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EXHIBIT 99
ASSET PURCHASE AND SALE AGREEMENT
BY AND AMONG
▇▇▇▇▇▇▇-OXIDERMO, INC.
DETREX CORPORATION
AND
RED SPOT PAINT & VARNISH CO., INC.
DATED: SEPTEMBER 1, 2000
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ASSET PURCHASE AND SALE AGREEMENT
THIS ASSET PURCHASE AND SALE AGREEMENT (the "Agreement") is made and
entered into this 1st day of September, 2000, by and among ▇▇▇▇▇▇▇-Oxidermo,
Inc., a Michigan corporation (hereinafter referred to as "Seller"), Detrex
Corporation, a Michigan corporation (hereinafter referred to as "Detrex"), and
Red Spot Paint & Varnish Co., Inc., an Indiana corporation (hereinafter referred
to as "Purchaser").
In consideration of the mutual promises of the parties contained
hereinbelow, and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties agree as follows:
1. Assets Being Acquired. Subject to the terms and conditions hereof,
and except for the Excluded Assets, as hereinafter defined, Seller hereby agrees
to sell, assign, transfer, convey and deliver to Purchaser at the Closing (as
hereinafter defined), and Purchaser hereby agrees to purchase at the Closing all
of Seller's right, title and interest in and to all of the assets, properties
and rights of Seller, tangible and intangible, used in connection with the
operation of its principal business located at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, including without limitation the following (collectively, the
"Property"):
(a) all machinery and equipment and other tangible personal
property (hereinafter referred to as the "Personal Property"),
including but not by way of limitation the items more particularly
described in Exhibit "A" attached hereto and incorporated herein by
this reference;
(b) all of Seller's inventories, raw materials, intermediate
materials, finished goods, manufacturing supplies, work in progress,
and work-off inventory agreed upon by the parties in the manner set
forth in paragraph 4 of this Agreement (hereinafter referred to as
"Inventory");
(c) any and all franchises, licenses, permits (but not
including air permits), consents and certificates of any regulatory,
administrative or other government agencies or body issued to or held
by Seller necessary or incidental to the conduct of Seller's business
(to the extent the same are transferable), including but not limited to
those described in Exhibit "B" attached hereto and incorporated herein
by reference;
(d) the business telephone numbers used in the operation of
Seller's business, to extent these are transferable at no cost to
Seller;
(e) all of the rights of Seller in and to the leases and
contracts described in Exhibit "C" attached hereto and incorporated
herein by reference (the "Assumed Leases and Contracts"), complete
copies of which, together with any and all amendments or modifications
thereto, are attached hereto and are incorporated as a part of said
Exhibit "C";
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(f) all trade secrets, confidential business information,
proprietary rights, proprietary knowledge (including, without
limitation, product formulae and specifications), goodwill, customer
lists (including without limitation Seller's records regarding customer
addresses, phone numbers, contact persons, and business requirements),
OEM approvals including Seller's records thereof, software, trade
marks, trade names, symbols, service marks, logos, patents, and
copyrights, and all applications therefor, registrations thereof and
licenses in respect thereof relating to or associated with Seller's
business, including but not limited to the trade name
"▇▇▇▇▇▇▇-Oxidermo" and any other intellectual property rights of
Seller, including, without limitation, those described in Exhibit "D"
attached hereto and incorporated herein by reference (collectively,
"Intellectual Property Rights"). Seller shall deliver all documentation
relating to the Intellectual Property Rights in whatever form possessed
by Seller on the Closing Date, including correspondence, magnetic disks
and any other information storage media, drawings, blueprints, manuals,
lists, letters, notes, notebooks, reports, flow-charts, formulas,
programs, proposals, documents concerning Seller's customers, documents
concerning products or processes used by Seller or its customers, and
all other documents, writings, and materials, together with any copies
or other reproductions thereof, in the possession of Seller;
(g) the accounts receivable of the Seller as of the date of
Closing, whether or not such amounts have been recorded on the books of
the Seller as a receivable. If, following the Closing, any payments are
made to Seller with respect to an account receivable which has been
purchased by Purchaser, Seller shall immediately notify the Purchaser
of such payment and shall forward such payment to Purchaser at the end
of the week in which the payment is received;
(h) all confidentiality agreements and non-competition
agreements executed by any former or current employee or agent of
Seller to the extent that such agreements can be assigned;
(i) personnel files with respect to any employee of Seller
hired by Purchaser after the Closing;
(j) all credit files with respect to Seller's customers;
(k) Seller's standard cost files, pricing files, and
outstanding quotes;
(l) all rights to research in process;
(m) all quality control records; and
(n) all MSDS records;
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provided, however, there shall be excluded from the assets and properties to be
conveyed, sold, transferred, assigned, and delivered to Purchaser under this
Agreement the following assets (collectively, the "Excluded Assets"):
i) all cash assets of Seller, including, without
limitation, cash on hand, savings deposits and other
bank accounts, tax deposits, certificates of deposit
and other direct obligations of the United States
Government and its agencies;
ii) all insurance policies;
iii) all prepaid expenses of Seller;
iv) the real estate, building and fixtures of Seller
located in Romulus, Michigan, and Detroit, Michigan,
except to the extent that any such fixtures are
specifically included in the list of Personal
Property being acquired;
v) Seller's tank farm and leased telephone system;
vi) Seller's ball ▇▇▇▇▇, only if Purchaser does not
remove them from Seller's premises by March 15, 2001.
Purchaser will notify Seller of the ball ▇▇▇▇▇
Purchaser intends to remove no later than January 31,
2001;
vii) Seller's corporate records, corporate seals, minute
books, stock books, other records pertaining solely
to the corporate organization of Seller, tax records
and checkbooks, copies of all of which (if and to the
extent possessed by Seller) will be provided to
Purchaser upon Purchaser's demonstration of good
reason therefor and at Purchaser's expense;
viii) the assets of Detrex or any of its affiliates other
than those used exclusively by Seller, none of which
are located at Seller's facility;
ix) ▇▇▇▇ ▇▇▇▇▇▇'▇ personal computer and leased vehicle;
x) all accounts receivable owed to Seller by Cambridge
Industries (the "Cambridge Receivable");
xi) the remaining goodwill obtained by Seller in
connection with Seller's purchase of ▇▇▇▇▇▇▇-Oxidermo
in 1986, as reflected in Seller's balance sheet; and
xii) any hazardous material of Seller, except the
Inventory.
2. Assumption of Certain Obligations. Upon the Closing and subject to
the terms and conditions of this Agreement, Purchaser shall assume
responsibility for the obligations and liabilities of Seller under the
agreements set forth in Exhibit "C" attached hereto and incorporated herein by
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reference only to the extent arising after the Closing Date except as otherwise
indicated on Exhibit "C" (the "Assumed Liabilities"), and no other liabilities
whatsoever.
