<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) October 18, 1995
---------------
Intermet Corporation
- -------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Georgia
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(State or Other Jurisdiction of Incorporation)
0-13787 58-1563873
- ----------------------- ------------------------------------
(Commission File Number) (I.R.S. Employer Identification No.)
5445 Corporate Drive, Suite 200, Troy, Michigan 48098
- -------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(810) 952-1503
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(Registrant's Telephone Number, Including Area Code)
1450 West Long Lake Road, Suite 150, Troy Michigan 48098
- -------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 18, 1995, the Registrant's subsidiary, InterMotive
Technologies, Inc. ("InterMotive"), sold substantially all of its
assets to Ricardo-North America Detroit, Inc. and Ricardo Group,
plc (collectively, "Ricardo") pursuant to an Asset Purchase Agreement,
dated October 12, 1995 by and among the Registrant, InterMotive and
Ricardo. In exchange therefor, the Registrant received $4,430,000 in
cash.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) The following unaudited pro forma financial statements
of the Registrant are attached hereto beginning on page
P-1:
Consolidated Balance Sheet at July 2, 1995
Consolidated Statement of Operations for the year ended
December 31, 1994 and six months ended July 2, 1995
(c) Exhibits
Asset Purchase Agreement by and among Ricardo
North America Detroit, Inc., Ricardo Group, plc.,
InterMotive Technologies, Inc. and Intermet
Corporation, dated October 12, 1995.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Intermet Corporation
Pro Forma Consolidated Balance Sheet
July 2, 1995
(Unaudited)
(A) (B)
-------------------------------------------------------------------------
Pro Forma Pro Forma
Historical Adjustments Pro Forma Adjustments Pro Forma
--------------------------------------------------------------------------
(In Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 7,366 $ 5,320 (a) $ 12,686 $ 4,430 (d) $ 17,116
Accounts receivable:
Trade, less allowance for doubtful
accounts of $807 75,446 (2,492)(a) 72,954 (1,157)(d) 71,797
Other 7,022 -- 7,022 -- 7,022
--------------------------------------------------------------------
82,468 (2,492) 79,976 (1,157) 78,819
Inventories 33,203 (2,034)(a) 31,169 (122)(d) 31,047
Other current assets 4,236 (465)(a) 3,771 (41)(d) 3,730
--------------------------------------------------------------------
Total current assets 127,273 329 127,602 3,110 130,712
Property, plant and equipment, at cost 365,205 (12,394)(a) 352,811 (5,461)(d) 347,350
Less:Foreign industrial development
grants, net of amortization 5,683 -- 5,683 -- 5,683
Accumulated depreciation and
amortization 196,640 (5,843)(a) 190,797 (1,042)(d) 189,755
---------------------------------------------------------------------
Net property, plant and equipment 162,882 (6,551) 156,331 (4,419) 151,912
Other noncurrent assets 14,955 2,500 (a) 17,455 -- 17,455
---------------------------------------------------------------------
$305,110 $(3,722) $301,388 $(1,309) $300,079
=====================================================================
</TABLE>
(A) Sale of PBM Industries, Inc.
(B) Sale of InterMotive Technologies, Inc.
SEE ACCOMPANYING NOTES.
P-1
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Intermet Corporation
Pro Forma Consolidated Balance Sheet
July 2, 1995
(Unaudited)
(A) (B)
-------------------------------------------------------------------------
Pro Forma Pro Forma
Historical Adjustments Pro Forma Adjustments Pro Forma
--------------------------------------------------------------------------
(In Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 32,850 $ (2,315) (a) $ 30,535 $ -- $ 30,535
Income taxes 14,206 -- 14,206 -- 14,206
Accrued liabilities 39,586 (105) (a) 39,481 -- 39,481
Notes payable 899 -- 899 -- 899
Long-term debt due within one year 9,395 -- 9,395 -- 9,395
-------------------------------------------------------------------------
Total current liabilities 96,936 (2,420) 94,516 -- 94,516
Noncurrent liabilities:
Long-term debt due after one year 62,882 -- 62,882 -- 62,882
Retirement benefits 44,597 -- 44,597 -- 44,597
Other noncurrent liabilities 11,502 -- 11,502 -- 11,502
--------------------------------------------------------------------------
Total noncurrent liabilities 118,981 -- 118,981 -- 118,981
Minority interests 2,837 -- 2,837 -- 2,837
Shareholders' equity:
Common stock 2,469 -- 2,469 -- 2,469
Capital in excess of par value 52,449 -- 52,449 -- 52,449
Retained earnings 27,787 (1,302) (a) 26,485 (1,309) (d) 25,176
Accumulated translation
adjustments 4,954 -- 4,954 -- 4,954
Minimum pension liability
adjustment (1,164) -- (1,164) -- (1,164)
Unearned restricted stock (139) -- (139) -- (139)
---------------------------------------------------------------------------
Total shareholders equity 86,356 (1,302) 85,054 (1,309) (d) 83,745
---------------------------------------------------------------------------
$305,110 $(3,722) $301,388 $(1,309) $300,079
===========================================================================
</TABLE>
(A) Sale of PBM Industries, Inc.
