS" means any damages, penalties, fines, liabilities, claims,
losses and expenses (including Fees and Costs).
"RELATED AGREEMENTS" are all written agreements, other than this
Agreement, which are executed and delivered by Buyer, the Seller, the
Corporation and/or any of their affiliates pursuant to this Agreement in
connection with the transactions contemplated by this Agreement (including
the Termination Agreement and Release, the Cleaning Contract, the
Management and Option Agreement, and the other agreements contemplated
thereunder), regardless of whether such other agreements are expressly
referred to in this Agreement.
2. PURCHASE AND PURCHASE PRICE.
2.1 PURCHASE OF THE SELLER SHARES. Subject to the terms and
conditions set forth in this Agreement, the Seller agrees to sell to Buyer
and Buyer agrees to purchase, effective as of the Closing Date, the Seller
Shares upon the delivery of the certificate(s) for the Seller Shares,
together with instruments of transfer satisfactory to Buyer in its sole
discretion, and delivery to Buyer of evidence satisfactory to Buyer in its
sole discretion that the Seller Shares represented by such certificate(s)
are free and clear of all liens, claims, encumbrances and charges.
2.2 PURCHASE PRICE. The aggregate consideration to be paid to
the Seller for the Seller Shares (the "PURCHASE PRICE") will be $2,200,000
to be paid as follows: (a) $1,500,000, to be paid to Seller in immediately
available funds at the Closing, and (b) Buyer will deliver a Promissory
Note ("SELLER NOTE") in the original principal amount of Seven Hundred
Thousand Dollars ($700,000), executed by Buyer and payable to Seller, in
substantially the form of EXHIBIT 2.2 attached hereto, to be paid in
quarterly principal installments of $35,000. Interest will only accrue on
overdue amounts under the Seller Note at a per annum rate of 18% of the
overdue amount. The Seller Note will be secured by a pledge by Buyer of
the Seller Shares on the terms provided in the Pledge Agreement attached as
EXHIBIT 3.2(b)(2).
2.3 ALLOCATION OF PURCHASE PRICE. Buyer and Seller agree that
$10,000 of the Purchase Price is in consideration of the agreements granted
to Buyer and the Corporation under the Management and Option Agreement
described in Section 3.2(d)(4) below. Buyer and the Seller each warrant to
each other that in any tax return or form hereafter filed by Buyer or
Seller they will report the allocation of the Purchase Price consistently
with such allocation.
2
3. CLOSING.
3.1 CLOSING DATE. The closing of the transactions contemplated
by this Agreement (the "CLOSING") will take place at the offices of
▇'▇▇▇▇▇▇, Rancilio, Nitz, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m. on March 24, 1998 or such other date and time
as may be agreed to by Buyer and the Seller, but in no event later than
April 1, 1998.
3.2 ACTIONS TO BE TAKEN AT THE CLOSING.
(a) At the Closing, Buyer will pay the cash portion of the
Purchase Price, in accordance with Section 2.2 above, and any unpaid
amounts owing under the former Cleaning Agreement.
(b) At the Closing, Buyer will also deliver to the Seller:
(1) The duly executed Seller Note in the form of EXHIBIT
2.2 attached hereto.
(2) The duly executed Pledge Agreement in the form of
EXHIBIT 3.2(b)(2) attached hereto.
(3) Certified resolutions of its Board of Directors
authorizing the execution and delivery of this Agreement and each
Related Agreement to which Buyer is a party.
(4) A copy of the Articles of Incorporation of Buyer
(recently certified by an appropriate state official) and
documents (each certified by an appropriate state official)
showing that Buyer is duly incorporated and in good standing in
Michigan.
(5) An opinion of counsel to Buyer in substantially the
form as set forth on EXHIBIT 3.2(b)(5) attached hereto.
(6) All amounts due under the Commission Agreement accrued
through the end of February, 1998.