3. Liabilities Not Assumed. With the exception of the Assumed
Liabilities, Purchaser shall not by the execution and consummation of this
Agreement, or otherwise, assume or otherwise be responsible for any liability or
obligation of any nature of Seller, or claims of such liability or obligation,
matured or unmatured, liquidated or unliquidated, fixed or contingent, or known
or unknown, including, without limitation:
(a) any liability or obligation under any lease, contract or
other instrument or agreement of Seller, including but not limited to
any forward purchase agreements or any accrued customer rebates or
discounts;
(b) any injury (physical or otherwise) to or death of any
person or damage to or destruction of any property, whether based on
negligence, invasion of privacy, breach of warranty, product liability,
strict liability or any other theory, and including but not limited to
any such injury, death, damage, or destruction relating to or caused by
products manufactured by Seller or services rendered by Seller to a
third party;
(c) any violation by Seller of the requirements of any
governmental authority or of the rights of any third person, including,
without limitation, requirements relating to the reporting or payment
(or both) of federal, state, local or foreign income, personal
property, withholding, sales and use, or other taxes;
(d) any claim, liability or obligation of Seller relating to
any collective bargaining agreement between Seller and Teamsters Local
Union No. 283 (Seller and Detrex hereby acknowledge that Purchaser will
not operate any part of Seller's facilities, and shall not assume, by
agreement, by operation of law, or otherwise, any liability or
obligation whatsoever with respect to any such collective bargaining
agreement, including but not limited to any liability as an alleged
successor of Seller, it being acknowledged that Purchaser intends to
conduct Purchaser's operations at Purchaser's existing facilities in
either Evansville, Indiana, where employees are represented by Local
833C of the International Chemical Workers Counsel of the United Food
and Commercial Workers, or in Westland, Michigan, where employees are
represented by the Westside Local 174 of the United Automobile
Workers);
(e) any claim, liability or obligation of Seller relating to
any other collective bargaining agreements or other contracts,
agreements, or other obligations to which Seller is a party or by which
Seller is bound: for the employment of any officer, individual,
employee or group of employees; for the processing and payment of any
worker's compensation claims with respect to any injury or condition
incurred by any employee of Seller; for the payment of any wages,
bonuses, commissions, vacation pay, or severance pay; for the
furnishing of any benefits, including but not limited to group
insurance benefits, profit sharing benefits, pension or other employee
benefits (including but not limited to any liability for unfunded or
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under-funded pension liability); or any obligations under the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"); or
any employment policy of Seller relating to payment upon dismissal or
termination of employment, including without limitation, with respect
to any employee of Seller not hired by Purchaser after Closing;
(f) any liability or penalty of Seller resulting from a
violation of, or noncompliance or non-conformance with, any law,
judgment, order, decree, regulation or rule of any court or
governmental authority, including, without limitation, the provisions
of all anti-pollution and environmental protection laws, including but
not limited to any liability with respect to off-site contamination and
third party liability (including but not limited to any potential
liability disclosed on Exhibit "I"), all anti-trust laws other than
those that may be applicable to the transaction contemplated herein,
all employment discrimination or other employment or labor related
laws, all safety and health laws, and all rules and regulations
promulgated under such laws, and whether any claim related to any such
violation or non-compliance or non-conformance is filed before or
after the time of Closing;
(g) any claim, liability, penalty, fine, or other obligation,
whether assessed against Seller or Purchaser, resulting from failure to
give any notice contemplated by the Worker Adjustment and Retraining
Notification Act with respect to this transaction, or any comparable
state law, if applicable;
(h) any claim, liability, or obligation of Seller related to
any products manufactured or services rendered by Seller, whether such
claim is based on breach of contract, breach of warranty, negligence,
strict liability, products liability, or otherwise;
(i) accruals for material returns, customer claims, or
rebates; and
(j) any other liability or obligation of Seller.
4. Purchase Price. The purchase price for the Property to be acquired
pursuant to paragraph 1 hereinabove, subject to such adjustments as may
hereinafter be provided for, shall be Eleven Million Three Hundred Seventy-Five
Thousand Dollars ($11,375,000.00) (the "Purchase Price"), which shall be paid to
Seller at the Closing in cash or immediately available funds, adjusted as
follows:
The sum of the accounts receivable of Seller transferred to
Purchaser on the date of Closing (which shall not include the Cambridge
Receivable) and the value of the Inventory of Seller transferred to
Purchaser on the Closing Date shall equal not less than Four Million
Three Hundred Eighty-Five Thousand Dollars ($4,385,000) (the "Balance
Sheet Amount"). To the extent that the sum of the accounts receivable
and the Inventory at the time of Closing is (i) less than the Balance
Sheet Amount, Purchaser shall be entitled to a dollar for dollar
reduction in the Purchase Price, or (ii) greater than the Balance Sheet
Amount, Seller shall be entitled to a dollar for dollar increase in the
Purchase Price. In the event any settlement is required pursuant to
this Paragraph, such settlement shall be made by the parties on October
20, 2000.
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On the 8th day of September, 2000, or on such other day
mutually agreed by the parties, Seller shall conduct a physical count
of its Inventory, and shall thereafter track all changes to its
Inventory from such date through the Effective Date (as hereinafter
defined) of Closing. Representatives of Purchaser shall be permitted to
observe the taking of such physical inventory and shall be permitted to
take reasonable actions which shall not interfere with Seller's
operations to confirm the results of said physical count.
Representatives of Seller and Purchaser shall mutually agree upon the
value of the Inventory, valued in accordance with this paragraph. The
Inventory of Seller being acquired by Purchaser shall be valued on a
FIFO cost basis. The parties shall mutually agree upon which items of
inventory, including but not limited to work-off inventory, shall be
included in the Inventory following the taking of the physical count,
and the dollar value thereof. In the event of a dispute between the
parties hereto regarding the valuation of the Inventory, including the
work-off inventory, any such dispute may be resolved, at the request of
either party, by binding arbitration with an arbitrator to be mutually
agreed upon by the parties, or if they fail to agree, then with an
arbitrator selected by the American Arbitration Association upon the
request of either party.
On the six month anniversary date of Closing, Purchaser shall
be entitled to payment from Seller in an amount equal to the balance of
any uncollected accounts receivable, and such uncollected accounts
receivable shall be transferred and assigned by Purchaser to Seller,
together with all applicable documents relating thereto. Purchaser
shall have no obligation to file suit to collect any such accounts
receivable during such six month period, but shall only be required to
send billing statements to said customers and make commercially
reasonable efforts to collect said accounts receivable in accordance
with its ordinary business practices.
Following the Closing, if Purchaser receives any refunds,
credits, rebates, discounts, or other amounts from a supplier
(collectively, "Rebates") based on the purchases of products from such
supplier made by Seller during 2000, Purchaser shall remit to Seller an
amount equal to Seller's pro-rata portion of the Rebates calculated as
follows: the sum of all Rebates from such Supplier multiplied by a
fraction, the numerator of which shall be the total dollars paid by
Seller to such supplier during 2000 (the "Seller's Purchases") and the
denominator of which shall be the sum of the Seller's Purchases and the
total dollars paid by Purchaser to such supplier during 2000
("Purchaser's Purchases"). Purchaser shall remit Seller's pro- rata
portion of the Rebates within ten business days of receipt of a Rebate,
less any Rebate received by Seller. Seller shall have the opportunity
to review all of Purchaser's records with respect to Purchaser's
Purchases in the event a dispute arises relating to the Rebates.
5. Allocation of Purchase Price. The parties hereto agree that the
purchase price shall be allocated among the assets being acquired in accordance
with an IRS Form ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, to be completed and mutually
agreed upon by the parties no later than November 30, 2000, or a date mutually
agreed by the parties. The parties further agree to use such allocation for
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tax purposes and to furnish to each other, upon request, such data and
documentation as may be available to support such allocations.
6. Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to Seller that:
(a) Organization. Purchaser is a corporation duly organized
and validly existing under the laws of the State of Indiana.
(b) Authorization of Purchaser. Purchaser has all requisite
power and authority (corporate and other) to enter into this Agreement
and all of the other contracts, documents and instruments contemplated
hereby, and to perform its obligations hereunder and thereunder, and to
consummate the transactions contemplated hereby and thereby, including,
without limitation, the execution and delivery of this Agreement and
all of the other contracts, documents and instruments contemplated
hereby. All necessary and appropriate action has been taken by
Purchaser with respect to the execution and delivery of this Agreement
and such other contracts, documents and instruments, and this Agreement
and such other contracts, documents and instruments, constitute a valid
and binding obligation of Purchaser, enforceable against it in
accordance with their terms.
(c) No Conflict or Default. The execution and delivery of this
Agreement by Purchaser, and compliance by Purchaser with the terms and
provisions hereof, including, without limitation, the consummation of
the transactions contemplated hereby, will not violate in any material
respect any statute, regulation or ordinance of any governmental
authority, or conflict with or result in the breach of any term,
condition or provision of the Certificate or Articles of Incorporation
or By-laws of Purchaser or of any agreement, deed, contract, mortgage,
indenture, writ, order, decree, legal obligation or instrument to which
Purchaser is a party or by which it or any of its properties are or may
be bound, or constitute a material default (or any event which, with
the lapse of time or the giving of notice, or both, would constitute a
material default) thereunder, or result in the creation or imposition
of any lien, charge or encumbrance, or restriction of any nature
whatsoever with respect to any of its properties. The granting by
Purchaser of a security interest in any of the Property or in any of
its properties, in order to secure financing for this transaction,
shall not be deemed to be a breach of the representations and
warranties contained in this paragraph.
(d) Litigation. There is no claim, litigation, action, suit,
proceeding, investigation or inquiry, administrative or judicial,
pending or, to the knowledge of Purchaser, threatened against
Purchaser, at law or in equity, before any federal, state or local
court or regulatory agency, or other governmental authority, which
might have an adverse affect on Purchaser's ability to perform any of
its obligations under this Agreement or any of the other documents to
be executed and delivered by Purchaser pursuant to the terms of this
Agreement, upon the consummation of the transactions contemplated by
this Agreement.
