Exhibit 10.1
[*] indicates that a confidential portion of the text of this agreement
has been omitted and filed separately with the Securities and Exchange
Commission.
JOINT VENTURE FORMATION AGREEMENT
by and among
NC-M CHASSIS SYSTEMS, LLC,
DAIMLERCHRYSLER CORPORATION
and
METALDYNE CORPORATION
Dated as of December 8, 2002
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
1.1 Definitions.......................................................1
ARTICLE II
CONTRIBUTION OF ASSETS
2.1 Contribution of Assets............................................15
2.2 Excluded Assets...................................................17
2.3 Issuance of Units.................................................18
2.4 Assumption of Liabilities.........................................18
2.5 Excluded Liabilities..............................................19
2.6 Nonassignable Assets and Approvals................................20
2.7 Opening Balance Sheet.............................................21
ARTICLE III
SALE AND PURCHASE OF TRANSFERRED UNITS
3.1 Sale and Purchase of Transferred Units............................22
3.2 Purchase Price for Transferred Units..............................22
ARTICLE IV
THE CLOSING
4.1 Closing...........................................................22
4.2 Closing Deliveries of Seller......................................22
4.3 Closing Deliveries of the Company.................................23
4.4 Closing Deliveries of Metaldyne...................................24
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
5.1 Due Incorporation.................................................24
5.2 Due Authorization.................................................25
5.3 Consents and Approvals; No Violations.............................25
5.4 Financial Statements..............................................25
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5.5 Conduct of Business...............................................26
5.6 Title to Properties...............................................27
5.7 Sufficiency of Transferred Assets.................................27
5.8 Real Property.....................................................27
5.9 Personal Property.................................................28
5.10 Inventory.........................................................28
5.11 Engineering and Development.......................................28
5.12 Intellectual Property.............................................28
5.13 Contracts.........................................................28
5.14 No Defaults or Violations.........................................31
5.15 Governmental Approvals............................................31
5.16 Insurance.........................................................31
5.17 Employment and Labor Matters......................................31
5.18 Capital Improvements..............................................32
5.19 Taxes.............................................................32
5.20 Product Claims and Product Warranty...............................32
5.21 Environmental Matters.............................................33
5.22 Litigation........................................................34
5.23 Brokers...........................................................34
5.24 Customers and Suppliers...........................................34
5.25 Health and Safety; Asbestos.......................................35
5.26 Disclosure........................................................35
5.27 No Other Representations or Warranties............................35
ARTICLE VI
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF SELLER
6.1 Due Formation......................................................36
6.2 Due Authorization..................................................36
6.3 Consents and Approvals; No Violations..............................36
6.4 Capitalization; Title to Units.....................................37
6.5 No Liabilities.....................................................37
6.6 Brokers............................................................37
6.7 No Other Representations or Warranties.............................38
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF METALDYNE
7.1 Due Incorporation..................................................38
7.2 Due Authorization..................................................38
7.3 Consents and Approvals; No Violations..............................39
7.4 Subsidiaries; Equity Investments...................................39
7.5 Capitalization.....................................................40
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7.6 Metaldyne SEC Documents............................................41
7.7 Financial Statements...............................................41
7.8 Conduct of Business................................................42
7.9 Insurance..........................................................43
7.10 Litigation.........................................................43
7.11 Outstanding Debt...................................................43
7.12 No Undisclosed Liabilities.........................................44
7.13 Brokers............................................................44
7.14 Investment Company Act.............................................44
7.15 Registration Rights................................................44
7.16 No Other Representations or Warranties.............................44
ARTICLE VIII
COVENANTS
8.1 Implementing Agreement.............................................44
8.2 Access to Information and Facilities...............................45
8.3 Consents and Approvals.............................................45
8.4 Use of Name........................................................45
8.5 Transfer Taxes.....................................................46
8.6 Publicity..........................................................46
8.7 Preservation of Business...........................................46
8.8 Tax Matters........................................................47
8.9 Maintenance of Insurance...........................................48
8.10 Title Insurance....................................................48
8.11 Survey.............................................................48
8.12 Financial Statements...............................................48
8.13 Further Assurances.................................................49
8.14 UAW Agreement......................................................49
8.15 Demolition.........................................................50
8.16 Baseline Environmental Remediation.................................50
8.17 Intellectual Property Licenses; Discussions Regarding
Ownership of Certain Intellectual Property.....................51
8.18 Notification of Certain Matters....................................52
8.19 Cooperation on Subsequent Litigation...............................53
8.20 Board Approval.....................................................53
8.21 Finalization of Exhibits...........................................53
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH PARTY
9.1 Governmental Approvals.............................................54
9.2 No Adverse Proceedings.............................................54
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ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF
THE COMPANY AND SELLER
10.1 Accuracy of Representations and Warranties.........................54
10.2 Compliance with Agreements and Covenants...........................54
10.3 Certificates.......................................................54
10.4 Requisite Consents.................................................54
10.5 No Metaldyne Material Adverse Change...............................55
10.6 Board Approval.....................................................55
ARTICLE XI
CONDITIONS PRECEDENT TO OBLIGATIONS OF METALDYNE
11.1 Accuracy of Representations and Warranties.........................55
11.2 Compliance with Agreements and Covenants...........................55
11.3 Certificates.......................................................55
11.4 Contribution.......................................................55
11.5 Requisite Consents.................................................55
11.6 No Business Material Adverse Change................................56
11.7 Board Approval.....................................................56
ARTICLE XII
TERMINATION
12.1 Termination........................................................56
12.2 Effect of Termination..............................................57
ARTICLE XIII
INDEMNIFICATION
13.1 Survival...........................................................57
13.2 Indemnification by Seller..........................................57
13.3 Indemnification by Metaldyne.......................................59
13.4 Limitations on Liability...........................................59
13.5 Claims.............................................................61
13.6 Notice of Third Party Claims; Assumption of Defense................61
13.7 Settlement or Compromise...........................................63
13.8 Shared Liability...................................................63
13.9 Environmental Indemnification by Seller............................63
13.10 Resolution of Indemnification Disputes.............................65
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ARTICLE XIV
MISCELLANEOUS
14.1 Expenses...........................................................66
14.2 Amendment..........................................................66
14.3 Notices............................................................66
14.4 Waivers............................................................68
14.5 Counterparts.......................................................68
14.6 Headings...........................................................68
14.7 Interpretation.....................................................68
14.8 Applicable Law.....................................................69
14.9 Jurisdiction; Waiver of Jury Trial.................................69
14.10 Assignment.........................................................70
14.11 No Third Party Beneficiaries.......................................70
14.12 Severability.......................................................70
14.13 Remedies Cumulative................................................70
14.14 Investigation......................................................70
14.15 Entire Understanding...............................................70
EXHIBITS
--------
Exhibit A Form of Employee Matters Agreement
Exhibit B Form of Supply Agreement
Exhibit C Form of Management Agreement
Exhibit D Form of Operating Agreement
Exhibit E Form of Deed
Exhibit F Form of ▇▇▇▇ of Sale
Exhibit G Description of the Facility
Exhibit H Forms of FIRPTA Certificates
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JOINT VENTURE FORMATION AGREEMENT
JOINT VENTURE FORMATION AGREEMENT (this "Agreement"), dated as of December
8, 2002, by and among NC-M Chassis Systems, LLC, a Delaware limited liability
company (the "Company"), DaimlerChrysler Corporation, a Delaware corporation
("Seller"), and Metaldyne Corporation, a Delaware corporation ("Metaldyne").
WHEREAS, Seller is currently engaged in the business of designing and
engineering ball joints and manufacturing and assembling suspension (including
ball joints), exhaust manifold, transmission, steering and engine components for
Seller's cars and trucks and as aftermarket parts therefor (such business as
conducted at the Facility (as defined below) and not at any other location, the
"Business");
WHEREAS, Seller and Metaldyne have agreed to form a joint venture to own
and operate the Business and the Facility on the terms and conditions set forth
in this Agreement;
WHEREAS, Seller has formed the Company to serve as the vehicle for the
joint venture;
WHEREAS, the parties have agreed that Seller will contribute and assign to
the Company, and that the Company will receive and assume from Seller, the
Transferred Assets (as defined below) and the Assumed Liabilities (as defined
below), in exchange for the issuance by the Company to Seller of 100% of the
Class A Units (as defined below) and 100% of the Class B Units (as defined
below) of the Company, all upon the terms and subject to the conditions of this
Agreement;
WHEREAS, Seller has agreed to sell, transfer and convey 40% of the Class A
Units (the "Transferred Units") to Metaldyne, and Metaldyne has agreed to
purchase the Transferred Units from Seller (the "Transfer"), upon the terms and
subject to the conditions set forth in this Agreement; and
WHEREAS, under certain circumstances in the future as provided for in the
Operating Agreement (as defined below), (i) Metaldyne may acquire from Seller
the remaining Class A Units and 100% of the Class B Units or (ii) Seller may
reacquire from Metaldyne the Transferred Units (either of the foregoing, the "JV
Termination").
NOW, THEREFORE, in consideration of the foregoing and the covenants,
agreements, representations and warranties contained herein, the parties hereto
hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. Unless otherwise defined in this Agreement, the following
terms shall have the respective meanings set forth below:
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"Accountant" shall have the meaning set forth in Section 2.7(b).
"Affiliate" shall mean, with respect to any Person, any other Person that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person, where "control"
means, with respect to any Person the possession, directly or indirectly, of the
power to direct the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agreement" shall mean this Joint Venture Formation Agreement, including
all exhibits and schedules hereto, as amended from time to time.
"Assets" shall mean, collectively, the Transferred Assets and the Excluded
Assets.
"Assumed Contracts" shall mean all Contracts used exclusively in or related
exclusively to, or, except with respect to the Intellectual Property and
information technology systems and related software and documentation, used
primarily in or related primarily to or necessary for, the conduct of the
Business or the ownership or operation of the Facility, other than the Excluded
Contracts; provided, however, that any Contracts between the Business, on the
one hand, and Seller or any of its Affiliates, on the other hand, shall not be
Assumed Contracts.
"Assumed Liabilities" shall have the meaning set forth in Section 2.4.
"Ball Joints" shall mean all Current Products that are ball joints or ball
and socket joints, including, without limitation, all integral and cartridge
style designs, and all components thereof, including, without limitation, all
castings, forgings, casings, pivots, bellows, bearings, shells, studs, seals,
liners, sockets, heads, shrouds, housings and covers.
"Business" shall have the meaning set forth in the recitals to this
Agreement.
"Business Day" shall mean a day other than Saturday, Sunday or any other
day on which commercial banks in New York, New York are authorized or required
by Law to close.
"Business Material Adverse Change" shall mean a change (or historical
circumstance or event resulting in a prospective change) that is materially
adverse with respect to either (i) the business, operations, assets,
liabilities, results of operations, cash flows or financial condition of the
Business, taken as a whole or (ii) the ability of Seller to consummate the
Transactions; provided, however, that any change (or historical circumstance or
event resulting in a prospective change) that is generally applicable to (A) the
industries and markets in which Seller and its Subsidiaries operate their
respective businesses, (B) the United States or global economy or (C) the United
States securities markets shall be excluded from the determination of a Business
Material Adverse Change; and provided, further, that any change (or historical
circumstance or event resulting in a prospective change) resulting from or
arising out of the execution of this Agreement or the announcement of this
Agreement and the transactions contemplated hereby shall also be excluded from
the determination of a Business Material Adverse Change.
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"Business Material Adverse Effect" shall mean an effect (or historical
circumstance or event resulting in a prospective effect) that is materially
adverse with respect to either (i) the business, operations, assets,
liabilities, results of operations, cash flows or financial condition of the
Business, taken as a whole or (ii) the ability of Seller to consummate the
Transactions; provided, however, that any effect (or historical circumstance or
event resulting in a prospective effect) that is generally applicable to (A) the
industries and markets in which Seller and its Subsidiaries operate their
respective businesses, (B) the United States or global economy or (C) the United
States securities markets shall be excluded from the determination of a Business
Material Adverse Effect; and provided, further, that any effect (or historical
circumstance or event resulting in a prospective effect) resulting from or
arising out of the execution of this Agreement or the announcement of this
Agreement and the transactions contemplated hereby shall also be excluded from
the determination of a Business Material Adverse Effect.
"Cap" shall have the meaning set forth in Section 13.4(a).
"Capital Stock" means: (i) in the case of a corporation, capital stock;
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock; (iii) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and (iv) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.
"CERCLA" shall have the meaning set forth in Section 5.21(d).
"Class A Units" shall mean the Class A limited liability company interests
in the Company.
"Class B Units" shall mean the Class B limited liability company interests
in the Company.
"Closing" shall have the meaning set forth in Section 4.1.
"Closing Date" shall have the meaning set forth in Section 4.1.
"Code" shall mean the United States Internal Revenue Code of 1986, as
amended.
"Common Stock" shall have the meaning set forth in Section 7.5(a).
"Company" shall have the meaning set forth in the preamble to this
Agreement.
"Company Indemnified Parties" shall mean the Company and each of its
Subsidiaries and their respective officers, directors, employees, members,
managers, agents and representatives; provided, however, that in no event shall
Seller be deemed a Company Indemnified Party.
"Company Material Adverse Effect" shall mean an effect (or historical
circumstance or event resulting in a prospective effect) that is materially
adverse with respect to either (i) the busi-
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ness, operations, assets, liabilities, results of operations, cash flows or
financial condition of the Company before or after giving effect to the
Contribution or (ii) the ability of the Company to consummate the Transactions;
provided, however, that any effect (or historical circumstance or event
resulting in a prospective effect) that is generally applicable to (A) the
industries and markets in which the Company will operate the Business, (B) the
United States or global economy or (C) the United States securities markets
shall be excluded from the determination of a Company Material Adverse Effect;
and provided, further, that any effect (or historical circumstance or event
resulting in a prospective effect) resulting from or arising out of the
execution of this Agreement or the announcement of this Agreement and the
transactions contemplated hereby shall also be excluded from the determination
of a Company Material Adverse Effect.
"Complete Financial Statements" shall have the meaning set forth in Section
8.12.
"Consultant" shall have the meaning set forth in Section 8.16(a).
"Contract" shall mean any contract, lease, commitment, understanding, sales
order, purchase order, rental agreement, insurance policy, agreement, indenture,
mortgage, note, bond, right, instrument of indebtedness, guarantee, warrant,
instrument, plan, permit or license, and any and all other binding arrangements.
"Contribution" shall mean the transactions set forth in clauses (i) and
(ii) of the definition of the term "Transactions" herein.
"CPR" shall have the meaning set forth in Section 13.10.
"Current Process" means any process used by Seller at the Facility as of
the Closing Date or within the 12-month period prior to the Closing Date to
manufacture any Current Product or other product.
"Current Product" means any product manufactured by Seller at the Facility
as of the Closing Date or within the 12-month period prior to the Closing Date
and listed on Schedule A to the Supply Agreement.
"Customer Lists" shall have the meaning set forth in Section 2.1(g).
"DaimlerChrysler Call Option Closing" shall have the meaning set forth in
the Operating Agreement.
"DaimlerChrysler Indemnified Parties" shall mean Seller, each of its
Subsidiaries and each of their respective Affiliates and the respective
officers, directors, employees, members, managers, agents and representatives of
Seller, its Subsidiaries and their respective Affiliates; provided, however,
that in no event shall the Company or any of its Subsidiaries be deemed a
DaimlerChrysler Indemnified Party.
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"Deed" shall mean a special or limited warranty deed including warranties
against grantor's acts relating to the Real Property in recordable form granted
by Seller in favor of the Company substantially in the form of Exhibit E.
"Demolition Costs" shall have the meaning set forth in Section 8.15.
"Dispute" shall have the meaning set forth in Section 13.10.
"Dollars" or numbers preceded by the symbol "$" shall mean amounts in
United States Dollars.
"Employee Benefit Plan" shall mean any "employee benefit pension plan" as
defined in Section 3(2) of ERISA, "welfare benefit plan" as defined in Section
3(1) of ERISA, stock bonus, stock option, restricted stock, stock appreciation
right, stock purchase, bonus, incentive, deferred compensation, severance and
vacation plans, employment or consulting agreements, and any other employee
benefit plans, programs, policies or arrangements, covering employees (or former
or future employees) of Seller engaged in the Business which is maintained or
contributed to by Seller or any of its ERISA Affiliates or to which Seller or
any of its ERISA Affiliates contributes or is obligated to make payments
thereunder or otherwise may have any Liability.
"Employee Matters Agreement" shall mean the Employee Matters Agreement by
and among Seller, the Company and Metaldyne substantially in the form of Exhibit
A.
"End Date" shall have the meaning set forth in Section 12.1(b)(i).
"Environment" shall mean any of the following media: (i) land, including
surface land, sub-surface strata, sea bed and river bed under water (as defined
in clause (ii) hereof), and any natural or man-made structures, (ii) water,
including coastal and inland waters, surface waters, ground waters, drinking
water supplies and waters in drains and sewers, surface and sub-surface strata;
and (iii) air, including indoor and outdoor air and air within buildings and
other man-made or natural structures above or below ground, in each case,
including any living organism or system supported by such media.
"Environmental Claim" shall mean any notice, claim, demand, action, suit,
complaint, proceeding or communication by any Governmental Authority or other
Person alleging Liability or potential Liability that affects or would
reasonably be expected to affect the Business or any of the Transferred Assets
(including, without limitation, the Facility) relating to, arising out of, in
connection with, based on or resulting from any Environmental Law or
Environmental Permit.
"Environmental Condition" shall mean (i) any environmental contamination or
pollution or threatened contamination or pollution arising out of any Release or
threatened Release of Hazardous Materials that could form the basis for any
Environmental Claim against the Business or any of the Transferred Assets, or
(ii) any other circumstance or condition that would reasonably be
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expected to give rise to any violation or alleged violation of any Environmental
Law or Environmental Permit or any Liability or potential Liability under any
Environmental Law that would reasonably be expected to form the basis for any
Environmental Claim against the Business or any of the Transferred Assets.
"Environmental Laws" shall mean the common law and all applicable federal,
state, local and foreign Laws, in each case as in effect as of the Closing Date,
relating in any manner to contamination, pollution or protection of human health
or the Environment including, without limitation: the Clean Air Act, as amended,
U.S.C. ▇▇.▇▇. 7401 et seq.; the Clean Water Act, as amended, 33 U.S.C. ▇▇.▇▇.
1251 et seq.; CERCLA; the Resource Conservation and Recovery Act, as amended, 42
U.S.C. ▇▇.▇▇. 6901 et seq.; the Emergency Planning and Community Right-to-Know
Act, 42 U.S.C. ▇▇.▇▇. 11001 et seq.; the Toxic Substances Control Act, 15 U.S.C.
▇▇.▇▇. 2601 et seq.; the Federal Insecticide, Fungicide and Rodenticide Act, as
amended, 7 U.S.C. ▇▇.▇▇. 136 et seq.; and any applicable state and local Laws,
in each case as in effect as of the Closing Date, regulating the same subject
matter as the aforementioned Laws.
"Environmental Liability" means all Losses incurred or suffered by a
Company Indemnified Party or Metaldyne Indemnified Party after the Closing to
the extent relating to, arising out of, in connection with or in respect of any
Environmental Condition that existed or occurred on or prior to the JV
Termination Date, including any Environmental Claim in respect of any such
Environmental Condition.
"Environmental Permits" shall mean all permits, licenses, registrations and
other Governmental Approvals required to be in effect as of the Closing Date
under Environmental Laws for the conduct of the Business as presently conducted
or the ownership or use of the Transferred Assets (including, without
limitation, the Facility) as presently owned or used.
"Environmental Reports" shall mean all non-privileged applications,
notifications, reports, studies, assessments and audits that address any
assessment or analysis of the Environment, or relate to the Transferred Assets
(including, without limitation, the Facility), or address any issue of
noncompliance with, or Liability under, any Environmental Law that may affect
the Business or the Transferred Assets (including, without limitation, the
Facility).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" shall mean any person (as defined in Section 3(9) of
ERISA) that is or has been a member of any group of persons described in Section
414(b), (c), (m), (o) or (t) of the Code.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and applicable rules and regulations promulgated thereunder, and any successor
to such statute, rules or regulations.
"Excluded Assets" shall have the meaning set forth in Section 2.2.
"Excluded Contracts" shall have the meaning set forth in Section 2.2(g).
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"Excluded Liabilities" shall have the meaning set forth in Section 2.5.
"Facility" shall mean the plant located in New Castle, Indiana and more
particularly described on Exhibit G, including the land and all improvements,
buildings, structures and fixtures located thereon and all other appurtenances
thereto.
"Filed Intellectual Property" means all patents, patent applications,
copyright registrations, applications to register copyrights, registered
trademarks, and applications to register trademarks owned by Seller that are
being transferred to Company under Section 2.1(f).
"Financial Statements" shall have the meaning set forth in Section 5.4.
"Financing Notice" shall have the meaning set forth in Section 8.12.
"Forge Building" shall mean the building indicated on the map included in
the description of the Facility attached as Exhibit G.
"FIRPTA Certificates" shall mean affidavits of Seller as required by
Section 1445 of the Code in the forms attached hereto as Exhibit H.
"GAAP" shall mean generally accepted accounting principles in the United
States in effect from time to time.
"Governmental Approvals" shall mean any consent, approval, authorization,
waiver, permit, grant, franchise, concession, agreement, license, exemption or
order of, registration, certificate, declaration or filing with, or report or
notice of or to, any Governmental Authority.
"Governmental Authority" shall mean the United States of America or any
other nation, any state or other political subdivision thereof, or any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of government or any agency or department or subdivision of any
governmental authority, including the United States federal government or any
state or local government.
"Hazardous Material" shall mean any pollutant, contaminant, chemical,
material, substance, waste or constituent (including, without limitation, crude
oil or any other petroleum product and asbestos) subject to regulation under, or
which can give rise to Liability under, any Environmental Law.
"HSR Act" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, and applicable rules and regulations promulgated thereunder,
and any successor to such statute, rules or regulations.
"Indebtedness" shall mean, with respect to any Person, any indebtedness of
such Person, whether or not contingent: (i) in respect of borrowed money; (ii)
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof); (iii) in respect of
banker's acceptances; (iv) representing capital lease obligations; (v)
representing the
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balance deferred and unpaid of the purchase price of any property, except any
such balance that constitutes an accrued expense or trade payable; or (vi)
representing any interest rate or currency hedging obligations, if and to the
extent any of the preceding items (other than letters of credit and hedging
obligations) would appear as a Liability upon a balance sheet of such Person
prepared in accordance with GAAP. In addition, "Indebtedness" includes (a)
indebtedness of others secured by a Lien on any asset of such Person (whether or
not such Indebtedness is assumed by such Person), (b) obligations with respect
to self-insurance arrangements, including for workers' compensation, and (c) to
the extent not otherwise included, the guarantee by such Person of indebtedness
of others.