(7) Such additional information and materials as the Seller
has reasonably requested.
(c) At the Closing, the Seller will deliver to Buyer:
3
(1) Certificates representing all of the Seller Shares,
endorsed in blank or with accompanying stock powers duly signed,
to be held in escrow under the escrow agreement contemplated in
Section 3.2(d)(7) below.
(2) The written resignations of such officers and directors
of Corporation that are affiliated with Seller, on or before the
Closing Date, together with a statement from the Seller and each
officer and director of Corporation that resigns as required
above that each either waives or has no claim, as may be
appropriate, against the Corporation for unpaid dividends,
bonuses, profit sharing or rights or other claims of whatsoever
kind, nature or description, other than for unbilled cleaning
services under the Cleaning Agreement, amounts due under the
Commission Agreement for March, 1998, unpaid amounts under the
letter agreement, dated June 15, 1997, signed by ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, and retiree benefits (including,
without limitation, pension benefits and healthcare benefits) of
any former employees of the Corporation.
(3) Certified resolutions of its Board of Directors (and
Shareholders, if needed) authorizing the execution and delivery
of this Agreement and each Related Agreement to which the Seller
is a party.
(4) A copy of the Certificate of Incorporation of the
Seller (recently certified by an appropriate state official) and
documents (each certified by an appropriate state official)
showing that the Seller is duly incorporated and in good standing
in Delaware.
(5) An opinion of counsel to the Seller in substantially
the form as set forth on EXHIBIT 3.2(c) attached hereto.
(6) Such additional information and materials as Buyer has
reasonably requested.
(d) At the Closing, Buyer and Seller will both execute and
deliver or cause to be executed and delivered:
(1) A new Cleaning Contract, in form mutually acceptable to
Buyer and Seller, (the "CLEANING CONTRACT"), which shall
supersede and replace the former Cleaning Agreement.
(2) A Termination Agreement and Release in form mutually
acceptable to Buyer and Seller, which shall evidence the
termination of the Shareholders Agreement, and shall provide for
a mutual release of matters occurring up to the Closing Date as
more fully specified therein.
4
(3) A Management and Option Agreement in form mutually
acceptable to Buyer and Seller.
(e) Buyer and the Seller will execute and deliver such other
documents and certificates as are required by the terms of this Agreement
and the Related Agreements (including all governmental and third party
consents required to be delivered by the Corporation, Buyer or the Seller)
or as may be reasonably requested by the other party.
4. THE SELLER'S REPRESENTATIONS AND WARRANTIES. The Seller
represents and warrants to Buyer as follows, as of the date of this
Agreement and as of the Closing Date:
4.1 ORGANIZATION; POWER AND AUTHORITY; AUTHORIZATION; DUE
EXECUTION; NO CONFLICTS.
(a) The Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of Delaware, and has the full
power and authority to enter into this Agreement and each of the Related
Agreements to which it is a party and to consummate the transactions
contemplated by this Agreement and each of the Related Agreements to which
it is a party.
(b) This Agreement and each Related Agreement to which the
Seller is a party have been duly authorized by all necessary action on the
part of the Seller. Upon the execution and delivery by the Seller of this
Agreement and such Related Agreements, this Agreement and such Related
Agreements will constitute the legal, valid and binding obligations of the
Seller, enforceable against the Seller in accordance with their respective
terms, except as may be limited by bankruptcy, reorganization, insolvency,
moratorium, fraudulent transfer or other similar laws relating to or
affecting the enforcement of creditors' rights generally, and subject to
general principles of equity, regardless of whether such enforceability is
considered in a proceeding at law or in equity.
