SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): May 2, 1995
COEUR D'ALENE MINES CORPORATION
(Exact name of Registrant as specified in its charter)
Idaho 1-8641 82-0109423
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification
Number)
400 Coeur d'Alene Mines Bldg.
505 Front Avenue
Coeur d'Alene, Idaho 83814
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (208) 667-3511
Not Applicable
(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets.
On May 2, 1993, Callahan Mining Corporation ("Callahan"), a
wholly-owned subsidiary of Coeur d'Alene Mines Corporation ("Coeur"),
consummated its sale of the assets of The Flexaust Company Division of Callahan
(the "Flexaust Division") and the shares representing 50% of the equity interest
owned by Callahan in Flexadux Incorporated ("Flexadux"), to The Flexaust Company
Inc. ("TFC") and its parent, Schauenburg International, Inc. ("SII"). The sale
was effected pursuant to an Asset and Stock Purchase Agreement, dated as of
April 28, 1995, among SII, TFC and Callahan (the "Agreement"). A copy of the
Agreement is filed as an exhibit hereto and is incorporated herein by reference.
The Flexaust Division was engaged in the manufacture and sale of lightweight
flexible hose and duct and metal tubing. In addition, an affiliate of SII and
TFC purchased Callahan's 50% equity interest in a foreign subsidiary and
Callahan also effected the sale of certain real properties used in connection
with the Flexhaust Division operations.
Pursuant to the Agreement, Callahan sold the Flexaust Division assets
and Flexadux shares for approximately $10 million payable in cash, of which
approximately $4 million was paid at the closing and the balance is payable over
the next five years.
During the second quarter of 1995, Coeur d'Alene Mines Corporation
expects to recognize a pre-tax gain of approximately $4.4 million as a result of
the above transactions.
Item 7. Financial Statement, Proforma Financial Information and
Exhibits
In accordance with Items 7(a)(4) and 7(b)(2) of Form 8-K, the
financial statements called for by Item 7(a) of Form 8-K and Rule 3-05(b) of
Regulation S-X, and the proforma financial information called for by Item 7(b)
of Form 8-K and Article XI of Regulation S-X, will be filed by amendment as soon
as practicable but not later than July 16, 1995.
The following exhibit is filed herewith:
Exhibit No. Document
2 Asset and Stock Purchase Agreement,
dated as of April 28, 1995, among
Schauenburg International, Inc., The
Flexaust Company, Inc., and Callahan
Mining Corporation.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COEUR D'ALENE MINES CORPORATION
(Registrant)
Dated: May 17, 1995 By: /s/JAMES A. SABALA
James A. Sabala
Senior Vice President and
Chief Financial Officer
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EXHIBIT 2
ASSET AND STOCK PURCHASE AGREEMENT
This Asset and Stock Purchase Agreement (this "Agreement") is dated as of
April 28, 1995 among SCHAUENBURG INTERNATIONAL, INC., a Delaware corporation
("SII"), THE FLEXAUST COMPANY INC., an Indiana corporation ("TFC") (SII and TFC
are referred to individually as a "Buyer" and collectively as the "Buyers"), and
CALLAHAN MINING CORPORATION, an Arizona corporation ("Callahan" or the
"Seller").
PREAMBLE
Flexadux Incorporated, a Delaware corporation ("Flexadux"), and The
Flexaust Company, a division of the Seller (the "Flexaust Division"), together
are engaged in the business of manufacturing and selling metal tubing,
industrial neoprene and plastic hoses, duct and related products (the
"Business"). The Seller is a wholly-owned subsidiary of Coeur D'Alene Mines
Corporation and TFC is a wholly-owned subsidiary of SII. In addition, SII and
the Seller each own 50% of the outstanding shares of stock of Flexadux.
The Seller wishes to sell to TFC, and TFC wishes to purchase and acquire
from the Seller, the assets of the Flexaust Division (which, together with the
assets of Flexadux, constitute all of the assets used in or related to the
Business), and the Seller wishes to sell to SII, and SII wishes to purchase and
acquire from the Seller, the shares of Flexadux stock owned by the Seller, all
upon the terms and subject to the conditions set forth herein. In addition,
Schauenburg GmbH, an affiliate of the Buyers, will acquire the Seller's 50%
equity interest in Flexaust GmbH, and Flormar Realty Company, L.L.C., an Indiana
limited liability company ("Flormar"), will acquire the Seller's real property
located in Warsaw, Indiana at which a portion of the Business is conducted.
Therefore, in consideration of their mutual promises set forth herein and for
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound, the parties hereby agree
as follows.
ARTICLE I
THE TRANSACTION
1.01 Purchase and Sale of Assets and Shares. At the Closing referred to in
Section 1.03 below, TFC shall purchase from the Seller, and the Seller shall
sell, convey, assign, transfer and deliver to TFC, free and clear of any and all
liens, charges, encumbrances, security interests and claims of any kind
whatsoever ("Liens"), all of the Seller's rights, title and interest in and to
the following assets of the Flexaust Division (the "Assets"):
(a) all cash and cash equivalents (including marketable securities)
held by the Seller and derived from or relating to the Business, and all notes,
drafts and accounts
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receivable of the Seller relating to the Business;
(b) all machinery, equipment (including without limitation all
laboratory, testing and office equipment), tools and furniture located in the
plants or offices occupied by the Seller and used in or relating to the Business
(collectively, the "Machinery and Equipment"), and all supplies, spare parts and
warranties relating to the Machinery and Equipment;
(c) all raw materials, work-in-process, finished goods, samples and
other inventories of the Seller used in the Business (collectively, the
"Inventory");
(d) all of the Seller's patents and patent applications, registered
and unregistered trademarks and service marks, logos, trade names, common law
and registered copyrights and corporate names, and all applications for any of
the foregoing, related to the Business, together with all of the Seller's rights
to use all of the foregoing forever, and all goodwill associated with any of the
foregoing, (collectively, the "Intellectual Property");
(e) all inventions, processes, methods, designs, engineering,
technical and shop drawings, specifications, trade secrets, confidential
information, know-how and ideas, whether patentable or not, shop rights,
licenses and other similar rights used in or relating to the Business, and all
drawings, records, books and other indicia of the foregoing, however evidenced,
together with all of the Seller's rights to use all of the foregoing and all
goodwill associated with any of the foregoing;
(f) all of the Seller's rights under contracts, purchase agreements,
bids, purchase orders, employment agreements and other agreements and business
arrangements relating to the Business (collectively, the "Contracts");
(g) to the extent transferable, all governmental and other permits,
licenses, authorizations, consents, orders, concessions, certificates and
governmental and customer approvals obtained by or belonging to the Seller
relating to the Business (collectively, the "Permits");
(h) all advertising material and all other printed or written
materials relating to the Business;
(i) all records pertaining to any of the foregoing and to customers,
suppliers and personnel, and all books, ledgers, files and business records of
every kind relating to the Business or the Assets, except for the minute books
and stock ledgers of the Seller (collectively, the "Books and Records");
(j) all goodwill of the Business as a going concern and all other
intangible properties; and
(k) any other asset of the Seller which is not referred to in items
(a)-(j) above and which is reflected on the Balance Sheet (as that term is
defined in Section 2.06 below) for the Flexaust Division or which has been or is
acquired by the Seller between the Balance Sheet Date (as that term is defined
in Section 2.06 below) and the Closing Date (as that term is defined in Section
1.03 below) and which is used in or related to the Business;
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provided, that notwithstanding any other provision hereof, the Assets shall not
include the property of the Seller listed on Schedule 1.01 hereto (the "Excluded
Assets"). In addition, at the Closing, SII shall purchase from the Seller, and
the Seller shall sell, convey, assign, transfer and deliver to SII, free and
clear of any and all Liens, all of the Seller's right, title and interest in and
to the 25 shares of common stock of Flexadux which it owns (the "Shares").
1.02 No Assumption of Liabilities. TFC shall not assume or be obligated to
perform any liability or obligation of the Seller other than the liabilities and
obligations identified on Schedule 1.02 hereto (the "Assumed Liabilities") as of
the Effective Time. All liabilities and obligations of the Seller not so assumed
shall be referred to herein as the "Excluded Liabilities."
1.03 Closing.
(a) Time and Place. The closing under this Agreement (the "Closing")
will take place at 10:00 a.m., local time, on April 28, 1995 at the offices of
Cohen & Grigsby, P.C., 2900 CNG Tower, 625 Liberty Avenue, Pittsburgh,
Pennsylvania, or at such other time, date or place as to which the parties shall
mutually agree, but no later than April 30, 1995. The date on which the Closing
occurs is sometimes referred to herein as the "Closing Date." The Closing shall
be effective as of 11:59 p.m. on April 30, 1995 (the "Effective Time").
(b) Deliveries and Proceedings at the Closing. At the Closing:
(i) Assignment Instruments. The Seller shall deliver to the
Buyers such bills of sale, endorsements, assignments and other good and
sufficient instruments of conveyance and transfer, satisfactory in form and
substance to the Buyers and their counsel, as shall be effective to vest in TFC,
as of the Effective Time, all of the Seller's rights, title and interest in and
to the Assets and to vest in SII all of the Seller's rights, title and interest
in and to the Shares, in each case, free and clear of all Liens, and to assign
to TFC and permit TFC to assume the Assumed Liabilities (collectively, the
"Assignment Instruments"). Simultaneously with such delivery, the Seller shall
have taken all additional steps as may be necessary to put TFC in possession and
operating control of the Assets and the Seller's interest in the Business.
(ii) Stock Certificates. The Seller shall deliver to SII one or
more stock certificates, duly endorsed for transfer to SII, representing the
Shares.
(iii) Payment of Purchase Price. The Buyers shall pay to the
Seller the portion of the Purchase Price (as defined in Section 1.04 below)
payable at closing in the manner set forth in Section 1.04 below.