"Indemnified Claim" shall have the meaning set forth in Section 13.8.
"Indemnified Person" shall mean the Person or Persons entitled to, or
claiming a right to, indemnification under Article XIII.
"Indemnifying Person" shall mean the Person or Persons claimed by the
Indemnified Person to be obligated to provide indemnification under Article
XIII.
"Intellectual Property" means (a) patents, utility models, trademarks,
service marks, rights in designs, trade or business names, copyrights (including
rights in computer software), and all rights or forms of protection of a similar
nature or having equivalent effect to any of the foregoing which may subsist
anywhere in the world, (b) applications for any of the foregoing, and (c)
know-how and technical and proprietary information, including all trade dress,
business and product names, logos, slogans, trade secrets, industrial models,
processes, specifications, plans, guidelines, standards, data, tests,
benchmarking, technical reports, designs, methodologies, computer programs
(including all source codes) and related documentation, technical information,
manufacturing, engineering and technical drawings.
"Interim Survey" shall mean a survey of the Real Property, prepared by a
certified or registered surveyor reasonably acceptable to Metaldyne and the
Title Company and certified to the Company, Metaldyne and the Title Company,
complying with the current minimum standard requirements for boundary surveys in
the State of Indiana and (a) locating any easements, licenses, rights of way or
other items of record disclosed in the Title Commitment; and (b) disclosing any
encroachment, gap, ▇▇▇▇ or other defect with respect to the boundaries of the
Real Property.
"Inventory" shall have the meaning set forth in Section 2.1(d).
"IRS" shall mean the Internal Revenue Service.
"JV Termination" shall have the meaning set forth in the recitals to this
Agreement.
"JV Termination Date" means the date of the Metaldyne Call Option Closing,
Metaldyne Put Option Closing or the DaimlerChrysler Call Option Closing,
whichever occurs.
"Knowledge" shall mean (i) with respect to Seller, the actual knowledge,
after due inquiry, of one or more of the personnel of Seller who have
supervisory, operational or administrative responsibility in respect of the
matter in question; and (ii) with respect to Metaldyne, the actual
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knowledge, after due inquiry, of one or more of the personnel of Metaldyne who
have supervisory, operational or administrative responsibility in respect of the
matter in question.
"Known Environmental Conditions" shall mean (i) all Environmental
Conditions set forth on Schedule 1.2 (which such schedule shall be [*] to
include any and all additional Environmental Conditions [*] and (ii) all
Environmental Conditions [*] delivered on or prior to [*] pursuant to Section
8.16 and (iii) all Environmental Conditions arising out of or revealed by [*].
"KPMG" shall have the meaning set forth in Section 8.12.
"Law" shall mean any law, statute, regulation, ordinance, rule, order,
decree, judgment, consent decree, settlement agreement or governmental
requirement enacted, promulgated, entered into, agreed or imposed by any
Governmental Authority.
"Liability" shall mean any liability or obligation, whether such liability
or obligation relates to payment, performance or otherwise, is known or unknown,
absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated
or unliquidated, secured or unsecured, joint or several, due or to become due,
vested or unvested, executory, determined, determinable or otherwise, and
whether or not such liability or obligation would be required to be reflected or
reserved against on financial statements of the obligor under GAAP.
"Lien" shall mean any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind, whether or not filed, recorded or otherwise perfected
under applicable Law, including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give a security interest in and any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction.
"Loss" or "Losses" shall mean any and all Liabilities, losses, costs,
claims, charges, damages (including out-of-pocket special, exemplary, punitive
and consequential damages), deficiencies, fines, penalties and expenses
(including reasonable attorneys' and other reasonable advisors' and consultants'
fees and expenses and reasonable out-of-pocket costs of investigation and
litigation of claims). In the event any of the foregoing are indemnifiable
hereunder, the terms "Loss" and "Losses" shall include any and all reasonable
attorneys' and other advisors' fees and expenses and costs of investigation and
litigation of claims incurred by the Indemnified Person in enforcing such
indemnity.
"Management Agreement" shall mean the Management Services Agreement by and
among Metaldyne, the Company and Seller substantially in the form of Exhibit C.
"Metaldyne" shall have the meaning set forth in the preamble to this
Agreement.
"Metaldyne Call Option" shall have the meaning set forth in the Operating
Agreement.
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"Metaldyne Call Option Closing" shall have the meaning set forth in the
Operating Agreement.
"Metaldyne Call Option Closing Date" shall have the meaning set forth in
the Operating Agreement.
"Metaldyne Disclosure Schedules" shall have the meaning set forth in
Article VII.
"Metaldyne Indemnified Parties" shall mean Metaldyne, each of its
Subsidiaries and each of their respective Affiliates and the respective
officers, directors, employees, members, managers, agents and representatives of
Metaldyne, its Subsidiaries and their respective Affiliates; provided, however,
that in no event shall the Company or any of its Subsidiaries be deemed a
Metaldyne Indemnified Party.
"Metaldyne Material Adverse Change" shall mean a change (or historical
circumstance or event resulting in a prospective change) that is materially
adverse with respect to either (a) the business, operations, assets,
liabilities, results of operations, cash flows or financial condition of
Metaldyne and its Subsidiaries, taken as a whole, or (b) the ability of
Metaldyne to consummate the Transactions; provided, however, that any change (or
historical circumstance or event resulting in a prospective change) that is
generally applicable to (A) the industries and markets in which Metaldyne and
its Subsidiaries operate their respective businesses, (B) the United States or
global economy or (C) the United States securities markets shall be excluded
from the determination of a Metaldyne Material Adverse Change; and provided,
further, that any change (or historical circumstance or event resulting in a
prospective change) resulting from or arising out of the execution of this
Agreement or the announcement of this Agreement and the transactions
contemplated hereby shall also be excluded from the determination of a Metaldyne
Material Adverse Change.
"Metaldyne Material Adverse Effect" shall mean an effect (or historical
circumstance or event resulting in a prospective effect) that is materially
adverse with respect to either (i) the business, operations, assets,
liabilities, results of operations, cash flows or financial condition of
Metaldyne and its Subsidiaries, taken as a whole, or (ii) the ability of
Metaldyne to consummate the Transactions; provided, however, that any effect (or
historical circumstance or event resulting in a prospective effect) that is
generally applicable to (A) the industries and markets in which Metaldyne and
its Subsidiaries operate their respective businesses, (B) the United States or
global economy or (C) the United States securities markets shall be excluded
from the determination of a Metaldyne Material Adverse Effect; and provided,
further, that any effect (or historical circumstance or event resulting in a
prospective effect) resulting from or arising out of the execution of this
Agreement or the announcement of this Agreement and the transactions
contemplated hereby shall also be excluded from the determination of a Metaldyne
Material Adverse Effect.
"Metaldyne Objection Notice" shall have the meaning set forth in Section
2.7(b).
"Metaldyne Put Option Closing" shall have the meaning set forth in the
Operating Agreement.
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"Metaldyne SEC Documents" shall have the meaning set forth in Section
7.6(a).
"Metaldyne Shareholders Agreement" shall mean the Shareholders Agreement,
dated as of November 28, 2000, as supplemented and amended, by and among
Metaldyne (as successor to Mascotech, Inc.) and certain shareholders of
Metaldyne.
"Non-Assigned Assets" shall have the meaning set forth in Section 2.6.
"North Building" shall mean the building indicated on the map included in
the description of the Facility attached as Exhibit G.
"Opening Balance Sheet" shall have the meaning set forth in Section 2.7(a).
"Operating Agreement" shall mean the Amended and Restated Operating
Agreement of the Company by and among the Company, Seller and Metaldyne
substantially in the form of Exhibit D.
"OSHA" shall have the meaning set forth in Section 5.25.
"Permitted Liens" shall mean:
(a) the Liens set forth on Schedule 1.3;
(b) Liens for current Taxes not yet due and payable or being contested
in good faith by appropriate proceedings;
(c) mechanics', materialmen's, workmen's, repairmen's, warehousemen's,
carriers' or other like Liens, in each case, arising or incurred in the
ordinary course of business;
(d) with respect to the Real Property, (i) easements, licenses,
covenants, rights-of-way and other similar encumbrances and restrictions
which are a matter of public record arising after the date hereof and which
would not reasonably be expected, individually or in the aggregate, to
materially and adversely affect the use of the Real Property as currently
used by Seller and (ii) zoning, building and other similar restrictions
pursuant to applicable Law;
(e) Liens created by the Company or Metaldyne; and
(f) other Liens that, in the aggregate, would not require payments in
excess of $10,000 to have discharged and released.
"Person" shall mean any individual, partnership, corporation, limited
liability company, association, joint stock company, trust, joint venture,
unincorporated organization, firm, proprietorship or other business entity or a
Governmental Authority.
"Phase II ESA" shall have the meaning set forth in Section 8.16(a).
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"Preferred Stock" shall have the meaning set forth in Section 7.5(a).
"Prepaid Expenses" shall mean all prepaid expenses, including, without
limitation, ad valorem taxes, leases and rentals.
"Product" shall have the meaning set forth in the Supply Agreement.
"Real Property" shall have the meaning set forth in Section 5.8(a).
"Related Agreement" shall mean any Contract or other document that is or is
to be entered into at or prior to the Closing pursuant to, or in connection
with, this Agreement, including, without limitation, the Employee Matters
Agreement, the Supply Agreement, the Management Agreement, the Operating
Agreement and the Transition Services Agreement.
"Release" shall mean any releasing, spilling, seeping, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing of any Hazardous Materials into the Environment (including the
abandonment or discarding of barrels, containers, tanks or other receptacles
containing Hazardous Materials).
"Relief Letter" shall have the meaning set forth in Section 8.12.
"Remedial Action" shall mean all actions required by any Environmental Law
or any Governmental Authority under any Environmental Law: (i) to clean up,
remove, treat, ▇▇▇▇▇ or in any other way address any Environmental Condition;
(ii) to prevent the Release or threat of Release or minimize the further Release
of any Hazardous Materials so that it does not migrate or endanger or threaten
to endanger human health or the Environment; and (iii) to perform pre-remedial
studies and investigations in connection with any Release or threatened Release.
"Remediation Standards" means either numeric or narrative standards to
which Hazardous Materials in, on or around land must be remediated as
established pursuant to Environmental Laws by the Governmental Authority with
jurisdiction over such land.
"Rules" shall have the meaning set forth in Section 13.10.
"SEC" shall have the meaning set forth in Section 7.6(a).
"Securities Act" shall mean the Securities Act of 1933, as amended, and
applicable rules and regulations promulgated thereunder, and any successor to
such statute, rules or regulations.
"Seller" shall have the meaning set forth in the preamble to this
Agreement.
"Seller Disclosure Schedules" shall have the meaning set forth in Article
V.
"Seller Related Intellectual Property" shall mean any Intellectual Property
pertaining to any product the Company supplies to Seller or its Affiliates or
which the Company is designing
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and/or developing for supply to Seller or its Affiliates pursuant to any vehicle
development program of Seller or its Affiliates.
"Seller's Accounting Principles" shall have the meaning set forth in
Section 5.4.
"Series A-1 Preferred Stock" shall have the meaning set forth in Section
7.2(b).
"Series A-2 Preferred Stock" shall have the meaning set forth in Section
7.2(b).
"Special Tooling" shall mean unique tools which are specifically designed
to hold parts in place, determine a part's location within the machine and/or
provide a placeholder for attaching cutting inserts, drills, dies or measuring
sensors. For avoidance of doubt, "Special Tooling" does not include any part of
an original equipments' or original machine's design or construction package.
"Subsidiary" shall mean, with respect to any Person: (i) any other Person
of which more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of such Person (or a combination thereof); and (ii) any partnership
or limited liability company (a) the sole general partner or member or the
managing general partner or member of which is such Person or a Subsidiary of
such Person or (b) the only general partners or members of which are such Person
or one or more Subsidiaries of such Person (or any combination thereof).
"Supply Agreement" shall mean the Supply Agreement by and between Seller
and the Company substantially in the form of Exhibit B.
"Survey" shall mean a survey of the Real Property, dated within 30 days of
the Closing Date, prepared by a certified or registered surveyor reasonably
acceptable to Metaldyne and the Title Company and certified to the Company,
Metaldyne and the Title Company, in form and substance satisfactory to Metaldyne
and the Title Company and not disclosing any matters (other than Permitted
Liens) to which Metaldyne has reasonably objected within fifteen (15) days after
receipt of the same, complying with the current Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys and such of the ALTA/ASCM Table
Requirements as Metaldyne or the Title Company shall reasonably request and (a)
setting forth an accurate description of each parcel of the Real Property, (b)
locating all improvements, Liens (setting forth the recording information of any
recorded instruments), setback lines, alleys, streets and roads, (c) showing any
encroachments upon or by any improvements on the Facility and (d) showing all
dedicated public streets providing access to the Facility and the municipal
address of any improvements located on the Real Property.
"Tax Return" shall mean any report, return or other information required to
be supplied to a Governmental Authority in connection with any Taxes.
"Taxes" shall mean all taxes, charges, fees, duties, levies or other
assessments related to the Business, including income, gross receipts, net
proceeds, ad valorem, turnover, real and personal property (tangible and
intangible), sales, use, franchise, excise, value added, stamp, leasing,
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lease, user, transfer, fuel, excess profits, occupational, interest
equalization, windfall profits, severance, employee's income withholding, other
withholding, unemployment and Social Security taxes, which are imposed by any
Governmental Authority, including any interest, penalties or additions to tax
attributable thereto.
"Threshold Amount" shall have the meaning set forth in Section 13.4(a).
"Title Company" shall mean Chicago Title Insurance Company or another
nationally recognized title insurance company reasonably satisfactory to
Metaldyne.
"Title Policy" shall mean an owner's title insurance policy issued to the
Company with respect to the Real Property, in form and substance satisfactory to
Metaldyne and not disclosing any material matters to which Metaldyne has
reasonably objected within fifteen (15) days after receipt of the same, together
with endorsements thereto reasonably requested and paid for by Metaldyne
(including, without limitation, access, zoning, comprehensive, non-imputation
and contiguity endorsements), in an amount determined by Metaldyne but in no
event to exceed the reasonable commercial value of the Real Property, insuring
the Company and issued as of the Closing Date by the Title Company, showing the
Company to have a valid fee interest in the Real Property.
"Transactions" shall mean: (i) the contribution by Seller to the Company of
the Transferred Assets and the assignment and assumption by the Company from
Seller of the Assumed Liabilities contemplated by this Agreement; (ii) the
issuance of the Units by the Company to Seller contemplated by this Agreement;
(iii) the Transfer; and (iv) the other transactions contemplated by this
Agreement and the Related Agreements.
"Transfer" has the meaning set forth in the recitals to this Agreement.
"Transfer Taxes" shall have the meaning set forth in Section 8.5(a).
"Transferred Assets" shall have the meaning set forth in Section 2.1.
"Transferred Intellectual Property" shall have the meaning set forth in
Section 2.1(f).
"Transferred Units" shall have the meaning set forth in the recitals to
this Agreement.
"Transition Services Agreement" shall mean the Transition Services
Agreement by and between Seller and the Company substantially in the form
attached to the Operating Agreement.
"UAW" shall mean International Union, United Automobile, Aerospace and
Agricultural Implement Workers of America.
"Units" shall mean, collectively, the Class A Units and the Class B Units.
"Unknown Environmental Conditions" shall mean all Environmental Conditions
other than Known Environmental Conditions.
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"▇▇▇▇ ▇▇▇" shall have the meaning set forth in Section 2.4(d).
ARTICLE II
CONTRIBUTION OF ASSETS
2.1 Contribution of Assets. Subject to Section 2.2 and the other terms and
conditions of this Agreement, at the Closing, Seller shall contribute, transfer,
assign and deliver to the Company, or cause to be contributed, transferred,
assigned and delivered to the Company, free and clear of any Liens except for
Permitted Liens, and the Company shall receive and assume from Seller, all of
Seller's right, title and interest in and to the Transferred Assets. To the
extent that the Transferred Assets consist of written documents (including
microfilm and computer files) which are necessary for Seller's records, Seller
may either deliver to the Company a duplicate copy of such documents and retain
the original or deliver to the Company the original of such documents and retain
a duplicate copy; provided, however, that Seller shall deliver the original of
any such document when delivery of the original is necessary or desirable to
effectuate the transfer of any Transferred Asset.
For purposes of this Agreement, "Transferred Assets" shall mean all of the
assets used exclusively in or related exclusively to, or, except with respect to
the Intellectual Property and information technology systems and related
software and documentation, used primarily in or related primarily to or
necessary for, the conduct of the Business or ownership or operation of the
Facility, real, personal or mixed, tangible or intangible, whether now existing
or acquired prior to the Closing Date as the same may exist on the Closing Date,
including, without limitation, the following assets to the extent used
exclusively in or related exclusively to, or, except with respect to the
Intellectual Property and information technology systems and related software
and documentation, used primarily in or related primarily to or necessary for,
the conduct of the Business or ownership or operation of the Facility (but
excluding in all cases the Excluded Assets):
(a) the Facility;
(b) all owned Real Property described on Schedule 2.1(b) and all
improvements, buildings, structures and fixtures located thereon and all
other appurtenances thereto;
(c) all fixtures and other fixed assets, machinery, equipment, tools
(other than Special Tooling), dies, furniture, furnishings and in-bound
material containers and all other tangible assets, including, without
limitation, those listed on the plant asset listing report dated October
31, 2002 attached hereto as Schedule 2.1(c), subject to such additions,
substitutions or deletions thereto, in compliance with Section 8.7, as
shall have occurred in the ordinary course of business, consistent with
past practice, prior to the Closing Date;
(d) all inventories of raw materials, work-in-process, in-plant
finished components, spare parts, replacement and component parts, office
and other supplies (the "Inventory");
(e) all Assumed Contracts;
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(f) notwithstanding any other provision of this Section 2.1, only the
Intellectual Property used by Seller exclusively in or related exclusively
to the conduct of the Business at the Facility, including, without
limitation, all Intellectual Property in, relating to or covering all
Current Processes used exclusively at the Facility (the "Transferred
Intellectual Property");
(g) all customer lists and records which relate to the historical
supply of products from the Facility (the "Customer Lists");
(h) all rights, claims, credits, guarantees, warranties, causes of
action or rights of set-off against third parties to the extent related to
the Transferred Assets or the Assumed Liabilities, including, without
limitation, all construction and capital equipment warranties and
unliquidated rights under manufacturers' and vendors' warranties, other
than in relation to Liabilities that are the obligation of Seller or rights
to ▇▇▇ for and remedies against past infringements of any Intellectual
Property rights of Seller;
(i) all books, records, manuals and other materials used exclusively
in or related exclusively to the conduct of the Business (in any form or
medium), advertising matter, catalogues, price lists, distribution lists,
photographs, production data, sales and promotional materials and records,
manufacturing and quality control records and procedures, blueprints,
research and development files, records, data and laboratory books, media
materials and plates, accounting records and sales order files, except to
the extent Seller is required by applicable Law or any Excluded Contract to
retain such documents; provided, however, that the Company shall receive
copies of any books, records, manuals and other materials necessary to
operate the Business;
(j) to the extent their transfer is permitted by applicable Law, all
Governmental Approvals used exclusively in or related exclusively to the
conduct of the Business, including, without limitation, NAFTA
certifications, and all applications therefor and records relating thereto;
(k) the systems and databases listed on Schedule 2.1(k);
(l) all goodwill;
(m) to the extent their transfer is permitted by applicable Law, any
Tax abatements related to the Business;
(n) the motor vehicles owned or leased by Seller and listed on
Schedule 2.1(n); and
(o) any and all other assets and rights that are not of the type or
character referenced in Section 2.1(a)-(n) and that are used exclusively in
or relate exclusively to, or, except with respect to the Intellectual
Property and information technology systems and related software and
documentation, are used primarily in or relate primarily to or are
necessary for, the conduct of the Business or the ownership or operation of
the Facility.
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2.2 Excluded Assets. Notwithstanding any other provision of this Agreement,
the Transferred Assets shall not include the following assets (the "Excluded
Assets"):
(a) Seller's rights under this Agreement and the Related Agreements to
which Seller is to be a party;
(b) Seller's ledgers, journals and Tax Returns, product design and
verification data pertaining to Current Products and past products
manufactured at the Facility (including, without limitation, drawings, CAD
files, computer models and test data), and any other documents not covered
by Section 2.1(i);
(c) any assets relating to benefits provided or Employee Benefit Plans
maintained by Seller for any employees engaged in the Business;
(d) the Intellectual Property in the design and configuration of the
Current Products, all Intellectual Property not used exclusively at the
Facility in the conduct of the Business or that relates exclusively to the
conduct of the Business at the Facility, and all trademarks, service marks
and trade names of Seller and Seller's Affiliates;
(e) the finished goods inventory in transit;
(f) all prepaid expenses and Taxes, cash (including ▇▇▇▇▇ cash) on
hand, cash equivalents and bank accounts and securities on hand or on
deposit;
(g) the Contracts listed on Schedule 2.2(g) (the "Excluded
Contracts");
(h) all Special Tooling;
(i) any software, whether owned by Seller or third parties, that is
not located exclusively at the Facility;
(j) all of Seller's proprietary engineering and production designs and
drawings;
(k) all outbound material containers, returnable containers, racks and
drums used for shipping supplies and products;
(l) all intracompany receivables owing by Seller, accounts and notes
receivable from third parties other than Seller, chattel paper and other
rights to receive payment from third parties existing as of the Closing
Date;
(m) the motor vehicles owned or leased by Seller and listed in
Schedule 2.2(m);
(n) all Contracts of insurance and policies of insurance, including,
without limitation, casualty, liability or group life, health or accident
insurance;
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(o) all Governmental Approvals (i) that are not used exclusively in or
related exclusively to the conduct of the Business or (ii) whose transfer
is not permitted by applicable Law;
(p) to the extent not used exclusively in or not related exclusively
to the conduct of the Business, all books, records, manuals and other
materials (in any form or medium), advertising matter, catalogues, price
lists, distribution lists, photographs, production data, sales and
promotional materials and records, manufacturing and quality control
records and procedures, blueprints, research and development files,
records, data and laboratory books, media materials and plates, accounting
records and sales order files;
(q) all rights to any refunds, credits, duty drawbacks or claims
(including, in each case, interest with respect thereto) in respect of
Taxes paid or required to be paid by Seller or any Affiliate of Seller
pursuant to this Agreement or otherwise, to any Governmental Authority for
any period;
(r) other than claims described in Section 2.1(h) and claims against
third parties with respect to Assumed Liabilities, all claims and rights
against third parties relating to the operation of the Business prior to
the Closing Date, including, without limitation, claims against the
Seller's insurance carriers;
(s) all fixed assets, machinery, equipment and tools of Seller used
primarily or exclusively in, or related primarily or exclusively to, the
design or development of products manufactured at the Facility that are
located at Seller's headquarters in Auburn Hills, Michigan (other than
those assets listed on Schedule 2.1(f));
(t) all returns and other Tax records pertaining to the operations of
Seller (including the Facility) for all taxable periods prior to the
Closing; and
(u) all signage making use of any trademarks, service marks or trade
name of Seller or any of its Affiliates.