(c) The Seller's execution, delivery and performance of this
Agreement and the Related Agreements to which the Seller is a party will
not (i) constitute a breach or violation of (A) any of the Seller's
Certificate of Incorporation or Bylaws, (B) any Law or (C) any agreement,
indenture, deed of trust, mortgage, loan agreement or other instrument to
which the Corporation or the Seller is a party or by which Seller or any of
its assets or properties are bound or affected; (ii) constitute a violation
of any order, judgment or decree to which the Seller is a party or by which
Corporation or the Seller is bound or affected; (iii) result in the
creation of any lien, charge or encumbrance upon the Seller Shares or the
Corporation; or (iv) require any authorization, consent, approval,
exemption or other action by or notice or declaration to, or filing with
any governmental entity or any third party.
(d) The Seller has good and unencumbered marketable title to the
Seller Shares, free and clear of all security interests, liens, pledges,
charges or encumbrances of any nature, and upon consummation of the sale of
the Seller Shares to Buyer, Buyer will acquire good and
5
unencumbered marketable title to, and all right and interest to, all of the
Seller Shares, free and clear of all security interests, liens, pledges,
charges or encumbrances of any nature, other than the lien of Seller
contemplated in Section 3.2(b)(2) above. Other than the Shareholders
Agreement, there are no options, calls, warrants or other agreements
outstanding which relate to the Seller Shares.
4.2 CAPITALIZATION.
(a) The Seller Shares and the ▇▇▇▇▇▇ Shares (1) constitute all
of the issued and outstanding capital stock of the Corporation and (2) are
validly authorized and issued, fully paid, nonassessable and free of
preemptive rights.
(b) There are no (1) options, warrants or other rights,
agreements, arrangements or commitments of any character relating to the
issued or unissued capital stock of the Corporation or obligating
Corporation to grant, issue or sell any shares of stock or other equity
interest in the Corporation; (2) agreements, arrangements or commitments of
any character (contingent or otherwise) pursuant to which any person is or
may be entitled to receive any payment based on revenues or earnings of the
Corporation, other than the Commission Agreement; or (3) voting trusts,
proxies or other agreements or understandings with respect to the voting of
Seller Shares.
4.3 GUARANTEES. The Corporation has not guaranteed any debt or
obligation of the Seller.
4.4 RELATED PARTIES. After the Closing, there will be no
contractual relationships between the Corporation and the Seller or any
affiliate of the Seller, or between Corporation and any entity in which the
Seller or any affiliate of the Seller have an interest, other than the
Related Agreements and the unreleased contracts and obligations referred to
in Section 3.2(c)(2) above.
4.5 BROKERS. Neither the Corporation nor the Seller (a) has
dealt with any broker or finder in connection with this transaction; (b)
has caused or created any liability to any broker or finder in connection
with this transaction; or (c) is aware of any claim from any third party
that it is entitled to brokerage, finders or other similar fees in
connection with this transaction.
4.6 INDEPENDENT DECISION. Buyer and the Corporation have made
available to the Seller the opportunity to ask questions of, and receive
answers from, Buyer and the Corporation and persons acting on their behalf
concerning the Corporation, and to obtain any additional information, to
the extent Buyer or the Corporation possessed such information or could
acquire it without unreasonable effort or expense, that was necessary to
determine the value of the Corporation and the Seller Shares. The Seller
has made its own independent decision concerning the terms and conditions
of this Agreement and the Related Agreements.
6
5. BUYER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. Buyer
represents and warrants to Seller as of the date of this Agreement and as
of the Closing Date, and covenants to the Seller, as follows:
5.1 ORGANIZATION; POWER AND AUTHORITY. Buyer is a corporation
duly incorporated, validly existing and in good standing under the laws of
the State of Michigan, and has the full power and authority to enter into
this Agreement and each of the Related Agreements to which it is a party
and to consummate the transactions contemplated by this Agreement and each
of the Related Agreements to which it is a party.
5.2 AUTHORIZATION; DUE EXECUTION; NO CONFLICTS.
(a) This Agreement and each Related Agreement to which Buyer is
a party have been duly authorized by all necessary corporate action on
Buyer's part. Upon the execution and delivery by Buyer of this Agreement
and such Related Agreements, this Agreement and such Related Agreements
will constitute the legal, valid and binding obligations of Buyer,
enforceable against Buyer in accordance with their respective terms.