(iv) Flormar Purchase Agreement. Flormar shall have completed the
purchase from the Seller of the real property located at 1510 Armstrong Road and
1515 Armstrong Road, Warsaw, Indiana at which a portion of the Business is
conducted for a purchase price of $758,331, pursuant to a separate purchase
agreement (the "Flormar Purchase Agreement").
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(v) Employment Agreements. TFC shall have entered into an
Employment Agreement in substantially the form attached hereto as Exhibit A with
Frederick R. Radcliffe, currently the President of the Flexaust Division, and
William Draper, currently the Senior Vice President of Sales of the Flexaust
Division (such agreements are referred to hereinafter collectively as the
"Employment Agreements").
(vi) Non-Competition Agreement. The Buyers and the Seller shall
execute and deliver a Non-Competition Agreement in substantially the form of
Exhibit B hereto (the "Non-Competition Agreement" and, together with the
Assignment Instruments, the Flormar Purchase Agreement and the Employment
Agreements, the "Related Agreements").
(vii) Flexaust GmbH Closing. The closing of the sale by the
Seller to Schauenburg GmbH of its 50% equity interest in Flexaust GmbH for a
purchase price of $50,000 pursuant to a separate purchase agreement shall have
occurred.
(viii) Other Deliveries. The closing certificates, opinions of
counsel and other documents required to be delivered pursuant to this Agreement
shall be exchanged.
1.04 Payment of Purchase Price. The Buyers shall pay to the Seller, in
consideration for the Assets and the Shares, a total of $8,880,539 (the
"Purchase Price"), $8,451,539 of which shall be paid by TFC to the Seller for
the Assets and $429,000 of which shall be paid by SII to the Seller for the
Shares (the portion of the Purchase Price being paid by TFC for the Assets is
referred to hereinafter as the "Asset Purchase Price" and the portion of the
Purchase Price being paid by SII for the Shares is referred to hereinafter as
the Shares Purchase Price"). The Purchase Price shall be paid as follows:
(a) Payment of Closing Amount. As part of the Purchase Price the
Buyers shall deliver to the Seller, in immediately available funds, a closing
amount (the "Closing Amount") of $2,880,539. $2,451,539 of this amount shall be
paid by TFC to the Seller for the Assets and $429,000 shall be paid by SII to
the Seller for the Shares.
(b) Deferred Amount. Subject to adjustment as set forth in Section
7.04 below, the balance of the Purchase Price, or $6,000,000 (the "Deferred
Amount"), shall be payable by TFC to the Seller, together with accrued interest
on the unpaid portion of the Deferred Amount as set forth below, pursuant to the
following schedule:
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Date Payment
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May 1, 1996 $1,000,000
May 1, 1997 1,000,000
May 1, 1998 1,200,000
May 1, 1999 1,600,000
May 1, 2000 1,200,000
The unpaid portion of the Deferred Amount shall bear interest from the Closing
Date at an annual rate of seven percent (7%). TFC shall have the right to prepay
all or any portion of the Deferred Amount notwithstanding the schedule set forth
above.
(c) Grant of Security Interest. As security for the obligation of TFC
to pay the Deferred Amount to the Seller, effective as of the Closing Date, TFC
hereby grants the Seller a security interest in the Assets and the assets of
Flexadux identified on Schedule 1.04(c) hereto (the "Collateral"). TFC agrees to
execute and deliver to the Seller at the Closing such documents and instruments
as are required to evidence or perfect the Seller's security interest in the
Collateral, including without limitation Uniform Commercial Code financing
statements (the "Financing Statements"). The Seller agrees that upon any
reduction in the unpaid portion of the Deferred Amount and upon the request of
TFC, it shall release its security interest in some or all of the Collateral,
provided that the Seller shall not be required to release its security interest
in any Collateral unless TFC demonstrates to the Seller's reasonable
satisfaction that the value of the remaining Collateral is at least equal to the
unpaid portion of the Deferred Amount. The Seller's security interest in the
Collateral shall terminate upon final payment by the Buyer of the Deferred
Amount and all accrued interest thereon. TFC agrees that the Seller shall, upon
a default by TFC in its payment obligations pursuant to Section 1.04(b) above,
have and be entitled to exercise all the rights and remedies of a secured party
under applicable law with respect to the lease covering the Seller's Ontario,
California facility, which lease is more particularly described on Schedule 2.12
hereto, as if the Seller had a valid and enforceable security interest in TFC's
right, title and interest in and to such lease.
1.05 Allocation of Purchase Price. TFC and the Seller agree to use their
best efforts to comply with the applicable requirements under section 1060 of
the Internal Revenue Code of 1986, as amended (the "Code"), by preparing a
schedule to be executed by TFC and the Seller at the Closing reflecting the
allocation of the Asset Purchase Price to the respective Assets and to be
reflected in their respective income tax returns; provided, however, that any
failure to agree on any such allocation shall not operate to relieve any party
of its obligations under this Agreement. Schedule 1.05 hereto sets forth the
allocation agreed to by TFC and the Seller and all other payments to be made by
the Buyers or their affiliates to the Seller pursuant to the Related Agreements
(including the Shares Purchase Price, the amount being paid by Schauenburg GmbH
for the stock of Flexaust GmbH, the amount being paid by TFC pursuant to the
Non-Competition Agreement and the amount being paid by Flormar pursuant to the
Flormar Purchase Agreement).
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to the Buyers as follows:
2.01 Organization. Flexadux is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. The
Seller is a corporation duly organized, validly existing and in good standing
under the laws of the State of Arizona. Each of Flexadux and the Seller has the
full corporate power to own or lease its properties and assets as now owned or
leased, to carry on its business as and where now being conducted and to make,
execute, deliver and perform the Related Agreements to which it is a party. The
copies of the articles of incorporation and bylaws of Flexadux and the Seller,
as amended to date, which have been delivered to the Buyers, are correct and
complete and are in full force and effect.
2.02 Subsidiaries; Capitalization and Ownership of Flexadux. Except as set
forth on Schedule 2.02 hereto and except for the Seller's ownership of shares of
Flexadux, neither the Seller nor Flexadux directly or indirectly owns any stock
of, or any other interest in, any corporation or business entity engaged in the
Business. The capitalization of Flexadux consists solely of 100 authorized
shares of common stock, par value $1.00 per share, 50 of which are issued and
presently outstanding. The Seller is the record and beneficial owner of 25
shares of common stock of Flexadux, free and clear of all Liens, and SII is the
record and beneficial owner of 25 shares of Flexadux common stock.
2.03 Location of Business and Assets. Set forth on Schedule 2.03 hereto is
a true and correct list of each location (specifying country, state, county,
city and street address) where the Seller or Flexadux (a) has a place of
business used in or relating to the Business, (b) owns or leases real property
used in or relating to the Business or (c) owns or leases any other property,
including inventory, equipment, and furniture, used in or relating to the
Business.
2.04 Authorization and Enforceability; Title to Assets. The execution,
delivery and performance by the Seller of the Related Agreements to which it is
a party have been duly authorized by all necessary corporate action on the part
of the Seller. This Agreement and the Related Agreements have been or will be
duly executed and delivered by the Seller and constitute or will constitute
legal, valid and binding obligations of the Seller enforceable against it in
accordance with their respective terms. Upon the Seller's delivery at the
Closing of the Assignment Instruments and the stock certificates representing
the Shares, duly endorsed for transfer, in accordance herewith, TFC will acquire
good and valid title to the Assets and SII will acquire good and valid title to
the Shares, in each case free and clear of all Liens.
2.05 No Violation of Laws or Agreements. The execution and delivery by the
Seller of this Agreement and the Related Agreements to which it is a party do
not, and the consummation of the transactions contemplated by this Agreement and
the Related Agreements and the compliance with the terms, conditions and
provisions hereof and thereof by the Seller will not:
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(a) contravene any provision of the certificate or articles of
incorporation or bylaws of the Seller or Flexadux;
(b) conflict with or result in a breach of or constitute a default (or
an event which might, with the passage of time or the giving of notice or both,
constitute a default) under any of the terms, conditions or provisions of any
indenture, mortgage, loan or credit agreement or any other agreement or
instrument to which the Seller or Flexadux is a party or by which it or its
assets may be bound or affected, or any judgment or order (a "Judgment") of any
court, any governmental department, commission, board, agency or instrumentality
or any arbitrator (each a "Judicial Authority"), or any applicable law, statute,
rule, regulation, code or ordinance (a "Law") of any federal, state or local
government authority (each a "Government Authority");
(c) result in the creation or imposition of any Lien upon any of the
assets of the Seller or Flexadux or give to others any interests or rights
therein except for the security interest in the Collateral granted by TFC to the
Seller pursuant to Section 1.04(c) above;
(d) result in the maturation or acceleration of any liability or
obligation of the Seller or Flexadux or give others the right to cause such a
maturation or acceleration; or
(e) result in the termination of or loss of any right, or give others
the right to cause such a termination or loss, under any agreement or contract
to which the Seller or Flexadux is a party or by which it is bound.
2.06 Financial Statements.
(a) The books of account and related records of the Seller and
Flexadux with respect to the Business fairly reflect in reasonable detail its
assets, liabilities and transactions in accordance with generally accepted
accounting principles ("GAAP") applied on a consistent basis.
(b) The Seller has delivered to the Buyers the following financial
statements (the "Financial Statements"):
(i) the unaudited statement of income of Flexadux for its fiscal
year ended December 31, 1994 and the unaudited balance sheet of Flexadux as of
such date and
(ii) the unaudited statement of income of the Flexaust Division
for the fiscal year ended December 31, 1994 and the unaudited balance sheet of
the Flexaust Division as of such date.