2.3 Issuance of Units. In consideration for the Transferred Assets, the
Company shall issue to Seller, at the Closing, 100% of the Class A Units and
100% of the Class B Units.
2.4 Assumption of Liabilities. In addition to the issuance of the Units in
accordance with Section 2.3, at the Closing, the Company shall, by appropriate
instruments reasonably satisfactory to the Company and Metaldyne to be executed
and delivered at Closing, assume and agree to pay, perform and discharge the
following Liabilities (the "Assumed Liabilities"):
(a) all Liabilities under the Assumed Contracts which by the terms of
the Assumed Contracts arise from performance or non-performance after the
Closing Date under the Assumed Contracts, but only when and to the extent
the Company receives the corresponding benefits of such Assumed Contracts;
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(b) all Liabilities for the purchase of raw materials, parts, supplies
and repair and maintenance materials under open supply contracts, purchase
orders and commitments set forth on Schedule 2.4 or given or made after the
date hereof consistent with Section 8.7;
(c) all Liabilities arising from the conduct of the Business and the
ownership and operation of the Facility from and after the Closing Date;
(d) except as provided in the Employee Matters Agreement, all
Liabilities arising under the Worker Adjustment and Retraining Notification
Act of 1988 (the "WARN Act") relating to, arising out of, or incurred in
connection with any closure or shutdown, or deemed closure or shutdown,
partial or otherwise, of the Facility, the Business or the operations
thereof after the JV Termination Date;
(e) all current liabilities of the business set forth on the Opening
Balance Sheet (and not in the notes thereto) using Seller's Accounting
Principles; and
(f) (i) any Liabilities relating to, arising out of, in connection
with or in respect of any Environmental Condition that did not exist or had
not occurred on or prior to the JV Termination Date, including any
Environmental Claim in respect of any such Environmental Condition, and
(ii) to the extent Seller is not required to indemnify and hold harmless
the Company Indemnified Parties and Metaldyne Indemnified Parties therefrom
under Section 13.9(b), any Environmental Liabilities relating to, arising
out of, in connection with or in respect of any Unknown Environmental
Conditions.
2.5 Excluded Liabilities. Notwithstanding any other provision of this
Agreement, the Assumed Liabilities shall not include the following Liabilities
(the "Excluded Liabilities"): (a) except with respect to Environmental
Liabilities (which are covered by clause (b) below), any Liabilities of Seller
relating to, arising out of or in connection with the ownership or operation of
the Business or the Assets or otherwise prior to the Closing, other than the
Assumed Liabilities;
(b) (i) any Environmental Liabilities relating to, arising out of, in
connection with or in respect of any Known Environmental Conditions and
(ii) to the extent Seller is required to indemnify and hold harmless the
Company Indemnified Parties and Metaldyne Indemnified Parties therefrom
under Section 13.9(b), any Environmental Liabilities relating to, arising
out of, in connection with or in respect of any Unknown Environmental
Conditions;
(c) any Liabilities under Assumed Contracts which by the terms of such
Assumed Contracts were due or to be performed or otherwise arose prior to
the Closing;
(d) any Liabilities relating to past, present or future employees of
Seller engaged in the Business or otherwise relating to Employee Benefit
Plans for past, present or future employees of Seller engaged in the
Business, whether prior to or after the Closing, including, without
limitation, liabilities under ERISA, workers' compensation laws or
employment laws;
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(e) any Liabilities of Seller under or relating to labor relations,
and any grievances, lawsuit or claim of any kind by any employee of Seller
whether or not relating to employment in the Business prior to the Closing
or thereafter under the Employee Matters Agreement;
(f) any Liabilities arising out of any action, suit or proceeding
relating to the Business or the Transferred Assets to the extent based upon
an event occurring or a claim arising (i) prior to the Closing, other than
the Assumed Liabilities, or (ii) after the Closing, in each case with
respect to claims relating to the design, manufacture or sale of products
by Seller prior to the Closing, including warranty and product liability
claims;
(g) any Tax liabilities of Seller;
(h) any Liabilities for Indebtedness incurred by Seller or any of its
Affiliates;
(i) any brokers' or finders' fees, or other Liability of Seller for
costs and expenses (including fees and expenses relating to professional
advisors (legal, financial, accounting or otherwise)) incurred in
connection with this Agreement or any Related Agreement;
(j) any Liability to the extent relating to, arising out of or in
connection with the Excluded Assets;
(k) any Liability relating to, arising out of or in connection with
Seller's demolition of the North Building or the Forge Building pursuant to
Section 8.15; provided, however, that the Excluded Liabilities shall not
include any Demolition Costs in excess of $6,000,000 in the aggregate;
(l) any Liability relating to, arising out of or in connection with
the capital improvement projects described on Schedule 2.5(l);
(m) any Liability or obligation for chargebacks relating to, arising
out of or in connection with the manufacture or production of products at
the Facility prior to the Closing; and
(n) all other Liabilities not expressly constituting Assumed
Liabilities.
2.6 Nonassignable Assets and Approvals. In the case of any Governmental
Approvals or any Assumed Contracts which by their terms or by virtue of their
subject matter are not assignable to the Company and which are included among
the Transferred Assets (collectively, the "Non-Assigned Assets"), Seller agrees
to use its commercially reasonable efforts to obtain, as soon as practicable
prior to the Closing Date, any written consents necessary to convey to the
Company the benefit thereof; provided, however, that Seller shall not be
obligated to pay any amount in consideration of any such consent, other than (a)
nominal filing, application or similar costs or fees, (b) nominal amounts to
cover processing and review by third parties of such consents, including de
minimis amounts of attorneys' fees, and (c) any amounts that were due and
payable prior to Closing, which
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amounts are required by Contract or applicable Law to be paid prior to
consummation of the transactions contemplated hereby. In the event that any such
consent is not obtained by the Closing Date, Seller agrees to continue to use
its commercially reasonable efforts to obtain such written consent and to
cooperate with the Company so that the Company can obtain the benefits of such
Non-Assigned Asset until such consent is obtained to the extent permitted by
applicable Law. Nothing in this Agreement shall be construed as an attempt or an
agreement to assign or cause the assignment of any Non-Assigned Asset, unless
the necessary consent shall have been given.
2.7 Opening Balance Sheet. (a) Within sixty (60) days after the Closing
Date, Seller shall prepare and deliver to Metaldyne a draft balance sheet of the
Company as of the Closing Date (the "Opening Balance Sheet"), which shall be
prepared in accordance with the principles set forth in Schedule 2.7.
(b) Metaldyne shall have a period of twenty (20) days following receipt of
the Opening Balance Sheet from Seller pursuant to Section 2.7(a) within which to
review the Opening Balance Sheet. If Metaldyne has any objections to the draft
Opening Balance Sheet, it will deliver to Seller a detailed statement describing
such objections (the "Metaldyne Objection Notice") within such twenty (20) day
review period. Seller and Metaldyne will use their respective commercially
reasonable efforts to resolve any such objections set forth in the Metaldyne
Objection Notice. If a final resolution is not obtained within a period of
twenty (20) days following delivery of a Metaldyne Objection Notice, Seller and
Metaldyne will select and jointly engage a nationally-recognized accounting firm
mutually acceptable to them (the "Accountant") to resolve any remaining
objections. The Accountant shall promptly, but in no event later than twenty
(20) days following its engagement by Seller and Metaldyne, deliver to Seller
and Metaldyne its decision as to any remaining objections set forth in the
Metaldyne Objection Notice. The decision of the Accountant shall be final and
binding on Seller and Metaldyne. If Seller and Metaldyne are unable to agree on
the choice of an accounting firm, they will select a nationally-recognized
accounting firm by lot (after excluding their respective independent public
accountants).
(c) The Company will revise the draft Opening Balance Sheet as appropriate
to reflect the resolution of any objections set forth in the Metaldyne Objection
Notice (as agreed upon by the Seller and Metaldyne or as determined by the
Accountant) and deliver it to Metaldyne within twenty (20) days after the final
resolution of such objections. Such revised draft shall be the Opening Balance
Sheet.
(d) If any unresolved objections are submitted to the Accountant for
resolution as provided above, the fees and expenses of the Accountant shall be
borne 50% by Seller and 50% by Metaldyne. The Company will provide reasonable
access to the work papers necessary for the preparation of the Opening Balance
Sheet to Seller, Metaldyne and the Accountant during the preparation by Seller
of the Opening Balance Sheet, the review by Metaldyne of the Opening Balance
Sheet, and the resolution of any objections with respect thereto.
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ARTICLE III
SALE AND PURCHASE OF TRANSFERRED UNITS
3.1 Sale and Purchase of Transferred Units. Upon the terms and subject to
the conditions of this Agreement, at the Closing, Seller shall sell, transfer
and convey to Metaldyne, free and clear of any Liens or any other limitation or
restriction other than as set forth in the Operating Agreement, and Metaldyne
shall purchase from Seller, the Transferred Units.
3.2 Purchase Price for Transferred Units. In consideration for the
Transferred Units, Metaldyne shall pay to Seller, at the Closing, $20,000,000 by
wire transfer of immediately available funds to the account designated by Seller
on Schedule 3.2.
ARTICLE IV
THE CLOSING
4.1 Closing. Upon the terms and subject to the conditions of this
Agreement, the closing of the Transactions (the "Closing") shall take place at
the offices of DaimlerChrysler Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, at 10:00 A.M. (local time) on the last Business Day of the calendar
month in which the conditions set forth in Articles IX, X and XI are satisfied
or waived (other than conditions which by their nature are to be satisfied at
the Closing, but subject to the satisfaction or waiver of those conditions), or
at such other place, time or date as the parties hereto may agree. The term
"Closing Date" shall mean the date on which the Closing actually occurs.
4.2 Closing Deliveries of Seller. In addition to any other documents to be
delivered by Seller under the provisions of this Agreement, at the Closing,
Seller shall deliver, or cause to be delivered, to the Company and Metaldyne the
following:
(a) a Deed;
(b) a Title Policy;
(c) the FIRPTA Certificates;
(d) a duly executed ▇▇▇▇ of sale, assignment and general conveyance,
substantially in the form of Exhibit F hereto, dated the Closing Date, with
respect to the Transferred Assets (other than any Transferred Asset to be
transferred pursuant to any other instrument referred to in any other
clause of this Section 4.2);
(e) duly executed assignments, in form and substance reasonably
satisfactory to Seller and Metaldyne, of all Contracts, Intellectual
Property and Governmental Approvals constituting Transferred Assets, dated
the Closing Date, assigning to the Company all of Seller's right, title and
interest therein and thereto, with any required consent endorsed thereon or
provided therewith;
-23-
(f) certificates of title to all owned vehicles included in the
Transferred Assets to be transferred to the Company hereunder, duly
endorsed for transfer to the Company as of the Closing Date;
(g) separate trademark assignments, each dated the Closing Date,
assigning to the Company any United States trademark registrations included
in the Transferred Assets;
(h) such other and further instruments of conveyance, assignment and
transfer as Metaldyne shall reasonably request and that are necessary for
the effective conveyance, assignment and transfer of any of the Transferred
Assets to the Company;
(i) one or more certificates representing the Transferred Units, duly
endorsed for transfer;
(j) the certificate contemplated by Section 11.3;
(k) duly executed counterparts of the Employee Matters Agreement, the
Supply Agreement, the Management Agreement and the Operating Agreement to
each of the other parties thereto; and
(l) a certificate of Seller, signed by an authorized officer of
Seller, certifying as to (i) the corporate resolutions of Seller
authorizing the consummation of the transactions contemplated by this
Agreement and the Related Agreements, (ii) the incumbency of the officers
of Seller executing this Agreement and the Related Agreements to which it
is a party, (iii) the good standing under applicable Law of Seller, (iv)
Seller's certificate of incorporation, as amended, certified as of the
Closing Date, by the Secretary of State of the State of Delaware, and (v)
Seller's bylaws, certified to be true, correct, complete and in full force
and effect and unmodified as of the Closing Date.
4.3 Closing Deliveries of the Company. In addition to any other documents
to be delivered by the Company under the provisions of this Agreement, at the
Closing, the Company shall deliver, or cause to be delivered, to Seller the
following:
(a) one or more certificates, registered in the name of
DaimlerChrysler Corporation, representing 100% of the Class A Units and
100% of the Class B Units;
(b) the certificate contemplated by Section 11.3;
(c) duly executed counterparts of the Employee Matters Agreement, the
Supply Agreement, the Management Agreement and the Operating Agreement to
each of the other parties thereto; and
(d) a certificate of the Company, signed by an authorized officer of
the Company, certifying as to (i) the corporate resolutions of the Company
authorizing the consummation of the transactions contemplated by this
Agreement and the Related Agreements, (ii) the incumbency of the officers
of the Company executing this Agreement and the Related Agreements
-24-
to which it is a party, (iii) the good standing under applicable Law of the
Company, (iv) the Company's certificate of formation, as amended, certified
as of the Closing Date, by the Secretary of State of the State of Delaware,
and (v) the Company's limited liability company operating agreement,
certified to be true, correct, complete and in full force and effect and
unmodified as of the Closing Date.
4.4 Closing Deliveries of Metaldyne. In addition to any other documents to
be delivered by Metaldyne under the provisions of this Agreement, at the
Closing, Metaldyne shall deliver or cause to be delivered, to Seller the
following:
(a) the purchase price for the Transferred Units as provided in
Section 3.2;
(b) the certificate contemplated by Section 10.3;
(c) duly executed counterparts of the Employee Matters Agreement, the
Management Agreement and the Operating Agreement to each of the other
parties thereto; and
(d) a certificate of Metaldyne, signed by an authorized officer of
Metaldyne, certifying as to (i) the corporate resolutions of Metaldyne
authorizing the execution of this Agreement and the Related Agreements and
the consummation of the transactions contemplated thereby, (ii) the
incumbency of the officers of Metaldyne executing this Agreement and the
Related Agreements to which it is a party, (iii) the good standing under
applicable Law of Metaldyne, (iv) Metaldyne's certificate of incorporation,
as amended, certified as of the Closing Date, by the Secretary of State of
the State of Delaware, and (v) Metaldyne's bylaws, certified to be true,
correct, complete and in full force and effect and unmodified as of the
Closing Date.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF Seller
Seller represents and warrants to the Company and Metaldyne that, except as
set forth in the corresponding schedule of the disclosure schedules delivered by
Seller to the Company and Metaldyne immediately prior to execution of this
Agreement (the "Seller Disclosure Schedules") (it being agreed that disclosure
of any item on a particular Schedule of the Seller Disclosure Schedules shall be
deemed disclosure of such item on each other Schedule of the Seller Disclosure
Schedules where the relevance of such item to such other Schedule is reasonably
apparent on its face):
5.1 Due Incorporation. Seller is a corporation duly incorporated, validly
existing and in good standing under the Laws of the State of Delaware, with all
requisite corporate power and authority to own, lease and operate the
Transferred Assets and to carry on the Business as they are now being owned,
leased, operated and conducted. Seller is licensed or qualified to do business
and is in good standing as a foreign corporation in each jurisdiction where the
nature of the Transferred Assets and the Business requires such licensing or
qualification, except where the failure to be so licensed or qualified would not
reasonably be expected to have a Business Material Adverse Effect.
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Accurate and complete copies of the certificate of incorporation and bylaws of
Seller as currently in effect have been delivered to Metaldyne.
5.2 Due Authorization. Seller has full corporate power and authority to
execute and deliver this Agreement and the Related Agreements to which it is to
be a party and to perform its obligations and consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by
Seller of this Agreement and the Related Agreements to which it is to be a party
have been duly and validly approved by all corporate actions or proceedings on
the part of Seller necessary to authorize this Agreement, the Related Agreements
to which it is to be a party and the transactions contemplated hereby and
thereby. Seller has duly and validly executed and delivered this Agreement and,
on the Closing Date, will have duly and validly executed and delivered the
Related Agreements to which it is to be a party. This Agreement constitutes and,
on the Closing Date, the Related Agreements to which it is to be a party will
constitute (assuming, in each case, due execution and delivery by the other
parties thereto), legal, valid and binding obligations of Seller, enforceable
against Seller in accordance with their respective terms, except to the extent
such enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization, fraudulent transfer or other similar laws of general
applicability relating to or affecting creditors' rights from time to time in
effect and general principles of equity, including concepts of materiality,
reasonableness, good faith and fair dealing, regardless of whether in a
proceeding in equity or at law.
5.3 Consents and Approvals; No Violations. (a) Schedule 5.3 of the Seller
Disclosure Schedules lists all material Governmental Approvals and consents,
authorizations or approvals of, or filings or registrations with, any other
Person not a party to this Agreement that are required to be made or obtained by
Seller in connection with the execution, delivery and performance by Seller of
this Agreement or the Related Agreements to which it is to be a party or the
consummation of the transactions contemplated hereby or thereby.
(b) The execution, delivery and performance by Seller of this Agreement and
the Related Agreements to which it is to be a party and the consummation of the
transactions contemplated hereby and thereby do not and will not: (i) violate
any Law applicable to Seller; (ii) violate, result in the breach, acceleration,
termination, modification or cancellation of, require any consent under, result
in the creation of any Lien upon any of the Transferred Assets under, or give
any third party the right to accelerate, terminate, modify or cancel, any
Assumed Contract or any other material Contract or other Liability to which
Seller is a party or by which Seller or any of the Transferred Assets are bound
or subject, (iii) constitute an event which, after notice or lapse of time or
both, would result in any such violation, breach, acceleration, termination,
cancellation, require any such consent, result in any such Lien or give rise to
any such right or (iv) violate or conflict with any provision of any of, or
cause the dissolution of Seller pursuant to, the certificate of incorporation or
bylaws of Seller or the Delaware General Corporation Law, except, in the case of
clauses (i), (ii) and (iii) above, for such exceptions as would not reasonably
be expected to have, individually or in the aggregate, a Business Material
Adverse Effect.
5.4 Financial Statements. Schedule 5.4 of the Seller Disclosure Schedule
sets forth the unaudited general ledger trial balance of the Business as of
September 30, 2002 (the "Financial Statements"). The Financial Statements fairly
present, in all material respects, the assets and li-
-26-
abilities of the Business as of the date thereof and the revenues and direct
operating expenses of the Business for the nine months ended September 30, 2002,
in each case, in conformity with the financial accounting principles and
practices ordinarily used by Seller in the preparation of financial statements
for the Business, as described on Schedule 5.4 of the Seller Disclosure
Schedule, consistently applied ("Seller's Accounting Principles"). Each of the
Company and Metaldyne acknowledge that (a) the Business is a fully integrated
operation of Seller, (b) the Financial Statements have been derived from the
consolidated financial statements and accounting records of Seller, and (c) the
Business relies on Seller for administrative, management and other services.
5.5 Conduct of Business. Since January 1, 2002, Seller has conducted the
Business in the ordinary course of business and consistent with past practice
and has not:
(a) suffered any damage, destruction or Loss to any of its assets
(whether or not covered by insurance) that has had or would reasonably be
expected to have, individually or in the aggregate, a Business Material
Adverse Effect;
(b) taken any action or failed to take any action, or made any
expenditure or failed to make any expenditure, or entered into or
authorized any Contract or transaction in connection with the Business, in
each case having a value in excess of $250,000, other than in the ordinary
course of business and consistent with past practice;
(c) sold, transferred, conveyed, assigned or otherwise disposed of any
assets that, if not sold, transferred, conveyed, assigned or otherwise
disposed of prior to the Closing, would constitute Transferred Assets or
any other material assets of the Business, in each case having a value in
excess of $250,000, except sales of Inventory in the ordinary course of
business and consistent with past practice;
(d) made any material changes in the accounting or tax systems,
policies, principles or practices of the Business, except as required by
applicable Law, GAAP or as applicable to all or a substantial portion of
Seller's facilities or operations;
(e) acquired or leased any assets of the Business outside the ordinary
course of business or any assets which are material to the Business, in
each case having a value in excess of $250,000, or made any Transferred
Assets subject to any Lien except for Permitted Liens;
(f) terminated or modified, amended or otherwise altered or changed
any of the material terms or provisions of any Assumed Contract the terms
of which provide for, individually or in the aggregate, amounts to be paid
either to or by Seller or the Business in excess of $250,000; or
(g) agreed to any repricing, giveback or discount pursuant to or in
connection with any Assumed Contract resulting in payments in excess of
$250,000 which is not provided for by the terms of such Assumed Contract.
-27-
5.6 Title to Properties. Other than Intellectual Property, which is
addressed in Section 5.12, Seller has good and marketable title to, is the
lawful owner or lessee of, and has the right to contribute, transfer, assign and
deliver to the Company, all of the Transferred Assets, in each case, free and
clear of any Liens except for Permitted Liens. At and as of the Closing Date,
Seller will convey the Transferred Assets to the Company by deeds, bills of
sale, certificates of title and other instruments of assignment and transfer
effective to vest in the Company, good and valid record and marketable title to
or leasehold interests in all of the Transferred Assets, free and clear of all
Liens except for Permitted Liens.
5.7 Sufficiency of Transferred Assets. Other than Intellectual Property of
third parties (which is addressed in Section 5.12), the Transferred Assets and
the Excluded Assets, taken as a whole, comprise all assets and rights used or
useful for the continued conduct of the Business as presently conducted. Other
than Intellectual Property of third parties, the Transferred Assets and the
Excluded Assets, taken as a whole, constitute substantially all the properties
and assets relating to or used or held for use in connection with the Business
during the past 12 months (except Inventory sold, cash disposed of, accounts
receivable collected, prepaid expenses realized, Contracts fully performed, and
assets replaced by equivalent or similar assets, in each case in the ordinary
course of business). Except for the Excluded Assets and Intellectual Property of
third parties, there are no assets used in the operation of the Business and
owned by any Person other than Seller that will not be leased or licensed to the
Company under valid, current leases or license arrangements.
5.8 Real Property. (a) Schedule 5.8 of the Seller Disclosure Schedules sets
forth an accurate and complete list of all real property owned (including,
without limitation, the Facility) by Seller and any easement rights appurtenant
to the real property or otherwise available to Seller and used primarily or
exclusively in, related primarily or exclusively to, or necessary for, the
conduct of the Business or ownership or operation of the Facility (the "Real
Property"), and sets forth the address and owner of each parcel. Accurate and
complete copies of each deed, title insurance policy and survey related to such
Real Property have previously been provided to Metaldyne. With respect to the
Real Property, to the Knowledge of Seller, the activities carried on by Seller
in all buildings, plants, facilities, installations, fixtures and other
structures or improvements included as part of, or located on or at, the Real
Property, and the buildings, plants, facilities, installations, fixtures and
other structures or improvements themselves, are not in violation of, or in
conflict with, any applicable zoning or building regulations or ordinance or any
other applicable Law relating to real property or improvements thereon.