(b) Buyer's execution, delivery and performance of this
Agreement and the Related Agreements will not (1) constitute a breach or
violation of (A) Buyer's Articles of Incorporation or Bylaws, (B) any Law,
or (C) any agreement, indenture, deed of trust, mortgage, loan agreement or
other instrument to which Buyer is a party or by which Buyer or Buyer's
assets or properties are bound or affected; or (2) constitute a violation
of any order, judgment or decree to which Buyer is a party or by which
Buyer or Buyer's assets or properties is bound or affected.
5.3 BROKERS. Buyer (a) has not dealt with any broker or finder
in connection with this transaction; (b) has not caused or created any
liability to any broker or finder in connection with this transaction; and
(c) is not aware of any claim from any third party that it is entitled to
brokerage, finders or other similar fees in connection with this
transaction.
5.4 INVESTMENT INTENT. Buyer is acquiring the Seller Shares in
accordance with this Agreement for its own account, for investment and not
with a view to the sale or distribution thereof.
5.5 NEW BYLAWS. Within 15 days of the Closing Date, new bylaws
for the Corporation will be adopted in the form of Exhibit 5.5 attached
hereto, and upon request from Seller, the Corporation will provide Seller
with a certified copy of its new bylaws.
5.6 COMMISSION AGREEMENT. Buyer shall cause the Corporation to
pay a pro rated commission to Seller under the Commission Agreement by
April 20, 1998, equal to the result of multiplying (a) the amount which
would have been due under the Commission Agreement for March, 1998 (if such
Commission Agreement had not been terminated on the
7
Closing Date) by (b) a fraction in which the numerator is the day in March
on which this Agreement is signed and the denominator is 31.
6. SURVIVAL OF OBLIGATIONS AND REPRESENTATIONS AND WARRANTIES. The
provisions of, and the parties' obligations under, this Agreement
(including Buyer's and the Seller's representations and warranties) will
continue and will survive the Closing.
7. CONDITIONS PRECEDENT TO THE PARTIES' OBLIGATION TO CLOSE.
7.1 BUYER'S CONDITIONS PRECEDENT. Buyer's obligations under
this Agreement are subject to the satisfaction at or before the Closing
Date of each of the following conditions (the fulfillment of any of which
may be waived in writing by Buyer):
(a) All terms, covenants and conditions of this Agreement and
the Related Agreements to be complied with or performed by the Corporation
or the Seller prior to or on the Closing Date will have been fully complied
with and performed by the Corporation or the Seller (as applicable),
including, without limitation, the Seller's timely taking of all actions
and delivery of all documents required to be taken and delivered by it
under this Agreement and the Related Agreements.
(b) All representations, warranties, disclosures and statements
of the Seller contained in this Agreement and the Related Agreements will
be true and complete as of the date of this Agreement and the Closing Date.
(c) The Seller will have furnished to Buyer all certificates,
resignations, opinions and agreements required to be provided by the Seller
under Section 3.2.
(d) Buyer shall have obtained adequate financing for the
transaction contemplated by this Agreement and Buyer's other financial
needs, on term and conditions satisfactory to Buyer.
(e) No development shall have occurred which materially and
adversely affects the value of the Corporation and no material change in
the nature of the relationships between the Corporation and its suppliers
and customers shall have occurred.
7.2 THE SELLER'S CONDITIONS PRECEDENT. The Seller's obligation
under this Agreement are subject to the satisfaction at or before the
Closing Date of the following conditions (the fulfillment of any of which
may be waived in writing by the Seller):
(a) All terms, covenants and conditions of this Agreement and
the Related Agreements to be complied with or performed by Buyer prior to
or on the Closing Date will have been fully complied with and performed by
Buyer, including Buyer's timely taking of all actions and delivery of all
documents required to be taken and delivered by it under this Agreement and
the Related Agreements.