(B) Sale of InterMotive Technologies, Inc.
SEE ACCOMPANYING NOTES.
P-2
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Intermet Corporation
Pro Forma Consolidated Statements of Operations
Year ended December 31, 1994
(Unaudited)
Historical Pro Forma
Year ended (A) (B) Year ended
December 31, Pro Forma Pro Forma December 31,
1994 Adjustments Adjustments 1994
---------------------------------------------------------------
(In Thousands of Dollars, except per share data)
<S> <C> <C> <C> <C>
Net sales $501,269 $(35,341) (b) $(4,910) (e) $461,018
Cost of sales 458,823 (37,625) (b) (5,228) (e) 415,970
--------------------------------------------------------------
Gross profit 42,446 2,284 318 45,048
Operating expenses 40,718 (1,835) (b) (815) (e) 38,068
--------------------------------------------------------------
Operating profit 1,728 4,119 1,133 6,980
Other income (expense)
net (6,817) (1,431) (b) (445) (e) (4,941)
--------------------------------------------------------------
Income (loss) before
income taxes (5,089) 5,550 1,578 2,039
Provision for income
taxes 5,896 60 (b) 456 6,412
--------------------------------------------------------------
Net earnings (loss) $(10,985) $ 5,490 $ 1,122 $(4,373)
==============================================================
Loss per share $(.45) $(.18)
======= ======
</TABLE>
(A) Sale of PBM Industries, Inc.
(B) Sale of InterMotive Technologies, Inc.
SEE ACCOMPANYING NOTES
P-3
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Intermet Corporation
Pro Forma Consolidated Statements of Operations
Six months ended July 2, 1995
(Unaudited)
Historical Pro Forma
Six months (A) (B) Six months
ended July 2, Pro Forma Pro Forma ended
1995 Adjustments Adjustments July 2, 1995
---------------------------------------------------------------
(In Thousands of Dollars, except per share data)
<S> <C> <C> <C> <C>
Net sales $302,313 $(20,371) (c) $(2,185) (f) $279,757
Cost of sales 253,203 (18,724) (c) (3,614) (f) 230,865
---------------------------------------------------------------
Gross profit 49,110 (1,647) 1,429 48,892
Operating expenses 15,723 (803) (c) (488) (f) 14,432
---------------------------------------------------------------
Operating profit 33,387 (844) 1,917 34,460
Other income (expense)
net (4,046) (340) (c) (299) (f) (3,407)
---------------------------------------------------------------
Income (loss) before
income taxes 29,341 (504) 2,216 31,053
Provision for income
taxes 13,284 (269) (c) 224 (f) 13,239
---------------------------------------------------------------
Net earnings (loss) $ 16,057 $(235) $ 1,992 $17,814
===============================================================
Earnings per share $.65 $.72
========= ========
</TABLE>
(A) Sale of PBM Industries, Inc.
(B) Sale of InterMotive Technologies, Inc.
SEE ACCOMPANYING NOTES
P-4
<PAGE>
<PAGE>
Intermet Corporation
Notes to Pro Forma Consolidated Financial Statements
(Unaudited)
1. BASIS OF PRESENTATION
The unaudited pro forma consolidated balance sheet at July 2, 1995 shows
the effect of selling substantially all assets, including inventory,
machinery and equipment, most receivables and certain intangible rights
and properties of the Registrant's machining subsidiary, PBM Industries,
Inc. and technical services subsidiary, InterMotive Technologies, Inc.
(the "Companies"), as of that date, including the losses realized on the
sales.
The unaudited pro forma statements of operations for the year ended
December 31, 1994 and six months ended July 2, 1995 give effect to the
sale of the above assets of the Companies as if the sale had occurred at
the beginning of each period presented. However, the statements of
operations do not reflect the losses realized by the Registrant on such
sales, and these results are not necessarily indicative of what would
have occurred had the sales actually taken place at the beginning of 1994
or the beginning of the six month period of 1995.
Management believes that the unaudited pro forma consolidated financial
statements provide a reasonable basis for presenting all of the
significant effects of the completed sales of the Companies' assets and
that the pro forma adjustments are properly applied in the unaudited pro
forma consolidated financial statements.
P-5
<PAGE>
<PAGE>
Intermet Corporation
Notes to Pro Forma Consolidated Financial Statements (continued)
(Unaudited)
SALE OF PBM INDUSTRIES, INC.