(b) There are no mortgages, deeds of trust, ground leases, security
interests or similar encumbrances on the owned Real Property.
(c) There is no real property used primarily or exclusively in, related
primarily or exclusively to, or necessary for, the conduct of the Business or
ownership or operation of the Facility that is not owned by Seller.
(d) All water, sewer, gas, electric, telephone, drainage and other
utilities required by applicable Law or necessary for the current or planned
operation of the Real Property have been installed and connected pursuant to
valid permits.
-28-
(e) Seller has received no written notice from any Governmental Authority
of any violation of any applicable Law or Governmental Approval issued with
respect to any of the Real Property that has not been corrected heretofore or
which would not reasonably be expected to have, individually or in the
aggregate, a Business Material Adverse Effect. Seller has received no written
notice of any pending or threatened real estate tax deficiency or reassessment
or condemnation of all or any portion of any of the Real Property.
5.9 Personal Property. Schedule 5.9 of the Seller Disclosure Schedules sets
forth an accurate and complete list of all of the tangible personal property
used primarily or exclusively in, related primarily or exclusively to, or,
except with respect to information technology systems not exclusive to the
Facility and related software and documentation, necessary for, the conduct of
the Business or the operation of the Facility and owned by Seller having an
original acquisition cost of $250,000 or more. Schedule 5.9 of the Seller
Disclosure Schedules also sets forth all material leases of personal property
binding upon Seller and used primarily or exclusively in, related primarily or
exclusively to, or, except with respect to information technology systems not
exclusive to the Facility and related software and documentation, necessary for,
the conduct of the Business, and all material items of personal property covered
thereby.
5.10 Inventory. The Inventory included in the Financial Statements or
acquired since September 30, 2002: (i) was acquired and has been maintained in
the ordinary course of business, (ii) is of good and merchantable quality; (iii)
is not obsolete; (iv) is valued at an amount not in excess of the lower of cost
or net realizable value; (v) is not subject to any write-down or write-off other
than reserves and allowances set forth on the Financial Statements or, with
respect to Inventory acquired or produced since the September 30, 2002, reserves
and allowances proportionate to the reserves and allowances for Inventory set
forth on the Balance Sheet; and (vi) is located at the Facility. Since September
30, 2002, no items of Inventory have been sold or disposed of except in the
ordinary course of business. Seller is not under any Liability or obligation
with respect to the return of Inventory in the possession of suppliers,
distributors, reseller or customers, other than in the ordinary course of
business and in amounts consistent with past practice. The Inventory (other than
the finished goods inventory in transit which constitute Excluded Assets) shall
be of a type and quality useable or saleable (subject, in the case of raw
materials and work-in-process, to completion of the production process) by the
Company in the ordinary course of business consistent with past practice.
5.11 Engineering and Development. Seller has no capitalized engineering and
development expenses with respect to the Business.
5.12 Intellectual Property. (a) Schedule 5.12 of the Seller Disclosure
Schedules sets forth an accurate and complete list of (i) all Filed Intellectual
Property and (ii) all Contracts involving the licensing of any Intellectual
Property (other than commercially available software used on personal computers)
to Seller that is used in and is material to the conduct of the Business and/or
the operation of the Facility as presently conducted and/or operated.
-29-
(b) With respect to all Intellectual Property included in the
Transferred Assets:
(i) all owned Intellectual Property is owned by Seller free and
clear of all Liens except for Permitted Liens, and is not subject to
any license, royalty or other agreement;
(ii) except for owned Intellectual Property, to the Knowledge of
Seller, all Intellectual Property is the subject of a valid license in
favor of Seller or Seller otherwise has a valid right to use it;
(iii) no Intellectual Property has been or is the subject of any
pending or, to the Knowledge of Seller, threatened litigation or claim
alleging infringement;
(iv) to the Knowledge of Seller, no Person has infringed,
violated or misappropriated or now infringes, violates or
misappropriates the rights of Seller with respect to any Intellectual
Property;
(v) to the Knowledge of Seller, no party to any license or
royalty agreement relating to Intellectual Property to which Seller is
a party is in breach or default, and no written notice of termination
has been given or is threatened;
(vi) (A) no product manufactured in the conduct of the Business
or any process used in the conduct of the Business or the operation of
the Facility to manufacture any such product is the subject of any
pending or, to the Knowledge of Seller, threatened litigation or claim
alleging infringement of an Intellectual Property right of any third
party, (B) to the Knowledge of Seller, no Current Product or Current
Process has infringed, violated or misappropriated or now infringes,
violates or misappropriates any Intellectual Property or confidential
or proprietary rights of any third party and (C) Seller has not
received any notice from any third party alleging that any Current
Product or Current Process infringes any Intellectual Property or
confidential or proprietary rights of such third party; and
(vii) to the Knowledge of Seller, the Intellectual Property
included in the Transferred Assets or licensed to Company under this
Agreement, other than the Intellectual Property set forth on Schedule
5.12(vii), comprises all of the Intellectual Property necessary for
the Company to conduct and operate the Business and the Facility as
presently conducted and/or operated and to manufacture the Launch
Products (as defined in the Supply Agreement). Metaldyne acknowledges
that Seller shall have a period of five (5) Business Days after the
date hereof within which to deliver to Metaldyne an updated Schedule
5.12(vii), and any such updates shall be deemed to have been delivered
as of the date hereof for all purposes of this Agreement.
5.13 Contracts. (a) Schedule 5.13 of the Seller Disclosure Schedules sets
forth an accurate and complete list of all the Contracts of the following types
to which Seller is a party or by which Seller or any of the Transferred Assets
is bound and which relate exclusively to, or, except with respect to the
Intellectual Property and information technology systems and related software
and
-30-
documentation, relate primarily to or are necessary for, the conduct of the
Business or the ownership or operation of the Facility:
(i) any collective bargaining agreement, as well as any document
modifying, terminating or extending such agreement and any letters of
understanding or side agreements with respect to such agreements;
(ii) any Contract or other arrangement of any kind between the
Business, on the one hand, and Seller's other businesses or any Affiliate
of Seller, on the other hand;
(iii) any Contract with any officer or director of Seller or any of
its Affiliates;
(iv) any Contract with any employee located at the Facility involving
an annual payment outside of salary and benefits in excess of $10,000;
(v) any Assumed Contract with a sales representative, manufacturer's
representative, promoter, producer, sponsor, distributor, dealer, broker,
sales agency, advertising agency or other Person engaged in sales,
distributing or promotional activities, or any Assumed Contract to act as
one of the foregoing on behalf of any Person;
(vi) any Assumed Contract of any nature which involves the payment or
series of payments or receipt of cash or other property, an unperformed
commitment, or goods or services, or any combination thereof having a value
in excess of $200,000 per annum;
(vii) any Contract involving the formation or operation of a
partnership, joint venture or other cooperative undertaking;
(viii) any Contract involving any restrictions with respect to the
geographical area of operations or scope or type of the Business, or, to
the Knowledge of Seller, any employee of Seller engaged in the Business
(other than covenants of which the Business is a beneficiary in employment
or consulting agreements);
(ix) any Contract (other than this Agreement and the Related
Agreements), whether or not fully performed, relating to any acquisition or
disposition of Seller or any predecessor in interest to Seller, or any
acquisition or disposition of any Assets (other than sales of inventory in
the ordinary course of business), in each involving amounts in excess of
$250,000; and
(x) any Contract containing an option to purchase or sell any
Transferred Assets or assets that, if sold prior to the Closing, would have
been Transferred Assets, or containing any right of first refusal to
acquire or sell any Transferred Assets, in each case having a value in
excess of $50,000, other than sales of Inventory in the ordinary course of
business.
(b) Seller has delivered to the Company accurate and complete copies of
each Contract listed on Schedule 5.13 of the Seller Disclosure Schedules, and
Schedule 5.13 of the Seller Disclosure Schedules contains a written description
of each oral arrangement of the kind listed
-31-
Known to Seller. All such Contracts, to the extent such Contracts are Assumed
Contracts, are valid and enforceable obligations of Seller and, to the Knowledge
of Seller, each other party thereto and are not subject to termination as a
result of the Transactions. Seller has not received any written notice of
default or termination (or threatened termination) with respect to any such
Assumed Contract.
(c) Seller has not breached in any material respect any provision of, nor
is it in default in any material respect under the terms of, any material
Assumed Contract, and, to the Knowledge of Seller, no other party to any
material Assumed Contract has breached in any material respect such material
Assumed Contract or is in default (with or without notice or the passage of
time, or both) in any material respect thereunder.
5.14 No Defaults or Violations. (a) Seller has not breached any provision
of, nor is in default under the terms of, its certificate of incorporation or
bylaws.
(b) Seller is in compliance with, and no violation exists under, any and
all Laws applicable to the Business, except for such noncompliance or violations
that, individually or in the aggregate would not reasonably be expected to have
a Business Material Adverse Effect.
(c) Since January 1, 2002, no written notice from any Governmental
Authority has been received by Seller claiming any violation of any applicable
Law (including any building, zoning or other ordinance) or requiring any work,
construction or expenditure, or asserting any Tax, assessment or penalty, in
each case material to the Business taken as a whole. As to any such notice from
any Governmental Authority received prior to January 1, 2002, all matters
therein have been resolved.
5.15 Governmental Approvals. Schedule 5.15 of the Seller Disclosure
Schedules sets forth an accurate and complete list of all material Governmental
Approvals held by Seller relating to the Business. Seller holds all material
Governmental Approvals that are necessary for the lawful operation of the
Business as presently conducted.
5.16 Insurance. Seller maintains insurance that is adequate to protect
Seller, the Business and the Facility and their respective conditions against
the Liabilities, claims and risks against which it is customary for companies
involved in the businesses conducted by Seller, the Business and the Facility to
insure.
5.17 Employment and Labor Matters. (a) Schedule 5.17 of the Seller
Disclosure Schedules sets forth any employment or consulting Contract currently
in effect which relates to the Business that is not terminable at will (other
than collective bargaining agreements or agreements with the sole purpose of
providing for the confidentiality of proprietary information or assignment of
inventions).
(b) Schedule 5.17 of the Seller Disclosure Schedules sets forth or
describes: (i) all existing and proposed collective bargaining agreements with
respect to any employees engaged in the Business and located at the Facility;
(ii) any existing or proposed mid-term bargaining agreement, effects bargaining
agreement or plant closure agreement with respect to any employees engaged in
the
-32-
Business and located at the Facility; (iii) any other Contract, written or oral,
affecting the Business with any trade or labor union, employees' association or
similar organization; and (iv) any actual or threatened material labor disputes
affecting the operation of the Facility. Seller and its Subsidiaries have good
labor relations, and Seller has no Knowledge of any facts indicating that the
consummation of the Transactions will have a material adverse effect on such
labor relations or that any key employee engaged in the Business intends to
terminate its employment.
(c) Seller is in material compliance with all Contracts, including
collective bargaining agreements, relating to employment, employment practices,
wages, hours and terms and conditions of employment of the employees engaged in
the Business. Seller is in material compliance with all applicable Laws with
respect to employment and employment practices, terms and conditions of
employment, wages and hours of work affecting the Business.
(d) Neither Seller nor any of its ERISA Affiliates has incurred, or
reasonably expects to incur, any liability under Title IV of ERISA or Section
412 of the Code which could reasonably be expected to result in Liability to the
Company.
5.18 Capital Improvements. The Operating Budget and Capital Plan (as
defined in the Operating Agreement) sets forth a list of all capital
improvements or purchases or other capital expenditures of Seller with respect
to the Business or the Assets that have not been completed prior to the date
hereof.
5.19 Taxes. (a) All material Taxes that Seller is required by applicable
Law to withhold or collect, including sales and use taxes, and amounts required
to be withheld from employees, have been duly withheld or collected and, to the
extent required, have been paid over to the proper Governmental Authorities or
properly deposited for such purpose. All material information returns relating
to the Business or the Transferred Assets required to be filed by Seller have
been filed, or extensions therefor have been granted, and all statements
required to be furnished to payees by Seller have been furnished to such payees,
and the information set forth on such information returns and statements is
accurate and complete.
(b) Seller is not a "foreign person" as defined in Section 1445(f)(3) of
the Code.
5.20 Product Claims and Product Warranty. Schedule 5.20 of the Seller
Disclosure Schedules sets forth an accurate and complete list of all claims,
actions or lawsuits involving any product manufactured or produced at the
Facility that resulted in a settlement or verdict in excess of $500,000 in the
past three (3) years, or that are currently pending or, to the Knowledge of
Seller, threatened, in each case based upon an alleged defect in design,
manufacture, materials or workmanship of any such product, or any alleged
failure to warn or from any breach of express or implied specifications or
warranties or representations. There has not been, nor is there under
consideration or investigation by Seller, any recall, rework, retrofit or
consumer advisory warning concerning any product manufactured or produced at the
Facility or any recall conducted by or on behalf of any entity involving any
such product.
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5.21 Environmental Matters. (a) (i) Seller is in compliance in all material
respects with all Environmental Laws applicable to the Business as presently
conducted and the Transferred Assets as presently operated and used and
possesses and complies in all material respects with all Environmental Permits
presently required under such Environmental Laws, and (ii) to the Knowledge of
Seller, there are no present or past Environmental Conditions.
(b) There is no pending or, to the Knowledge of Seller, threatened
Environmental Claim against Seller relating to the Business or the Transferred
Assets or against any entity relating to the Business or the Transferred Assets
for which Seller may have any Liability.
(c) To the Knowledge of Seller, there are no Hazardous Materials or other
conditions at, under or emanating from, and there has been no Release at, on or
adjoining, any of the Real Property that would reasonably be expected to give
rise to an Environmental Claim against or Liability of Seller under any
Environmental Law.
(d) (i) None of the Real Property is (A) listed or proposed for listing on
the National Priorities List promulgated under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended ("CERCLA"), or (B)
listed on the Comprehensive Environmental Response, Compensation, and Liability
Information System promulgated under CERCLA or (C) listed on any comparable list
promulgated or published by any Governmental Authority (including, without
limitation, any such list relating to gasoline or petroleum or oil) and (ii) no
Lien has been recorded under any Environmental Law with respect to any of the
Real Property.
(e) Seller has not assumed, contractually or by operation of applicable
Law, any Liabilities of any third party under any Environmental Law that affects
the Business or the Transferred Assets.
(f) The execution and delivery by Seller of this Agreement and the Related
Agreements to which it is to be a party and the consummation by Seller of the
Transactions will not require any Remedial Action under any Environmental Law.
(g) Seller is not now conducting any Remedial Action under any
Environmental Law, nor is Seller obligated under any order, decree or agreement
with any Governmental Authority to conduct any such Remedial Action, in each
case related to the Business and involving amounts in excess of $100,000.
(h) To the Knowledge of Seller, there are no underground storage tanks or
related piping, surface impoundments, land disposal sites or friable asbestos
containing material at the Real Property.
(i) Schedule 5.21 of the Seller Disclosure Schedules sets forth an accurate
and complete list of all Environmental Reports and written notices and
correspondence to or from any Governmental Authority in the possession or
control of Seller or any of its Affiliates in connection with any Environmental
Conditions or current or planned Remedial Action with respect to the Business,
the Real Property (including, without limitation, the Facility) or any other
Transferred Assets. A
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copy of such Environmental Reports and written notices and correspondence has
previously been provided to Metaldyne.
(j) Schedule 1.2 sets forth all Environmental Conditions of which Seller
has any Knowledge.
5.22 Litigation. (a) There are no actions, suits, claims, notices of
potential claims, requests for accommodation, arbitrations, regulatory
proceedings or other litigation, proceedings or governmental investigations
pending or, to the Knowledge of Seller, threatened against or affecting the
Business or any of the Transferred Assets that would reasonably be expected to
have, individually or in the aggregate, a Business Material Adverse Effect.
Seller is not subject to any order, judgment, decree, injunction, stipulation or
consent order of or with any court or other Governmental Authority affecting the
Business or the Transferred Assets. Since January 1, 2000, Seller has not
entered into any agreement to settle or compromise any proceeding pending or
threatened against or affecting the Business or any of the Transferred Assets
which has involved any Liability other than the payment of money or for which
the Business has any continuing Liability.
(b) There are no claims, actions, suits, proceedings or investigations
pending or, to the Knowledge of Seller, threatened by or against Seller, any of
its officers, directors, employees or agents in their capacities as such, or the
Business or any of the Transferred Assets, with respect to this Agreement or the
Related Agreements, or in connection with the Transactions.
5.23 Brokers. Except for Donnelly, Penman, French, ▇▇▇▇▇▇▇▇ & Co., Seller
has not used any broker or finder in connection with the Transactions, and none
of the Company, Metaldyne or any of their respective Affiliates has or shall
have any Liability or otherwise suffer or incur any Loss as a result of, or in
connection with, any brokerage or finder's fee or other commission of any Person
retained by Seller or any of its Affiliates in connection with this Agreement,
the Related Agreements or any of the Transactions.
5.24 Customers and Suppliers. (a) Since September 30, 2001, none of the top
five customers (as identified by Seller's product platform group) of or top ten
suppliers (including subcontractors thereof) to the Business, in each case
measured by dollar volume for the twelve months ended as of September 30, 2002,
has (i) notified Seller in writing that it intends to discontinue its
relationship with Seller, (ii) notified Seller in writing that it intends to
materially reduce its trading with or provision of supplies to Seller, or (iii)
materially changed the terms on which it is prepared to purchase from, trade
with or supply Seller. Schedule 5.24 of the Seller Disclosure Schedules sets
forth an accurate and complete list of each material Assumed Contract with the
suppliers of the Business, in each case involving annual payments in excess of
$50,000. Copies of each such Assumed Contract and of each standard business
agreement (i.e., purchase orders, invoices and the like) used by Seller have
previously been provided to Metaldyne.
(b) There are no material disputes with any of the top ten suppliers of the
Business for the 12 months ended November 30, 2002, including, but not limited
to, disputes regarding tooling monies, expenses for premium freight, expenses
arising from quality issues and costs arising from capacity disputes.
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5.25 Health and Safety; Asbestos. (a) The Facility is in compliance with
the Occupational Safety and Health Act, as amended ("OSHA"), and all other
applicable Laws with respect to occupational safety and health, except for
failures to so comply that would not reasonably be expected to have,
individually or in the aggregate, a Business Material Adverse Effect. There are
no actions, suits, claims, notices of potential claims, regulatory proceedings
or other litigation, proceedings or governmental investigations pending or, to
the Knowledge of Seller, threatened against or affecting the Business of any of
the Transferred Assets, in each case based upon an alleged violation of OSHA or
any other applicable Law with respect to occupational safety and health, except
such as would not reasonably be expected to have, individually or in the
aggregate, a Business Material Adverse Effect.
(b) There are no actions, suits, claims, notices of potential claims,
regulatory proceedings or other litigation, proceedings or governmental
investigations pending or, to the Knowledge of Seller, threatened against or
affecting the Business of any of the Transferred Assets, in each case based upon
an alleged exposure to asbestos at the Facility or the Real Property or based
upon an alleged exposure to any other substance or condition at the Facility or
the Real Property that is alleged to violate OSHA or any other applicable Law
with respect to occupational safety and health.
5.26 Disclosure. Seller has previously provided or made available to
Metaldyne accurate and complete copies, in all material respects, of each
document listed or referred to on the schedules to this Agreement.
5.27 No Other Representations or Warranties. Except for the representations
and warranties of Seller expressly set forth in this Agreement or any of the
Related Agreements, neither Seller nor any other Person makes any other express
or implied representation or warranty on behalf of Seller, in each case, in
respect to the Business or the Transferred Assets. The representations and
warranties made in this Agreement and the Related Agreements in respect to the
Business or the Transferred Assets are in lieu of all other warranties Seller
might have given the Company or Metaldyne, including, without limitation,
implied warranties of merchantability and implied warranties of fitness for
intended use. All other warranties that Seller or anyone purporting to represent
Seller gave or might have given, or which might be provided or implied by
applicable law or commercial practice, in respect to the Business or the
Transferred Assets are hereby expressly excluded.
ARTICLE VI
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF SELLER
In addition to the representations and warranties in Article IV, Seller
represents and warrants to Metaldyne that, except as set forth in the
corresponding schedule of the Seller Disclosure Schedules delivered by Seller to
Metaldyne immediately prior to execution of this Agreement (it being agreed that
disclosure of any item on a particular Schedule of the Seller Disclosure
Schedules shall be deemed disclosure of such item on each other Schedule of the
Seller Disclosure Schedules where the relevance of such item to such other
Schedule is reasonably apparent on its face):
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6.1 Due Formation. The Company is a limited liability company duly formed,
validly existing and in good standing under the Laws of the State of Delaware,
with all requisite power and authority to own, lease and operate the Transferred
Assets and to carry on the Business as it is now being owned, leased, operated
and conducted. As of the Closing Date, the Company will be licensed or qualified
to do business and will be in good standing as a foreign limited liability
company in each jurisdiction where the nature of Transferred Assets and the
Business requires such licensing or qualification, except where the failure to
be so licensed or qualified would not reasonably be expected to have a Company
Material Adverse Effect. Accurate and complete copies of (i) the certificate of
formation and any limited liability company operating agreement of the Company
as currently in effect and (ii) the books and records of the Company have been
delivered to Metaldyne. Before giving effect to the Contribution, the Company
will have no assets or operations other than those related to its formation.
6.2 Due Authorization. The Company has full power and authority to execute
and deliver this Agreement and the Related Agreements to which it is to be a
party and to perform its obligations and consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by the
Company of this Agreement and the Related Agreements to which it is to be a
party have been duly and validly approved by all actions or proceedings on the
part of the Company necessary to authorize this Agreement, the Related
Agreements to which it is to be a party or the transactions contemplated hereby
and thereby. The Company has duly and validly executed and delivered this
Agreement and, on the Closing Date, will have duly and validly executed and
delivered the Related Agreements to which it is to be a party. This Agreement
constitutes and, on the Closing Date, the Related Agreements to which it is to
be a party will constitute (assuming, in each case, due execution and delivery
by the other parties thereto), legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their respective
terms, except to the extent such enforceability may be limited by applicable
bankruptcy, insolvency, moratorium, reorganization, fraudulent transfer or other
similar laws of general applicability relating to or affecting creditors' rights
from time to time in effect and general principles of equity, including concepts
of materiality, reasonableness, good faith and fair dealing, regardless of
whether in a proceeding in equity or at law.
6.3 Consents and Approvals; No Violations. (a) Schedule 6.3 of the Seller
Disclosure Schedule lists all material Governmental Approvals and consents,
authorizations or approvals of, or filings or registrations with, any other
Person not a party to this Agreement that are required to be made or obtained by
the Company in connection with the execution, delivery and performance by the
Company of this Agreement or the Related Agreements to which it is to be a party
or the consummation of the transactions contemplated hereby or thereby.