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(e) Broker and Finders. Neither Purchaser nor any of its
officers, directors or employees, has employed any broker or finder or
incurred any liability for any brokerage fees, commissions, finder's
fees or similar fees or expenses and no broker or finder has acted
directly or indirectly for Purchaser in connection with this Agreement
or the transactions contemplated hereby.
(f) Employee Benefits. With respect to Purchaser's health
plans, Purchaser covenants, represents and warrants that individuals
who were employed by Seller immediately prior to the Closing Date and
who participated in Seller's health insurance plans and who are hired
by Purchaser within six months after the Closing Date will, as of their
date of hire by Purchaser, become eligible for participation, without
any preexisting condition limitations, in a group health plan (as
defined for purposes of Section 4980B of the Internal Revenue Code of
1986, as amended) established and maintained by Purchaser for the
general benefit of its employees and their dependents.
7. Representations and Warranties of Seller. Seller and Detrex hereby
jointly and severally represent and warrant to Purchaser that:
(a) Corporate Organization; Authority to Conduct Business.
Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Michigan and has all requisite
power and authority (corporate and other) to own, lease and operate its
properties and conduct its business as now being conducted.
(b) Authorization of Seller and Detrex. Seller and Detrex each
have all requisite power and authority (corporate and other) to enter
into this Agreement and all of the other contracts, documents and
instruments contemplated hereby, and to perform their obligations
hereunder and thereunder, and consummate the transactions contemplated
hereby and thereby, including, without limitation, the execution and
delivery of this Agreement and all of the other contracts, documents
and instruments contemplated hereby. All necessary and appropriate
corporate action has been taken by Seller and Detrex with respect to
the execution and delivery of this Agreement and such other contracts,
documents and instruments, and this Agreement and such other contracts,
documents and instruments, constitute a valid and binding obligation of
Seller and Detrex, enforceable against them in accordance with their
terms. Seller is a wholly owned subsidiary of Detrex, and Detrex will
receive a direct financial benefit from the consummation of this
Agreement, and Detrex has entered into this Agreement in order to
induce Purchaser to enter into this Agreement.
(c) No Conflict or Default. Except as set forth in Exhibit
"E-1" attached hereto and incorporated herein by reference, neither the
execution and delivery of this Agreement by Seller and/or Detrex, nor
compliance by Seller and/or Detrex with the terms and provisions
hereof, including, without limitation, the consummation of the
transactions contemplated hereby, will violate in any material respect
any statute, regulation or ordinance
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of any governmental authority, or conflict with or result in the breach
of any term, condition or provision of the Articles of Incorporation or
By-laws of Seller and/or Detrex or of any material agreement, deed,
contract, mortgage, indenture, writ, order, decree, legal obligation or
instrument to which Seller and/or Detrex is a party or by which either
of them or any of their properties are bound, or constitute a material
default (or any event which, with the lapse of time or the giving of
notice, or both, would constitute a material default) thereunder, or
result in the creation or imposition of any lien, charge or
encumbrance, or material restriction of any nature whatsoever with
respect to any of the Property.
(d) Title to the Property; Leases and Contracts. Upon the
occurrence of each of the conditions precedent to Closing, and upon the
consummation of the transactions contemplated hereby, Purchaser will
obtain good and marketable title to all of the Property free and clear
of all liens, encumbrances, and adverse claims. The Property and the
Excluded Assets constitute all of the tangible and intangible assets
and contract rights used in the business of the Seller as it is
presently conducted. To Seller's Knowledge, all of the Assumed Leases
and Contracts are currently in full force and effect, and there does
not exist, nor will there exist at the time of Closing, an event of
default on the part of Seller, or, to Seller's Knowledge, on the part
of the other party to any of the Assumed Leases or Contracts, nor, to
Seller's Knowledge, is there any fact or circumstance which, with the
passage of time or the giving of notice, or both, would constitute an
event of default.
(e) Condition of Property. The Personal Property is being sold
as-is, where-is. Seller shall provide reasonable assistance to
Purchaser in locating and recovering the paint totes that are not at
Seller's premises on the Closing Date.
(f) Books and Records. The books and records of Seller are
reasonably complete and correct in all material respects and Seller has
made available to Purchaser for examination the originals or true and
correct copies of all documents material to the business of the Seller
as conducted prior to the Closing.
(g) Accounts Receivable. Seller has provided Purchaser with a
complete and accurate accounts receivable aging report dated as of July
31, 2000. The accounts receivable of Seller have arisen from bona fide
transactions in the ordinary course of business and are good and
collectible in the ordinary course of business, without off-set or
credit of any kind. Except as disclosed in Exhibit "E-2," attached
hereto and incorporated herein by reference, Seller does not give any
rebates or discounts to its customers on sales of Seller's products.
(h) Inventory. The Inventory shall not include any damaged,
defective, slow moving, work-off, or obsolete merchandise, except to
the extent expressly agreed-upon by the parties in writing. Except for
the work-off inventory included in the Inventory, all Inventory of
finished goods held for resale, stocks of raw materials, intermediate
materials, or goods in process shall be usable or saleable in the
ordinary course of business on the Closing Date.
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(i) Intentionally omitted.
(j) Financial Statements. Attached hereto as Exhibit "F-1" and
incorporated herein by reference are Seller's financial statements for
the years ended December 31, 1999, and the six month period ended June
30, 2000, which are true and correct in all material respects, present
fairly the financial condition of the Seller as of the dates stated
therein, and, except as set forth in Schedule "F-1", were prepared in
accordance with generally accepted accounting principles consistently
applied.
(k) Absence of Material Changes. Except as disclosed in
Exhibit"F-2", since January 1, 2000, there has not been, and at the
time of Closing there shall not be:
i) any damage, destruction or loss, whether or not
covered by insurance, materially and adversely affecting the
Property, except any such damage, destruction or loss
disclosed in writing to Purchaser by Seller prior to Closing;
or
ii) any labor dispute or disturbances materially
affecting in an adverse manner the business or financial
condition of Seller, including, without limitation, the filing
of any charge of unfair labor practices with the National
Labor Relations Board; or
iii) any change in the financial condition, assets,
liabilities, or business of the Seller, other than changes in
the ordinary course of business, none of which has been
materially adverse; or
iv) any transaction entered into or carried out by
Seller other than in the ordinary and usual course of its
business; or
v) any mortgage, pledge, lien, security interest,
charge or other encumbrance imposed or agreed to be imposed on
or with respect to any of the Property; or
vi) any sale, lease, or other distribution of, or any
agreement to sell, lease, or otherwise dispose of any of the
properties of Seller, except for the sale of finished goods in
the usual and ordinary course of business; or
vii) any material loss of the business of a material
customer of Seller, or any indication that any material
customer intends to significantly reduce the volume of
products purchased from Seller; or
viii) any claim or notice from any customer of any
material defect in any product; or
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ix) any other event or condition of any character
which materially or adversely affects the business operations,
assets, properties, rights, or condition of the Seller's
business.
(l) Continuing Operation of Seller's Business. Seller agrees
that since January 1, 2000, and from such time until the Closing, and
except as otherwise consented to or approved by an authorized officer
of Purchaser in writing:
i) the business, operations, activities and practices
of Seller have been and shall be conducted only in the
ordinary course of business and consistent with past
practices;
ii) Seller has used and will use reasonable efforts
to keep the business organization of the Seller intact, and to
preserve the goodwill of its suppliers, customers, and others
with whom business relationships exist, and to keep available
the services of its employees and agents;
iii) Seller has not and will not take, agree to take
or knowingly permit to be taken any action or do or knowingly
permit to be done anything in the conduct of the business of
Seller, or otherwise, which would be contrary to or in breach
of any of the terms or provisions of this Agreement or which
would cause any of the representations of Seller contained
herein to be or become untrue in any material respect;
iv) To Seller's Knowledge, Seller has substantially
complied, and will continue to use commercially reasonable
efforts to substantially comply, with all executory contracts,
and to maintain Inventory at levels consistent with past
practices.