2. PRO FORMA ADJUSTMENTS
Pro forma adjustments to consolidated balance sheet
<TABLE>
<CAPTION>
DR (CR)
-----------
<S> <C>
(a) Record proceeds from sale of substantially
all of the assets and assume certain
liabilities of wholly-owned subsidiary PBM
Industries, Inc.
Cash and cash equivalents $ 5,320
Promissory note 2,500
Accounts receivable (2,492)
Inventory (2,034)
Other current assets (465)
Property, plant and equipment (12,394)
Accumulated depreciation 5,843
Accounts payable 2,315
Accrued liabilities 105
Shareholders' equity 1,302
</TABLE>
Pro forma adjustments to consolidated statements of operations
<TABLE>
<CAPTION>
Year ended Six months ended
December 31, 1994 July 2, 1995
DR (CR) DR (CR)
---------------------------------------
<S> <C> <C>
(b) and (c) Eliminate operating results of
wholly-owned subsidiary PBM Industries,
Inc.
(b) (c)
Sales $ 35,341 $ 20,371
Cost of sales (37,625) (18,724)
Operating expenses (1,835) (803)
Other income (expense) net (1,431) (340)
Provision for income tax 60 (269)
----------------------------------------
Net earnings (loss) of PBM Industries, Inc. $ (5,490) $ 235
========================================
</TABLE>
P-6
<PAGE>
<PAGE>
Intermet Corporation
Notes to Pro Forma Consolidated Financial Statements (continued)
(Unaudited)
SALE OF INTERMOTIVE TECHNOLOGIES, INC.
<TABLE>
<CAPTION>
2. PRO FORMA ADJUSTMENTS
Pro forma adjustments to consolidated balance sheet
DR (CR)
----------
<S> <C>
(d) Record proceeds from sale of substantially
all of the assets and assume certain
liabilities of wholly-owned subsidiary
InterMotive Technologies, Inc.
Cash and cash equivalents $ 4,430
Accounts receivable (1,157)
Inventory (122)
Other current assets (41)
Property, plant and equipment (5,461)
Accumulated depreciation 1,042
Shareholders' equity 1,309
</TABLE>
Pro forma adjustments to consolidated statements of operations
<TABLE>
<CAPTION>
Year ended Six months ended
December 31, 1994 July 2, 1995
DR (CR) DR (CR)
---------------------------------------
<S> <C> <C>
(e) and (f) Eliminate operating results of
wholly-owned subsidiary InterMotive
Technologies, Inc.
(e) (f)
Sales $ 4,910 $ 2,185
Cost of sales (5,228) (3,614)
Operating expenses (815) (488)
Other income (expense) net (445) (299)
Provision for income tax 456 224
---------------------------------------
Loss of InterMotive Technologies, Inc. $(1,122) $(1,992)
========================================
</TABLE>
P-7
<PAGE>
<PAGE>
SIGNATURES
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 hereunto duly authorized.
INTERMET CORPORATION
By: /s/ Doretha J. Christoph
Date: November 2, 1995 Doretha J. Christoph
Vice President - Finance
(Principal Financial Officer)
<PAGE>
ASSET PURCHASE AGREEMENT
BY AND AMONG
RICARDO NORTH AMERICA DETROIT, INC.,
RICARDO GROUP plc,
INTERMOTIVE TECHNOLOGIES, INC.
AND
INTERMET CORPORATION<PAGE>
ASSET PURCHASE AGREEMENT
AGREEMENT made as of the _____ day of October, 1995 by and
among RICARDO NORTH AMERICA DETROIT, INC., a Michigan
corporation (the "Buyer"), RICARDO GROUP PLC, a United Kingdom
corporation ("Ricardo"), INTERMOTIVE TECHNOLOGIES, INC., a
Michigan corporation (the "Seller") and INTERMET CORPORATION, a
Georgia corporation ("Seller's Parent").
Preliminary Statement
---------------------
The Buyer, a wholly-owned subsidiary of Ricardo, desires to
purchase, and the Seller, a subsidiary of Seller's Parent,
desires to sell, certain of the assets and business of the Seller
(the "Business") , for the consideration set forth below, subject
to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises
hereinafter set forth and other good and valuable consideration,
the receipt of which is hereby acknowledged, the parties hereby
agree as follows:
1. SALE AND DELIVERY OF THE ASSETS; EMPLOYEE MATTERS
1.1 DELIVERY OF THE ASSETS.
a. Subject to and upon the terms and conditions
of this Agreement, except as specifically provided in
Section 1.1(b) hereof, at the closing of the
transactions contemplated by this Agreement (the
"Closing"), the Seller shall sell, transfer, convey,
assign and deliver to the Buyer, and the Buyer shall
purchase from the Seller, free and clear of all liens,
liabilities, security interests, leasehold interests
and encumbrances of any nature whatsoever (except as
otherwise expressly provided herein), all of the
properties, assets and other claims, rights and
interests which on the Closing Date (as defined below)
are owned by the Seller, including but not limited to:
i. All supplies, stores and materials
of Seller including specifically gasoline,
petroleum and oil stores, hand tools, expendable
supplies, shop supplies and the like;
ii. All rights under the contracts,
agreements, leases, licenses, purchase orders,
customer sales agreements and other instruments
set forth on Schedule 2.9(b) and Schedule 2.13(b)
attached hereto (collectively, the "Contract
Rights");
iii. All of Seller's interest in the
real estate set forth on Schedule 2.22, together
with all buildings, fixtures and improvements
located on or attached thereto, including the
Seller's right, title and interest in and to all
leases, subleases, franchises, licenses and
permits (to the extent transferable) easements and
rights-of-way which are appurtenant to said real
estate (collectively, the "Real Estate");
<PAGE>
iv. All books; payment records;
accounts; customer lists; environmental reports or
studies; correspondence; production records;
technical, accounting, manufacturing and
procedural manuals; development and design data;
plans, blueprints, specifications and drawings;
employment and personnel records; and other useful
business records, including electronic media, and
any confidential or other information which has
been reduced to writing, utilized in the conduct
of or relating to the Business or the Assets (as
hereinafter defined), subject to the Seller's
right to retain copies thereof which the Seller
reasonably requires for its ongoing operation,
winding-up or dissolution or any tax dispute or
third party claims;
v. All rights of the Seller under
express or implied warranties from the suppliers
of the Assets to the extent transferable;
vi. The Seller's right, title and
interest in the name, trademark or service mark
"InterMotive;"
vii. All of the machinery, equipment,
tools, tooling, fixtures, maintenance machinery
and equipment, computers, telecommunication
systems, fittings and other office equipment,
furniture, leasehold improvements and construction
in progress on the Closing Date whether or not
reflected as capital assets in the accounting
records of the Seller which are owned by the
Seller and used or useful in the Business
including but not limited to all of the foregoing
located at the locations set forth on Schedule
1.1(vii) (collectively, the "Fixed Assets");
viii. All right, title and interest of
the Seller in and to all intangible property
rights, including but not limited to inventions,
discoveries, trade secrets, processes, formulas,
know-how, patents, patent applications, trade
names including but not limited to those names
listed on Schedule 2.20 attached hereto,
trademarks, trademark registrations, applications
for trademark registrations, copyrights, copyright
registrations, certification marks, industrial
designs, technical expertise, research data and
other similar property and the registrations and
applications for registration thereof owned by the
Seller or, where not owned, used by the Seller in
the Business and all licenses and other agreements
to which the Seller is a party (as licensor or
licensee) or by which the Seller is bound relating
to any of the foregoing kinds of property or
rights to any "know-how" or disclosure or use of
ideas (collectively, the "Intangible Property");
ix. All transferable approvals,
authorizations, certifications, consents,
variances, permissions, licenses and permits to or
from, or filings, notices or recordings to or
with, federal, state and local governmental
authorities as held or effected by the Seller in
connection with the Assets;
-2-
<PAGE>
x. Except as specifically provided in
Section 1.1(b) hereof, all other assets,
properties, claims, rights and interests of the
Seller which relate to the Business and exist on
the Closing Date, of every kind and nature and
description, whether tangible or intangible, real,
personal or mixed.
b. Notwithstanding the provisions of Section
1.1(a) above, the assets to be transferred to the Buyer
under this Agreement shall not include (i) any cash or
cash equivalents of the Seller; (ii) any of Seller's
rights in accounts, accounts receivable, notes or notes
receivable; (iii) any of Seller's rights to prepaid
expenses or (iv) any refunds of federal, state or local
income or other tax previously paid by the Seller,
including, without limitation, any federal or state
road tax rebate; (v) any right, title or interest of
Seller or license with respect to the trademark or
service mark "Intermet"; (vi) any of Seller's rights in
or ownership of inventory, raw materials or spare
parts; or (vii) those assets listed on Schedule 1.1(b)
attached hereto (collectively, the "Excluded Assets").
c. The properties, assets and business of the
Seller described in Section 1.1(a) above, other than
the Excluded Assets, shall be referred to collectively
as the "Assets."
1.2 FURTHER ASSURANCES. At the Closing the Seller
shall execute and deliver a Bill of Sale (the "Bill of
Sale") substantially in the form attached hereto as Exhibit
A, and the deeds and assignments described in Section 7.7
hereof. At any time and from time to time after the
Closing, at the Buyer's request and without further
consideration, the Seller (or its successors) promptly shall
execute and deliver such deeds, assignments of leases and
other instruments of sale, transfer, conveyance, assignment
and confirmation, and take such other action, as the Buyer
may reasonably request to more effectively transfer, convey
and assign to the Buyer, and to confirm the Buyer's title
to, all of the Assets and the Business, to put the Buyer in
actual possession and operating control thereof, to assist
the Buyer in exercising all rights with respect thereto and
to carry out the purpose and intent of this Agreement.