(c) The Financial Statements: (i) are correct and complete in all
material respects and in accordance with the books and records of the Flexaust
Division and Flexadux, respectively; (ii) fairly present the financial
condition, assets and liabilities of Flexadux and the Flexaust Division (on a
stand-alone basis) as of their respective dates and the results of their
operations and changes in their financial position for the periods covered
thereby; and (iii) have been prepared in accordance with GAAP applied on a
consistent basis. All references in
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this Agreement to a "Balance Sheet" shall mean the balance sheet of Flexadux or
the Flexaust Division (as the case may be) as at December 31, 1994 included in
the Financial Statements and all references to the "Balance Sheet Date" shall
mean December 31, 1994.
2.07 No Undisclosed Liabilities. Neither the Seller nor Flexadux has any
liability or obligation relating to the Business of any nature, whether due or
to become due, absolute, contingent, known, unknown or otherwise, including
without limitation liabilities for or in respect of Taxes (as hereinafter
defined) and any interest or penalties relating thereto, except for liabilities
that (a) are fully reflected on the Balance Sheet of the Flexaust Division or
Flexadux (as the case may be), (b) have been incurred in the ordinary course of
business since the Balance Sheet Date and are fully reflected as liabilities on
the books of account of the Flexaust Division or Flexadux (as the case may be)
and in any interim financial statements provided to the Buyers, including the
Final Takeover Balance Sheets required by Section 7.04 below, none of which,
individually or in the aggregate, have been materially adverse, or (c) are
disclosed on Schedule 2.07 hereto.
2.08 No Changes. Except as disclosed on Schedule 2.08 hereto, since the
Balance Sheet Date the Seller and Flexadux have conducted the Business only in
the ordinary course. Without limiting the generality of the foregoing sentence,
except as disclosed on Schedule 2.08 hereto, since the Balance Sheet Date, there
has not been, with respect to the Business:
(a) any change in the financial condition, assets, liabilities,
prospects, net worth or business of the Business except changes in the ordinary
course of business, none of which, individually or in the aggregate, has been or
will be materially adverse to the Business;
(b) any damage, destruction or loss, whether or not covered by
insurance, adversely affecting the properties, business or prospects of the
Business, or any material deterioration in the operating condition of the assets
of the Business;
(c) any mortgage or pledge on, or subjection to any Lien of, any of
the Assets, tangible or intangible, relating to the Business;
(d) any strike, walkout or labor trouble;
(e) any wage or salary increases or any employment or consulting
contract or arrangement entered into with any officer, employee or consultant
relating to the Business which is not terminable at will without penalty or
continuing obligation;
(f) any making of or commitment to make any capital expenditures in
excess of $50,000 in the aggregate;
(g) any cancellation or waiver of any right with respect to the Assets
or the Business or permitting any of such rights to lapse, except, in each case,
in the ordinary course of business;
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(h) any payment, discharge or satisfaction of any liability or
obligation (whether accrued, absolute, contingent or otherwise) by either the
Seller or Flexadux other than the payment, discharge or satisfaction, in the
ordinary course of business, of liabilities or obligations shown or reflected on
the Balance Sheet of the Flexaust Division or Flexadux or incurred in the
ordinary course of business since the Balance Sheet Date;
(i) any sale, transfer or other disposition of any Assets except (x)
sales of inventory in the ordinary course of business, (y) sales or other
dispositions of assets which are not material to the Business and (z) the sale
of the Amesbury Facility (as defined in Section 4.02 below);
(j) any adverse change or any threat of any adverse change in the
relations of the Seller or Flexadux with, or any loss or threat of loss of, any
of the important suppliers, clients or customers of the Business;
(k) any write-offs as uncollectible of any notes or accounts
receivable of the Seller or Flexadux or write-downs of the value of any assets
or inventory by the Seller or Flexadux other than in immaterial amounts or in
the ordinary course of business consistent with past practice and at a rate no
greater than during the twelve month period ending on the Balance Sheet Date;
(l) any change by either the Seller or Flexadux in any method of
accounting or keeping its books of account or in its accounting practices;
(m) any payment, loan or advance of any amount to or in respect of, or
the sale, transfer or lease of any properties or assets to, or entering into of
any agreement, arrangement or transaction with, any related party except for (i)
directors' fees and (ii) compensation to the officers and employees of the
Seller or Flexadux with respect to the Business at rates not exceeding the rates
of compensation disclosed on Schedule 2.23 hereto;
(n) to the best knowledge of the Seller, any disclosure to any person
not an employee or other disposal of any trade secret, process or know-how; or
(o) any transaction, agreement or event outside the ordinary course of
business or inconsistent with past practice or which has had or is likely to
have a material adverse effect on the business, properties or prospects of the
Business.
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2.09 Taxes.
(a) Each of the Seller and Flexadux has, with respect to the Business,
(i) timely filed all returns and reports required to be filed by it with respect
to all foreign, federal, state and local income, payroll, withholding, excise,
sales, use, personal property, use and occupancy, business and occupation,
mercantile, real estate, stock, franchise or other tax (all the foregoing taxes,
including interest and penalties thereon and including estimated taxes, being
hereinafter collectively called "Taxes"), (ii) paid all Taxes shown to have
become due pursuant to such returns and reports and (iii) paid all other Taxes
due, including without limitation Taxes for which a notice of or assessment or
demand for payment has been received. All such returns have been prepared in
accordance with all applicable Laws and accurately reflect the taxable income
(or other measure of Tax) of the Seller or Flexadux (as the case may be).
(b) The accruals for Taxes contained in the Balance Sheet of the
Seller and Flexadux are adequate to cover all liabilities for Taxes of the
Seller or Flexadux (as the case may be) for all periods ending on or before the
Balance Sheet Date, and nothing has occurred subsequent to that date to make any
of such accruals inadequate. All Taxes for periods ended after the Balance Sheet
Date through the date hereof have been paid or are adequately reserved against
on the books of the Seller or Flexadux and on any interim financial statements
provided to the Buyers, including the Final Takeover Balance Sheets required by
Section 7.04 below.
(c) Each of the Seller and Flexadux has timely filed all information
returns or reports which are required to be filed with respect to the Business
and has accurately reported all information required to be reflected on such
returns or reports. There are no proposed assessments of Tax against either the
Seller or Flexadux or proposed adjustments to any tax returns or reports filed
pending against either the Seller or Flexadux.
(d) Schedule 2.09 hereto lists the most recent Tax return and report
of the Seller and Flexadux that has been audited by the relevant authorities and
all deficiencies or proposed deficiencies resulting from such audits have been
paid or are adequately provided for in the Balance Sheet, and no Tax return or
report is under examination by any taxing authority. Neither the Seller nor
Flexadux has ever (i) executed a waiver or consent extending any statute of
limitation for federal income or other tax liability which remains outstanding,
(ii) joined in or been required to join in filing a consolidated federal income
tax return with any other party, except as listed on Schedule 2.09 hereto, (iii)
applied for a tax ruling, (iv) entered into a closing agreement with any taxing
authority or (vi) filed an election under section 338(g) or section 338(h)(10)
of the Code or caused a deemed election under section 338(e) of the Code to have
occurred.
2.10 Inventory. All of the inventories of the Seller and Flexadux relating
to the Business, including those reflected in the Balance Sheets and in the
Final Takeover Balance Sheets, are valued at the lower of cost or market, the
cost thereof being determined on a first-in, first-out basis, except as
disclosed in the Financial Statements. All of the inventories of the Seller and
Flexadux reflected in the Balance Sheets and all inventories acquired since the
Balance Sheet Date consist of items of a quality and quantity usable and salable
in the ordinary course of the Business within a reasonable period of time, and
all of the raw materials and
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work in process inventories of the Seller or Flexadux relating to the Business
reflected in the Balance Sheets and all such inventories acquired since the
Balance Sheet Date can reasonably be expected to be consumed in the ordinary
course of business within a reasonable period of time. None of the inventory of
the Seller or Flexadux relating to the Business is obsolete or slow moving.
Attached hereto as Schedule 2.10 is a true and correct summary of the
inventories of the Seller and Flexadux relating to the Business of finished
goods, work in process and raw materials as of the last day of the month
immediately preceding the present month.
2.11 Accounts Receivable. All of the accounts receivable of Flexadux and
the Seller with respect to the Business, including those reflected on the
Balance Sheets and the Final Takeover Balance Sheets represent amounts
receivable for merchandise actually delivered or services actually provided (or,
in the case of non-trade accounts or notes, represent amounts receivable in
respect of other bona fide business transactions), have arisen in the ordinary
course of business, are not subject to any counterclaims or offsets and have
been billed and generally are due within 30 days after such billing. All such
receivables are reasonably believed to be fully collectible in the normal and
ordinary course of business, except to the extent of the reserve for doubtful
accounts reflected on the Balance Sheet. Schedule 2.11 hereto sets forth (a) the
total amount of accounts receivable of the Business outstanding as of the last
day of the month immediately preceding the present month and (b) the aging of
such receivables based on the following schedule: 0-30 days, 31-60 days, 61-90
days and over 90 days, from the due date thereof.
2.12 Real Property.
(a) Schedule 2.12 hereto sets forth a true and correct list of all
leases for real property (including any subleases and assignments of leases)
used in or relating to the Business with respect to which either the Seller or
Flexadux is the lessee (or the sublessee or assignee of the lessee)
(collectively, "Leases") and the location of all properties covered thereby, and
indicates which of such Leases will require the consent of the landlord
thereunder in order to prevent a default from occurring thereunder upon the sale
of the Assets to TFC or the sale of the Shares to SII. All of such Leases are in
full force and effect, all parties thereto are in compliance with all of the
terms thereof and no default or event which, with the giving of notice or the
passage of time or both, would constitute a default exists with respect to any
party under any of such Leases.
(b) Each of the Seller and Flexadux presently owns (beneficially or of
record) the real properties described on Schedule 2.12 used in or relating to
the Business (the real properties owned or leased by the Seller or Flexadux,
including all structures and improvements thereon, are referred to collectively
as the "Seller Properties").