(m) Litigation; Compliance With Law. With respect to the
Property and the business of the Seller, except as set forth in Exhibit
"G" attached hereto and incorporated herein by reference: (i) Seller is
not engaged in or, to Seller's Knowledge, threatened with, any claim,
controversy, legal action, or other proceeding whether or not before
any court or administrative agency; (ii) Seller is not in violation of,
and has not received any notice alleging a violation of, any law,
judgment, order, decree, regulation or rule of any court or government
authority applicable to it; (iii) to Seller's Knowledge the products,
manufacturing facilities, operations and processes and business
operations of the Seller, are, and have been, in compliance with all
applicable laws, including without limitation, the provisions of all
anti-trust laws, all safety and health laws, and all rules and
regulations promulgated under such laws, except when the failure to
comply with such laws would not have a material adverse effect on the
Property being transferred to Buyer; and (iv) there is no pending or,
to Seller's Knowledge, threatened litigation, administrative action or
examination, claim, or demand whatsoever relating to the Property.
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(n) Employee Benefit Plans; ERISA. To Seller' Knowledge and
with respect to plans which it sponsors, Seller has substantially
satisfied all of its obligations arising under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), including but not
limited to any and all liability under any "Employee Benefit Plans" it
sponsors as defined in Section 3(iii) of ERISA and all other employee
benefit arrangements or payroll practices it sponsors, including each
severance pay, bonus, deferred compensation, incentive compensation,
stock purchase, stock option, hospitalization or other medical, life,
disability or other welfare, pension, profit sharing or retirement
programs covering present and/or former officers, directors,
shareholders, employees of the Seller and their respective dependents
or beneficiaries.
(o) Brokers and Finders. Neither Seller nor any of its
officers, directors or employees has employed any broker or finder or
incurred any liability for any brokerage fees, commissions, finder's
fees or similar fees or expenses, and no broker or finder has acted
directly or indirectly for Seller in connection with this Agreement or
the transactions contemplated hereby.
(p) Employees, Compensation and Benefits. At the Closing,
Seller will provide Purchaser with Exhibit "H", which shall be attached
hereto and incorporated herein by reference, and which shall set forth
the names of certain employees of Seller actively involved in the
business of Seller that Purchaser has identified prior to Closing as
being individuals Purchaser may desire to employ, their position with
the Seller, their date of hire, and their rate of compensation and the
amount of any accrued vacation pay as of the Closing Date. Except as
set forth in Exhibit "H," there will be no other fringe benefits or
other forms of compensation paid to any such employee of Seller except
the fringe benefits described in Seller's "New Employee Folder" and
certain sales bonus and commission plans which have been disclosed to
Purchaser. Except as set forth in Exhibit "H,", Seller will have no
agreement or understanding with any employees identified by Purchaser,
either explicit or implicit, which, in Seller's reasonable judgment,
would influence any such person not to become associated with Purchaser
from and after the time of Closing or from serving Purchaser in a
capacity similar to the capacity presently held. Seller shall
reasonably cooperate with Purchaser in its efforts to hire such
employees and encourage the individuals which shall be identified by
Purchaser to accept employment with Purchaser, to the extent that
Seller is reasonably able to do so, prior to the Closing of this
transaction, it being understood by the parties hereto that Purchaser
has no obligation and has made no commitment to hire any of Seller's
employees. Purchaser shall make any such offer of employment to any
such employee, upon such terms and conditions, including starting date,
as Purchaser may deem appropriate, it being acknowledged that the
foregoing does not in any way constitute an employment agreement or an
agreement either to employ any of such employees, or to employ them for
any specific period of time or other than on an "at will" basis.
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(q) Labor Relations.
i) To Seller's Knowledge, Seller has substantially
complied with Title VII of the Civil Rights Act of 1964, as
amended, the Fair Labor Standards Act, as amended, the Equal
Pay Act, the Age Discrimination in Employment Act of 1967, as
amended by the Older Workers Benefit Protection Act, the
Americans with Disabilities Act, and, the Occupational Safety
and Health Act of 1970, as amended. To Seller's Knowledge,
Seller has substantially complied with all applicable federal,
state and local laws, rules and regulations relating to
employment, and all applicable laws, rules and regulations
governing payment of minimum wages and overtime rates, and the
withholding and payment of taxes from compensation of
employees.
ii) There are no material controversies pending or,
to Seller's Knowledge, threatened between Seller or Detrex and
any of Seller's employees, concerning labor relations or
employment matters generally.
iii) There are no pending or, to Seller's Knowledge,
threatened investigations of Seller by the Michigan
Occupational Safety and Health Administration or by the United
States Occupational Safety and Health Administration.
iv) There are no pending or, to Seller's Knowledge,
threatened investigations of Seller by the National Labor
Relations Board or the United States Department of Labor's
Wage and Hour Division.
v) There are no pending or, to Seller's Knowledge,
threatened claims against Seller by female employees that
involve the Equal Pay Act.
vi) There are no pending or, to Seller's Knowledge,
threatened claims for sexual harassment by an employee of
Seller involving the Seller, Detrex, or any of their
employees.
vii) There are no pending or, to Seller's Knowledge,
threatened claims against Seller for violations of the Family
and Medical Leave Act.
viii) There are no pending or, to Seller's Knowledge,
threatened employment related civil actions or administrative
claims involving the Seller or its employees.
ix) There are no pending or, to Seller's Knowledge,
threatened unemployment compensation claims against Seller.
x) Seller is not subject to the notification
requirements of the Worker Adjustment and Retraining
Notification Act.
15
xi) Seller shall be responsible for any liabilities
or obligations to Teamsters Local Union 283 with respect to
the anticipated closure of Seller's plant.
(r) Boycotts; Pickets. There are no organizations known to
Seller which are boycotting Seller's business operations or products,
which refuse to engage in business with those who do business with
Seller, or which are or have within the past twelve (12) months
picketed Seller or Seller's business establishment.
(s) Environmental Hazards. Except as forth in Exhibit "I"
attached hereto and incorporated herein by this reference: (i) To
Seller's Knowledge, Seller has not caused or permitted any hazardous
material to be brought upon, kept, flushed into sanitary sewers or used
in or about the Seller's real estate, whether by Seller, Seller's
agents, employees, contractors, invitees, or any other party, except
for inventory and other materials used in the ordinary course of
Seller's business which were necessary, useful to, produced by or
incident to Seller's business and which were at all times used, kept,
stored and disposed of in a manner which substantially complies with
all applicable laws regulating any such hazardous material so brought
upon or used or kept in or about the Seller's real estate, whether now
or previously in effect. Seller and Detrex shall remove any hazardous
materials on Seller's real estate known to Seller and dispose of such
hazardous materials in the manner which complies with all laws
regulating any such hazardous material. Except as set forth in Schedule
"I", Seller has not been designated as a "potentially responsible
party" in connection with any contamination or release involving
hazardous materials; and (ii) to Seller's Knowledge, the facilities,
operations and processes, and business operations of the Seller at or
from Seller's real estate, including without limitation the storage or
disposal from Seller's real estate of hazardous materials, both on-site
and off-site, are, and have been, in substantial compliance with all
applicable anti-pollution and environmental protection laws.
As used herein, the term "hazardous material" means any
hazardous or toxic substance, material or waste which is regulated by
any local governmental authority, the State of Michigan or the United
States government. The term "hazardous material" includes, without
limitation, petroleum hydrocarbons, asbestos, PCB's, and any material
or substance that is:
i) infectious waste;
ii) radioactive materials;
iii) designated as a "hazardous substance"
pursuant to the Federal Clean Water Pollution Control Act, as
such act may have been amended;
iv) defined as a "hazardous waste" pursuant to
the Federal Resource Conservation and Recovery Act, as such
act may have been amended;
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v) defined as a "hazardous substance" pursuant
to the Comprehensive Environmental Response, Compensation and
Liability Act, as such act may have been amended; and/or
vi) defined as a toxic, infectious, contaminating, or
hazardous waste, substance, or material, or a substance which
is otherwise the subject of any environmental or
anti-pollution law or regulation pursuant to state, local or
federal laws.
(t) Taxes. Except as set forth in Exhibit "J-1" attached
hereto and incorporated herein by this reference: (i) Seller has paid
any and all taxes (including without limitation, payroll taxes),
license fees or other charges levied, assessed or imposed upon the
Seller and any of the Property of Seller which is being purchased by
Purchaser pursuant to this Agreement, except taxes not yet due and
payable; (ii) all tax returns required to be filed by Seller prior to
and including the date of Closing have been duly prepared and filed on
Seller's behalf within the time prescribed by law; and (iii) all taxes,
contributions and other charges required to be paid by Seller to
governmental agencies, including but not limited to withholding taxes
and sales and use taxes with respect to its operations prior to the
date of Closing, will be paid by Seller or on behalf of Seller as they
become due.