(b) The execution, delivery and performance by the Company of this
Agreement and the Related Agreements to which it is to be a party and the
consummation of the transactions contemplated hereby and thereby do not and will
not: (i) violate any Law applicable to the Company, except for such violations
as would not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect; or (ii) violate or conflict with any provision
of any of, or cause the dissolution of the Company pursuant to, the certificate
of formation or any limited liability operating agreement of the Company or the
Delaware Limited Liability Company Act.
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(c) The Company is not, and before giving effect to the Contribution the
Company will not be, a party to any Contract other than this Agreement or the
Related Agreements.
6.4 Capitalization; Title to Units. (a) The authorized Capital Stock of the
Company consists of 100 Class A Units and 100 Class B Units. As of the date
hereof, there is outstanding one Class A Unit, which is owned beneficially and
of record by Seller, and no Class B Units. As of the Closing Date after giving
effect to the Contribution but before giving effect to the Transfer, there will
be outstanding 100 Class A Units and 100 Class B Units, all of which will be
owned beneficially and of record by Seller. As of the Closing Date after giving
effect to all of the Transactions, there will be outstanding 100 Class A Units,
60% of which will be owned beneficially and of record by Seller and 40% of which
will be owned beneficially and of record by Metaldyne, and 100 Class B Units,
all of which will be owned beneficially and of record by Seller. All outstanding
Units of the Company have been duly authorized and validly issued and are fully
paid and non-assessable. Except as contemplated by this Agreement or the Related
Agreements, there are no outstanding (i) limited liability company interests or
voting securities of the Company, (ii) securities of the Company convertible
into or exchangeable for limited liability company interests or voting
securities of the Company or (iii) options, agreements or other rights to
acquire from the Company or Seller, or other obligations of the Company to
issue, any limited liability company interests, voting securities or securities
convertible into or exchangeable for limited liability company interests or
voting securities of the Company. There are no outstanding obligations of the
Company to repurchase, redeem or otherwise acquire any securities.
(b) As of the date hereof, except for Seller, no Person has any rights as a
member or manager of the Company under any applicable Law. As of the Closing
Date after giving effect to Contribution and the Transfer, except for Seller and
Metaldyne, no Person will have any rights as a member or manager of the Company
under any applicable Law.
(c) On the Closing Date after giving effect to the Contribution but before
giving effect to the Transfer, Seller will have good and valid title to the
Transferred Units, free and clear of any Liens. Upon the Transfer of the
Transferred Units to Metaldyne pursuant to this Agreement, Seller will convey
good and valid title to the Transferred Units, free and clear of any Liens or
any other restriction or limitation whatsoever, except as set forth in this
Agreement or the Related Agreements.
6.5 No Liabilities. The Company has, and prior to the Contribution the
Company will have, no Liabilities or Indebtedness, other than in connection with
its formation. At the Closing, the Company will have no Indebtedness whatsoever
and no Liabilities, other than the Assumed Liabilities or in connection with
this Agreement and the Related Agreements.
6.6 Brokers. The Company has not used any broker or finder in connection
with the Transactions, and none of the Company, Metaldyne or any of their
respective Affiliates has or shall have any Liability or otherwise suffer or
incur any Loss as a result of, or in connection with, any brokerage or finder's
fee or other commission of any Person retained by the Company or any of its
Affiliates in connection with this Agreement, the Related Agreements or any of
the Transactions.
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6.7 No Other Representations or Warranties. Except for the representations
and warranties of Seller expressly set forth in this Agreement or any of the
Related Agreements, neither Seller nor any other Person makes any other express
or implied representation or warranty on behalf of Seller, in each case, in
respect to the Company. The representations and warranties made in this
Agreement and the Related Agreements in respect to the Company are in lieu of
all other warranties Seller might have given Metaldyne. All other warranties
that Seller or anyone purporting to represent Seller gave or might have given,
or which might be provided or implied by applicable law or commercial practice,
in respect to the Company are hereby expressly excluded.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF METALDYNE
Metaldyne represents and warrants to Seller, except as set forth in the
corresponding schedule of the disclosure schedules delivered by Metaldyne to
Seller and immediately prior to execution of this Agreement (the "Metaldyne
Disclosure Schedules") (it being agreed that disclosure of any item on a
particular Schedule of the Metaldyne Disclosure Schedules shall be deemed
disclosure of such item on each other Schedule of the Metaldyne Disclosure
Schedules where the relevance of such item to such other Schedule is reasonably
apparent on its face):
7.1 Due Incorporation. Metaldyne is a corporation duly incorporated,
validly existing and in good standing under the Laws of the State of Delaware,
with all requisite corporate power and authority to own, lease and operate its
assets and to carry on its business as they are now being owned, leased,
operated and conducted. Metaldyne is licensed or qualified to do business and is
in good standing as a foreign corporation in each jurisdiction where the nature
of the its assets and business requires such licensing or qualification, except
where the failure to be so licensed or qualified would not reasonably be
expected to have a Metaldyne Material Adverse Effect. Accurate and complete
copies of the certificate of incorporation and bylaws of Metaldyne as currently
in effect have been delivered to Seller.
7.2 Due Authorization. (a) Metaldyne has full corporate power and authority
to execute and deliver this Agreement and the Related Agreements to which it is
to be a party and to perform its obligations and consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by
Metaldyne of this Agreement and the Related Agreements to which it is to be a
party have been duly and validly approved by all other corporate actions or
proceedings on the part of Metaldyne necessary to authorize this Agreement, the
Related Agreements to which it is to be a party or the transactions contemplated
hereby and thereby. Metaldyne has duly and validly executed and delivered this
Agreement and, on the Closing Date, will have duly and validly executed and
delivered, the Related Agreements to which it is to be a party. This Agreement
constitutes and, on the Closing Date, the Related Agreements to which it is to
be a party will constitute (assuming, in each case, due execution and delivery
by the other parties thereto) legal, valid and binding obligations of Metaldyne,
enforceable against Metaldyne in accordance with their respective terms, except
to the extent such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization, fraudulent transfer or other similar
laws of general applicability relating to or affecting creditors' rights from
time to time in effect and general principles of equity, including concepts of
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materiality, reasonableness, good faith and fair dealing, regardless of whether
in a proceeding in equity or at law.
(b) The shares of Series A-1 Preferred Stock, par value $1.00 per share,
having the rights, privileges and preferences set forth in the form of
Certificate of Designation attached to the Operating Agreement (the "Series A-1
Preferred Stock"), issuable to Seller in connection with a Metaldyne Call Option
Closing have been duly authorized for issuance and sale to Seller pursuant to
the Operating Agreement, and, when issued and delivered by Metaldyne pursuant to
the Operating Agreement against payment of the consideration set forth therein,
will be validly issued, fully paid and non-assessable. The shares of the Series
A-2 Preferred Stock, par value $1.00 per share, having the rights, privileges
and preferences set forth in the Certificate of Designation attached to the
Operating Agreement (the "Series A-2 Preferred Stock"), issuable to the holders
of the Series A-1 Preferred Stock in exchange for shares of Series A-1 Preferred
Stock pursuant to such Certificate of Designation have been duly authorized for
issuance pursuant to the terms of such Certificate of Designation, and when
issued and delivered by Metaldyne pursuant thereto will be validly issued fully
paid and nonassessable. Any such issuance of shares of the Series A-1 Preferred
Stock or the Series A-2 Preferred Stock is not subject to any preemptive or
other similar rights of any security holder of Metaldyne.
7.3 Consents and Approvals; No Violations. (a) Schedule 7.3 of the
Metaldyne Disclosure Schedules lists all material Governmental Approvals and no
consents, authorizations or approvals of, or filings or registrations with, any
Governmental Authority or any other Person not a party to this Agreement are
required to be made or obtained by Metaldyne or any of its Subsidiaries in
connection with the execution, delivery and performance by Metaldyne or any of
its Subsidiaries of this Agreement or the Related Agreements to which it is to
be a party or the consummation of the transactions contemplated hereby or
thereby.
(b) The execution, delivery and performance by Metaldyne of this Agreement
and the Related Agreements to which it is to be a party and the consummation of
the transactions contemplated hereby and thereby do not and will not: (i)
violate any Law applicable to Metaldyne or any of its Subsidiaries; (ii)
violate, result in the breach, acceleration, termination, modification or
cancellation of, require any consent under, result in the creation of any Lien
upon any of the assets of Metaldyne or any of its Subsidiaries under, or give
any third party the right to accelerate, terminate, modify or cancel, any
Contract to which Metaldyne or any of its Subsidiaries is a party or by which
Metaldyne or any of its Subsidiaries or any of their assets are bound or
subject, (iii) constitute an event which, after notice or lapse of time or both,
would result in any such violation, breach, acceleration, termination,
cancellation, require any such consent, result in any such Lien or give rise to
any such right or (iv) violate or conflict with any provision of any of, or
cause the dissolution of Metaldyne or any of its Subsidiaries pursuant to, the
certificate of incorporation or bylaws of Metaldyne or any of its Subsidiaries
or the Delaware General Corporation Law, with such exceptions, in the case of
clauses (i), (ii) and (iii), as would not reasonably be expected to have,
individually or in the aggregate, a Metaldyne Material Adverse Effect.
7.4 Subsidiaries; Equity Investments. (a) Each Subsidiary of Metaldyne is a
corporation or other entity duly incorporated or formed, validly existing and in
good standing under
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the Laws of its jurisdiction of incorporation or formation and has all corporate
or comparable power and authority required to own, lease and operate its assets
and to carry on its business as they are now being owned, leased, operated or
conducted. Each such Subsidiary is licensed or qualified to do business and is
in good standing as a foreign corporation or other entity in each jurisdiction
where the nature of its assets and its business requires such licensing or
qualification, except where the failure to be so licensed or qualified would not
reasonably be expected to have, individually or in the aggregate, a Metaldyne
Material Adverse Effect.
(b) All of the outstanding Capital Stock of, or other voting securities or
ownership interests in, each Subsidiary of Metaldyne is owned by Metaldyne,
directly or indirectly, free and clear of any Lien and free of any other
limitation or restriction (including any restriction on the right to vote, sell
or otherwise dispose of such Capital Stock or other voting securities or
ownership interests). All of the outstanding shares of Capital Stock of each
Subsidiary of Metaldyne have been validly issued and are fully paid and
non-assessable. There are no outstanding (i) securities of Metaldyne or any of
its Subsidiaries convertible into or exchangeable for shares of Capital Stock or
other voting securities or ownership interests in any Subsidiary of Metaldyne or
(ii) options or other rights to acquire from Metaldyne or any of its
Subsidiaries, or obligations of Metaldyne or any of its Subsidiaries to issue or
to repurchase, redeem or otherwise acquire, any Capital Stock or other voting
securities or ownership interests in, or any securities convertible into or
exchangeable for any Capital Stock or other voting securities or ownership
interests in, any Subsidiary of Metaldyne.
7.5 Capitalization. (a) The authorized Capital Stock of Metaldyne consists
of 250,000,000 shares, par value $1.00 per share, of common stock (the "Common
Stock") and 25,000,000 shares, par value $1.00 per share, of preferred stock
(the "Preferred Stock"), of which 370,000 shares have been designated as Series
A Preferred Stock and 184,153 shares have been designated as Series B Preferred
Stock. As of the close of business on September 30, 2002, (i) 44,643,637 shares
of Common Stock were issued and outstanding, (ii) 545,154 shares of Preferred
Stock were issued and outstanding, of which 361,001 shares have been designated
as Series A Preferred Shares and 184,153 shares have been designated as Series B
Preferred Shares, (iii) no shares of Common Stock were held by Metaldyne in its
treasury; (iv) 644,540 shares of Preferred Stock have been reserved for issuance
as Series A-1 Preferred Stock and (iv) 644,540 shares of Preferred Stock have
been reserved for issuance as Series A-2 Preferred Stock. All outstanding shares
of Capital Stock have been duly authorized and validly issued and are fully paid
and nonassessable.
(b) Except as set forth on Schedule 7.5 of the Metaldyne Disclosure
Schedules, there are no outstanding (i) shares of Capital Stock or voting
securities of Metaldyne, (ii) securities of Metaldyne convertible into or
exchangeable for shares of Capital Stock or voting securities of Metaldyne,
(iii) options, warrants or other rights agreements, arrangements or commitments
to acquire from Metaldyne, or obligations of Metaldyne to issue or to
repurchase, redeem or otherwise acquire or retire, any Capital Stock, voting
securities or securities convertible into or exchangeable for Capital Stock or
voting securities of Metaldyne or (iv) stock appreciation, phantom stock or
similar rights with respect to Metaldyne.
(c) None of the outstanding shares of Capital Stock of Metaldyne were
issued in violation of preemptive or other similar rights of any security holder
of Metaldyne. Metaldyne has
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not violated any applicable foreign, federal or state securities laws in
connection with the offer, sale or issuance of any of its Capital Stock or
rights to acquire Capital Stock, except for such violations that would not
reasonably be expected to have, individually or in the aggregate, a Metaldyne
Material Adverse Effect. In the event of the Metaldyne Call Option Closing, the
offer, sale and issuance of the Series A-1 Preferred Stock pursuant to the
Operating Agreement will not require registration under the Securities Act or
any applicable state securities laws (including as a result of integration of
one or more such offerings). Except as provided in the Metaldyne Shareholders
Agreement, there are no statutory or contractual stockholders preemptive rights
or rights of first refusal with respect to the issuance of the Series A-1
Preferred Stock pursuant to the Operating Agreement. There are no agreements
between Metaldyne's stockholders with respect to the voting or transfer of
Metaldyne's Capital Stock or with respect to any other aspect of Metaldyne's
affairs except as set forth in the Metaldyne Shareholders Agreement and/or the
Metaldyne SEC Documents.
7.6 Metaldyne SEC Documents. (a) Metaldyne has delivered or made available
to Seller (i) Metaldyne's annual reports on Form 10-K for its fiscal year ended
December 31, 2001, (ii) its quarterly report on Form 10-Q for its fiscal quarter
ending September 30, 2002, (iii) its proxy statement relating to the 2002 annual
meeting of stockholders of Metaldyne and (iv) all of its other reports,
statements, schedules and registration statements filed with the Securities and
Exchange Commission (the "SEC") since December 31, 2001 (the documents referred
to in this Section 7.6(a), collectively, the "Metaldyne SEC Documents").
(b) As of its filing date, each Metaldyne SEC Document complied as to form
in all material respects with the applicable requirements of the Exchange Act.
(c) As of its filing date, each Metaldyne SEC Document did not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. No Subsidiary of Metaldyne is
subject to the periodic reporting requirements of the Exchange Act. As of the
date hereof, there are no material unresolved comments issued by the staff of
the SEC with respect to any of the Metaldyne SEC Documents.
(d) Except as set forth in the Metaldyne SEC Documents, (i) neither
Metaldyne nor any of its Subsidiaries is indebted to any director or officer of
Metaldyne or any of its Subsidiaries (except for amounts due as normal salaries
and bonuses, in reimbursement of ordinary business expenses and directors'
fees), (ii) no director or officer of Metaldyne is indebted to Metaldyne or any
of its Subsidiaries and (iii) there have been no other transactions of the type
required to be disclosed pursuant to Items 402 or 404 of Regulation S-K
promulgated by the SEC.
7.7 Financial Statements. (a) The audited consolidated financial statements
and unaudited consolidated interim financial statements of Metaldyne included in
the Metaldyne SEC Documents fairly present, in all material respects, the
consolidated financial position of Metaldyne and its consolidated Subsidiaries
as of the dates thereof and their consolidated results of operations, changes in
stockholders equity and cash flows for the periods then ended (subject to normal
year-end adjustments and the absence of notes in the case of any unaudited
interim financial statements) in conformity with GAAP applied on a consistent
basis (except as may be indicated in the notes thereto).
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(b) The accountants who certified the financial statements and supporting
schedules included in Metaldyne's annual reports on Form 10-K for its fiscal
year ended December 31, 2001 are independent public accountants as required by
the Securities Act.
7.8 Conduct of Business. Since September 30, 2002, Metaldyne and its
Subsidiaries, taken as a whole, have conducted their business in the ordinary
course of business and consistent with past practice and have not:
(a) suffered any damage, destruction or Loss to any of their assets
(whether or not covered by insurance) that has had or would reasonably be
expected to have, individually or in the aggregate, a Metaldyne Material
Adverse Effect;
(b) taken any action or failed to take any action, or made any
expenditure or failed to make any expenditure, or entered into or
authorized any Contract or transaction, in each case having a value in
excess of $1,000,000, other than in the ordinary course of business and
consistent with past practice;
(c) declared, set aside or paid any dividend or other distribution
with respect to any shares of Capital Stock of Metaldyne, or repurchased,
redeemed or otherwise acquired any outstanding shares of Capital Stock or
other securities of, or other ownership interests in, Metaldyne or any of
its Subsidiaries (other than ordinary course open market purchases made in
connection with Metaldyne's stock incentive plan);
(d) amended any material term of any outstanding security of Metaldyne
or any of its Subsidiaries;
(e) incurred, assumed or guaranteed any Indebtedness in excess of
$1,000,000, individually or in the aggregate, other than (i) between
Metaldyne and its Subsidiaries or between two or more of Metaldyne
Subsidiaries or (ii) trade payables in the ordinary course of business
consistent with past practice;
(f) sold, transferred, conveyed, assigned or otherwise disposed of any
assets of the business of Metaldyne or any of its Subsidiaries where the
relevant asset has a value in excess of $1,000,000, except sales of (i)
inventory in the ordinary course of business and consistent with past
practice; (ii) accounts receivables in securitization financing
transactions or (iii) equipment in sale leaseback financing transactions;
(g) made any material changes in any method of the accounting or tax
systems, policies, principles or practice by Metaldyne or any of its
Subsidiaries, except as required by GAAP, Regulation S-X under the Exchange
Act or other applicable Law;
(h) acquired or leased any assets outside the ordinary course of
business or made any of their material properties subject to any Lien;
(i) authorized or made any capital expenditures which individually or
in the aggregate are in excess of $1,000,000 other than capital
expenditures contemplated by the
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budget for the business of Metaldyne and its Subsidiaries previously
delivered or made available to Seller;
(j) terminated or modified, amended or otherwise altered or changed
any of the material terms or provisions of any material Contract the terms
of which provide for, individually or in the aggregate, amounts to be paid
either to or by Metaldyne or any of its Subsidiaries in excess of
$1,000,000; or
(k) (i) adopted or amended in any material respect any bonus, profit
sharing, compensation, severance, termination, stock option, stock
appreciation right, pension, retirement, employment or other employee
benefit agreement, trust, plan or other arrangement for the benefit or
welfare of any director or elected officer of Metaldyne or any of its
Subsidiaries, (ii) increased in any material respect any compensation or
fringe benefits of any director or elected officer of Metaldyne or any of
its Subsidiaries or (iii) made payment of any benefit not required by any
existing agreement or placed any assets in any trust for the benefit of any
director or elected officer of Metaldyne or any of its Subsidiaries not
required by any existing agreement. 7.9 Insurance. Metaldyne and/or its
Subsidiaries maintain insurance that is adequate to protect Metaldyne and
its Subsidiaries and their respective financial conditions against the
Liabilities, claims and risks against which it is customary for companies
involved in the businesses conducted by Metaldyne and its Subsidiaries to
insure.
7.10 Litigation. (a) Except as set forth in the Metaldyne SEC Documents,
there are no actions or suits, arbitrations, regulatory proceedings or other
litigation, proceedings or governmental investigations pending or, to the
Knowledge of Metaldyne, threatened against or affecting the business of
Metaldyne or any of its Subsidiaries that would reasonably be expected to have,
individually or in the aggregate, a Metaldyne Material Adverse Effect. Except as
set forth in the Metaldyne SEC Documents, neither Metaldyne nor any of its
Subsidiaries is subject to any order, judgment, decree, injunction, stipulation
or consent order of or with any court or other Governmental Authority affecting
the business of Metaldyne or any of its Subsidiaries that would reasonably be
expected to have, individually or in the aggregate, a Metaldyne Material Adverse
Effect.
(b) There are no claims, actions, suits, proceedings or investigations
pending or, to the Knowledge of Metaldyne, threatened by or against Metaldyne or
any of its Subsidiaries or any of their respective officers, directors,
employees or agents in their capacities as such, with respect to this Agreement
or the Related Agreements or in connection with the Transactions.
7.11 Outstanding Debt. Except as set forth in the Metaldyne SEC Documents
(including, without limitation, as reflected in the financial statements
included in the Metaldyne SEC Documents), neither Metaldyne nor any of its
Subsidiaries has any outstanding Indebtedness or is a guarantor or otherwise
contingently liable for any such Indebtedness. There exists no default by
Metaldyne or any of its Subsidiaries (or to the Knowledge of Metaldyne, by any
other party) under the provisions of any instrument evidencing any Indebtedness
of Metaldyne or any of its Subsidiaries, or of any agreement relating thereto.
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7.12 No Undisclosed Liabilities. There are no liabilities or obligations of
Metaldyne or any of its Subsidiaries of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, other than: (a)
liabilities or obligations disclosed in the Metaldyne SEC Documents (including,
without limitation, liabilities and obligations provided for in the financial
statements included in the Metaldyne SEC Documents); (b) liabilities or
obligations incurred in the ordinary course of business consistent with past
practice since September 30, 2002; (c) liabilities or obligations under this
Agreement and the Related Agreements; and/or (d) liabilities or obligations that
would not reasonably be expected to have, individually or in the aggregate, a
Metaldyne Material Adverse Effect.
7.13 Brokers. Metaldyne has not used any broker or finder in connection
with the Transactions, and neither Seller nor any Affiliate of Seller has or
shall have any Liability or otherwise suffer or incur any Loss as a result of,
or in connection with, any brokerage or finder's fee or other commission of any
Person retained by Metaldyne in connection with any of the Transactions.
7.14 Investment Company Act. Neither Metaldyne nor any of its Subsidiaries
is, nor in the event of the Metaldyne Call Option Closing and the issuance and
sale of the Series A-1 Preferred Stock pursuant to the Operating Agreement and
after the application of the net proceeds therefrom will be, an "investment
company" or an entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended.
7.15 Registration Rights. Except as provided by the Metaldyne Shareholders
Agreement or otherwise disclosed in the Metaldyne SEC Documents, there are no
Persons with registration rights or other similar rights to have any securities
registered by Metaldyne under the Securities Act.
7.16 No Other Representations or Warranties. Except for the representations
and warranties of Metaldyne expressly set forth in this Agreement or any of the
Related Agreements, neither Metaldyne nor any other Person makes any other
express or implied representation or warranty on behalf of Metaldyne, in each
case, in respect to Metaldyne or any of its Subsidiaries. The representations
and warranties made in this Agreement and the Related Agreements in respect to
Metaldyne and its Subsidiaries are in lieu of all other warranties Metaldyne
might have given Seller. All other warranties that Metaldyne or anyone
purporting to represent Metaldyne gave or might have given, or which might be
provided or implied by applicable law or commercial practice, in respect to
Metaldyne or its Subsidiaries are hereby expressly excluded.