(c) Schedule 2.12 sets forth a true and correct list of all real
properties (other than the Seller Properties) which were owned or leased by the
Seller or Flexadux and used in or relating to the Business at any time since
January 1, 1985 (all such properties and all other properties which were owned
or leased by the Seller or Flexadux since its inception, including all
structures and improvements thereon, are referred to as the "Former Seller
Properties"), together with a brief description of the activities conducted on
such properties by the Seller or
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Flexadux or the occupants thereof during the time when the Seller or Flexadux
owned or occupied such properties.
2.13 Material Agreements. Except as listed on Schedule 2.13 hereto, neither
the Seller nor Flexadux is a party to or bound by any agreement, contract or
commitment, oral or written, formal or informal, of the following types relating
to the Business (collectively, "Material Agreements"):
(a) employment or consulting agreements;
(b) powers of attorney;
(c) sales agency, manufacturer's representative and distributorship
agreements or other distribution or commission arrangements;
(d) licenses of patents, trademarks or other intellectual property
rights;
(e) agreements, orders or commitments for the purchase of services,
supplies or finished products from any one supplier for an amount in excess of
$10,000;
(f) agreements, orders or commitments for the sale of products or
services for more than $10,000 to any single purchaser;
(g) agreements, orders or commitments for the sale of products or
services to any Government Authority;
(h) contracts or options relating to the sale by the Seller or
Flexadux of any asset, other than sales of inventory in the ordinary course of
business;
(i) agreements or commitments for capital expenditures in excess of
$25,000 for any single project;
(j) joint venture agreements;
(k) lease agreements for personal property;
(l) agreements relating to the assumption or guarantee by the Seller
or Flexadux of any liability or obligation of any other person or entity,
whether absolute, accrued, contingent or otherwise;
(m) agreements, contracts or commitments for any charitable or
political contribution; or
(n) other agreements, contracts or commitments which are material to
the Business, or which involve payments or receipts of more than $10,000 in any
single year, or
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which were entered into other than in the ordinary and usual course of business,
and which are not listed on any other Schedule hereto.
All such Material Agreements are in full force and effect, all parties to
such Material Agreements have, to the best knowledge of the Seller, complied
with the provisions thereof (including without limitation any provision relating
to hiring practices, equal opportunity of employment or affirmative action), and
no default or event which, with the giving of notice or the passage of time or
both, would constitute a default exists with respect to any party under any of
such Material Agreements. Schedule 2.13 hereto indicates which of such Material
Agreements will require the consent of a party thereto in order to prevent a
default from occurring thereunder upon the sale of the Assets and the Business
to TFC or the sale of the Shares to SII.
2.14 Patents and Intellectual Property Rights. Schedule 2.14 hereto sets
forth a true and correct list of all patents, patent applications, trademarks
and trade names, copyrights, service marks, logos and other Intellectual
Property presently held, owned or used by the Seller or Flexadux relating to the
Business, or necessary to the Business as it is now conducted, all of which are
valid and in good standing, and none of which infringes (nor has any claim been
made that any of them infringes) the patents, trademarks or other rights of
others. The manufacture, sale or use of any products now or heretofore
manufactured or sold by the Business did not and does not infringe (nor has any
claim been made that any such action infringes) the patents or rights of others.
2.15 Title to Assets. Each of the Seller and Flexadux has good and
marketable title (fee or leasehold) to all of its properties and assets which
relate to the Business, including the properties and assets reflected in the
Balance Sheets (except those disposed of in the ordinary course of business
since the Balance Sheet Date), free and clear of any Liens except (a) minor
imperfections of title, none of which, individually or in the aggregate,
materially detracts from the value of or impairs the use of the affected
properties or impairs the operations of the Business, (b) Liens for current
taxes not yet due and payable and (c) as disclosed on Schedule 2.15 hereto
(collectively, "Permitted Liens"). The assets of the Flexaust Division, together
with the assets of Flexadux, constitute all of the assets used in or related to
the Business.
2.16 Condition of Assets. The buildings, equipment, machinery, furniture,
improvements and other assets of the Seller and Flexadux used in or relating to
the Business, including those reflected in the Balance Sheets, are in good
operating condition and repair and are suitable for the purposes for which they
are used in the Business.
2.17 Permits. Schedule 2.17 hereto sets forth a true and correct list of
all material Permits held by the Seller or Flexadux with respect to the Business
or the Assets and indicates which of such Permits will require the consent of
the issuing Government Authorities for such Permits to remain in full force and
effect upon the sale of the Assets to TFC and the sale of the Shares to SII. All
such Permits are in full force and effect and the Seller and Flexadux are in
compliance with the terms and conditions thereof. The Seller and Flexadux
together hold all Permits required under all Laws which are material to the
Business.
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2.18 Compliance with Laws. Each of the Seller and Flexadux has complied and
is in substantial compliance with all material Laws relating to the Business
(including without limitation those relating to environmental protection,
occupational safety and health and equal employment practices). No notice,
citation, summons or order has been issued, no complaint has been filed, no
penalty has been assessed and no investigation or review is pending or
threatened by any Government Authority or other entity which has had or could
have a material effect on the Business with respect to any alleged violation by
either the Seller or Flexadux of any Law.
2.19 Environmental Matters. Except as set forth on Schedule 2.19 hereto,
none of the following events has occurred:
(a) any direct or indirect discharge, disposal, spillage, emission,
escape, pumping, pouring, injection, release, seepage or filtration of any
Hazardous Substance (as hereinafter defined) at, upon, under or within any of
the Seller Properties or, to the best knowledge of the Seller, the Former Seller
Properties, or from any of the Seller Properties or, to the best knowledge of
the Seller, from any of the Former Seller Properties, to any other real property
or into the air or any body of water, in violation of any applicable
Environmental Laws (as defined below);
(b) any deposit, storage, dumping, placement or use of any Hazardous
Substance at, upon, under or within the Seller Properties or, to the best
knowledge of the Seller, the Former Seller Properties in violation of any
applicable Environmental Laws;
(c) the transport, disposal, abandonment or discarding by the Seller
or Flexadux or their respective employees, agents or independent contractors, of
any Hazardous Substance in violation of any applicable Environmental Laws;
(d) any activity which could result in any material liability, cost or
expense to any past, present or future owner or occupier of the Seller
Properties or, to the best knowledge of the Seller, the Former Seller Properties
under any applicable Environmental Laws; or
(e) any other material violation of or noncompliance with any
Environmental Law by either the Seller or Flexadux or any of their respective
employees or, to the best knowledge of the Seller, agents or independent
contractors.
As used herein, "Environmental Laws" shall mean any Laws which relate to the
environment or human health or safety, including without limitation Laws
relating to the use, storage, treatment, transportation, manufacture,
refinement, handling, production or disposal of any Hazardous Substance, and
"Hazardous Substance" shall mean (i) any flammable substances, explosives,
radioactive materials, hazardous materials, hazardous wastes, toxic substances,
pollutants, contaminants or any related materials or substances specified in any
applicable Environmental Laws (including any "hazardous substance" as defined in
the Comprehensive Environmental Response Compensation Liability Act, 42 U.S.C.
ss.ss.6901 et seq.), and (ii) asbestos, polychlorinated biphenyls, radon,
petroleum products and urea formaldehyde.
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2.20 ERISA Matters.
(a) Except for the benefit plans listed on Schedule 2.20 hereto,
neither the Seller nor Flexadux sponsors or maintains nor is required, either by
law or by contract, to contribute to any employee welfare benefit plan, within
the meaning of section 3(1) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), with respect to the Business or any employees of the
Business nor to any employee pension benefit plan, within the meaning of section
3(2) of ERISA, with respect to the Business or any employees of the Business
(all such plans, including the Pension Plan, are referred to individually as a
"Plan" and collectively as the "Plans"). Neither the Seller nor Flexadux has
contributed to, nor is it required to contribute to, any multi-employer plan,
within the meaning of section 3(37) of ERISA, with respect to the Business.
(b) All contributions required, by law or by contract, to be made to
any Plan for any plan year or other period on the basis of which contributions
are required ending before the date hereof have been made as of the date hereof
or have been adequately provided for in the Financial Statements.
(c) The Plans and any trusts or insurance contracts maintained in
connection therewith have been administered in compliance with ERISA and the
Code in all material respects, and the Seller and Flexadux (as applicable) have
complied in all material respects with all legal requirements with respect to
the Plans, including any reporting and disclosure requirements.
(d) No Plan, nor any trust created thereunder, nor any trustee or
administrator thereof, has engaged in any transaction prohibited by section 406
or section 407 of ERISA, or by section 4975 of the Code, which could subject
either Seller or any Plan to any penalty imposed under ERISA or to any tax
imposed by section 4975 of the Code or, if any such transaction has occurred, it
has been corrected, within the meaning of section 4975 of the Code, and all
applicable Taxes and penalties with respect thereto have been paid.
(e) Each Plan has been determined by the Internal Revenue Service to
be "qualified" within the meaning of section 401(a) of the Code and the Seller
has provided the Buyers with a copy of the most recent determination letter
issued by the Internal Revenue Service with respect to each Plan. The Seller
knows of no fact that may adversely affect the qualified status of any Plan.
(f) No "reportable event" as that term is defined in section 4043(c)
of ERISA has occurred with respect to any Plan.
(g) The Seller has provided the Buyers with true and correct copies of
the IRS Form 5500 most recently filed for each Plan.
(h) Neither the Seller nor Flexadux nor any other employer which, with
either of them, could be or has been considered to be a "single employer" within
the meaning of
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section 414(b) or 414(c) of the Code has ever terminated or withdrawn, wholly or
partially, from any multi-employer plan within the meaning of section 3(37) of
ERISA, nor has any such employer announced an intention to withdraw, but not yet
completed such withdrawal, from any multi-employer plan.
(i) There are no actions, suits, investigations or proceedings pending
or, to the best knowledge of the Seller, threatened against or affecting any
Plan, any fiduciaries thereof or the assets of any trust thereunder, at law or
in equity, by or before any Judicial Authority, and there is no basis for any
such action, suit, investigation or proceeding. There are presently no
outstanding Judgments against or affecting any Plan, any fiduciaries thereof or
the assets of any trust thereunder.