(u) Insurance. Seller currently has in full force and effect,
comprehensive general liability, unemployment compensation, worker's
compensation and product liability insurance. Seller will continue to
maintain such insurance coverage in full force and effect through the
Closing Date, and throughout the term of the Transition Contract
Manufacturing and Shipping Agreement, as hereinafter defined.
(v) No Bulk Sales Act Requirements. Seller is not required to
provide any notice to its creditors of the sale contemplated by this
Agreement, pursuant to any Bulk Sales Act or similar law. Seller
represents and warrants that the Bulk Sales Act as previously in effect
in the State of Michigan has been repealed.
(w) Intellectual Property Rights. Seller owns the Intellectual
Property Rights described in paragraph 1(f) of this Agreement as well
as the Intellectual Property Rights set forth on Exhibit "D" attached
hereto and incorporated herein by reference. To Seller's Knowledge,
Seller is not aware of the use by any third party of the formulas for
any of the products set forth in Exhibit "D." To Seller's Knowledge,
the Intellectual Property Rights do not interfere with, infringe upon,
or otherwise come into conflict with any intellectual property rights
of any third party, and neither Seller nor Detrex have received any
charge, complaint, claim, demand or notice alleging any such
interference, infringement, misappropriation or violation. To Seller's
Knowledge, no third party has interfered with, infringed upon,
misappropriated or otherwise come into conflict with any Intellectual
Property Rights of Seller. Seller shall deliver to Purchaser upon
request, each pending application or application for registration which
the Seller has made with respect to any of its Intellectual Property
Rights. Except as set forth in Exhibit "D," Seller has not entered into
17
any license, agreement, or other permission granting any third party
any rights with respect to any of its Intellectual Property Rights.
Seller will deliver to Purchaser upon request, correct and complete
copies of all patents, registrations, applications, licenses,
agreements, and permissions and any other written documentation
evidencing ownership and prosecution (if applicable), of each item of
Intellectual Property Rights.
(x) Customers. Seller shall provide Purchaser as a part of
Purchaser's due diligence investigation a list of Seller's top thirty
largest customers based on gross sales dollars before returns for the
year ended December 31, 1999, and year to date information through the
31st day of August, 2000, including information with respect to the
sales attributable to each such customer, which list and accompanying
information shall be true and correct in all material respects. Seller
and Detrex will disclose during the due diligence investigation any
material negative trends or material adverse changes which have
occurred since December 31, 1999, with respect to any customer with
annual sales during 1999 or from January 1, 2000, through August 1,
2000, of at least One Hundred Thousand Dollars ($100,000). To Seller's
Knowledge, except as set forth in Exhibit "J-2", no such customer has
indicated that it intends to reduce its level of purchases from Seller,
or that it does not intend to continue such level of purchase with
Purchaser after Closing.
(y) Reliance. The foregoing representations and warranties are
made by Seller with the knowledge and expectation that Purchaser is
placing complete reliance thereon.
8. Conditions Precedent to Obligations of Purchaser. All of the
obligations of Purchaser under this Agreement are subject to the fulfillment
prior to or at the Closing Date of each of the following conditions, any one or
more of which may only be waived in writing by the Purchaser:
(a) Accuracy of Representations. The representations and
warranties of Seller and Detrex contained herein shall be true in all
material respects as of the date when made, shall be deemed to be made
and shall be true in all material respects at and immediately prior to
Closing; provided, however, Seller shall not be in breach of this
Agreement so long as Seller, from time to time prior to the Closing
Date, supplements or amends the Exhibits to this Agreement with respect
to any matter arising after the date hereof which, if existing on or
occurring after the date hereof, would have been required to be set
forth in the Exhibits or which is necessary to correct any information
contained in this Agreement. In the event Seller makes a material
change to any Exhibit, Purchaser shall have five (5) days from the date
of such disclosure to Purchaser of such material change to notify
Seller of Purchaser's desire to terminate this Agreement.
(b) Fulfillment of Obligations. All covenants, conditions and
other obligations under this Agreement which are to be performed or
complied with by Seller and/or Detrex shall have been fully performed
and complied with in all material respects on or prior to the Closing
Date including the delivery of the fully executed instruments and/or
documents in accordance with this Agreement, including but not limited
to the execution and delivery of the Transition Contract Manufacturing
and Shipping Agreement and the other documents required to be delivered
at Closing.
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(c) Due Diligence. Purchaser shall have the right to perform
due diligence activities at Seller's facilities, including but not
limited to inspections of the Property, tests of related records, and
discussions with employees as Purchaser deems reasonably necessary. All
such due diligence activities will take place during normal business
hours and shall not unduly interfere with the operations and business
activities of Seller. Seller and Detrex will provide Purchaser and its
authorized representatives reasonable access during normal business
hours to all plants, offices, warehouses and other facilities of Seller
and to all books and records of the Seller. Seller will permit
Purchaser to make such inspections as it may reasonably require, and
Seller and Detrex shall cause its officers to furnish Purchaser with
such available financial and operating data and other information with
respect to the Seller as Purchaser may from time to time reasonably
request; provided, however, that such activities shall be conducted
with a view towards minimizing any disruption of the day to day
business of the Seller. Purchaser will discuss its due diligence plan
and sensitivities with Seller and Detrex prior to conducting such due
diligence activities. The due diligence period will commence on the
second business day after execution of this Agreement and shall
continue for up to seven business days. During such due diligence
investigation, Purchaser shall evaluate the details of the business and
assets being purchased to ensure that the assets, business, and
potential future earnings are as Purchaser currently believes them to
be, based upon information and discussions with Detrex and Seller, and
to satisfy itself that a sufficient number of Seller's sales, technical
service, customer service, and technical personnel will accept
employment from Purchaser following Closing, in order to assure the
retention of existing business contacts, customer base, and know-how
related to the sale, servicing and production of the products
manufactured by Seller. After completion of the due diligence period,
Purchaser shall have until the end of business on Wednesday, September
20, 2000 (the "Cancellation Date") (subject to the time period provided
in paragraph 8(a)) to cancel and rescind this Agreement without
liability in the event Purchaser has determined, based upon such due
diligence investigation, that Purchaser should not proceed to Closing.
Notwithstanding the foregoing, in the event Seller does not provide
Purchaser with inventory reports reflecting results of the physical
count taken on September 8, 2000, as described in paragraph 4 by
September 12, 2000, the Cancellation Date shall be extended by one day
for each day beyond September 12 that Seller delayed providing such
reports to Purchaser.
(d) Financing. Purchaser's obligations under this Agreement
are subject to closing the necessary financing for this acquisition
from Comerica Bank and Old National Bank in Evansville, upon terms and
conditions reasonably acceptable to Purchaser. Purchaser shall provide
Seller with evidence of any loan commitment from Comerica Bank and Old
National Bank in Evansville, when available.
(e) No Adverse Change. There shall have been no material
adverse change in the financial or business condition of the business
and operations of Seller or in the condition of the Property between
the date of this Agreement and the Closing.
19
(f) No Adverse Proceeding. There shall be no pending or
threatened claim, action, litigation or proceeding, judicial or
administrative, or governmental investigation against Purchaser,
Seller, Detrex or the Property for the purpose of enjoining or
preventing the consummation of this Agreement, or otherwise claiming
that this Agreement or the consummation hereof is illegal.
(g) Employees. All issues with regard to Seller's union
employees shall have been resolved to the satisfaction of Purchaser.
9. Conditions Precedent to Obligations of Seller and Detrex. All of the
obligations of Seller and Detrex under this Agreement are subject to the
fulfillment prior to or at the Closing Date of each of the following conditions,
any one or more of which may only be waived in writing by the Seller and Detrex:
(a) Accuracy of Representations. The representations and
warranties of Purchaser contained herein shall be true in all material
respects as of the date when made, shall be deemed to be made again at
and as of the Closing Date and shall be true in all material respects
at and as of the Closing Date.