8
(b) All representations, warranties, disclosures and statements
of Buyer contained in this Agreement and the Related Agreements will be
true and complete as of the date of this Agreement and on the Closing Date.
(c) Buyer will have furnished to the Seller all certificates,
opinions and agreements required to be provided by Buyer under Section 3.2.
(d) The Seller shall have obtained all necessary approvals by
its Board of Directors and, if necessary, shareholders.
7.3 MUTUAL CONDITION PRECEDENT. Unless waived in writing by
each party, it will be a further condition to the consummation of this
transaction that no litigation will have been commenced or threatened to
challenge the right of any party to consummate the transactions
contemplated under this Agreement and the Related Agreements.
8. DEFAULT; TERMINATION OF AGREEMENT.
8.1 DEFAULT. Buyer's and the Seller's obligations under this
Agreement are of a special and unique character and Buyer's or the Seller's
failure to perform its or their obligations will cause irreparable injury
to the other party, the amount of which would be extremely difficult, if
not impossible, to estimate or determine and which may not be adequately
compensable by monetary damages alone. Therefore, the injured party will be
entitled, as a matter of course, to an injunction, restraining order, writ
of mandamus or other equitable relief from any court of competent
jurisdiction, including specific performance, restraining any violation or
threatened violation of any term of this Agreement or any Related
Agreement, or requiring compliance with or performance of any obligation
under this Agreement or such Related Agreement, by the violating party or
parties, or such other persons as the court may order. The parties' rights
under this Section 8.1 are cumulative and are in addition to the rights and
remedies otherwise available to them under Section 8.2 below, any other
provision of this Agreement and any other agreement or applicable Law.
8.2 TERMINATION. This Agreement may be terminated at any time
before the Closing as follows:
(a) At the election of Buyer, by notice to the Seller at any
time if any of Buyer's conditions precedent to Closing, as specified
in Section 7.1 or 7.3 above, has not been satisfied as of the Closing
Date or has at any time become incapable of being satisfied by the
Closing Date.
(b) At the election of the Seller, by notice to Buyer, if any of
the Seller's conditions precedent to Closing, as specified in Section
7.2 or 7.3 above, has not been satisfied as of the Closing Date or has
at any time become incapable of being satisfied by the Closing Date.
9
(c) By mutual agreement of the parties hereto.
8.3 EFFECT OF TERMINATION. Except as set forth in the last
sentence of this Section 8.3, if this Agreement terminates in accordance
with Section 8.2 above, it will be null and void and have no further force
or effect, except as to Section 10.10 hereof. The parties' rights under
this Section 8.3 are cumulative and are in addition to the other rights and
remedies available to them under Section 8.1 above, any other provision of
this Agreement, any other agreement or applicable Law.
9. INDEMNIFICATION.
9.1 INDEMNIFICATION BY THE SELLER. The Seller will indemnify
and hold Buyer and its subsidiaries, affiliates, directors, officers,
employees, agents and representatives harmless against any Loss which may
be incurred by Buyer as a result of:
(a) Any breach by the Seller of any of its representations and
warranties contained in this Agreement or any Related Agreement or the
Seller's breach or violation of any covenants or agreements made in
this Agreement or any Related Agreement or the exhibits or schedules
to this Agreement or any Related Agreement.
(b) Any action, suit, proceeding, investigation, assessment or
judgment relating to any of the matters indemnified against in this
Section 9.1, including Fees and Costs (whether prior to or at trial or
in appellate proceedings).
9.2 INDEMNIFICATION BY BUYER. Buyer will indemnify and hold the
Seller and its subsidiaries, affiliates (other than the Corporation),
directors, officers, employees, agents and representatives harmless against
any Loss which may be incurred by the Seller as a result of:
(a) Any breach by Buyer of any of Buyer's representations,
warranties, covenants or agreements made in this Agreement or any
Related Agreement or the exhibits or schedules to this Agreement or
any Related Agreement.