1.3 NO ASSUMPTION OF LIABILITIES.
a. Except as explicitly provided herein, the
Buyer shall not assume any of the liabilities of the
Seller and shall purchase the Assets free and clear of
all liens, mortgages, security interests, encumbrances
and claims and the Seller and Seller's Parent
represents, warrants and agrees that the Buyer shall
not be or become liable for any claims, demands,
liabilities or obligations not expressly assumed in
this Agreement of any kind whatsoever arising out of or
relating to the conduct of the Business by the Seller
or the Assets prior to the Closing Date. Without
limiting the foregoing, the Buyer shall not at the
Closing assume or agree to perform, pay or discharge,
and the Seller shall remain unconditionally liable for,
all obligations, liabilities and commitments, fixed or
contingent, of the Seller, including but not limited
to:
-3-
<PAGE>
i. Accounts payable, accrued expenses
or withholding of any kind or nature; obligations
for indebtedness or borrowed money;
ii. Obligations arising under rental or
lease agreements for rent or lease payments or
other financial obligations;
iii. Obligations arising under any
purchase order, sales or supply agreement or other
agreement;
iv. Obligations or liabilities relating
to any product, good or service provided by Seller
including any claim for defect, personal injury or
breach of warranty;
v. Severance, termination or other
payments or benefits (including but not limited to
post-retirement benefits or accrued vacation pay)
including but not limited to those owing under the
Seller's severance policy, any union contract or
any employment agreement to any employees (union
or non-union), sales agents or independent
contractors employed by the Seller prior to the
Closing (collectively, "Seller's Employees"),
liabilities arising under any federal, state or
local "plant closing law", liabilities accruing
under the Seller's employee benefit plans,
retirement plans, pension plans or savings or
profit sharing plans and liabilities for any
Employee Plan (as defined in Section 2.21),
including but not limited to any obligations under
Section 601 through 608 of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA");
vi. Worker's compensation claims;
vii. Stock option or other stock-based
awards made to the Seller's Employees, if any;
viii. Liabilities for any federal, state,
local or foreign income taxes (including interest,
penalties and additions to such taxes) or any
deferred income taxes of the Seller;
ix. Liabilities incurred in connection
with violations of occupational safety, wage,
health, welfare, employee benefit or environmental
laws or regulations, which violations result from
the action or inaction of the Seller prior to the
Closing Date; or
x. Except as provided in Section 12
hereof, any tax (including but not limited to any
federal, state, or local income, franchise, single
business, value added, excise, customs,
intangible, sales, transfer, recording,
documentary or other tax) imposed upon, or
incurred by, the Seller, if any, in connection
with or related to this Agreement or the
transactions contemplated hereby.
-4-
<PAGE>
1.4 WORK-IN-PROGRESS.
a. The Buyer shall assume the obligation to
complete Seller's customer contracts, agreements, and
work in progress ("Work-in-Progress") on the Closing
Date. The Buyer and Seller shall meet at least two (2)
days prior to the Closing Date to discuss and identify
all such Work-in-Progress and execute and deliver at
the Closing a schedule listing all such contracts,
agreements and work ("Work-in-Progress Schedule").
Buyer's obligation under this provision shall be
limited to those items listed on the Work-in-Progress
Schedule.
b. The parties shall agree on the Work-in-
Progress Schedule as to the status of projects and
contracts to be assumed by the Buyer and the amounts or
methodology for computing the amounts to be paid to
Seller in connection with its services on Work-in-
Progress prior to the Closing. The following general
principles will apply:
i. For contracts being performed on a time-
and-materials basis, the amount of work completed
by the Seller which is unbilled (and anticipated
to be collectible) will be determined and
collections of such amounts after the Closing
shall be remitted by the Buyer to the Seller. In
the event all or a portion of the amount billed
for such Work-in-Progress becomes uncollectible,
the parties shall allocate any proceeds in
proportion to the relative amount of work
performed by each party.
ii. For all other contracts, including fixed
priced contracts, the amount to be remitted to the
Seller in connection with such Work-in-Progress
shall be determined by Seller and Buyer and set
forth in the Work-in-Progress Schedule using
either the percentage-of- completion or cost-to-
complete methods. All amounts collected by
Ricardo with respect to Work-in-Progress will be
allocated between the Buyer and the Seller in
accordance with the Work-in-Progress Schedule.