(b) Fulfillment of Obligations. All covenants, conditions and
other obligations under this Agreement which are to be performed or
complied with by Purchaser shall have been fully performed and complied
with in all material respects on or prior to the Closing Date including
the delivery of the funds and the fully executed instruments and/or
documents in accordance with this Agreement.
(c) No Adverse Proceeding. There shall be no pending or
threatened claim, action, litigation or proceeding, judicial or
administrative, or governmental investigation against Purchaser,
Seller, Detrex or the Property for the purpose of enjoining or
preventing the consummation of this Agreement or otherwise claiming
that this Agreement or the consummation hereof is illegal.
(d) Employees. All issues with regard to Seller's union
employees shall have been resolved to the satisfaction of Seller.
(e) Comerica Approval. Comerica shall approve this transaction
and shall agree to release its lien on the Property which it holds in
connection with Detrex's financing with Comerica.
10. Time, Date, and Place of Closing; Effective Date. Upon satisfaction
or effective waiver of the conditions specified hereinabove, this transaction
shall close, and all deliveries to be made at the time of Closing shall take
place, at 10:00 a.m., local time, on Friday, September 29, 2000 (the "Closing
Date"), at ▇▇▇▇▇ ▇▇▇▇ PLC, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, or at such other place, date or time as may be agreed upon from time
to time in writing by Seller and Purchaser. In the event of the failure of this
transaction to Close on or
20
before the Closing Date, neither party shall be obligated to consummate this
transaction and this Agreement shall be canceled and of no further effect;
provided, however, Purchaser shall receive upon request one or more extensions
of the Closing Date in the event all of the conditions to Closing which are
solely in the control of Seller have not been satisfied by the Closing Date. The
"Closing" shall mean the deliveries to be made by Purchaser and Seller at the
time of Closing in accordance with this Agreement. Notwithstanding the Closing
Date, the effective date of the transfer of the Property to Purchaser shall be
considered to be September 30, 2000 (the "Effective Date").
11. Events Comprising the Closing. The Closing, which shall be subject
to the prior satisfaction of the conditions set forth in this Agreement, shall
consist of delivery of the following:
(a) ▇▇▇▇ of Sale. Seller shall deliver to Purchaser an
executed ▇▇▇▇ of Sale transferring to Purchaser the Property free and
clear of all liens and security interests, in the form and content
attached hereto as Exhibit "K" and hereby incorporated herein by this
reference.
(b) Seller's and Detrex's Resolutions. Seller and Detrex shall
each deliver to Purchaser resolutions of its Board of Directors,
certified by its secretary, authorizing the execution, delivery and
performance of this Agreement.
(c) Purchaser's Resolutions. Purchaser shall deliver to Seller
resolutions of its Board of Directors, certified by its secretary,
authorizing the execution, delivery and performance of this Agreement.
(d) Opinion of Counsel-Seller and Detrex. Seller and Detrex
shall deliver to Purchaser the opinion of Seller's legal counsel, in
substantially the content attached hereto as Exhibit "L" and
incorporated herein by this reference.
(e) Opinion of Counsel-Purchaser. Purchaser shall deliver to
Seller the opinion of Purchaser's legal counsel, in substantially the
content attached hereto as Exhibit "M" and incorporated herein by this
reference.
(f) Payment of Purchase Price. Purchaser shall deliver to
Seller the Purchase Price as provided in paragraph 4 hereinabove.
(g) Confidentiality and Noncompetition Agreement. Purchaser,
Seller and Detrex shall execute and deliver a Confidentiality and
Non-Competition Agreement in the form and content set forth as Exhibit
"N" attached hereto and incorporated herein by reference.
(h) Certificates of Title. Seller shall endorse for transfer
and deliver to Purchaser any and all certificates of title which may
exist with respect to any of the Property.
21
(i) Lien Releases. Seller shall obtain and deliver to
Purchaser releases of all liens existing upon any of the Property,
including but not limited to those liens described in Exhibit "O"
attached hereto and incorporated herein by reference.
(j) Certificate of Amendment. Seller shall execute a
Certificate of Amendment to its Articles of Incorporation changing
Seller's name.
(k) Assignment of Leases and Contracts; Consents. Seller and
Purchaser shall execute an Assignment and Assumption Agreement in
substantially the form and content set forth in Exhibit "P" attached
hereto and incorporated herein by reference for each of the Assumed
Leases and Contracts, and Seller shall use good faith efforts to
deliver to Purchaser the written consent of the lessor or other party
to each of the Assumed Leases and Contracts, consenting to such
assignment, if timely required by Purchaser or such lessor or other
party.
(l) Transition Contract Manufacturing and Shipping Agreement.
Seller, Detrex, and Purchaser shall execute and deliver the Transition
Contract Manufacturing and Shipping Agreement in the form and content
set forth in Exhibit "Q" attached hereto and incorporated herein by
reference.
(m) Royalty Agreement. Seller and Purchaser shall execute and
deliver the Royalty Agreement, in the form and content set forth in
Exhibit "R" attached hereto and incorporated herein by reference.
(n) Other Documents. Purchaser and Seller shall each execute
and deliver such other documents and information as are provided for in
this Agreement.
12. Possession. Seller shall deliver possession of the Property to
Purchaser in the condition existing at the time of execution of this Agreement,
ordinary wear and tear excepted, subject to the provisions of paragraph 16
hereinbelow. Purchaser shall be entitled to possession of the Property
immediately upon Closing; provided, however, Seller shall be permitted to
utilize the Property to the extent necessary to fulfill its obligations under
the Transition Contract Manufacturing and Shipping Agreement. Purchaser shall
cause the Personal Property to be removed as set forth in the Transition
Contract Manufacturing and Shipping Agreement. The Inventory may remain, in
Purchaser's discretion, on Seller's real estate during the term of the
Transition Contract Manufacturing and Shipping Agreement, and any Inventory on
said real estate shall be removed by Purchaser as set forth in the Transition
Contract Manufacturing and Shipping Agreement. Upon conclusion of the term of
the Transition Contract Manufacturing and Shipping Agreement, Seller and Detrex
agree to cooperate to provide the services of ▇▇▇▇ ▇▇▇▇▇▇▇ to Purchaser upon
terms agreeable to the parties.
13. Indemnification.
(a) Indemnification by Seller and Detrex. Seller and Detrex,
jointly and severally, agree to indemnify Purchaser, its affiliates and
the directors, officers, shareholders,
22
employees, agents, successors and assigns of Purchaser and its
affiliates against, and hold each and every one of the foregoing
harmless from, any and all damages, losses, claims, actions, causes of
action, liabilities, obligations, demands, charges, suits, penalties,
fines, costs or expenses, whether accrued, absolute, contingent, known
or unknown, foreseeable or unforeseeable, or otherwise, including but
not limited to court costs, reasonable attorneys' fees, reasonable
paralegals' fees, deposition charges, reasonable investigation fees,
reasonable expert witness fees, reasonable appraiser fees and expenses
of environmental remediation (hereinafter collectively referred to as
the "Losses"), which any of the foregoing may incur or to which any of
the foregoing may be subjected, arising out of, incurred in connection
with, related to, or otherwise caused by, directly or indirectly, any
of the following:
(i) any misrepresentation or breach of warranty or
representation by Seller and/or Detrex or any nonfulfillment, breach or
default by Seller and/or Detrex of or under any of the covenants or
other provisions of this Agreement, or of the other agreements and
documents referred to herein or executed pursuant hereto; or
(ii) any liabilities set forth in paragraph 3
hereinabove, and any liabilities, obligations, and commitments of, or
claims against, Seller and/or Detrex, including those which may accrue
by operation of law against Purchaser under a theory of successor
liability and which are not based on any act, omission or duty of
Purchaser, other than the Assumed Liabilities identified in paragraph 2
hereof; or
(iii) any failure to give any notice contemplated by
the Worker Adjustment and Retraining Notification Act with respect to
this transaction, whether assessed against Seller or Purchaser;
(iv) any hazardous material in, on, or under any of
Seller's facilities, whether owned or leased, and/or any hazardous
material arising from, related to, or otherwise used in connection with
Seller's operations, regardless of whether said hazardous materials are
located on or off Seller's real estate, and regardless of whether
discovered prior to Closing or following Closing; or
(v) any defective products manufactured by Seller,
including but not limited to the cost of providing credits for returned
product and amounts paid in settlement of damages caused by such
defective products manufactured by Seller prior to Closing; or
(vi) any collective bargaining agreement with
Teamsters Local Union No. 283.