(b) Any action, suit, proceeding, investigation, assessment or
judgment relating to any of the matters indemnified against in this
Section 9.2, including Fees and Costs (whether prior to or at trial or
in appellate proceedings).
9.3 CLAIMS FOR INDEMNIFICATION.
(a) Whenever any claim is made for indemnification under this
Section 9, the person claiming such indemnification (the "CLAIMANT") will
notify the party against whom indemnification is sought (the "INDEMNIFYING
PARTY") promptly after the Claimant has actual knowledge of any event which
might give rise to a claim for indemnification under this Agreement;
provided that if the Claimant receives a complaint, petition or any other
pleading in
10
connection with a claim which requires the filing of an answer or other
responsive pleading, it will furnish the Indemnifying Party with a copy of
such pleading as soon as possible after receipt.
(b) The failure by the Claimant to give notice of a claim as
required in Section 9.3(a) above or a delay in giving such notice will not
affect the validity or amount of such claim and the indemnification
obligations of the Indemnifying Party will remain in effect as to such
claim, except to the extent that the Indemnifying Party can demonstrate
that it has been materially prejudiced or materially and adversely affected
thereby.
(c) Any claim made for indemnification under this Section 9 must
be made within four years and one month from the Closing.
9.4 THIRD-PARTY CLAIMS. If the facts giving rise to the right
of indemnification under Sections 9.1 or 9.2 above involve any actual or
threatened claim or demand by any third party against the Claimant or any
possible claim by the Claimant against any third party ("THIRD-PARTY
CLAIM"), and if, within 15 days after receipt of notice of the claim, the
Indemnifying Party gives the Claimant an agreement in writing, in form and
substance reasonably satisfactory to the Claimant, agreeing to indemnify
and hold the Claimant harmless from all costs and liability arising from
such Third-Party Claim (and including, if required by the Claimant,
adequate assurances of the Indemnifying Party's ability to meet its
obligations under this Section 9), the Indemnifying Party may, at its own
expense, undertake full responsibility for the defense or prosecution of
such Third-Party Claim and may contest or, subject to the following
sentence, settle or compromise it on such terms as it may choose.
Notwithstanding the foregoing, the Claimant may not settle or compromise
any Third-Party Claim over the objection of the Indemnifying Party;
provided, however, that if the settlement or compromise does not result in
liability to the Indemnifying Party or require the Indemnifying Party to
take any action or refrain from taking any action or otherwise restrict or
limit in any way Buyer's ability to operate its business or the Corporation
after the Closing, consent to such settlement or compromise will not be
required. If the Indemnifying Party fails to deliver such an agreement of
indemnity to the Claimant, (a) the Claimant will be entitled to defend or
prosecute such Claim with counsel of its own choice (the Fees and Costs of
such defense or prosecution being indemnified under this Section 9), and
(b) the Claimant may settle or compromise the Third-Party Claim on such
terms as it may choose. An Indemnifying Party's defense or prosecution of,
or participation in, a Third-Party Claim will not in any manner relieve the
Indemnifying Party of its other obligations to indemnify the Claimant under
this Section 9.
10. MISCELLANEOUS.
10.1 NOTICES. Any notice required or permitted to be given under
this Agreement must be in writing. Any such written communication shall be
deemed to have been duly given, and shall be deemed sufficient to preserve
the rights of the sending party if either (a) mailed by U.S. mail, with
postage prepaid by sender or sent by recognized overnight courier (such as
Airborne or Federal Express), with charges prepaid by sender and receipted
for by or on behalf
11
of the intended recipient, in each case to the following address, or else
(b) delivered by hand and receipted for by or on behalf of the intended
recipient:
(a) To Buyer: ▇▇▇▇▇▇ Industries, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇ Industries, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
And a copy to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
(b) To the Seller: Margate Industries, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
With a copy to: ▇'▇▇▇▇▇▇, Rancilio, Nitz,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
One Sterling Town Center
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
And a copy to: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(or ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ 48236)
Addresses for notices may be changed by notice given pursuant to this
Section 10.1.