ARTICLE VIII
COVENANTS
8.1 Implementing Agreement. On the terms and subject to the conditions
hereof, from and after the date hereof, each party hereto shall use its
commercially reasonable efforts to take all action required of it to fulfill its
obligations under the terms of this Agreement, and to facilitate the
consummation of the transactions contemplated hereby. Subject to the terms and
conditions of this Agreement, each party hereby agrees that it shall not,
directly or indirectly, take any other action (or
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refrain from taking any action) that would reasonably be expected to have the
effect of preventing or materially delaying such party's performance of its
obligations under this Agreement, except as required by applicable Law. Each of
the parties shall keep the other parties reasonably apprised of the status of
matters relating to the completion of the transactions contemplated hereby,
including promptly furnishing the other with copies of material notices or other
material written communications received by any of them or by any of their
Subsidiaries, from any third party and/or Government Authority with respect to
the transactions contemplated by this Agreement, which would reasonably be
expected to result in the prevention or material delay of the transactions
contemplated hereby.
8.2 Access to Information and Facilities. From and after the date hereof
and subject to applicable Law, Seller shall give Metaldyne and Metaldyne's
representatives reasonable access at reasonable times, on reasonable notice, to
all of the Transferred Assets and the books and records of Seller used in or
related to the Business (including, without limitation, the Facility), and shall
make Seller's officers, managers and employees who have responsibility for the
Business, reasonably available to Metaldyne and its representatives as Metaldyne
and its representatives, in each case, shall from time to time request upon
reasonable notice. All information and documents obtained by Metaldyne shall be
subject to the Confidentiality Agreement between Metaldyne and Seller dated
October 9, 2001.
8.3 Consents and Approvals. Each of Seller and Metaldyne shall use its
commercially reasonable efforts to obtain all consents, approvals, certificates
and other documents required in connection with the performance by it of this
Agreement and the Related Agreements to which it is to be a party and the
consummation of the transactions contemplated hereby and thereby and which are
set forth on Schedules 5.3 and 6.3 of the Seller Disclosure Schedules and
Schedule 7.3 of the Metaldyne Disclosure Schedules; provided, however, that
neither Seller nor Metaldyne shall incur any obligation or be obligated to pay
any additional consideration therefor, other than (i) nominal filing,
application or similar costs or fees, (ii) nominal amounts to cover processing
and review by third parties of such consents, approvals, certificates and
documents, including de minimis amounts of attorneys' fees, and (iii) any
amounts that were due and payable prior to Closing, which amounts are required
by Contract or applicable Law to be paid prior to consummation of the
transactions contemplated hereby; provided, further, however, that no contact
shall be made by Seller or Metaldyne or any representative of Seller or
Metaldyne with any third party to obtain any such consent or approval except
following prior consultation with the other party. Each of Seller and Metaldyne
shall make all filings, applications, statements and reports to all Governmental
Authorities and other Persons that are required to be made by it prior to the
Closing Date by, or on behalf of, any such party pursuant to any applicable Law
or Contract in connection with this Agreement and the Related Agreements and the
transactions contemplated hereby and thereby.
8.4 Use of Name. From and after the Closing Date, Seller agrees that it
shall not, and that it shall cause its Affiliates not to, directly or
indirectly, use as a trade name, trademark or service ▇▇▇▇ the name "NC-M
Chassis Systems", or any other name that is confusingly similar thereto in sound
or appearance. From and after the Closing Date, the Company agrees that it shall
not, and that it shall cause its Affiliates not to, directly or indirectly, use
as a trade name, trademark or service ▇▇▇▇ that is confusingly similar to any
trade name, trademark or service ▇▇▇▇ of Seller or of any of Seller's
Affiliates.
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8.5 Transfer Taxes. (a) Seller shall be responsible for the timely payment
of, and shall indemnify and hold harmless the Company against, all sales
(including, without limitation, bulk sales), use, value added, documentary,
stamp, gross receipts, registration, transfer, conveyance, real property gains
or transfer, excise, recording, license and other similar taxes and fees
("Transfer Taxes"), arising out of or in connection with or attributable to the
transactions effected pursuant to this Agreement and the Related Agreements.
(b) As between Seller and the Company on the one hand, and Metaldyne, on
the other hand, the party that has the primary responsibility under applicable
Law for filing any Tax Return required to be filed in respect of Transfer Taxes
shall prepare and timely file such Tax Return; provided that such party's
preparation of such Tax Return shall be subject to the other party's approval,
which approval shall not be withheld unreasonably.
(c) The parties will cooperate with each other in attempting to minimize
Transfer Taxes.
8.6 Publicity. Subject to applicable Law, including the requirements of the
Exchange Act, each of the parties agree that, from and after the date hereof
through the earlier of the termination of this Agreement and January 1, 2005, no
public release or announcement concerning this Agreement, the Related Agreements
or the transactions contemplated hereby or thereby shall be issued without the
joint consent with the other parties, such consent not to be unreasonably
withheld or delayed, and, in connection therewith, the issuing party shall
provide each other party with a reasonable opportunity to review such proposed
release prior to publication thereof. Notwithstanding the foregoing, if any
party is required to disclose the terms of this Agreement or any Related
Agreement pursuant to the Securities Act or the Exchange Act, it shall use its
commercially reasonable efforts to avoid any such disclosure and shall, whenever
reasonably practicable, consult with the other party concerning the timing and
content of such disclosure before the same is made.
8.7 Preservation of Business. From and after the date hereof until the
Closing Date, except as set forth on Schedule 8.7 or with the prior written
consent of Metaldyne (which consent shall not be unreasonably withheld or
delayed), Seller shall: (a) operate the Business only in the ordinary course of
business and consistent with past practice; (b) preserve intact the present
business organization and personnel of the Business and maintain the Transferred
Assets in their present repair, working order and operating condition, subject
only to ordinary wear and tear; (c) preserve the goodwill and business
relationships of the Business with customers, suppliers, independent
contractors, employees and other Persons material to the operation of the
Business; and (d) use commercially reasonable efforts to preserve in full force
and effect its permits and licenses included in the Transferred Assets.
Without limiting the generality of the foregoing, from the date hereof
until the Closing Date, Seller shall not, without the prior written consent of
Metaldyne (which consent shall not be unreasonably withheld or delayed):
(i) sell, transfer, convey, assign or otherwise dispose of any of the
Transferred Assets or assets that, if not sold, transferred, conveyed,
assigned or otherwise disposed of
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prior to the Closing, would constitute Transferred Assets, except sales of
Inventory in the ordinary course of business and consistent with past
practice;
(ii) make any material changes in its accounting or tax systems,
policies, principles or practices of the Business, except as required by
applicable Law, GAAP or applicable to all or a substantial portion of
Seller's facilities or operations;
(iii) acquire or lease any assets of the Business outside the ordinary
course of business or any assets which are material to the Business or make
any Transferred Assets subject to any Lien, except for Permitted Liens;
(iv) authorize or make any capital expenditures in connection with the
Business which individually or in the aggregate are in excess of $1,000,000
other than capital expenditures contemplated by Schedule 8.7;
(v) terminate or modify, amend or otherwise alter or change any of the
material terms or provisions of any Assumed Contract the terms of which
provide for, individually or in the aggregate, amounts to be paid either to
or by Seller or the Business in excess of $50,000; or
(vi) agree to any repricing, giveback or discount pursuant to or in
connection with any Assumed Contract which is not provided for by the terms
of such Assumed Contract or resulting in payments in excess of $25,000.
For the avoidance of doubt, notwithstanding anything to the contrary in
this Section 8.7, Seller shall have the right to, prior to the Closing, (i) take
any action to the extent such action is contemplated by the Agreement or any of
the Related Agreements, (ii) take any action to the extent undertaken at the
written request of Metaldyne, (iii) take or omit to take any action which it is
required to take or omit to take by applicable Law or any Governmental Authority
and (iv) take all such actions as are reasonably necessary to cause the
Agreement or the Related Agreements to be performed and the Transactions to be
consummated.
8.8 Tax Matters. After the Closing, the Company shall file all Tax Returns
required to be filed by it as soon as practicable after the end of each Tax
year. The Company shall supply all holders of Units a copy of the Company's
federal and state income Tax Returns (in addition to any information returns
required to be provided). After the Closing Date, each of the parties shall (and
shall cause their respective Affiliates to) (i) assist in preparing the
Company's Tax Returns and (ii) cooperate fully in preparing for any audits of,
or disputes with any tax authority regarding, any Tax Return of the Company.
Seller shall not dispose of any Tax work papers, books or records relating to
the operation of the Business by the Company during the six (6) year period
following the Closing Date, and thereafter, if the Company provides notice to
Seller within six (6) months of the end of such six (6) year period, Seller
shall give the Company reasonable written notice before disposing of any such
items.
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8.9 Maintenance of Insurance. Seller shall continue to cover the Business
and the Transferred Assets under its then applicable insurance or self-insurance
program in effect from time to time through the JV Termination Date.
8.10 Title Insurance. Seller shall arrange for the Company to receive a
Title Policy at the sole cost and expense of Seller, except that Metaldyne shall
pay any and all costs relating to any endorsements that it may request. Seller
shall deliver to the Title Company any affidavits or indemnities required by the
Title Company in connection with the delivery of the Title Policy.
8.11 Survey. At or prior to the Closing, Seller shall deliver the Interim
Survey to Metaldyne and the Title Company, and within thirty (30) days of the
Closing, Seller shall deliver the Survey to Metaldyne and the Title Company. All
costs and expenses of the Interim Survey and the Survey shall be borne to the
extent of the first $50,000 by Seller and any excess by Metaldyne.
8.12 Financial Statements. It is hereby acknowledged that Metaldyne has
submitted a letter to the SEC dated November 4, 2002 in which it is seeking
relief with respect to the requirements of Regulation S-X which may be
applicable to Metaldyne as a result of the transactions contemplated hereby (the
"Relief Letter"). Metaldyne agrees to use its reasonable best efforts to follow
up with the SEC to pursue the relief sought by the Relief Letter. To the extent
that any of the following requirements would be reduced or otherwise modified as
a result of the SEC's response to the Relief Letter or otherwise, Metaldyne
shall promptly (but in no event more than five (5) Business Days following
receipt of such response or other information) inform Seller and provide Seller
with the correspondence from the SEC to that effect and the following shall be
deemed modified to the extent thereof. If the SEC denies or fails to
definitively respond to the Relief Letter on or prior to the Closing Date,
following the Closing Date, Seller shall prepare and deliver to Metaldyne the
following financial statements (which shall be prepared in accordance with GAAP)
and, in the case of annual financial statements, shall cause KPMG LLP, its
independent auditors ("KPMG"), to audit and, in the case of unaudited quarterly
financial statements, to cause KPMG to conduct a SAS 71 review typical for a
public reporting entity: (1) to permit Metaldyne to make any required filings on
Form 8-K under the Exchange Act following the Closing Date, as soon as
reasonably possible but in no event later than 55 days after the Closing Date
(which time period shall be extended to 65 days in the event that the request in
the Relief Letter or the equivalent thereof is not granted and it would not
prejudice Metaldyne's ability to comply with its reporting obligations under the
Exchange Act), (x) audited financial statements (comprised of consolidated
balance sheets, statements of operations and cash flows and statements of
changes in shareholder's equity) of the Business for the two years ended
December 31, 2002 (and the statements of operations and cash flows and
statements of changes in shareholder's equity for the year ended December 31,
2000 if necessary in the reasonable opinion of Metaldyne's auditors to comply
with the requirements of Form 8-K based upon financial information supplied by
Seller to Metaldyne) and (y) with respect to quarterly periods occurring after
December 31, 2002 but prior to the Closing Date (if any), unaudited financial
statements of the Business (comprised of consolidated balance sheets, statements
of operations and cash flows and statements of changes in shareholder's equity),
together with the comparable quarterly period(s) of the immediately preceding
year; and (2) if Metaldyne provides to Seller a written notice (a "Financing
Notice") of an intention to undertake a securities offering (which notice shall
(1) state that Metaldyne intends to pursue a public or private securities
offering and (2) specifically list the financial information required in
connection
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therewith), to permit Metaldyne to comply with the requirements of the
Securities Act, as promptly as reasonably possible following receipt of the
Financing Notice, such additional historical financial information as would be
required, in the reasonable opinion of Metaldyne's independent auditors, for
inclusion in a registration statement filed under the Securities Act in
accordance with the requirements of Regulation S-X under the Securities Act (all
such financial statements, together with the Financial Statements, the "Complete
Financial Statements"). In addition to the foregoing, Seller shall, and shall
cause KPMG to, cooperate with Metaldyne's independent auditors in the
preparation of such pro forma financial information as may be required to be
included in a filing on Form 8-K of Metaldyne or as Metaldyne may be required to
include in connection with any securities offering pursuant to the requirements
of Regulation S-X under the Securities Act or may be advised by the lead
underwriter or placement agent in any securities offering is highly advisable
for the securities offering. Metaldyne shall promptly reimburse Seller for all
out-of-pocket costs and expenses incurred in connection with KPMG LLP's audit
and review of the Complete Financial Statements (other than the Financial
Statements, which are not being prepared for this purpose) and in connection
with any securities offering. Each of the Company and Metaldyne acknowledge that
(a) the Complete Financial Statements are being prepared for the purpose of
complying with the rules and regulations of the SEC and (b) the financial
position of the Business as reflected in the Complete Financial Statements may
differ from that which would have resulted had the Business operated
autonomously or as an entity independent of Seller. In the event that the Seller
is unable to comply with the provisions of this Section notwithstanding the good
faith efforts of Seller, there shall be no liability on the part of Seller for a
breach of this Section and the only consequences will be those following from
the failure to provide the information under Article 15 of the Operating
Agreement.
8.13 Further Assurances. From time to time, without further consideration,
each of the parties hereto will execute and deliver such documents as such other
party may reasonably request in order more effectively to consummate the
Transactions.
8.14 UAW Agreement. (a) In its negotiations with the International UAW as
to a new collective bargaining agreement to become effective in 2003, Seller
shall use its commercially reasonable efforts (which in no event will include
agreeing to arrangements that, in Seller's reasonable judgment, would materially
and adversely affect any of Seller's facilities other than the Facility) to
negotiate the sale of the Facility and to obtain the Facility's complete
withdrawal from the DaimlerChrysler/UAW National Agreement including all side
letters, and including, but not limited to, provisions regarding labor
protection (including, but not limited to, the so-called the so-called ESL, BEL,
SWEL and any and all other job security and job security provisions),
outsourcing restrictions, job relocation provisions, mandatory classification
and training provisions, and all other terms and conditions which would in any
way limit the ability of Metaldyne and/or the Company to operate the Facility in
the manner contemplated by the collective bargaining agreement between Metaldyne
and/or the Company and UAW Local 371 following its possible exercise of the
Metaldyne Call Option under the Operating Agreement.
(b) At the request of Metaldyne, Seller shall provide Metaldyne with
regular updates on negotiations with the International UAW to the extent the
negotiations impact the sale and the employee programs negotiated as part of the
sale of the Facility, as well as copies of all relevant provisions of any
tentative or final agreements reached.
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(c) Seller shall use its commercially reasonable efforts to assist
Metaldyne in obtaining all Local Qualified Collective Bargaining Agreements (as
defined in the Operating Agreement) and shall cause the Company to execute such
Local Qualified Collective Bargaining Agreements upon request by Metaldyne.
8.15 Demolition. If Metaldyne so requests before the date that is six (6)
months following the later of the JV Termination Date or the date on which there
is no additional Product being made for Seller under the Supply Agreement in the
North Building or the Forge Building, Seller shall complete, in accordance with
all applicable Laws, the demolition of the North Building and the Forge Building
within eighteen (18) months after such request; provided that (i) Seller shall
not be obligated to spend more than $6,000,000 in the aggregate in Demolition
Costs and (ii) Seller shall control all actions relating to such demolition. The
parties acknowledge and agree that their mutual intent is for such demolition to
be completed on or prior to December 31, 2006. Seller shall (A) furnish to
Metaldyne in advance of commencing such demolition a written demolition plan and
provide Metaldyne with a reasonable opportunity to review and approve (which
approval shall not be unreasonably withheld or delayed) such plan (B) demolish
the North Building and the Forge Building in accordance with such approved plan
and (C) keep Metaldyne reasonably informed as to the progress of the same. For
purposes of this Section 8.15, "Demolition Costs" shall mean only Seller's
out-of-pocket costs directly related to the physical demolition of the North
Building and the Forge Building and, for the avoidance of doubt, shall not
include any other Liabilities that may arise out of or result from such
demolition, such as Liabilities under Environmental Laws or Environmental Claims
or the costs of any Remedial Action.
8.16 Baseline Environmental Remediation. (a) Within thirty (30) days after
the Closing Date, Metaldyne shall engage a qualified environmental consultant
reasonably acceptable to Seller (the "Consultant") to conduct a comprehensive
Phase II Environmental Site Assessment ("Phase II ESA") of the Real Property
(including, without limitation, the Facility), or such portion thereof and any
other Transferred Assets as Metaldyne shall deem appropriate. The Phase II ESA
shall be completed by [*]. The purpose and intent of the Phase II ESA shall be
to identify Environmental Conditions at the Real Property (including, without
limitation, the Facility) and such other Transferred Assets. Seller shall
promptly provide the Consultant with all reasonable and necessary access to the
Real Property (including, without limitation, the Facility) and such other
Transferred Assets and to perform and complete its Phase II ESA. Within ten (10)
days of receiving the final Phase II ESA, Metaldyne shall provide copies of same
to Seller. [*] Metaldyne and Seller shall share equally the complete costs for
the preparation of the Phase II ESA, including all fees and expenses of the
Consultant. In selecting the Consultant to perform the Phase II ESA, Metaldyne
shall ensure that the terms of engagement include a provision that Seller may
rely upon the contents of the final Phase II ESA. The provisions of this Section
8.16 shall not in any way bar or preclude a claim by Metaldyne for
indemnification under the provisions of Section 13.9 for any Loss relating to,
arising from or in connection with an Environmental Condition not identified in
the Phase II ESA.
(b) Seller shall provide Metaldyne with copies of all reports, notices and
correspondence that Seller or any of its Affiliates delivers to or receives from
any Governmental Authority in connection with any Environmental Conditions or
current or planned Remedial Action with respect to the Real Property (including,
without limitation, the Facility) and any other Transferred Assets.
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Seller also shall copy Metaldyne on Environmental Reports regarding any current
or planned Remedial Action by Seller or any of its Affiliates with respect to
the Real Property. Seller agrees to comply with all applicable Environmental
Laws in connection with any Remedial Action with respect to the Real Property
(including, without limitation, the Facility) and any other Transferred Assets.
(c) Each of Seller and Metaldyne agree to promptly notify the other in
writing upon being served with any summons, citation, subpoena, complaint,
indictment, information, notice of violation or other document relating to any
Environmental Conditions or Remedial Action with respect to the Real Property
(including, without limitation, the Facility) and any other Transferred Assets,
whether civil, criminal, or investigative; provided, however, that the failure
of a party to give such notice shall not adversely affect the party's rights
under this Agreement except to the extent that the party who is not promptly so
notified shall have been materially prejudiced as a result of such failure.
8.17 Intellectual Property Licenses; Discussions Regarding Ownership of
Certain Intellectual Property. (a) The Company hereby grants to Seller and its
Affiliates a non-exclusive worldwide, paid-up, irrevocable and perpetual license
to the Transferred Intellectual Property to practice the same in connection with
the products of Seller or its Affiliates, including, without limitation, (i) to
make, have made, use, offer to sell, sell and import any products, and (ii) to
reproduce, distribute with their products, display publicly, perform publicly,
and prepare derivative works based upon, any copyrighted work.
(b) Seller hereby grants to the Company a non-exclusive, worldwide,
paid-up, royalty-free, irrevocable and perpetual license (assignable to any
successor of the Company), with the right to sublicense, to use all Intellectual
Property presently owned by Seller in the designs of the Ball Joints and in the
Current Processes not transferred to the Company under Section 2.1 to make, have
made, import, use, offer to sell and sell any product to any Person. To the
extent Seller can sublicense the Company under any Intellectual Property
presently licensed from third parties in the designs of the Ball Joints or in
the Current Processes not transferred to the Company under Section 2.1 without
consent of or payment to such third parties, then Seller hereby grants to the
Company the sublicense that Seller is permitted to grant to the Company. Seller
also grants to the Company a non-exclusive, worldwide, paid-up, royalty-free
license to use all Intellectual Property presently owned by Seller in the
designs of all Current Products and Launch Products, other than the Ball Joints,
to make, have made, use, offer to sell and sell products only to Seller or to
Seller's Affiliates. Seller will also grant the Company that sublicense(s) under
the Settlement Agreement between Seller and the Lemelson Medical, Education and
Research Foundation Limited Partnership dated May 22, 1998 that it is permitted
to grant the Company under that Settlement Agreement.
(c) All right, title and interest in and to all Intellectual Property
developed by the Company after the Closing Date, including, without limitation,
any improvement or modification on any Current Product or Current Process, shall
be the sole and exclusive property of the Company and Seller shall gain no
right, title or interest in such Intellectual Property by virtue of this
Agreement or any of the Related Agreements (other than as provided in a written
agreement between the Company and Seller, such as in a purchase order of Seller
under which the Company supplies products to Seller) or Seller's ownership of
any Units. In the event of the JV Termination pursuant to the Met-
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aldyne Put Option Closing or the DaimlerChrysler Call Option Closing,
concurrently with such closing, the Company shall grant to Metaldyne a
non-exclusive, worldwide, paid-up, royalty free, assignable, irrevocable and
perpetual license, with the right to sublicense, to use all Intellectual
Property developed by the Company from the Closing Date through the JV
Termination Date, including, without limitation, any improvement or modification
in any Current Product or Current Process.
(d) During the period from the date of this Agreement until the Metaldyne
Call Option Closing under the Operating Agreement:
(i) If the Company licenses any Intellectual Property from any third
party, the Company will ensure that the license (i) will survive the
exercise of any put or call option under the Operating Agreement and (ii)
is transferrable to any successor of the Company, including any Unitholder
(as defined in the Operating Agreement).
(ii) To the extent that Metaldyne or an Affiliate of Metaldyne
performs any design or development work pertaining to any product that the
Company produces or plans to produce, Metaldyne agrees to and hereby does
grant the Company a non-exclusive, paid-up, royalty free, irrevocable,
worldwide license, with the right to sublicense Seller and Seller's
Affiliates as to any Seller Related Intellectual Property, to use any
Intellectual Property in such design or development work in connection with
the manufacture and sale of products, including, without limitation, to
make, use, sell, offer to sell and import any product and any improvement
thereof, and to reproduce, distribute in connection with the Company's
products, display publicly, perform publicly and prepare derivative works
based on any copyrighted work. Metaldyne or its Affiliates, as applicable,
will also provide to the Company all information and documentation
reasonably necessary for the Company to practice the Intellectual Property
licensed under this Section 8.17(d)(ii) to the fullest extent under the
license and to provide the same to Seller and its Affiliates as to all
Seller Related Intellectual Property.