(b) Indemnification by Purchaser. Purchaser agrees to
indemnify Seller, Detrex and each of their affiliates, and the
directors, officers, shareholders, employees, agents, successors and
assigns of Seller, Detrex and each of their affiliates, and to hold
them harmless from and against all Losses, including the Assumed
Liabilities, in any way arising
23
out of or related to any act or omission of Purchaser and any breach or
other default of any agreements, representations, warranties or
covenants on the part of Purchaser contained in this Agreement or any
of the documents referred to herein or in the conduct of the business
being acquired by Purchaser after Closing.
(c) Obligation to Indemnify. No party hereto shall have an
obligation to indemnify the other party from and against any Losses
until the other party has suffered Losses of Fifty Thousand Dollars
($50,000) (the "Deductible") or more in aggregate, after which the
responsible party shall be obligated to indemnify such party from and
against all such Losses in excess thereof, except the Deductible shall
not apply to: (i) claims for defective products manufactured by Seller,
including but not limited to the cost of providing credits for returned
product and amounts paid in settlement of damages caused by such
defective products manufactured by Seller prior to Closing; (ii) any
settlements or adjustments set forth in paragraph 4 of this Agreement;
(iii) any claim by Purchaser for the failure of the Seller to deliver
any portion of the Property; and (iv) any claim arising out of the
existence of any lien or encumbrance on the Property at the time of the
Closing. Notwithstanding anything to the contrary contained in this
paragraph 13, the aggregate liability of ▇▇▇▇▇▇▇ and Detrex on the one
hand and Purchaser on the other under this paragraph 13 shall not
exceed Five Million Dollars ($5,000,000).
(d) Limitations. No party hereto shall have an obligation to
indemnify any other party from and against any Losses unless written
notice of a probable Loss is given within two years of the Closing
Date; provided, however, that with respect to Third Party Claims (as
defined below), the indemnification provision provided for herein shall
expire if notice of a probable Loss is not given within sixty days
following the expiration of the applicable statute of limitations.
"Third Party Claims" as used in this paragraph 13(d) shall mean the
claims of any third party, including but not limited to any claim,
fine, penalty, tax, assessment, or obligation asserted by any
governmental authority. Notwithstanding anything to the contrary
contained in this Agreement, the remedies provided in paragraph 13
shall constitute the exclusive remedy for all parties indemnified under
paragraph 13 for any claim in connection with this Agreement. No claim
for indemnification or otherwise whether based on statute, rule,
regulation, ordinance or any other law, may be made with respect to a
representation and warranty or any other claim arising out of the
transaction outlined herein after the expiration of the applicable
period described above.
(e) Notice of Claim. In the event of a breach or other claim,
the party claiming such breach or making such other claim (the
"Indemnitee") shall give written notice ("Notice") to the party in
breach or against whom such other claim is made (the "Indemnitor")
stating that payment of an amount described in such notice is due and
payable to the Indemnitee under the provisions of this Agreement on
grounds set forth in such notice.
(f) Defense. If any action, litigation, suit, investigation,
arbitration or other proceeding ("Proceeding") is brought against an
Indemnitee for which such Indemnitee is or may be entitled to
indemnification pursuant to subparagraph 13(a) or 13(b) from an
24
Indemnitor, the Indemnitee shall promptly give a Notice to the
Indemnitor of such Proceeding. The Indemnitor shall, at its own
expense, have the opportunity to be represented by counsel of its
choosing and to assume and conduct the defense of any such Proceeding
upon providing a written undertaking to that effect to the Indemnitee.
If, after such opportunity, the Indemnitor or its counsel does not
assume the defense of any such Proceeding, it shall be bound by the
results obtained by the Indemnitee. In the event that the Indemnitee
does not receive written notice from the Indemnitor within ten (10)
days of having given Notice to the Indemnitor of any such Proceeding,
the Indemnitor shall be deemed to have elected not to assume the
defense of such Proceeding, and in such event the Indemnitee will have
the right to conduct such defense. In the event that the Indemnitor
does elect to assume the defense of such Proceeding, the Indemnitee
will cooperate with and make available to the Indemnitor such
assistance and materials as may be reasonably requested by it at no
cost to the Indemnitor, and the Indemnitee will have the right at its
expense to participate in the defense; provided, however, that the
Indemnitee will have the right to compromise or settle such Proceeding
only with the prior written consent of the Indemnitor which shall not
be unreasonably withheld.
(g) Cooperation and Access. Seller, Detrex and Purchaser shall
cooperate fully with each other after the Closing with respect to any
claims, demands, tax or other audits, suits, actions and proceedings by
or against Seller, Detrex, or Purchaser, as the case may be, in respect
of the Property or the liabilities of Seller's business, whether or not
assumed by Purchaser, whether or not either party has notified the
other of a claim for indemnity with respect to such matter.
14. Change of Seller's Name. Within thirty days following the Closing,
Seller shall amend its Articles of Incorporation to change its name to a name
which is not confusingly similar to the name "▇▇▇▇▇▇▇-Oxidermo". Purchaser
agrees that the use by Seller of the name "▇▇▇▇▇▇▇-Oxidermo" following the
Closing on stationery, checks, and similar matters in connection with Seller's
operations under the Transition Contract Manufacturing and Shipping Agreement
and otherwise as a part of Seller's wind-down of its business will not violate
this Agreement so long as Seller does not otherwise conduct any other trade or
business using such name.
15. Specific Performance; Remedies. The parties hereto acknowledge and
agree that in the event either party should refuse to fully perform its
obligations at Closing, even though all conditions precedent to its obligation
to Close hereunder have been satisfied or waived, the other party's remedy at
law would be inadequate due to the unique nature of the transaction contemplated
herein. The parties agree, therefore, that in the event that either party fails
or refuses to Close under the circumstances set forth in the previous sentence,
the other party shall be entitled to specific performance to enforce the
provisions of this Agreement, in addition to any other rights or remedies
available at law or in equity.
16. Risk of Loss. Seller shall bear the risk of loss or damage to the
Property until the date of Closing. If the Property is totally or substantially
destroyed or damaged prior to Closing, Purchaser may cancel this Agreement, or,
at Purchaser's sole option, Purchaser may enforce this
25
Agreement without reduction of the Purchase Price and Seller shall assign to
Purchaser the insurance proceeds covering the damage. In the event of the loss,
damage, or destruction of an insubstantial portion of the Property, Purchaser
shall negotiate in good faith with Seller an equitable reduction in the Purchase
Price, and if such a reduction can be mutually agreed upon, Purchaser and Seller
shall proceed with Closing.
17. Good Faith; Further Assurances. The parties to this Agreement shall
in good faith undertake to perform their obligations under this Agreement, to
satisfy all conditions precedent to Closing and to cause the transactions
contemplated by this Agreement to be carried out promptly in accordance with the
terms of this Agreement. Upon the execution of this Agreement and thereafter,
each party shall do such things as may be reasonably requested by the other
party hereto (other than the expenditure of moneys) in order more effectively to
consummate or document the transactions contemplated by this Agreement.
18. Definition of Knowledge. As used herein, "Seller's Knowledge" or
"to the Knowledge of Seller" shall mean the actual conscious awareness of ▇▇▇▇▇▇
▇. Israel, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, and ▇▇▇▇ ▇▇▇▇▇▇▇.
19. Notices. All notices, communications and deliveries under this
Agreement shall be made in writing signed by the party making the same, shall
specify the section of this Agreement pursuant to which it is given, if any, and
shall be effective only if delivered in person, by overnight carrier, by
facsimile transmission, or by certified mail, return receipt requested, postage
prepaid, as follows:
To Seller and/or Detrex: ▇▇▇▇▇▇ ▇. Israel, Vice President Finance
DETREX CORPORATION
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇ ▇. ▇▇▇▇, ▇▇. Esq.
▇▇▇▇▇ HILL, PLC
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
To Purchaser: ▇. ▇. "▇▇▇▇" ▇▇▇▇▇▇▇▇▇▇, Executive Vice
President
RED SPOT PAINT & VARNISH CO., INC.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
P. O. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
26
With a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
KAHN, DEES, ▇▇▇▇▇▇▇ & ▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
Fifth Main Financial Plaza
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other representative or to such other address or facsimile number as
the parties hereto may furnish to the other from time to time in writing. Such
notices, communications, and deliveries shall be deemed to be given on the date
delivered if delivered in person or by overnight carrier, on the date
transmitted if transmitted by facsimile, or on the earlier of the date of
receipt or the third (3rd) business day after mailed, if mailed by certified
mail, as aforesaid. If notice is given pursuant to this paragraph of a permitted
successor or assign of a party to this Agreement, then notice shall be given as
set forth above to such successor or assign of such party.