2.21 Consents. No consent, approval or authorization of, or registration or
filing with, any person or entity, including any Government Authority, is
required in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby, except as otherwise
disclosed on a Schedule to this Agreement.
2.22 No Pending Litigation or Proceedings. Except as set forth on Schedule
2.07, there are no actions, suits, investigations, or proceedings pending or, to
the best knowledge of the Seller, threatened against or affecting either the
Seller or Flexadux, the Business, any of the Assets or the Shares or the
Seller's or Flexadux's respective rights thereto, at law or in equity, by or
before any Judicial or Government Authority, and to the best knowledge of the
Seller there is no basis for any such action, suit, investigation or proceeding.
To the best knowledge of the Seller, there are presently no outstanding
Judgments against or affecting either the Seller or Flexadux or any of their
assets or affecting the Business, the Assets, the Shares or the Seller's rights
thereto.
2.23 Officers and Employees. Schedule 2.23 hereto contains a list of all
officers and other employees of and consultants to either the Seller or Flexadux
employed or used in connection with the Business whose current annual salary or
rate of compensation, exclusive of commissions, is $25,000 or more, together
with the current job title or relationship to the Seller or Flexadux and the
aggregate remuneration rate for each such person.
2.24 Labor Relations. The relations of each of the Seller and Flexadux with
its employees in the Business are good. Except as disclosed on Schedule 2.24
hereto, with respect to the Business:
(a) no employee of either the Seller or Flexadux is represented by any
union or other labor organization, and neither the Seller nor Flexadux is party
to any union or collective bargaining agreement;
(b) no employees of either the Seller or Flexadux are party to, or are
the target of, any union organizing drive or similar activity;
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(c) there is no unfair labor practice charge or complaint against
either the Seller or Flexadux pending or, to the best knowledge of the Seller,
threatened before the National Labor Relations Board or any other Government or
Judicial Authority;
(d) there is no labor strike, dispute, slow down or stoppage pending
or, to the best knowledge of the Seller, threatened against or involving either
the Seller or Flexadux;
(e) no labor grievance which might have an adverse affect on either
the Seller or Flexadux or the conduct of the Business is pending or, to the best
knowledge of the Seller, threatened;
(f) to the best knowledge of the Seller, neither the Seller nor
Flexadux is or has engaged in any unfair or discriminatory labor practices which
remain unresolved as of the date of this Agreement;
(g) no agreement to which either the Seller or Flexadux is a party or
by which it is bound restricts Seller or Flexadux from relocating, closing or
terminating any of its operations or facilities; and
(h) neither the Seller nor Flexadux has experienced any work stoppage
or other labor difficulty in the past three years.
2.25 Products; Products Liability.
(a) Schedule 2.25 hereto sets forth a true and correct list of all
product lines currently or formerly manufactured or sold by the Business and all
services currently or formerly provided by the Business with respect to which
either the Seller or Flexadux has any outstanding warranty obligations or other
liabilities, whether actual or contingent.
(b) The Seller has delivered to the Buyers true and correct copies of
all express warranties in effect with respect to any products manufactured or
sold, and any services provided by, the Business.
(c) Except for lawsuits, claims, damages and expenses adequately
covered by insurance, to the best knowledge of the Seller there are no
liabilities of either the Seller or Flexadux, fixed or contingent, asserted or
unasserted, with respect to (i) any product manufactured or sold by the Business
or (ii) any claim for the breach of any express or implied product warranty or
any other similar claim with respect to any product manufactured or sold by the
Business.
2.26 Insurance. Schedule 2.26 hereto sets forth a true and correct list of
all policies of insurance of which either the Seller or Flexadux is the owner,
insured or beneficiary relating to the Business, or covering any of its property
used in or relating to the Business, indicating for each policy the carrier,
risks insured, the amounts of coverage, deductible, premium rate, cash value if
any, expiration date and any pending claims thereunder. All such policies are
outstanding and in full force and effect. The coverages provided by such
policies are
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reasonable, in both scope and amount, in light of the risks attendant to the
businesses in which the Seller or Flexadux is, or has been, engaged and are
comparable to coverages customarily maintained by the Seller or Flexadux in a
similar line of business, and such insurance is reasonably believed to be,
subject to reasonable deductibles, sufficient in the aggregate to cover all
reasonably foreseeable damage to and liabilities or contingencies relating to
the conduct by the Seller and Flexadux of the Business. There is no default with
respect to any provision contained in any such policy, nor has there been any
failure to give any notice or present any material claim under any such policy
in a timely fashion or in the manner or detail required by such policy. Except
as set forth on Schedule 2.26, there are no outstanding unpaid premiums or
claims under such policies. Schedule 2.26 contains an accurate and complete
description of any provision contained in such policies which provide for
retrospective or retroactive premium adjustments. No notice of cancellation or
non-renewal with respect to, or disallowance of any claim under, any such policy
has been received by either the Seller or Flexadux. Neither the Seller nor
Flexadux has been refused any insurance, nor has its coverage been limited by
any insurance carrier to which it has applied for insurance or with which it has
carried insurance during the last five years. Since January 1, 1990, all
products liability and general liability policies maintained by or for the
benefit of either the Seller or Flexadux have been "occurrence" policies and not
"claims made" policies.
2.27 Customers and Suppliers. Schedule 2.27 hereto contains a list of each
of the customers and suppliers of the Business whose purchases from or sales to
the Business constituted five percent or more of the net sales or net purchases
of the Business, respectively, during any of the fiscal years ended December 31,
1992, December 31, 1993 or December 31, 1994 or during the three-month period
ended March 31, 1995, showing, with respect to each, the name and address,
dollar volume and nature of the relationship (including the principal categories
of products bought or sold). Neither the Seller nor Flexadux is required to
provide any material bonding or other financial security arrangements in
connection with any of the transactions with any of such customers or suppliers.
Neither the Seller nor Flexadux has received any direct communication (whether
oral or written) of any intention of any customer identified on Schedule 2.27
hereto to discontinue its relationship as a customer of, or materially to reduce
its purchases from the Business.
2.28 Brokerage. Neither the Seller nor Flexadux has made any agreement or
taken any other action which might cause anyone to become entitled to a finder's
or broker's fee or commission as a result of the transactions contemplated
hereunder.
2.29 Disclosure. No representation or warranty by the Seller in this
Agreement, and no Exhibit, Schedule, document, statement or certificate
furnished or to be furnished to the Buyers pursuant hereto or in connection with
the transactions contemplated hereby, contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary to (a) make the statements or facts contained herein or therein not
misleading or (b) provide the Buyers with adequate and complete information as
to the Seller, Flexadux and their respective affairs, the Business, the Assets
and the Shares.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BUYERS
The Buyers hereby represent and warrant to the Seller as follows:
3.01 Organization. TFC is a corporation duly organized, validly existing
and in good standing under the laws of the State of Indiana. SII is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Each Buyer has the full corporate power to own or
lease its properties and assets as now owned or leased, to carry on its business
as and where now being conducted and to make, execute, deliver and perform this
Agreement and the Related Agreements to which it is a party.
3.02 Authorization and Enforceability. The execution, delivery and
performance of this Agreement and the Related Agreements to which each Buyer is
a party have been duly authorized by all necessary corporate action on the part
of such Buyer. This Agreement and the Related Agreements to which each Buyer is
a party have been or will be duly executed and delivered by such Buyer and
constitute or will constitute legal, valid and binding obligations of such
Buyer, enforceable against it in accordance with their respective terms.
3.03 No Violation of Laws or Agreements. The execution and delivery of this
Agreement and the Related Agreements to which each Buyer is a party do not, and
the consummation of the transactions contemplated by this Agreement and the
Related Agreements and the compliance with the terms, conditions and provisions
hereof and thereof by such Buyer will not, conflict with or result in a breach
of or constitute a default (or an event which might, with the giving of notice
of the passage of time or both, constitute a default) under any of the terms,
conditions or provisions of any indenture, mortgage, loan or credit agreement or
any other agreement or instrument to which such Buyer is a party or by which
such Buyer or any of its assets may be bound or affected, or any Judgment or
material Law.
3.04 Brokerage. Neither Buyer has made any agreement or taken any other
action which might cause anyone to become entitled to a finder's or broker's fee
or commission as a result of the transactions contemplated hereunder.
ARTICLE IV
CERTAIN RIGHTS AND OBLIGATIONS OF THE PARTIES PRIOR TO CLOSING
4.01 Conduct of Business Pending Closing. From and after the date hereof
and pending the Closing, and unless the Buyers shall otherwise consent or agree
in writing, the Seller covenants and agrees that:
(a) Ordinary Course. The Business shall be conducted only in the
ordinary course and consistent with past practice, including without limitation
billing, shipping and collection practices, inventory transactions and payment
of accounts payable.
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(b) Preservation of Business. The Seller shall use all reasonable
efforts to preserve the business organization of the Business intact, to keep
available to the Buyers the services of the present officers and employees of
the Business and to preserve for the Buyers the good will of the suppliers,
customers and others having business relations with the Business.