10.2 NO WAIVER. No waiver of any breach of any provision of this
Agreement will be deemed a waiver of any preceding or succeeding breach or
of any other provision of this Agreement. No extension of time for
performance of any obligations or acts will be deemed a extension of the
time for performance of any other obligations or acts.
10.3 SUCCESSORS AND ASSIGNS. This Agreement will bind and inure
to the benefit of the parties and their successors and assigns.
12
10.4 SEVERABILITY. The provisions of this Agreement will be
deemed severable, and if any provision or part of this Agreement is held
illegal, void or invalid under applicable law, such provision or part may
be changed to the extent reasonably necessary to make the provision or
part, as so changed, legal, valid and binding. If any provision of this
Agreement is held illegal, void or invalid in its entirety, the remaining
provisions of this Agreement will not in any way be affected or impaired
but will remain binding in accordance with their terms.
10.5 ENTIRE AGREEMENT; AMENDMENT. This Agreement, the Related
Agreements and the schedules and the exhibits attached to this Agreement
and the Related Agreements contain the entire agreement of the parties with
respect to the transactions contemplated by this Agreement and the Related
Agreements and supersede all prior or contemporaneous agreements,
understandings, negotiations and discussions of the parties. This Agreement
may be altered or amended only by an instrument in writing, duly executed
by Buyer and the Seller.
10.6 COST OF LITIGATION. If any party breaches this Agreement or
any Related Agreement and if counsel is employed to enforce this Agreement
or a Related Agreement, the successful party will be entitled to Fees and
Costs associated with such enforcement.
10.7 INTERPRETATION. This Agreement and the Related Agreements
are being entered into among competent and experienced business persons,
represented by counsel, and have been reviewed by the parties and their
counsel. Therefore, any ambiguous language in this Agreement or any Related
Agreement will not necessarily be construed against any particular party as
the drafter of such language.
10.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts. All counterparts will be construed together and will
constitute one agreement.
10.9 APPLICABLE LAW; CHOICE OF VENUE. The laws of the State of
Michigan shall govern this Agreement, its construction and the
determination of any rights, duties or remedies of the parties arising out
of or relating to this Agreement. The parties acknowledge that the United
States District Court for the Eastern District of Michigan or the Michigan
Circuit Court for the County of Macomb shall have exclusive jurisdiction
over any case or controversy arising out of or relating to this Agreement
and the Related Agreements and that all litigation arising out of or
relating to this Agreement and the Related Agreements shall be commenced at
the United States District Court for the Eastern District of Michigan or in
the Macomb County (Michigan) Circuit Court.
10.10 EXPENSES. Except as otherwise provided in this Agreement
or the Related Agreements, each party will bear its own expenses in
connection with the transactions contemplated by this Agreement, including
costs of their respective attorneys and accountants.
13
10.11 FURTHER ASSURANCES. If at any time after the execution of
this Agreement, Buyer or the Seller reasonably considers or is advised that
any further actions, assignments or assurances on its part are necessary or
desirable to carry out the intent and accomplish the purposes of this
Agreement and the Related Agreements, it will, at its own expense, take
such actions, execute and make all such assignments and assurances and do
all things necessary or appropriate to carry out the intent and accomplish
the purposes of this Agreement and the Related Agreements.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date set forth in the introductory paragraph of this Agreement.
"Buyer"
▇▇▇▇▇▇ INDUSTRIES, INC.,
a Michigan corporation
By:__________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
"Seller"
MARGATE INDUSTRIES, INC.,
a Delaware corporation
By: _________________________________
Name:____________________________
Title:___________________________
14