(iii) To the extent that Metaldyne allows any of its Intellectual
Property or Intellectual Property of any of its Affiliates to be
incorporated into or used to make any product made or planned to be made by
the Company, then Metaldyne grants the Company the license provided by
Section 8.17(d)(ii).
(e) During the period from Closing until the exercise of the Metaldyne Call
Option under the Operating Agreement, Seller agrees to negotiate in good faith
with the Company transferring ownership of any Intellectual Property in the
Current Processes that was not transferred to the Company under Section 2.1 and
any Intellectual Property in the Ball Joints. In the event that Seller agrees
(which decision will be at Seller's sole discretion) to transfer any such
Intellectual Property, it will be deemed included in the Transferred
Intellectual Property licensed to Seller and its Affiliates under Section
8.17(a).
8.18 Notification of Certain Matters. From time to time prior to the
Closing Date, and as soon as reasonably practicable after becoming aware of such
a matter, Seller and Metaldyne, as applicable, shall promptly notify the other
of (i) any matter that, if known, existing or occurring as of
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the date of this Agreement, would have been required to be set forth or
described on any schedule to this Agreement for which it has primary
responsibility, or that is necessary to complete or correct any information in
any of its representations or warranties contained in this Agreement, (ii) the
existence or non-existence of any circumstance or condition, or the occurrence
or non-occurrence of any event, that would be reasonably likely to cause any
condition to the obligations of such party to consummate the Transactions not to
be satisfied or (iii) the failure of such party to perform, comply with or
satisfy any covenant, agreement or conditions to be performed, complied with or
satisfied by it pursuant to this Agreement that would reasonably be likely to
result in any condition to the obligations of such party to consummate the
Transactions not to be satisfied.
8.19 Cooperation on Subsequent Litigation. With respect to any action,
suit, claim, notice of potential claim, request for accommodation, arbitration,
regulatory proceeding or other litigation, proceedings or investigation by a
Government Authority affecting the Business or any of the Transferred Assets
that is initiated after the Closing Date (whether pending or threatened and
whether or not an indemnifiable claim pursuant to Article XIII), each party
hereto shall use its commercially reasonable efforts to cooperate with any other
party hereto in the defense or prosecution thereof, including, without
limitation, the sharing of any records an information reasonably relevant to
such claim and making a reasonable number of employees available on a mutually
convenient basis to provide additional information and explanation of any
material relevant to such claim.
8.20 Board Approval. Promptly following the date hereof, but in no event
later than ten (10) Business Days hereafter, each of Seller and Metaldyne shall
use its reasonable best efforts and take such further actions as may be required
to obtain and secure the approval of its board of directors of this Agreement,
the Related Agreements and the transactions contemplated hereby and thereby.
8.21 Finalization of Exhibits. Each of Seller and Metaldyne shall use its
reasonable best efforts to, as promptly as practicable after the date hereof,
(a) cooperate in drafting and finalizing forms of the Indenture, the Series A-1
Preferred Stock Investor Rights Agreement and the Senior Subordinated Notes
Registration Rights Agreements (each as defined in the Operating Agreement),
having substantially the terms set forth in the term sheets for each such
document attached to the Operating Agreement as of the date hereof and (b)
following finalization of such forms, take such actions as are necessary to
cause the Operating Agreement to be amended to replace the applicable term
sheets attached thereto with the applicable form.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH PARTY
The obligations of each of the parties hereto to consummate the
Transactions are subject to the satisfaction, or wavier by each of the parties
hereto (to the extent permitted by applicable Law), of the following conditions:
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9.1 Governmental Approvals. Each of the parties hereto and any other Person
required in connection with the Transactions to make or obtain any Governmental
Approvals under applicable Law shall have made or obtained such Governmental
Approvals.
9.2 No Adverse Proceedings. No applicable Law, temporary restraining order,
preliminary or permanent injunction or other judgment or order issued by any
court of competent jurisdiction or other Governmental Authority shall be in
effect preventing the consummation of the transactions contemplated by this
Agreement or any of the Related Agreements in any material respect or imposing
any material limitation on the ability of the Company to receive or own the
Transferred Assets (including, without limitation, the Facility) or to operate
the Business. No action, suit or proceeding shall have been instituted, or shall
be pending or threatened, by a Governmental Authority seeking to restrain or
prohibit the consummation of the transactions contemplated by this Agreement or
any of the Related Agreements in any material respect or to impose any material
limitation on the ability of the Company to receive or own the Transferred
Assets (including, without limitation, the Facility) or to operate the Business.
ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF
THE COMPANY AND SELLER
The obligations of the Company and Seller to consummate the Transactions
are subject to the satisfaction, or waiver by Seller (to the extent permitted by
applicable Law), of the following conditions:
10.1 Accuracy of Representations and Warranties. The representations and
warranties of Metaldyne contained in Article VII shall be accurate and complete
when made and as of the Closing Date (except to the extent expressly made as of
an earlier date, in which case as of such date) except where the failure of such
representations and warranties to be so accurate and complete (without giving
effect to any limitation as to "materiality" or "Metaldyne Material Adverse
Effect" set forth therein) has not had and would not reasonably be expected to
have, individually or in the aggregate, a Metaldyne Material Adverse Effect.
10.2 Compliance with Agreements and Covenants. Metaldyne shall have
performed and complied in all material respects with all of its covenants,
obligations and agreements contained in this Agreement to be performed and
complied with by it on or prior to the Closing Date.
10.3 Certificates. Metaldyne shall have furnished to Seller a certificate,
dated the Closing Date, certifying as to the matters set forth in Sections 10.1
and 10.2.
10.4 Requisite Consents. Metaldyne shall have obtained each of the consents
listed on Schedule 10.4.
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10.5 No Metaldyne Material Adverse Change. No Metaldyne Material Adverse
Change shall have occurred and be continuing, and no event shall have occurred
which would reasonably be expected to have, individually or in the aggregate, a
Metaldyne Material Adverse Effect.
10.6 Board Approval. The board of directors of Seller shall have approved
this Agreement, the Related Agreements and the transactions contemplated hereby
and thereby.
ARTICLE XI
CONDITIONS PRECEDENT TO OBLIGATIONS OF METALDYNE
The obligations of Metaldyne to consummate the Transactions are subject to
the satisfaction, or waiver by Metaldyne (to the extent permitted by applicable
Law), of the following conditions:
11.1 Accuracy of Representations and Warranties. (a) The representations
and warranties of Seller contained in Article V shall be accurate and complete
when made and as of the Closing Date (except to the extent expressly made as of
an earlier date, in which case as of such date), except where the failure of
such representations and warranties to be so accurate and complete (without
giving effect to any limitation as to "materiality" or "Business Material
Adverse Effect" set forth therein) has not had and would not reasonably be
expected to have, individually or in the aggregate, a Business Material Adverse
Effect.
(b) The representations and warranties of Seller contained in Article VI
shall be accurate and complete when made and as of the Closing Date (except to
the extent expressly made as of an earlier date, in which case as of such date),
except where the failure of such representations and warranties to be so
accurate and complete (without giving effect to any limitation as to
"materiality" or "Company Material Adverse Effect" set forth therein) has not
had and would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.
11.2 Compliance with Agreements and Covenants. Each of the Company and
Seller shall have performed and complied in all material respects with all of
its covenants, obligations and agreements contained in this Agreement to be
performed and complied with by it on or prior to the Closing Date.
11.3 Certificates. Seller shall have furnished to Metaldyne a certificate,
dated the Closing Date, certifying as to the matters set forth in Sections 11.1
and 11.2, and the Company shall have furnished to Metaldyne a certificate, dated
the Closing Date, certifying as to the matters set forth in Section 11.2.
11.4 Contribution. The Contribution shall have occurred.
11.5 Requisite Consents. Seller shall have obtained each of the consents
listed on Schedule 11.5.
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11.6 No Business Material Adverse Change. No Business Material Adverse
Change shall have occurred and be continuing, and no event shall have occurred
which would reasonably be expected to have, individually or in the aggregate, a
Business Material Adverse Effect or a Company Material Adverse Effect.
11.7 Board Approval. The board of directors of Metaldyne shall have
approved this Agreement, the Related Agreements and the transactions
contemplated hereby and thereby.
ARTICLE XII
TERMINATION
12.1 Termination. Anything in this Agreement to the contrary
notwithstanding, this Agreement may be terminated, and the transactions
contemplated hereby may be abandoned, in any of the following ways, at any time,
on or prior to the Closing Date:
(a) by mutual written consent of each party hereto;
(b) by any party, if:
(i) the Closing has not occurred on or before February 28, 2003
(the "End Date"), provided that the right to terminate this Agreement
pursuant to this Section 12.1(b)(i) shall not be available to any
party whose breach of any provision of this Agreement results in the
failure of the Closing to occur by that time; or
(ii) there shall be any applicable Law or regulation that makes
consummation of the Transactions illegal or otherwise prohibited or
any judgment, injunction, order or decree of any Governmental
Authority having competent jurisdiction enjoining any party from
consummating the Transactions is entered and such judgment,
injunction, order or decree shall have become final and nonappealable;
(c) by Seller, if there shall have been (i) a material breach of (A)
any material covenant of Metaldyne or (B) any other covenant of Metaldyne,
which breach would be reasonably expected to result, individually or in the
aggregate, in the prevention or material delay of the transactions
contemplated by this Agreement or have a Metaldyne Material Adverse Effect,
or (ii) a breach of a representation or warranty of Metaldyne hereunder
that would give rise to the failure of a condition set forth in Section
10.1, and such breach is incapable of being remedied by the End Date or
shall not have been remedied within twenty (20) Business Days after receipt
by Metaldyne of a written notice from Seller specifying the breach and
requesting that such breach be remedied; or
(d) by Metaldyne, if there shall have been (i) a material breach of
(A) any material covenant of Seller or (B) any other covenant of Seller,
which breach would be reasonably expected to result, individually or in the
aggregate, in the prevention or material delay of the transactions
contemplated by this Agreement or have a Business Material Adverse Effect
or a
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Company Material Adverse Effect, or (ii) a breach of a representation or
warranty of the Company or Seller hereunder that would give rise to the
failure of a condition set forth in Section 11.1, and such breach is
incapable of being remedied by the End Date or shall not have been remedied
within twenty (20) Business Days after receipt by Seller of a written
notice from Metaldyne specifying the breach and requesting that such breach
be remedied.
12.2 Effect of Termination. If this Agreement is terminated and the
transactions contemplated hereby are abandoned pursuant to Section 12.1, this
Agreement shall become null and void and of no further force and effect and all
obligations of the parties hereunder shall terminate, except for the obligations
set forth in Sections 8.6, 14.1, 14.8, 14.9 and this Section 12.2, which shall
survive the termination of this Agreement, and except that if this Agreement is
terminated by any of the parties hereto because one or more of the conditions to
such party's obligations hereunder are not satisfied as a result of any other
party's failure to comply with any provision of this Agreement, such terminating
party's right to pursue all legal and equitable remedies for breach of contract
and damages shall survive such termination unimpaired.
ARTICLE XIII
INDEMNIFICATION
13.1 Survival. The representations and warranties of the parties hereto
contained herein shall survive the Closing and remain in full force and effect
until the date that is eighteen (18) months following the JV Termination Date;
provided, however, that (i) the representations and warranties set forth in
Sections 5.1, 5.2, 5.12, 6.1, 6.2, 7.1 and 7.2 shall survive the Closing and
remain in full force and effect until the sixth anniversary of the JV
Termination Date, (ii) the representations and warranties set forth in Section
5.19 shall survive the Closing and remain in full force and effect until the
expiration of the applicable statute of limitation with respect to the matters
covered thereby and (iii) the representations and warranties set forth in
Sections 5.6, 6.4 and 6.5 shall survive the Closing and remain in full force and
effect indefinitely.
13.2 Indemnification by Seller. Except with respect to any claim or
Liability arising out of or resulting from Environmental Law, Environmental
Conditions or Environmental Claims or any matters addressed by Section 2.5(b) or
Section 5.21, for which Section 13.9 shall provide the sole and exclusive remedy
of the Company and Metaldyne, and subject to Sections 13.4, 13.5, 13.6, 13.7,
13.8 and 13.10, Seller agrees to indemnify each of the Company Indemnified
Parties and Metaldyne Indemnified Parties against, and agrees to hold each of
them harmless from, any and all Losses incurred or suffered by them to the
extent relating to, arising out of, or resulting from, any of the following:
(a) any breach by Seller of any of the representations or warranties
of Seller contained in Articles V and VI of this Agreement, in each case
when read without giving effect to any qualifier as to "materiality" or
"Business Material Adverse Effect" or "Company Material Adverse Effect";
(b) any breach by Seller of any of its covenants contained in this
Agreement;
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(c) any of the Excluded Liabilities and any third party claims with
respect thereto (other than Excluded Liabilities described in Section
2.5(b), which are addressed in Section 13.9);
(d) any third party claim for infringement of Intellectual Property
arising from or related to (i) Seller's use of any process at the Facility
or use, manufacture, offering for sale, sale or importing of any product in
connection with the Business prior to the Closing; (ii) the Company's
manufacturing, using, selling, importing or offering for sale any Product
for sale only to Seller or an Affiliate of Seller at the time of sale
(directly or indirectly through suppliers to Seller or Seller's Affiliates)
to the extent that the claim of infringement is attributable to a design or
design change created by Seller or to the use of a Current Process except
to the extent the infringement is attributable to a change in such Current
Process made after the Closing Date which was not created by Seller;
(e) any third party claim [*] arising out of or relating to [*];
provided, however, that, with respect to claims by [*] (i) Seller shall not
be responsible for any such claim [*], (ii) in the event Metaldyne does not
request before the date that is [*] following the later of the JV
Termination Date or the date on which there is no additional Product being
made for Seller under the Supply Agreement in the North Building or the
Forge Building that Seller complete the demolition of the North Building
and the Forge Building pursuant to Section 8.15, [*];
(f) any third party claim for product liability or product warranty
with respect to products manufactured or produced at the Facility prior to
the JV Termination Date or arising from or related to product designs
established by Seller before the JV Termination Date;
(g) any costs, expenses, Taxes or other liabilities of Seller arising
out of or in connection with Taxes arising out of the Business incurred
through the Closing Date or otherwise resulting from the Transactions;
(h) any employees of Seller engaged in the Business, including,
without limitation, any severance or workers' compensation liability and
any charge, complaint, investigation or proceeding by or before the
National Labor Relations Board, the Department of Labor, the Equal
Employment Opportunity Commission, the Occupational Health and Safety
Administration or any comparable federal, state or local agency by or on
behalf of any such employees or class of employees or by or before any
Governmental Authority related to a purported violation of any applicable
employment laws;
(i) any employee benefit plan (within the meaning of Section 3(3) of
ERISA) or other compensation plan or arrangement maintained or contributed
to by Seller or any of its ERISA Affiliates (other than the Company); and
(j) any failure to comply with applicable bulk sales laws.
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To the extent that (A) Seller fully satisfies any indemnification
obligation pursuant to Article XVI of the Operating Agreement, it shall have no
further obligation to any Company Indemnified Party or Metaldyne Indemnified
Party for such Loss and (B) Seller indemnifies any Company Indemnified Party or
Metaldyne Indemnified Party for any Loss pursuant to this Section 13.2, it shall
have no obligation to indemnify any other Company Indemnified Party or Metaldyne
Indemnified Party for the same Loss.
13.3 Indemnification by Metaldyne. Subject to Sections 13.4, 13.5, 13.6,
13.7, 13.8 and 13.10, Metaldyne agrees to indemnify each of the DaimlerChrysler
Indemnified Parties against, and agrees to hold each of them harmless from, any
and all Losses incurred or suffered by it to the extent relating to, or arising
out of, or resulting from, (a) any breach by Metaldyne of any of the
representations, warranties or covenants of Metaldyne contained in Article VII
of this Agreement, in each case when read without giving effect to any qualifier
as to "materiality" or "Metaldyne Material Adverse Effect," (b) any breach by
Metaldyne of any of its covenants contained in this Agreement; (c) in the event
that Metaldyne exercises the Metaldyne Call Option and purchases from Seller the
remaining Class A Units and 100% of the Class B Units pursuant to the Operating
Agreement, from and after the JV Termination Date, the Assumed Liabilities and
any breach by the Company of any of its covenants contained in this Agreement;
(d) the use by Metaldyne or any third party of any of the financial information
provided by Seller pursuant to Section 8.12 (except to the extent any such
Losses result from fraud on the part of Seller); and (e) any product liability,
warranty or intellectual property infringement claim with respect to any product
sold after the JV Termination Date by the Company to any third party (other than
to a supplier of Seller or its Affiliates who supplies such product to Seller or
its Affiliates).
13.4 Limitations on Liability. (a) Notwithstanding the provisions of
Section 13.2(a) or 13.3(a): (i) no Indemnified Person shall be entitled to make
a claim against an Indemnifying Person under Section 13.2(a) or 13.3(a) unless
such claim is made within any applicable survival period set forth in Section
13.1; (ii) the maximum amount of indemnification which can be required of any
Indemnifying Person under Section 13.2(a) or 13.3(a) shall be $10,000,000 (the
"Cap"); and (iii) no Indemnifying Person shall be required to indemnify, defend
or hold harmless any Indemnified Person from and against any Losses under
Section 13.2(a) or 13.3(a) unless and until the amount of all Losses under
Section 13.2(a) or 13.3(a), as the case may be, exceeds $500,000 in the
aggregate (the "Threshold Amount"), in which event the Indemnifying Person shall
be obligated to indemnify the Indemnified Person to the extent of all Losses
relating to such breach to the extent such Losses exceed the Threshold Amount,
subject to the Cap. Notwithstanding the foregoing, the Cap and the Threshold
Amount shall not apply to Losses relating to a breach of any representation or
warranty contained in Section 5.1, 5.2, 6.1, 6.2, 6.4, 7.1, 7.2 or 7.5. For the
avoidance of doubt, the Cap and the Threshold Amount shall not apply to Seller's
indemnification obligations under Sections 13.2(b) through (j) or 13.9 or
Metaldyne's indemnification obligations under Sections 13.3(b) through (e).
(b) Notwithstanding anything to the contrary in this Agreement, the parties
acknowledge and agree that the only representations and warranties of Seller
with respect to (i) Taxes are set forth in Section 5.19, (ii) Intellectual
Property are set forth in Section 5.12 and (iii) the Environment are set forth
in Section 5.21, and that no other representations and warranties of the parties
contained in this Agreement shall give rise to any liability with respect to
such matters.
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(c) The amount of any Losses for which indemnification is provided under
this Article XIII shall be net of any amounts actually recovered by the
Indemnified Person under insurance policies of the Indemnified Person (net, in
each case, of all deductibles and costs, charges and expenses of the Indemnified
Person in connection with such recovery). If any Indemnified Person is at any
time entitled to recover under any third-party policy of insurance (excluding
any self-insurance that is not reinsured with a third party), in respect of any
Losses for which indemnification is sought under this Article XIII, the
Indemnified Person shall, at the request of the Indemnifying Person, use its
commercially reasonable efforts to enforce such recovery at the expense of and
for the benefit of the Indemnifying Person and, in the event of recovery under
such policy, reduce the amount of Losses for which it is seeking indemnification
under this Article XIII by the amount recovered (net of all deductibles and
costs, charges and expenses of the Indemnified Person in connection with such
recovery); provided, however, that the Indemnified Person shall not be required
to renew any insurance policy. If any Indemnifying Person indemnifies an
Indemnified Person for Losses pursuant to this Article XIII and the Indemnified
Person subsequently recovers from a third Person any sum in respect of any
event, change, development, circumstance or state of facts giving rise to such
Losses, the Indemnified Person shall repay to the Indemnifying Person the lesser
of (A) the Losses paid by the Indemnifying Person to the Indemnified Person and
relating to such event, change, development, circumstance or state of facts and
(B) the sum (including any interest) recovered from such third Person, in either
case net of any additional Taxes directly incurred by the Indemnified Person as
a result of its receipt of such sum.
(d) The liability of any Indemnifying Person under this Article XIII shall
be subject to reduction in an amount equal to the value of any net Tax benefit
realized by the Indemnified Person (by reason of a Tax deduction, basis
adjustment, shifting of income, credits and/or deductions, or otherwise from one
or more fiscal periods to another resulting, in each case, from any Loss
suffered by the Indemnified Person that forms the basis of the Indemnifying
Person's obligation hereunder), giving effect to any Tax liabilities of the
Indemnified Person arising as a result of any payments made by an Indemnifying
Person with respect to such claim for indemnification (but only to the extent
such payments are not treated, for income tax purposes, as adjustments to the
purchase price of a Transferred Asset).
(e) To the extent permitted by applicable Law, no Indemnified Person shall
assert any right to recover, and the parties hereby waive any claim against any
Indemnifying Person for, special, exemplary, punitive or consequential damages
arising out of or resulting from any matter for which such party is entitled to
indemnification under this Article XIII, except to the extent such special,
exemplary, punitive or consequential damages are out-of-pocket.
(f) Following the Closing, absent willful concealment or fraud, claims for
indemnification pursuant to this Article XIII and claims for specific
performance of covenants of the parties under this Agreement shall,
collectively, be the sole and exclusive remedies of the parties for claims and
damages arising out of this Agreement and the Transactions and the parties shall
not be entitled to bring, and hereby irrevocably waive, any other claims, rights
or causes of action against the other parties hereto, whether in equity or in
law. The right of indemnification provided in this Article XIII is solely for
the benefit of the Indemnified Persons referred to therein, and such right will
not be
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extended, directly or indirectly, to any other Person. For the avoidance of
doubt, this Section 13.4(f) shall not limit a party's ability to bring other
claims after Closing under any Related Agreement.
(g) No liability shall arise in respect of any breach of any representation
or warranty, covenant or agreement herein to the extent that liability for such
breach occurs (or is increased) directly or indirectly as a result of any
retrospective application of a change in Law, or in accounting policies,
procedures or practices, announced, or if not announced in advance of taking
effect, taking effect, after the Closing Date, in each case, which has
retrospective effect.
13.5 Claims. The provisions of this Section 13.5 shall be subject to
Section 13.6. As soon as is reasonably practicable but no later than thirty (30)
Business Days after becoming aware of a claim for indemnification under this
Agreement, the Indemnified Person shall promptly give notice to the Indemnifying
Person of such claim and the amount the Indemnified Person will be entitled to
receive hereunder from the Indemnifying Person, if known; provided that the
failure of the Indemnified Person to give notice shall not relieve the
Indemnifying Person of its obligations under this Article XIII except to the
extent (if any) that the Indemnifying Person shall have been prejudiced thereby.