c. The Seller and Buyer acknowledge that certain
customers of the Seller whose projects are included in
the Work-in-Progress have not issued appropriate
purchase orders covering the work being performed. To
assure the Buyer of payment for its services on this
Work-in-Progress, the Seller agrees to deposit with
Escrow Agent pursuant to an escrow agreement in
substantially the form attached hereto as Exhibit B
("Escrow Agreement"), such amount (the "Escrow Amount")
as the parties shall determine in the Work-in-Progress
Schedule represents the anticipated value of Buyer's
work on such Work-in-Progress after the Closing. The
Buyer shall be entitled to draw from the Escrow Amount
an amount equal to the difference between the value of
its work on such Work-in-Progress after the Closing and
the amount it is able to collect from the customer
-5-
<PAGE>
after all Work-in-Progress identified in this sub-
paragraph has been completed and all billing and
collection matters resolved with the customer. Seller
shall be entitled to distributions from the Escrow
Amount as Work-in-Progress is completed, billed and
collected or as purchase orders are issued by customers
in an amount, which if deducted from the Escrow Amount,
would permit the Escrow Amount to be sufficient to
adequately cover any exposure Buyer may have for other
Work-in-Progress for which the escrow was established.
The Buyer shall, monthly, give instructions to the
Escrow Agent as to the amount of any distributions and
the identity of the distributees. Any proceeds
remaining in the escrow after all Work-in-Progress
referred to in this subparagraph (c) is completed and
all billing and collection matters with the customers
are resolved shall be delivered to the Seller.
d. Seller shall deliver to Buyer prior to the
Closing proof satisfactory to Buyer that all work on Ford
Motor Company projects No.441000 and 450500 is complete and
that Ford Motor Company expects no further service on either
of such projects.
e. Buyer shall use its best efforts to collect
accounts receivable from customers for work performed
prior to the Closing (subject in all cases to the Work-
in-Progress Schedule). In the event Buyer is unable to
collect amounts due to Seller from such customer using
its best efforts, Seller shall be entitled to commence
collection activities but shall keep Buyer reasonably
apprised of its intended action.
1.5 PURCHASE PRICE. The purchase price (the "Purchase
Price") for the Assets shall be Four Million Four
Hundred Thirty Thousand Dollars ($4,430,000).
1.6 THE CLOSING.
a. The Closing shall take place at the offices
of Butzel Long, Detroit, Michigan at 9:00 a.m., local
time, on or before October 31, 1995, or at such other
place, time or date as may be mutually agreed upon in
writing by the parties hereto. The transfer of the
Assets by Seller to the Buyer shall be deemed to occur
at 8:00 a.m., local Michigan time, on the date of the
Closing (the "Closing Date").
b. At the Closing, the Buyer shall pay
i. to the Seller the Purchase Price
(reduced by the Escrow Amount) by wire transfer to
an account specified by the Seller, and
ii. to the Escrow Agent (as defined in
the Escrow Agreement), the Escrow Amount by wire
transfer or otherwise in immediately available
funds.
1.7 ALLOCATION OF PURCHASE PRICE. The aggregate
amount of the Purchase Price shall, for tax purposes only,
be allocated among the Assets substantially in accordance
with the amounts set forth on Schedule 1.7. The Seller,
Seller's Parent, Buyer, and Ricardo agree that they will
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not take any position which is materially inconsistent with
the allocations provided for in this Agreement in preparing
income, capital or franchise tax returns.
1.8 PRORATIONS. All real and personal property taxes,
rents, utilities, water charges, special assessments and the
like shall be prorated among the parties according to local
custom and credits or payments shall be made by and to the
appropriate parties at Closing.
1.9 EMPLOYEE MATTERS.
a. Except as the parties shall otherwise agree,
Seller shall terminate the employment of all employees
on or before the Closing and shall be liable for all
costs, expenses, damages, claims or rights related to
such termination or related to employment of the
employees prior to the Closing including severance,
vacation, sick, personal or grievance pay or time.
Buyer shall have no obligation with respect to and will
not assume, (i) any liability related to such
termination or employment of Seller's employees prior
to the Closing, (ii) any collective bargaining,
employment, severance, change-in-control stock option,
bonus or incentive or other agreement between Seller
and any employee, group of employees or collective
bargaining unit or (iii) any health, welfare or benefit
plan or pension, deferred income, profit sharing or
401K plan offered by Seller or Seller's Parent to
Seller's employees.
b. Prior to and contingent upon the Closing
occurring, the Buyer shall accept applications for
employment from Seller's employees with the expectation
on Buyer's behalf that Buyer will hire at least seventy
percent (70%) of Seller's employees, such employment to
be effective as of the Closing Date. Buyer shall apply
standards adopted by Ricardo and other affiliates of
Ricardo in evaluating applicants for employment and
shall have no obligation or liability with regard to
the failure to hire any of Seller's employees or with
regard to any differences in the terms of employment
between Buyer and Seller, including any differences in
salary or wages or benefits.