20. Public Announcements. Purchaser acknowledges that Detrex is a
publicly held company and that by entering into this Agreement, Purchaser, will
receive information regarding Detrex and Seller which is not available to the
general public. Purchaser agrees that neither Purchaser, nor any officer or
director of Purchaser or any employee or agent of Purchaser who has knowledge of
the transaction contemplated in this Agreement, or any member of the immediate
family or household of such persons, shall engage in any transaction involving a
purchase or sale of the stock of Detrex, including any offer to purchase or
offer to sell, beginning on the date of this Agreement and ending at the close
of business on the second Trading Day (as defined below) following the date of
public disclosure of any confidential information (including the fact that the
parties have entered into this Agreement or consummated the transactions
contemplated herein) provided to Purchaser hereunder, or at such time as such
confidential information is no longer material. As used herein, the term
"Trading Day" shall mean a day on which national stock exchanges and the
National Association of Securities Dealers, Inc. Automated Quotation System
(Nasdaq) are open for trading. Further, no officer, director, employee or agent
of Purchaser shall disclose ("tip") confidential information to any other person
(including family members) where such information may be used by such person to
his or her profit by trading in the securities of Detrex, nor shall any officer,
director, employee or agent of Purchaser (including family members) make
recommendations or express opinions on the basis of confidential information as
to trading in securities of Detrex. Detrex, Seller and Purchaser will consult
with each other before issuing any press releases or otherwise making any public
statements with respect to this Agreement and the transaction contemplated
hereby, and shall not issue any such press release or make any such public
statement prior to said consultation or as to which a party hereto reasonably
objects, except as may be required by law or by obligations pursuant to any
listing agreement with any national securities exchange or inter-dealer
quotation system.
21. Successors and Assigns. This Agreement shall be binding upon and
shall enure to the benefit of, the parties hereto and their successors and
assigns, whether such successor is a successor by virtue of a merger,
consolidation, acquisition, or other reorganization. The parties hereto
27
specifically acknowledge and agree that this Agreement shall enure to the
benefit of, and shall be specifically enforceable by, any third party which
acquires from Purchaser substantially all of the assets used in the operation of
the business which is the subject of this Agreement.
22. Entire Agreement. This Agreement contains or incorporates by
reference the entire agreement between the parties hereto, and supersedes all
prior oral or written agreements, commitments and understandings with respect to
the matters provided for herein, and no amendment or modification hereof shall
be binding upon any party hereto unless set forth in writing and duly executed
by all of the parties hereto.
23. Survival of Representations and Warranties. All of the
representations and warranties contained herein shall survive the execution of
this Agreement and the Closing of the transaction contemplated herein for a
period of two years following the date of Closing, subject to the exceptions set
forth in paragraph 13(d). Such execution and Closing shall not be considered to
be a waiver of any misrepresentation or breach of warranty, and each party may
pursue any rights or remedies granted herein or available at law or in equity.
24. Additional Actions and Instruments. Each of the parties hereto
agrees to take or cause to be taken such further reasonable actions (other than
the expenditure of moneys), to obtain such consents and approvals, and to
execute, deliver and file or cause to be executed, delivered and filed such
further instruments as any other party may from time to time reasonably request
in order to fully effectuate the purposes, terms and conditions of this
Agreement.
25. Waivers. No waiver by any party of, or consent by such party to, a
variation from, or breach of, or default under any provision of this Agreement
shall be effective unless made in a written instrument duly executed on behalf
of such party by its duly authorized officer or such individual (as the case may
be), and any such waiver or consent shall be limited solely to those rights or
conditions expressly so waived or consented to. No failure or delay on the part
of any party in exercising any power, right or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power preclude any other or further exercise thereof, or the
exercise of any other right or power under this Agreement. No investigation by
or on behalf of any party shall be deemed to constitute a waiver or an extension
by such party of compliance with any representation, warranty, condition,
agreement or indemnification set forth in this Agreement.
26. Interpretation. The language in all parts of this Agreement shall
in all cases be construed as a whole according to its fair meaning, strictly
neither for nor against Purchaser, Seller, or Detrex, and without implying a
presumption that the terms hereof shall be more strictly construed against one
(1) party by reason of any rule of construction to the effect that a document is
to be construed more strictly against the party who personally or through such
parties agent prepared the same.
27. Severability. If fulfillment of any provision of this Agreement or
performance of any act contemplated hereby, at the time such fulfillment or
performance shall be due shall exceed the
28
limit of validity prescribed by law, then the obligation to be fulfilled or
performed shall be reduced to the limit of such validity and if any clause or
provision contained in this Agreement or in any document or instrument to be
delivered pursuant hereto, operates or would operate to invalidate this
Agreement or such document or instrument, in whole or in part, such clause or
provision shall be held ineffective, as though not herein or therein contained,
and the remainder of this Agreement or such document or instrument shall remain
operative and in full force and effect.
28. Applicable Law; Arbitration. This Agreement shall be governed and
construed under the laws of the State of Michigan, not including the choice of
law rules thereof. Except as provided for elsewhere in this Agreement, or in any
instrument executed in connection herewith, any and all disputes, complaints,
controversies, claims and grievances arising under, out of, in connection with,
or in any manner related to this Agreement or the relationship of the parties
hereunder shall be submitted to arbitration to be conducted by the American
Arbitration Association in accordance with the Commercial Arbitration Rules of
the American Arbitration Association. Notwithstanding said Rules, any
arbitration hearing to take place hereunder shall be conducted in the Chicago,
Illinois, metropolitan area before one arbitrator who shall be an attorney who
has substantial experience in commercial law issues. Either party may apply to
any court of competent jurisdiction for specific performance or injunctive
relief or other interim measures: (i) as expressly provided for elsewhere in
this Agreement; (ii) in aid of the arbitration proceedings; or (iii) to enforce
the arbitration award, but not otherwise. Any such application to a court shall
not be deemed incompatible or a waiver of this paragraph. Arbitration
proceedings hereunder may be commenced by written notice from either party
hereto to the other party. The arbitrator shall have the power and the authority
to make such decisions and awards as he shall deem appropriate, including
granting damages and costs to the prevailing party, and the granting or issuance
of such mandatory directions, prohibitions, orders, restraining and other
injunctions as he may deem necessary or advisable directed to or against any
other parties, including a direction or order requiring specific performance of
any covenant, agreement or provision of this Agreement as a result of a breach
or threatened breach thereof. In arriving at his decision the arbitrator shall
be free to consider all such matters, fact and principles, as he, in his sole
discretion shall determine. Any decision and award of the arbitrator shall be
final, binding and conclusive upon all of the parties hereto and said decision
and award may be entered as a final judgment in any court of competent
jurisdiction. It is expressly agreed that, except as otherwise specifically
provided herein, the arbitration as provided herein shall be the exclusive means
for determination of all matters as above provided and neither of the parties
hereto shall institute any action or proceeding in any court of law or equity,
state or federal, other than respecting enforcement of the arbitrator's award
hereunder. The foregoing sentence shall be a bona fide defense in any action or
proceeding instituted contrary to this Agreement.
29. Headings. The descriptive headings of the paragraphs and
subparagraphs of this Agreement are inserted for convenience only and do not
constitute a part of the Agreement.
30. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same document.
29
IN WITNESS WHEREOF, the Parties hereto have duly executed this
Agreement as of the date first hereinabove written.
▇▇▇▇▇▇▇-OXIDERMO, INC.
By:
---------------------------------------
▇▇▇▇▇▇ ▇. Israel, Treasurer
------------------------------------------
Printed Name and Title
"SELLER"
DETREX CORPORATION
By:
---------------------------------------
▇▇▇▇▇▇ ▇. Israel, Vice President Finance
------------------------------------------
Printed Name and Title
"DETREX"
RED SPOT PAINT & VARNISH CO., INC.
By:
---------------------------------------
▇.▇. ▇▇▇▇▇▇▇▇▇▇, Executive Vice President
------------------------------------------
Printed Name and Title
"PURCHASER"