(c) Material Transactions. The Seller shall, with respect to the
Business:
(i) permit the Buyers to have on the premises of the Business, at
the Buyers' expense, a representative of the Buyers who shall consult with the
Seller and supervise the conduct of the Business in a manner satisfactory to the
Buyers;
(ii) in the event of a casualty, loss or damage to any of the
Assets prior to the Closing Date for which the Seller or Flexadux is insured, at
the option of the Buyers, either repair or replace such damaged Asset or
transfer the proceeds of such insurance to the Buyers at Closing;
(iii) not enter into any contract or commitment the performance
of which may extend beyond the Closing, except those made in the ordinary course
of business the terms of which are consistent with past practice and reasonable
in light of current conditions;
(iv) not enter into any employment or consulting contract or
arrangement with any person relating to the Business which is not terminable at
will without penalty or continuing obligation;
(v) not incur, create, assume or suffer to exist any Lien,
tenancy or other matter affecting title to any of its assets used in or relating
to the Business, except Permitted Liens;
(vi) not make, change or revoke any tax election or make any
agreement or settlement with any taxing authority;
(vii) loan or advance funds to, or make an investment in or
capital contribution to, any person or entity;
(viii) not sell, transfer or otherwise dispose of any of the
Assets except for sales of inventory in the ordinary course of business and
sales or other dispositions of assets which are not material to the Business, or
sell, transfer or otherwise dispose of any of the Shares, or negotiate with or
enter into any agreement with any person or entity to do any of the foregoing,
except as permitted by Section 4.02 below;
(ix) merge or consolidate with or into any other entity, or
negotiate or enter into any agreement with any person or entity to do any of the
foregoing;
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(x) not take any action or permit to occur any event described in
Section 2.08, except as otherwise expressly required by the terms hereof;
(xi) not take any action or omit to take any action which will
result in a violation of any material Law or cause a breach of any material
agreements, contracts or commitments;
(xii) promptly notify the Buyers in writing of any materially
adverse developments with respect to the Business, the Assets or the Shares;
(xiii) enter into no transaction, and use its best efforts not to
permit any event to occur, which would result in any of the representations and
warranties of the Seller contained in this Agreement not being true and correct
at and as of the time immediately after the occurrence of such transaction or
event;
(xiv) maintain levels of Inventory substantially in accordance
with the Inventory levels of the Business as of the date hereof (as adjusted to
reflect purchase orders received after the date hereof) and in accordance with
the Seller's normal business practices; or
(xv) not incur any other obligation or liability, absolute or
contingent, with respect to the Business except in the ordinary course of
business and consistent with past practice.
4.02 Permitted Transfers of Assets to Others. Notwithstanding Section
4.01(c)(viii) above, the Seller may sell its Amesbury, Massachusetts facility at
which a portion of the Business is conducted (the "Amesbury Facility") provided
that (i) the sale price for the Amesbury Facility shall be at least $390,000 and
(ii) all proceeds of such sale shall remain in the Flexaust Division and shall
be transferred to TFC at the Closing.
4.03 Insurance. The Seller and Flexadux shall maintain in full force and
effect the policies of insurance listed on Schedule 2.26, subject only to
variations required by the ordinary operations of its business, or else will
obtain, prior to the lapse of any such policy, substantially similar coverage
with insurers of recognized standing and approved by the Buyers. The Seller
shall promptly notify the Buyers of any change of insurer or type of coverage in
respect of the policies listed on Schedule 2.26 hereto.
4.04 Satisfaction of Closing Conditions. The Buyers and the Seller each
shall (a) use their best efforts to cause all of the conditions to the
obligations of the other under Article V of this Agreement to be satisfied on or
prior to the Closing Date and (b) promptly notify the other of any event or fact
which represents or is likely to cause a breach of any of or its
representations, warranties, covenants or agreements hereunder. The Seller shall
promptly advise the Buyers in writing of the occurrence of any condition or
development (exclusive of general economic factors affecting business in
general) of a nature that is or may be materially adverse to the businesses,
operations, assets, prospects or conditions (financial or otherwise) of the
Business.
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4.05 Access, Information and Documents; Confidentiality. The Seller shall
give to the Buyers and to the Buyers' counsel, accountants and other
representatives (collectively, "Representatives") full access during normal
business hours to all of the Seller's and Flexadux's properties, books, tax
returns, contracts, commitments, records, officers, personnel and accountants
relating to the Business and will furnish to the Buyers all such documents and
copies of documents and all such other information with respect to the affairs
of the Business as the Buyers may reasonably request. The Buyers agree that they
will hold in strict confidence, and cause their Representatives to hold in
strict confidence, all information obtained from the Seller under this Section
4.05 and will not disclose, and will cause their Representatives not to
disclose, any portion of such information to any third party (except for (i)
information which, at the time of disclosure or thereafter, became or becomes
generally known to the public through no act or omission of the Buyers; (ii)
information that is already in possession of the Buyers free of any obligation
of confidence to the Seller or any other third party; (iii) information that
became or becomes available to the Buyers from a third party who did not acquire
such information under an obligation of confidentiality, either directly or
indirectly; or (iv) information that was or becomes required to be disclosed by
law, provided, however, that the Buyers shall give prior written notice of such
disclosure to the Seller, use their best efforts to limit such disclosure, and
make such disclosure only to the extent so required). In the event this
Agreement is terminated pursuant to Section 5.03(a) below or the transactions
contemplated by this Agreement are otherwise not consummated, the Buyers shall
immediately upon request of the Seller return, and shall cause their
Representatives to immediately return, all copies of documents and other
information obtained pursuant to this Section 4.05 without retaining copies or
extracts thereof.
4.06 Audit of Inventory. As soon as practicable prior to the Closing Date,
the Buyers and the Seller shall conduct an audit of the Inventory being
purchased by TFC pursuant hereto, at the Buyers' expense.
4.07 Environmental Law Compliance. Prior to the Closing Date, the Buyers,
at their sole option, may cause an environmental audit to be performed on the
Seller Properties. Such environmental audit shall be performed by an
environmental auditing firm selected by the Buyers and at the sole expense of
the Buyers.
4.08 Consents and Best Efforts. The Buyers and the Seller will take all
reasonable action required to obtain all consents, approvals and agreements of,
and to give and make all notices and filings with, any third parties, including
Governmental Authorities, necessary to authorize, approve or permit the full and
complete transfer of the Business, the Assets and the Shares to the Buyers
pursuant to this Agreement. The Buyers and the Seller covenant and agree to use
their best efforts to take, or cause to be taken, all actions and do, or cause
to be done, all things and execute any documents necessary or advisable under
applicable laws or as reasonably requested by the other party to consummate and
make effective the transactions contemplated hereby.
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4.09 Certain Employee Matters.
(a) Nothing in this Agreement (i) requires the Buyers to hire, or to
offer to hire, any employees of the Seller employed at the Amesbury Facility,
(ii) constitutes an offer to employ such employees or (iii) requires the Buyers
to pay any such persons severance pay in the event of termination of employment.
Notwithstanding the foregoing, the Buyers may make offers of employment to such
of the employees of the Seller working in the Business as the Buyers in their
sole discretion may choose, and the Seller shall use its best efforts to
persuade such employees to accept such offers. Prior to the Closing Date, the
Seller shall afford the Buyers reasonable access to the Seller's employees to
allow the Buyer to interview such employees.
(b) The Buyers do not and shall not assume or be responsible for any
obligations or liabilities arising out of any employment relationship between
the Seller and any employee or former employee, and without limiting the
foregoing, the Buyers shall have no liability or obligation in connection with
either Seller's employees or former employees and their beneficiaries for: (i)
contributions to or payments under employee benefit plans, stock options,
programs, arrangements or understandings; (ii) accrued, but unused, sick leave,
vacation pay and severance pay, if any; (iii) liabilities or obligations under
any collective bargaining agreement or bargaining relationship; or (iv) claims,
demands, administrative proceedings or suits arising out of, or in connection
with, alleged unlawful employment practices of the Seller.
(c) Pursuant to Section 4.09(a) above, the Buyers are not hiring any
of the employees of the Seller employed at the Amesbury Facility and listed on
Schedule 4.09(c)(i) hereto (the "Amesbury Employees"). However, TFC has
requested the Seller not to terminate, and the Seller has agreed not to
terminate, the Amesbury Employees listed on Schedule 4.09(c)(ii) hereto (such
employees are referred to as the "Holdover Amesbury Employees") until May 12,
1995. The Seller shall use its best efforts to cause the Holdover Amesbury
Employees to perform such services for TFC as TFC may reasonably direct. TFC
shall reimburse the Seller for the costs of the Seller relating to payment of
regular salary or wages and normal benefits (other than severance pay and
accrued vacation, sick leave and holiday pay) to the Holdover Amesbury Employees
(at the employee's current salary or wage rate) for the period from May 1, 1995
through May 12, 1995 (except as otherwise indicated on Schedule 4.09(c)(ii)).
The Buyers shall not be responsible for any other costs of the Seller relating
to the Amesbury Employees (including the Holdover Amesbury Employees).
4.10 Bulk Sales Law Compliance. The Buyer hereby waives compliance by the
Seller with the requirements of the bulk sales law of any state having
jurisdiction.
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ARTICLE V
CONDITIONS TO CLOSING; TERMINATION
5.01 Conditions Precedent to Obligations of Buyers. The obligation of the
Buyers to proceed with the Closing is subject to the fulfillment on or prior to
the Closing Date of the following conditions (any one or more of which may be
waived in whole or in part by the Buyers at the Buyers' option):
(a) Bringdown of Representations and Warranties. The representations
and warranties of the Seller contained in this Agreement shall be true and
correct on and as of the Closing Date with the same force and effect as though
such representations and warranties had been made on and as of such date, and
the Buyers shall have received a certificate to such effect signed by the
President of the Seller.
(b) Performance and Compliance. The Seller shall have performed all of
the covenants and complied with all of the provisions required by this Agreement
to be performed or complied with by it on or before the Closing Date, and the
Buyers shall have received a certificate to such effect signed by the President
of the Seller.
(c) Opinion of Counsel. The Buyers shall have received from Freedman,
Levey, Kroll & Simonds, counsel for the Seller, an opinion dated the Closing
Date in form and substance satisfactory to Buyers, with respect to the matters
set forth in Section 2.01, 2.04 (first two sentences only), 2.05, 2.18, 2.21 and
2.22 and with respect to such other matters as the Buyers may reasonably
request.
(d) Satisfactory Instruments. All instruments and documents required
on the Seller's part to effectuate and consummate the transactions contemplated
hereby shall be delivered to the Buyers and shall be in form and substance
reasonably satisfactory to the Buyers.