2. Representations of the Seller and Seller's Parent. The
representations and warranties made herein or in any instrument
or document furnished in connection herewith shall survive the
Closing, and any investigation made at any time with respect
thereto, for a period which includes one full fiscal year plus
three (3) months after the Closing but in no event later than
March 31, 1997. The representations and warranties in this
Section 2 or in any document delivered to the Buyer pursuant to
this Agreement are deemed to be material and the Buyer and
Ricardo are entering into this Agreement relying on such
representations and warranties. The Seller and Seller's Parent
represent and warrant as follows:
2.1 ORGANIZATION. The Seller is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Michigan, and has all requisite power
and authority (corporate and other) to own its properties,
to carry on its business as now being conducted, to execute
and deliver this Agreement and the agreements contemplated
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herein, and to consummate the transactions contemplated
herein, and to consummate the transactions contemplated
hereby. Seller's Parent is a corporation duly organized,
existing and in good standing under the laws of the State of
Georgia and has all requisite power and authority to execute
and deliver this Agreement and the agreements contemplated
herein, and to consummate the transactions contemplated
hereby. Schedule 2.1 sets forth the authorized and
outstanding capital stock of the Seller as well as the
record and beneficial owners thereof. The Seller is duly
qualified to do business and is in good standing in all
jurisdictions in which the failure to be so qualified would
have a materially adverse effect upon the business or the
assets of the Seller. Schedule 2.1 contains a true, correct
and complete list of all of the jurisdictions in which the
ownership of the property used in the Business or the nature
of the business requires qualification.
2.2 AUTHORIZATION. The execution and delivery of this
Agreement (and all other agreements provided for herein) by
the Seller and Seller's Parent, and the consummation of all
transactions contemplated hereby, have been duly authorized
by all requisite corporate action other than any required
shareholder approval of Seller or director approval of
Seller's Parent which will be obtained prior to the Closing.
This Agreement and all such other agreements and obligations
entered into and undertaken in connection with the
transactions contemplated hereby to which the Seller or
Seller's Parent is a party will constitute the valid and
legally binding obligations of such corporation, enforceable
against it in accordance with their respective terms except
as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting
creditors' rights generally, and by principles of equity
(whether applied in a proceeding at law or in equity). The
execution, delivery and performance by the Seller and
Seller's Parent of this Agreement and the agreements
provided for herein, and the consummation by Seller and
Seller's Parent of the transactions contemplated hereby and
thereby, will not, with or without the giving of notice or
the passage of time or both, (a) violate the provisions of
any law, rule or regulation applicable to either
corporation; (b) violate the provisions of the Certificate
or Articles of Incorporation or Bylaws of the Seller or
Seller's Parent; (c) violate any judgment, decree, order or
award of any court, governmental body or arbitrator; or (d)
to the extent any of the following would have a material
adverse effect on the business or financial condition of
Seller or Seller's Parent, conflict with or result in the
breach or termination of any term or provision of, or
constitute a default under, or cause any acceleration under,
or cause the creation of any lien, charge or encumbrance
upon the properties or assets of the Seller or Seller's
Parent pursuant to, any indenture, mortgage, deed of trust
or other instrument or agreement to which any of them is a
party or by which any of them or any of their properties is
or may be bound, other than with respect to obligations of
the Seller which will be discharged or consents identified
on Schedule 2.2 which Buyer will use its best efforts to
obtain at or prior to Closing. Schedule 2.2 attached hereto
sets forth a true, correct and complete list of all
consents, approvals, permissions, licenses, authorizations
and other requirements prescribed by law, rule, regulation
or by contract in connection with the consummation by the
Seller of the transactions contemplated by this Agreement.
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2.3 ASSETS.
a. ASSETS OWNED. Schedule 2.3 attached hereto
sets forth a true, correct and complete list of all
claims, liabilities, liens, pledges, charges,
encumbrances and equities of any kind affecting their
respective Assets (collectively, the "Encumbrances").
The Seller is, and at the Closing will be, the true and
lawful owner of the Assets, and will have the right to
sell and transfer to the Buyer (i) good and marketable
title to the Residential Property and (ii) good and
marketable title to all Assets other than the Real
Estate, free and clear of all Encumbrances except as
otherwise set forth in Schedule 2.22(a) with respect to
the Real Estate. The delivery to the Buyer of the
instruments of transfer of ownership contemplated by
this Agreement will vest good and marketable title to
the Residential Property and good and marketable title
to all Assets other than the Residential Property in
the Buyer, free and clear of all liens, mortgages,
pledges, security interests, restrictions, prior
assignments, encumbrances and claims of any kind or
nature whatsoever, except for the Permitted Exceptions
(as hereinafter defined) as set forth on Schedule
2.22(b).
b. NECESSARY ASSETS. The Assets to be conveyed
to the Buyer hereunder constitute all properties,
assets, rights and claims which are necessary to the
conduct of the Business as currently conducted by the
Seller except for the Excluded Asset.