The notice to be sent by the Indemnified Person to the Indemnifying Person
pursuant to this Section 13.5 shall include all information concerning the claim
of which the Indemnified Person is aware and which the Indemnified Person,
acting reasonably and in good faith, considers to be required by the
Indemnifying Person in order for the Indemnifying Person to evaluate such claim
and whether such claim gives rise to an indemnification obligation of the
Indemnifying Person hereunder.
13.6 Notice of Third Party Claims; Assumption of Defense. (a) The
Indemnified Person shall give notice as promptly as is reasonably practicable to
the Indemnifying Person of the assertion of any claim, or the commencement of
any suit, action or proceeding, by any Person not a party hereto in respect of
which indemnity may be sought under this Agreement; provided that the failure of
the Indemnified Person to give notice shall not relieve the Indemnifying Person
of its obligations under this Article XIII except to the extent (if any) that
the Indemnifying Person shall have been prejudiced thereby. The notice to be
sent by the Indemnified Person to the Indemnifying Person pursuant to this
Section 13.6 shall include all information concerning the claim of which the
Indemnified Person is aware and which the Indemnified Person, acting reasonably
and in good faith, considers to be required by the Indemnifying Person in order
for the Indemnifying Person to evaluate such claim and whether such claim gives
rise to an indemnification obligation of the Indemnifying Person hereunder.
Following receipt of a notice from the Indemnified Person pursuant to this
Section 13.6, the Indemnified Person hereunder shall permit the Indemnifying
Person, at the Indemnifying Person's election, to assume, at its own expense,
the defense of any such claim, suit, action or proceeding with counsel selected
by the Indemnifying Person (and not reasonably objected to by the Indemnified
Person). Prior to any assumption of the defense of a claim, suit, action or
proceeding by the Indemnifying Person, the Indemnified Person shall not settle,
compromise or consent to any judgment in respect of any such claim, suit, action
or proceeding without the prior written consent of the Indemnifying Person
(which consent shall not be unreasonably withheld or delayed).
(b) Following the Indemnifying Person's election to assume the defense of
any claim, action or proceeding pursuant to Section 13.6(a), (i) the Indemnified
Person shall deliver to the Indemnifying Person, in a timely fashion (which
shall be no later than fifteen (15) Business Days after
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the Indemnified Person's receipt of notice of such election), copies of all
notices and documents (including court papers) received by the Indemnified
Person relating to such claim, action or proceeding and (ii) the Indemnified
Person shall use its commercially reasonable efforts to cooperate in the defense
or prosecution thereof as reasonably requested by the Indemnifying Person in the
context of the relevant claim, action or proceeding (including the quantum and
nature of damages sought thereunder). Such cooperation shall include the
retention and (upon the Indemnifying Person's request) the provision to the
Indemnifying Person of records and information that are reasonably relevant to
such claim, action or proceeding, and making a reasonable number of employees
reasonably available on a mutually convenient basis, to provide additional
information and explanation of any material provided hereunder; provided,
however, that the foregoing is organized in a manner as shall not unreasonably
disrupt the normal operations of the Indemnified Person's business having regard
to the context in which such cooperation is requested and of the relevant claim,
action or proceeding (including the quantum and nature of the damages sought
thereunder).
(c) The Indemnifying Person shall be liable for the reasonable fees and
expenses of counsel employed by the Indemnified Person for any period during
which the Indemnifying Person has not assumed the defense of a claim, action or
proceeding for which the Indemnified Person is entitled to indemnification
hereunder, except to the extent (if any) that the Indemnifying Person shall have
been prejudiced by the Indemnified Person's failure to give timely notice of
such claim, action or proceeding as required by Section 13.5.
(d) If the Indemnifying Person assumes the defense of any claim, action or
proceeding pursuant to Section 13.6(a), the Indemnified Person shall have the
right (but not the duty) to participate in such defense and to employ counsel,
at its own expense, separate from the counsel employed by the Indemnifying
Person.
(e) If the Indemnifying Person does not elect to assume defense of any
claim, action or proceeding pursuant to Section 13.6(a), the Indemnifying Person
may nevertheless participate (but not control) and employ its own counsel (not
reasonably objected to by the Indemnified Person), at its expense, in the
defense of such claim, action or proceeding.
(f) Each party to this Agreement agrees to use its commercially reasonable
efforts to cooperate and cause its employees to cooperate with and assist the
appropriate Indemnifying Person and Indemnified Person in connection with any
claim, action, proceeding or liability for which indemnity is sought hereunder,
including, but not limited to claims, actions and proceedings with respect to
which an Indemnifying Person has elected to assume or participate in the
defense, including using its commercially reasonable efforts to mitigate or
resolve any such claim, action, proceeding or liability for which indemnity is
sought hereunder; provided, however, that in the event that the Indemnified
Person shall fail to use such commercially reasonable efforts to mitigate or
resolve any claim, action, proceeding or liability, then notwithstanding
anything else to the contrary contained in this Agreement, such failure shall
only affect the Indemnified Person's right to indemnification with respect to
such claim, action, proceeding or liability to the extent of any Losses that
could reasonably be expected to have been avoided if the Indemnified Person had
made such commercially reasonable efforts.
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13.7 Settlement or Compromise. Subject to Section 13.4, the Indemnifying
Person may, without the prior written consent of the Indemnified Person, settle
or compromise or consent to the entry of any judgment with respect to a claim or
any litigation resulting therefrom which is the subject of Section 13.6 if such
settlement, compromise or consent (i) includes an unconditional release of the
Indemnified Person from all liability arising out of such action, (ii) includes
no admission of fault or culpability by or on behalf of any Indemnified Person
or its businesses and (iii) provides for settlement or relief solely in the form
of monetary damages to be paid fully by the Indemnifying Person. Any other type
of settlement or compromise or consent to the entry of any judgment shall not be
undertaken by the Indemnifying Person without obtaining the prior written
consent of the Indemnified Person to its terms, which consent shall not be
unreasonably withheld or delayed; provided that if the Indemnified Person shall
have given such consent, the Indemnified Person agrees that it shall, and shall
cause its Affiliates to, submit to any non-monetary relief of judgment arising
out of or forming part of any such settlement, compromise or consent.
13.8 Shared Liability. With respect to any third party claim, action or
proceeding in relation to which an Indemnifying Person is required to indemnify
an Indemnified Person pursuant to this Article XIII (an "Indemnified Claim")
that is combined or joined with one or more claims, actions or proceedings that
are not Indemnified Claims or with respect to an Indemnified Claim under which
both the Indemnified Person and the Indemnifying Person may be liable, which
both desire to contest and control, the control of such claim, action or
proceeding shall rest with the Person having the larger amount in dispute, and
the Person in control may not settle or compromise any such claim without the
prior written consent of the other Person (such consent not to be unreasonably
withheld or delayed); provided, however, that if an Indemnifying Person may be
obligated to indemnify an Indemnified Person with respect to any Indemnified
Claim, the Indemnifying Person shall be deemed to have the amounts of such
Indemnified Claim in dispute.
13.9 Environmental Indemnification by Seller. (a) Subject to the remaining
provisions of this Section 13.9, Seller agrees to indemnify each of the Company
Indemnified Parties and Metaldyne Indemnified Parties against, and agrees to
hold each of them harmless from, any and all Environmental Liabilities relating
to, arising out of, in connection with or in respect of any Known Environmental
Conditions. Seller's indemnification obligations under this Section 13.9(a)
shall not be subject to any limits as to amount or time.
(b) Subject to the remaining provisions of this Section 13.9, Seller agrees
to indemnify each of the Company Indemnified Parties and Metaldyne Indemnified
Parties against, and agrees to hold each of them harmless from, any and all
Environmental Liabilities relating to, arising out of, in connection with or in
respect of any Unknown Environmental Conditions; provided, however, that: (i) no
Indemnified Person shall be entitled to make a claim against Seller under this
Section 13.9(b) unless such claim is made on or prior to [*]; and (ii) Seller
shall only be required to indemnify and hold harmless the Company Indemnified
Parties and Metaldyne Indemnified Parties from and against [*] of such
Environmental Liabilities unless and until the aggregate amount of all such
Environmental Liabilities exceeds [*], in which event Seller shall be obligated
to indemnify and hold harmless the Company Indemnified Parties and Metaldyne
Indemnified Parties from and against [*] of such Environment Liabilities in
excess of [*].
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(c) Notwithstanding any other provision of this Agreement, the
indemnification obligations of Seller under this Section 13.9 shall not be
subject to the provisions of Sections 13.5 through 13.8.
(d) Notwithstanding any other provision of this Agreement, Seller shall
have no obligation to indemnify, defend or hold harmless the Company Indemnified
Parties or Metaldyne Indemnified Parties for Environmental Liabilities or any
Losses whatsoever under this Section 13.9 to the extent such Environmental
Liabilities or Losses (i) arise out of or result from Remedial Action that
exceeds the standards necessary to (A) bring an Environmental Condition into
compliance with Environmental Law or (B) satisfy the requirements of an
applicable Governmental Authority with respect to an Environmental Condition to
the extent required by Environmental Law or (ii) result from or would not have
arisen but for (A) Metaldyne or any Metaldyne Indemnified Party undertaking any
invasive drilling and sampling of soil or groundwater other than as required by
or for (w) the Phase II ESA, (x) any Environmental Law in effect at the time of
such drilling or sampling, any Environmental Permit or any applicable
Governmental Authority, (y) any commercial transaction relating to or involving
the Real Property or the Transferred Assets (including, without limitation, the
Facility) or (z) any construction, erection, removal, repair, maintenance,
demolition, alteration, modification or relocation of any physical improvement
or structure, (B) any change of the use of any Real Property after the Closing
Date to a non-industrial or non-commercial use or (C) any disclosure by the
Company, Metaldyne or any of their Affiliates to any applicable Governmental
Authority of information or data, where such disclosure is not otherwise
required by any Environmental Law in effect at the time of such disclosure.
(e) From and after the Closing, Seller shall control all Remedial Action
and negotiations with any Governmental Authority in respect of all Environmental
Conditions. Seller shall make its environmental personnel and consultants
reasonably available to Metaldyne to discuss Environmental Conditions. Metaldyne
shall provide Seller and its environmental consultants with reasonable access to
the Real Property and Seller shall provide Metaldyne with copies of all
non-privileged information with respect to Remedial Action to be taken in
respect of such Environmental Conditions. Such Remedial Actions shall be
performed in a commercially reasonable manner, including, to the extent allowed
or authorized by applicable Environmental Law or the Governmental Authority with
jurisdiction over a Remedial Action, the use of applicable Remediation
Standards. Seller shall select consultants and contractors to implement such
Remedial Action (not reasonably objected to by Metaldyne) and shall also provide
Metaldyne and its environmental consultants with copies of all non-privileged
Environmental Reports, analytical data, correspondence, directives, orders and
documents submitted to or received by Seller from any Governmental Authority in
connection with the Remedial Action and other non-privileged documents created
or received by or on behalf of Seller in connection with the Remedial Action.
Seller shall afford Metaldyne a reasonable opportunity to comment on Seller's
proposed response to an Environmental Condition, and Seller shall not
unreasonably refuse to incorporate Metaldyne's comments.
(f) Metaldyne shall inform Seller promptly in writing of any Environmental
Condition or Environmental Claim in respect of which Seller may have an
indemnification obligation under this Section 13.9; provided that the failure of
Metaldyne to so promptly inform Seller shall not
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affect the rights of the Company Indemnified Parties or Metaldyne Indemnified
Parties Buyer except to the extent (if any) that Seller shall have been
prejudiced thereby.
(g) Seller shall have no obligation to indemnify, defend and hold harmless
the Company Indemnified Parties and Metaldyne Indemnified Parties for
Environmental Liabilities under this Section 13.9 to the extent that such
Environmental Liabilities result solely from or to the extent such Environmental
Liabilities are increased as a result of any Environmental Law which is not
binding and in effect as of the Closing Date, or any Environmental Permit that
is not required to be in effect as of the Closing Date.
(h) Following the Closing, absent willful concealment or fraud, claims for
indemnification pursuant to this Section 13.9 and claims for specific
performance of covenants of Seller under this Section 13.9 shall, collectively,
be the sole and exclusive remedies of the Company Indemnified Parties and
Metaldyne Indemnified Parties for claims and damages arising out of
Environmental Laws, Environmental Claims, Environmental Conditions,
Environmental Liabilities, Environmental Permits, Hazardous Materials or any
matters addressed in Section 2.5(b) or Section 5.21 or any Losses with respect
thereto, and the Company Indemnified Parties and Metaldyne Indemnified Parties
shall not be entitled to bring, and hereby irrevocably waive, any other claims,
rights or causes of action against Seller, whether in equity or in law. The
right of indemnification provided in this Section 13.9 is solely for the benefit
of the Company Indemnified Parties and Metaldyne Indemnified Parties, and such
right will not be extended, directly or indirectly, to any other Person. For the
avoidance of doubt, this Section 13.9(h) shall not limit a party's ability to
bring other claims after Closing under any Related Agreement.
13.10 Resolution of Indemnification Disputes. If a dispute arises in
connection with determining the validity or amount of a claim for
indemnification for any Loss under this Agreement Article XIII (including
Section 13.9) (a "Dispute"), and if the Dispute cannot be settled through direct
discussions held in good faith between representatives of the Indemnifying
Person and representatives of the Indemnified Persons within one hundred twenty
(120) days following receipt of notice of a Dispute, the parties agree first to
endeavor to settle the dispute in an amicable manner by mediation administered
under the CPR Mediation Procedure established by the CPR Institute for Dispute
Resolution ("CPR") before resorting to arbitration. If a Dispute cannot be
resolved through such mediation process within sixty (60) days following the
appointment of the mediator, the Dispute will be settled finally by arbitration
under the CPR Rules for Non-Administered Arbitration (the "Rules"), then in
effect, by a sole arbitrator, chosen by agreement of the parties within twenty
(20) days of the receipt by the respondent of a copy of the notice of
arbitration. Any arbitrator appointed by CPR shall be a retired judge or a
practicing attorney with no less than ten (10) years of experience with large
commercial cases and an experienced arbitrator, except that in the case of a
Dispute with respect to a claim for indemnification under Section 13.9, the
arbitrator appointed by CPR shall be a nationally-recognized expert in
environmental matters and an experienced arbitrator. The arbitration will be
governed by the Federal Arbitration Act, 9 U.S.C. ss. 1 et seq. Any arbitrator
shall be bound to apply the terms of this Agreement and applicable Law pursuant
to Section 14.8. The hearing on the merits shall be held no later than six (6)
months after the appointment of the arbitrator unless the parties otherwise
agree or the arbitrator extends such time period for good cause shown. The award
shall be in writing and shall state the findings of fact and conclusions of law
on which it is based. The award of
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the arbitrator shall be final and binding on the parties and judgment upon the
award may be entered and enforced in any court having jurisdiction. Unless the
parties otherwise agree in writing, the mediation and arbitration will be held
in Detroit, Michigan. Each party shall bear its own costs and expenses
(including fees and disbursements of counsel) and Seller and Metaldyne shall
each bear one-half of the costs and expenses payable to the mediator and
arbitrator.
ARTICLE XIV
MISCEllANEOUS
14.1 Expenses. Whether or not the transactions contemplated hereby are
consummated, each party hereto shall bear its own costs and expenses (including
the fees and disbursements of legal counsel, investment bankers, brokers and
accountants) with respect to the transactions contemplated hereby. Seller shall
pay all sales, use, stamp, transfer, service, recording, real estate and like
taxes or fees, if any, imposed by any Governmental Authority in connection with
the transactions, contemplated hereby.
14.2 Amendment. This Agreement may be amended, modified, supplemented,
superseded or canceled, and any of the terms, covenants, representations,
warranties or conditions hereof may be waived, only by a written instrument
signed by each of the parties hereto or, in the case of waiver, by or on behalf
of the party waiving compliance.
14.3 Notices. Any notice, request, instruction or other document to be
given or made hereunder by a party hereto shall be in writing and shall be
deemed to have been duly given or made: (a) on the date of receipt if given in
person; (b) on the date of transmission if sent by facsimile or e-mail with
receipt of delivery confirmation; (c) three (3) Business Days after being
deposited in the U.S. mail, certified or registered mail, postage prepaid,
return receipt requested; or (d) one (1) Business Day following sending by
overnight delivery via an internationally recognized courier service, in each
case, to the applicable party at the following addresses or facsimile numbers
(or at such other address or facsimile number for a party as shall be specified
by like notice):
If to Seller, addressed as follows:
DaimlerChrysler Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇@▇▇▇.▇▇▇
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with a copy to:
▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
If to the Company, addressed as follows:
NC-M Chassis Systems, LLC
▇▇▇▇ ▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Plant Manager
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇@▇▇▇.▇▇▇
with a copy to:
▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
If to Metaldyne, addressed as follows:
Metaldyne Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
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with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: W. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
Any rejection or other refusal to accept or the inability to deliver any such
notice because of a changed address of which no notice was given shall be deemed
to be receipt of the notice as of the date of such rejection, refusal or
inability to deliver.
14.4 Waivers. The failure of a party hereto at any time or times to require
performance of any provision hereof shall in no manner affect its right at a
later time to enforce the same. No waiver by a party of any condition or of any
breach of any term, covenant, representation or warranty contained in this
Agreement shall be effective unless given in writing by the party entitled to
the benefits thereof, and no waiver in any one or more instances shall be deemed
to be a further or continuing waiver of any such condition or breach in other
instances or a waiver of any other condition or breach of any other term,
covenant, representation or warranty.
14.5 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
14.6 Headings. The headings preceding the text of articles and sections
included in this Agreement and the headings to schedules attached to this
Agreement are for convenience only and shall not be deemed part of this
Agreement or be given any effect in interpreting this Agreement.
14.7 Interpretation. Unless otherwise indicated, words describing the
singular number shall include the plural and vice versa, and words denoting each
gender shall include the other gender and words denoting natural persons shall
include corporations and partnerships and vice versa. The use of the terms
"including" or "included" shall in all cases herein mean "including, without
limitation" or "included, without limitation," respectively. Unless otherwise
indicated, references to articles, sections, subsections or schedules shall
refer to those portions of this Agreement. Consummation of the transactions
contemplated herein shall not be deemed a waiver of a breach of or inaccuracy in
any representation, warranty or covenant or of any party's rights and remedies
with regard thereto. No specific representation, warranty or covenant contained
herein shall limit the generality or applicability of a more general
representation, warranty or covenant contained herein. A breach of or inaccuracy
in any representation, warranty or covenant shall not be affected by the fact
that any more general or less general representation, warranty or covenant was
not also breached or inaccurate.
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14.8 Applicable Law. The validity, construction, enforcement,
interpretation and effect of this Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Michigan, without
giving effect to the principles of conflicts of law of such State.
14.9 Jurisdiction; Waiver of Jury Trial. Except as otherwise expressly
provided in this Agreement or any Related Agreement, any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the Related Agreements shall be
brought in any United States federal or state court sitting in the State of
Michigan, and each of the parties hereby irrevocably and unconditionally
consents to the exclusive jurisdiction of such courts (and of the appropriate
appellate courts therefrom) in any such suit, action or proceeding, agrees that
it will not attempt to deny or defeat personal jurisdiction by motion or other
request for leave from any such court and irrevocably and unconditionally
waives, to the fullest extent permitted by applicable Law, any objection that it
may now or hereafter have to the laying of the venue of any such suit, action or
proceeding in any such court or that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum. Process in any such
suit, action or proceeding may be served on any party anywhere in the world,
whether within or without the jurisdiction of any such court. Without limiting
the foregoing, each party agrees that service of process, summons or notice on
such party as provided in Section 14.3 shall be deemed effective service of
process on such party for any suit, action or proceeding brought in such court.
Each party agrees that a final judgment in any such suit, action or proceeding
brought in any such court shall be conclusive and binding upon such party and
may be enforced in any other courts to whose jurisdiction such party is or may
be subject, by suit upon judgment. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE RELATED AGREEMENTS
OR ANY DEALINGS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER OF THIS
AGREEMENT OR THE RELATED AGREEMENTS. THE PARTIES ALSO WAIVE ANY BOND OR SURETY
OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF ANY
OF THE OTHER PARTIES. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT
RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION,
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW
AND STATUTORY CLAIMS. THE PARTIES ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO THIS AGREEMENT, THAT EACH HAS ALREADY RELIED ON THE
WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON
THE WAIVER IN ITS RELATED FUTURE DEALINGS. THE PARTIES FURTHER WARRANT AND
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT
OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTIONS COMPLETED
HEREBY. IN THE
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EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
BY THE COURT.
14.10 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns;
provided, however, that no assignment of any rights or obligations shall be made
by (i) the Company or Seller without the written consent of Metaldyne or (ii)
the Company or Metaldyne without the written consent of Seller. Notwithstanding
the foregoing, each of the Company and Metaldyne may assign its rights or
obligations under this Agreement to the purchaser of any of the Real Property in
a sale leaseback transaction; provided that Metaldyne shall continue to,
directly or indirectly, operate the Business and the Facility.
14.11 No Third Party Beneficiaries. This Agreement is solely for the
benefit of the parties hereto, and no provision of this Agreement shall be
deemed to confer upon other Person not a party hereto any legal or equitable
right or remedy, claim, Liability, reimbursement, cause of action or other
right.
14.12 Severability. If any provision of this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality or enforceability of
the other provisions shall not be affected thereby, and there shall be deemed
substituted for the provision at issue a valid, legal and enforceable provision
as similar as possible to the provision at issue.
14.13 Remedies Cumulative. The remedies provided in this Agreement shall be
cumulative and shall not preclude the assertion or exercise of any other rights
or remedies available by applicable Law, in equity or otherwise.
14.14 Investigation. The right to indemnification, reimbursement or other
remedy based upon breach of any representations, warranties, covenants or
obligations hereunder shall not be affected by any investigation (including any
environmental investigation or assessment) conducted with respect to, or any
knowledge acquired (or capable of being acquired) at any time, with respect to
the accuracy or inaccuracy of or the performance or nonperformance of or
compliance or noncompliance with any such representation, warranty, covenant or
obligation. The waiver of any condition based upon the accuracy of any
representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification,
reimbursement or other remedy based upon such representations, warranties,
covenants and obligations.
14.15 Entire Understanding. This Agreement, together with the exhibits and
schedules hereto and the Related Agreements, constitute the entire agreement and
understanding of the parties hereto and supersede any and all prior agreements,
representations, arrangements and understandings, both written and oral, among
the parties hereto with respect to the subject matter hereof. None of the
parties shall be liable or bound to any other party in any manner by any
representations, warranties or covenants relating to such subject matter except
as specifically set forth herein or in any Related Document.
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
NC-M CHASSIS SYSTEMS, LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
DAIMLERCHRYSLER CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President of Mergers
& Acquisitions
METALDYNE CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President and CEO
S-1