(e) Consents. All consents necessary to prevent a default from
occurring under any of the Leases or Material Agreements, or to prevent any
suspension or termination of any of the Permits or withdrawal of any right or
privilege thereunder, shall have been obtained by the Seller.
(f) Litigation. No Judgment shall be in effect which restrains or
prohibits the transactions contemplated hereby or which would limit or adversely
affect TFC's ownership or control of the Assets or SII's ownership of the
Shares, and there shall not be pending or threatened, by or before any Judicial
or Government Authority, any action or proceeding challenging any of the
transactions contemplated by this Agreement or the Related Agreements or seeking
monetary relief by reason of the consummation of such transactions or which
might affect TFC's right to own, operate or control the Assets after the Closing
Date in the manner in which they were operated prior thereto, SII's right to own
the Shares after the Closing Date, or which might have a material adverse effect
on the business, prospects or condition (financial or otherwise) of the Assets.
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(g) Employment Agreements. Frederick R. Radcliffe and William Draper
each shall have entered into an Employment Agreement with TFC.
(h) Flormar Purchase Closing. The closing of the sale by the Seller to
Flormar of the Seller's Warsaw, Indiana real property pursuant to the Flormar
Purchase Agreement shall have occurred.
(i) Flexaust GmbH Closing. The closing of the sale by the Seller to
Schauenburg GmbH of its 50% equity interest in Flexaust GmbH shall have
occurred.
(j) Approval of Board of Directors. This Agreement, the Related
Agreements and all transactions contemplated hereby or thereby shall have been
duly approved by all required corporate action on the part of (i) each Buyer's
board of directors and (ii) the Seller's board of directors and sole
shareholder. In addition, the Buyers shall have received copies, certified by
the Secretary of the Seller, of the resolutions of the Seller's board of
directors and sole shareholder approving said agreements and transactions.
(k) No Material Adverse Change. There shall have been no material
adverse change since the Balance Sheet Date in the businesses, operations,
assets, prospects or condition (financial or otherwise) of the Business.
(l) Compliance With Laws. The Seller shall have duly complied with all
such applicable Laws (other than bulk sales laws) as may be required for the
valid and effective consummation of the transactions contemplated by this
Agreement.
(m) Assignment Instruments. The Seller shall have executed and
delivered to the Buyers the Assignment Instruments.
(n) Non-Competition Agreement. The Seller shall have executed and
delivered to the Buyers the Non-Competition Agreement.
5.02 Conditions Precedent to the Obligations of the Seller. The obligation
of the Seller to proceed with the Closing is subject to the fulfillment on or
prior to the Closing Date of the following conditions (any one or more of which
may be waived in whole or in part by the Seller at the Seller's option):
(a) Bringdown of Representations and Warranties. The representations
and warranties of the Buyers contained in this Agreement shall be true and
correct on and as of the Closing Date with the same force and effect as though
such representations and warranties had been made on as of such date, and each
Buyer shall have delivered to the Seller a certificate to such effect.
(b) Performance and Compliance. Each of the Buyers shall have
performed all of the covenants and complied with all the provisions required by
this Agreement to be
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performed or complied with by it on or before the Closing Date, and each of the
Buyers shall have delivered to the Seller a certificate to such effect.
(c) Opinion of Counsel for Buyers. The Seller shall have received from
Cohen & Grigsby, P.C., counsel for the Buyers, an opinion dated the Closing Date
in form and substance satisfactory to the Seller, with respect to the matters
set forth in Sections 3.01, 3.02 and 3.03 and with respect to such other matters
as the Seller may reasonably request.
(d) Satisfactory Instruments. All instruments and documents required
on the part of the Buyers to effectuate and consummate the transactions
contemplated hereby shall be delivered to the Seller and shall be in form and
substance reasonably satisfactory to the Seller.
(e) Litigation. No Judgment shall be in effect which restrains or
prohibits the transactions contemplated hereby and there shall not be pending or
threatened, by or before any Judicial or Government Authority, any action or
proceeding challenging any of the transactions contemplated by this Agreement or
the Related Agreements or seeking monetary relief by reason of the consummation
of such transactions.
(f) Flormar Purchase Closing. The closing of the sale by the Seller to
Flormar of the Seller's Warsaw, Indiana real property pursuant to the Flormar
Purchase Agreement shall have occurred.
(g) Flexaust GmbH Closing. The closing of the sale by the Seller to
Schauenburg GmbH of its 50% equity interest in Flexaust GmbH shall have
occurred.
(h) Approval of Board of Directors This Agreement, the Related
Agreements and all transactions contemplated hereby or thereby shall have been
duly approved by all required corporate action on the part of (i) each Buyer's
board of directors and (ii) the Seller's board of directors and sole
shareholder. In addition, the Seller shall have received from each Buyer a copy,
certified by the Secretary or Assistant Secretary of such Buyer, of resolutions
of each Buyer's board of directors approving said agreements and transactions.
5.03 Termination.
(a) When Agreement May Be Terminated. This Agreement may be terminated
at any time prior to Closing:
(i) by mutual consent of the Buyers and the Seller;
(ii) by the Buyers if there has been a material misrepresentation
by the Seller hereunder, a material breach by the Seller of any of its
warranties or covenants set forth herein, or if any of the conditions specified
in Section 5.01 hereof shall not have been fulfilled within the time required
and shall not have been waived by the Buyers;
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(iii) by the Seller if there has been a material
misrepresentation by either Buyer hereunder, a material breach by either Buyer
of any of its warranties or covenants set forth herein or if any of the
conditions specified in Section 5.02 hereof shall not have been fulfilled within
the time required and shall not have been waived by the Seller;
(iv) by the Buyers or the Seller if the Closing shall not have
occurred on or prior to April 30, 1995 (as such date may be extended by mutual
consent of the Buyers and the Seller); provided that the Buyers or the Seller
may terminate this Agreement pursuant to this subparagraph (iv) only if the
Closing shall not have occurred prior to such date for a reason other than a
failure by such party to satisfy the conditions to Closing of the other party
set forth in Section 5.01 or 5.02 hereof or a failure by such party to bargain
in good faith; or
(v) by the Buyers under the circumstances set forth in Section
4.07 above.
(b) Effect of Termination. In the event of termination of this
Agreement by either the Seller or the Buyers as provided above, this Agreement
shall forthwith terminate and there shall be no liability on the part of either
the Seller or the Buyers, except for liabilities arising from a breach of this
Agreement prior to such termination.
ARTICLE VI
INDEMNIFICATION
6.01 Indemnification by the Seller. The Seller hereby agrees to indemnify
and hold harmless the Buyers from and against:
(a) any loss, liability (including without limitation any Tax
liability), claim, obligation, damage or deficiency of or to the Buyers arising
out of or resulting from (i) any misrepresentation, breach of warranty or
nonfulfillment of any covenant on the part of either Seller contained in this
Agreement or in any statement or certificate furnished or to be furnished to the
Buyers pursuant hereto or in connection with the transactions contemplated
hereby, or (ii) any investigation by any Government or Judicial Authority of
either Seller or its business or affairs, to the extent such investigation is
addressed to events occurring prior to the Closing Date, or (iii) any events,
actions or omissions occurring prior to the Closing Date and which relate to the
Business or the Assets (other than Assumed Liabilities), or (iv) resulting from
the Buyer's waiver of compliance by the Seller with the requirements of any
applicable bulk sales law; and
(b) any actions, judgments, costs and expenses (including without
limitation reasonable attorneys fees and all other expenses incurred in
investigating, preparing or
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defending any litigation, proceeding or investigation, commenced or threatened)
incident to any of the foregoing or the enforcement of this Section 6.01.
6.02 Indemnification by Buyers. The Buyers hereby agree to indemnify and
hold harmless the Seller from and against:
(a) any loss, liability, claim, obligation, damage or deficiency of or
to the Seller arising out of or resulting from (i) any misrepresentation, breach
of warranty or nonfulfillment of any covenant on the part of either Buyer
contained in this Agreement or in any statement or certificate furnished or to
be furnished to the Seller in connection with the transactions contemplated
hereby, or (ii) any investigation by any Government or Judicial Authority of
either Buyer or its business or affairs, to the extent such investigation is
addressed to events, actions or omissions occurring on or after the Closing Date
and which relate to the Business or the Assets or (iii) events occurring on or
after the Closing Date or from any Assumed Liability; and
(b) any actions judgments, costs and expenses (including reasonable
attorneys fees and all other expenses incurred in investigating, preparing or
defending any litigation or proceeding, commenced or threatened) incident to any
of the foregoing or the enforcement of this Section 6.02.
6.03 Representation, Cooperation and Settlement.
(a) A party seeking indemnification pursuant to this Article VI (an
"Indemnitee") shall give prompt written notice to the party from whom
indemnification is sought (an "Indemnitor") of any claim asserted against such
Indemnitee which might give rise to a claim by such Indemnitee against such
Indemnitor based on the indemnity agreement contained in this Article VI,
stating the nature and basis of the first-mentioned claim and the amount (or a
good faith estimate) thereof.
(b) An Indemnitor shall have full responsibility and authority with
respect to the disposition of any action, suit or proceeding brought against an
Indemnitee with respect to which such Indemnitor may have liability under the
indemnity agreement contained in this Article VI (an "Action"); provided that
notwithstanding the foregoing, if such Indemnitor shall fail or refuse to
exercise such responsibility and authority within a reasonable time after
receiving notice from the Indemnitee of such action, suit or proceeding, then
such Indemnitee may do so at such Indemnitor's expense. If any Action is brought
against an Indemnitee which is defended by an Indemnitor, such Indemnitee shall
have the right, at its own expense, to be represented by counsel of its own
choosing and with whom counsel for such Indemnitor shall confer in connection
with the defense of any such Action. Each of such Indemnitee and Indemnitor
shall make available to the counsel and accountants of the other all of its
books and records relating to such Action, and the parties agree to render to
each other such assistance as may reasonably be requested in order to insure the
proper and adequate defense of any such Action.
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6.04 Duration of Indemnification Obligations. No claim for indemnification
pursuant to this Article VI shall be made after the third anniversary of the
Closing Date, except that such time limitation shall not apply to:
(a) claims for misrepresentations or breaches of warranty relating to
Section 2.09 (relating to Taxes), which may be asserted until after the running
of the applicable statute of limitations with respect to the taxable period to
which a particular claim relates;
(b) claims for misrepresentations or breaches of warranty relating to
Section 2.19 (relating to environmental matters), which claims may be asserted
until after the running of the applicable statute of limitations, if any;
(c) claims for misrepresentations or breaches of warranty relating to
Section 2.20 (relating to ERISA), which claims may be asserted until after the
running of the applicable statute of limitations with respect to the period of
time to which a particular claim relates;
(d) claims which have been the subject of a notice from an Indemnitee
to an Indemnitor prior to such date;
(e) claims made by an Indemnitee pursuant to Section 6.01(b) or
6.02(b), which may be asserted until after the amount of an Indemnitor's
indemnification liability with respect to the underlying claim is finally
determined;
(f) claims for misrepresentations or breaches of warranty if such
representation or warranty was made with actual knowledge that it contained an
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements or facts contained therein not misleading or
constituted fraud under applicable Laws; and
(g) claims made by the Buyers pursuant to Section 6.01(a)(ii).
6.05 Satisfaction of Claims Against the Seller. The Buyers shall have the
right to set-off the amount of any claim for indemnification against the Seller
against any amounts owed by TFC to the Seller under Section 1.04(b) of this
Agreement and, so long as the Buyers have acted reasonably and in good faith in
asserting such claim for indemnification against the Seller, the exercise by the
Buyers of such setoff right shall not constitute a default against obligations
under Section 1.04(b).
ARTICLE VII
COVENANTS OF THE PARTIES AFTER THE CLOSING
7.01 Further Assurances. From time to time after the Closing Date, upon the
request of the Buyers the Seller shall (a) make available to the Buyers any
records, documents or other information relating to the Business and retained by
the Seller and (b) execute, deliver and acknowledge all such further instruments
of transfer and conveyance and take all such other
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actions as the Buyers may reasonably require to more effectively transfer the
Assets to TFC or the Shares to SII. In addition, upon the request of the Seller
the Buyers shall (a) make available to the Seller any records, documents or
other information relating to the Business and in the possession of the Buyers
for the purpose of enabling the Seller to prepare tax returns or for any other
reasonable purpose and (b) execute, deliver and acknowledge all such further
documents and instruments and take all such other actions as the Seller may
reasonably require to more effectively complete the transactions contemplated by
this Agreement or the Related Agreements.
7.02 Delivery of Payments and Documents. The Seller shall, as promptly as
practicable after receipt thereof, properly endorse (if necessary) and deliver
to TFC any payments or documents received by the Seller on account of any item
constituting a part of the Assets or otherwise relating to the Business.
7.03 Non-Transferable Contracts. If the Seller is unable to obtain the
consent, if required, of any third party to the assignment of any contract or
agreement constituting an Assumed Liability to the Buyers, then such contract
shall constitute an Excluded Asset, and the Seller shall remain solely liable
for the performance of such contract. The Buyers agree to cooperate with the
Seller to perform any such contract. All proceeds of any such contract shall be
delivered to the Buyers promptly upon the Seller's receipt thereof.
7.04 Final Takeover Balance Sheets; Adjustments to Purchase Price.
(a) The parties have intended that the Purchase Price would be
adjusted with reference to the net worth of the Flexaust Division and Flexadux
as of December 31, 1994. Therefore, in order to permit the appropriate
adjustments to the Purchase Price to be made, within 45 days after the Closing
Date, the Seller shall provide the Buyers with unaudited interim balance sheets
for Flexadux and the Flexaust Division as of the Effective Time (each interim
balance sheet is referred to as a "Final Takeover Balance Sheet") demonstrating
that, as of the Effective Time, (i) the book value of the assets of the Flexaust
Division less the book value of the Amesbury Facility (net of the items on the
balance sheet assumed by TFC pursuant to Section 1.02 and listed in paragraph 4
of Schedule 1.02) was at least $5,359,675, and (ii) the book value of the assets
of Flexadux (net of liabilities) was at least $858,225. The Buyers and the
Seller each shall designate a representative to assist and shall cooperate with
each other in preparing the Final Takeover Balance Sheets.
(b) Each Final Takeover Balance Sheet shall be accompanied by a
certificate of the Seller representing and warranting to the Buyers that such
Final Balance Sheet (i) is correct and complete and in accordance with the books
and records of Flexadux or the Flexaust Division (as the case may be); (ii)
fairly presents the financial condition, assets and liabilities of the Flexaust
Division (on a stand-alone basis) or Flexadux (as the case may be) as of its
date; and (iii) has been prepared in accordance with GAAP applied on a
consistent basis.
(c) The Seller shall pay to TFC, within 10 days after the date of
delivery of the Final Takeover Balance Sheets, an amount equal to (i) the
amount, if any, by which the book value of the assets of the Flexaust Division
less the book value of the Amesbury Facility
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(net of the items on the balance sheet assumed by TFC pursuant to Section 1.02
and listed in paragraph 4 of Schedule 1.02) was less than $5,359,675, plus (ii)
the amount, if any, by which the book value of the assets of Flexadux (net of
liabilities) was less than $858,225. If the book value of the assets of the
Flexaust Division less the book value of the Amesbury Facility (net of the items
on the balance sheet assumed by TFC pursuant to Section 1.02 and listed in
paragraph 4 of Schedule 1.02) exceeds $5,359,675, then TFC shall pay to the
Seller, within 10 days after the date of delivery of the Final Takeover Balance
Sheets, an amount equal to such excess (if any).
(d) SII shall pay to the Seller, within 10 days after the date of
delivery of the Final Takeover Balance Sheets, an amount equal to 50% of the
earnings of Flexadux, if any, for the period from January 1, 1995 through April
30, 1995.
7.05 Use of Trade Names. The Seller acknowledges that from and after the
Closing Date it shall have no right to use any trade names which constitute any
part of the Assets. Therefore, the Seller agrees that immediately after the
Closing it will take all such action as is necessary to permit TFC to have
exclusive right to any and all such trade names.
7.06 Use of Amesbury Facility. The Seller shall take all actions required
to enable TFC to lawfully occupy the Amesbury Facility, at no cost to TFC, from
the Effective Time until May 31, 1995.
ARTICLE VIII
MISCELLANEOUS
8.01 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given and
received (a) upon delivery, if personally delivered, (b) on the tenth day after
being deposited with the U.S. Postal Service or the Deutsche Bundespost, if sent
by certified or registered mail, return receipt requested, (c) on the next day
after being deposited with a reliable overnight delivery service or (d) upon
receipt of an answerback, if transmitted by telefax, postage prepaid in all
cases other than telefax, addressed to the other party at the following
addresses, or telefax numbers in the case of a telefax (or at such other address
or telefax number as shall be given in writing by any party to the others):
If to the Buyers, to:
The Flexaust Company Inc.
1510 Armstrong Road
Warsaw, Indiana 46580
Telefax Number: (219) 267-7909
Attention: Fred Radcliffe, President
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With a required copy to:
Schauenburg GmbH
Weseler Strasse 35
45478 Muelheim-Ruhr
Federal Republic of Germany
Telefax Number: (011) 49-208-54110
Attention: Werner Hackenberg
Cohen & Grigsby
2900 CNG Tower
625 Liberty Avenue
Pittsburgh, PA 15222
Telefax Number: (412) 391-3382
Attention: Hugh W. Nevin, Jr., Esq.
If to the Seller, to:
Callahan Mining Corporation
505 Front Avenue,
P.O. Box 1
Coeur d'Alene, Idaho 83814
Telefax Number: (208) 667-2213
Attention: James A. Sabala
With a required copy to:
Callahan Mining Corporation
505 Front Avenue
P.O. Box 1
Coeur d'Alene, Idaho 83814
Telefax Number: (208) 667-2213
Attention: William F. Boyd, Esq.
8.02 Successors and Assigns. This Agreement and all rights and powers
granted hereby shall bind and inure to the benefit of the parties hereto and
their respective successors and assigns.
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8.03 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Indiana.
8.04 Counterparts; Telefacsimile Execution. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original, but
which together shall constitute one and the same instrument. Delivery of an
executed counterpart of this Agreement by telefacsimile shall be equally as
effective as delivery of a manually executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by telefacsimile also
shall deliver a manually executed counterpart, but the failure to deliver a
manually executed counterpart shall not affect the validity, enforceability or
binding effect of this Agreement.
8.05 Amendment. To be effective, any amendment or waiver to this Agreement
must be in writing and be signed by the party against whom enforcement of the
same is sought.
8.06 Severability. If any portion of this Agreement shall for any reason be
held by a court of competent jurisdiction to be invalid and unenforceable, the
valid and enforceable provisions will continue to be given effect and bind the
parties hereto.
8.07 Entire Agreement. This Agreement and the Schedules and Exhibits
hereto, each of which is hereby incorporated herein, set forth all of the
promises, covenants, agreements, conditions and undertakings between the parties
hereto with respect to the subject matter hereof, and supersede all prior and
contemporaneous agreements and understandings, inducements or conditions,
express or implied, oral or written.
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IN WITNESS WHEREOF, the parties have executed this Asset and Stock Purchase
Agreement as of the date first written above.
BUYERS:
THE FLEXAUST COMPANY INC.
By:/s/Jack B. Meyer
Title: Chairman
SCHAUENBURG INTERNATIONAL, INC.
By:/s/Werner Hackenberg
Title: President
SELLER:
CALLAHAN MINING CORPORATION
By:/s/James A. Sabala
Title: Vice President
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