2.4 FINANCIAL STATEMENTS.
a. The Seller and Seller's Parent have
previously delivered to the Buyer the Seller's balance
sheet as of December 31, 1994, (the "Balance Sheet")
and the related statements of operations, shareholders'
equity and changes in financial position of the Seller
for the fiscal year then ended (collectively, including
the Balance Sheet, the "Annual Financial Statements").
The Seller has also previously delivered to the Buyer
its current balance sheet as of August 6, 1995 (the
"Current Balance Sheet") and the related statements of
operations, shareholders' equity and changes in
financial position of the Seller as of and for the
period beginning January 1, 1995 and ending August 6,
1995 (collectively, the "Current Financial
Statements"). The Annual Financial Statements and the
Current Financial Statements (collectively, the
"Financial Statements") have been certified by the
Seller's Parent's Chief Financial Officer as being
consistent with Section 2.4(b).
b. The Financial Statements are accurate in all
material respects and fairly present, as of their
respective dates, the financial condition, retained
earnings (deficit), assets and liabilities of the
Seller and the results of operations of the Seller's
business for the periods indicated; with respect to the
contracts and commitments for the sale of goods or the
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provision of services by the Seller, the Financial
Statements contain and reflect adequate reserves and
accruals for all reasonably anticipated material losses
and costs and expenses, including but not limited to
medical costs of the Seller's Employees, product
liability claims, management bonuses and property
taxes; and the amounts shown as accrued for current and
deferred income and other taxes in the Financial
Statements are sufficient for the payment of all
accrued and unpaid federal, state and local income,
employer withholding taxes, interest, penalties,
assessments or deficiencies applicable to the Seller,
whether disputed or not, for the applicable period then
ended and periods prior thereto.
2.5 LITIGATION. Except as set forth on Schedule 2.5
attached hereto, the Seller is not a party to, or to the
Seller's best knowledge threatened with, and none of the
Assets are subject to, any litigation, suit, action,
investigation (to the best of the Seller's knowledge),
grievance, arbitration, proceeding, or controversy or claim
before any court, administrative agency or other
governmental authority relating to or affecting the Assets
or the business, properties, condition (financial or
otherwise) or prospects of the Business. The Seller is not
in violation of or in default with respect to any judgment,
order, award, writ, injunction, decree or rule of any court,
governmental authority or any regulation of any
administrative agency or governmental authority, where such
violation or default would have a material adverse effect
upon the Assets, the business, properties, condition
(financial or otherwise) or prospects of the Business or the
consummation of the transactions contemplated hereby.
Except as set forth in Schedule 2.5, the Seller has not
received notice of any product liability claim, warranty
claim or other claim whatsoever which, if decided adversely,
would have a material adverse effect on the Assets or the
business, condition (financial or otherwise), properties or
prospects of the Business.
2.6 INSURANCE. Schedule 2.6 sets forth a true,
correct and complete list of all fire, theft, casualty,
general liability, workers compensation, business
interruption, environmental impairment, product liability,
automobile and other insurance policies insuring the Assets
or business of the Business and of all life insurance
policies maintained for any employees of the Business,
specifying the type of coverage, the amount of coverage, the
premium, the insurer and the expiration date of each such
policy (collectively, the "Insurance Policies"). The
Insurance Policies are in full force and effect and, in the
reasonable judgment of Seller and Seller's Parent, are in
amounts and of a nature which are adequate and customary for
the Business. All premiums due on the Insurance Policies or
renewals thereof have been paid and there is no default
under any of the Insurance Policies. Except as set forth on
Schedule 2.6, neither Seller nor Seller's Parent has
received any notice or other communication from any issuer
of the Insurance Policies canceling or materially amending
any of the Insurance Policies, materially increasing any
deductibles or retained amounts thereunder, or materially
increasing the annual or other premiums payable thereunder,
and, to the best knowledge of the Seller and Seller's
Parent, no such cancellation, amendment or increase of
deductibles, retainages or premiums is threatened.
2.7 INTENTIONALLY OMITTED.
2.8 FIXED ASSETS. Schedule 2.8 sets forth a true,
correct and complete list of all Fixed Assets as of the date
hereof, including a description and the book value net of
accumulated depreciation on an aggregate basis with respect
to all Fixed Assets. Except as set forth in Schedule 2.8,
the Fixed Assets are, and at the Closing Date, will be, in
good condition and repair, ordinary wear and tear excepted.
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The Fixed Assets have been maintained substantially in
accordance with the manufacturer's guidelines and in such a
manner so as to retain any applicable warranty.
2.9 LEASES. Schedule 2.9(a) attached hereto sets
forth a true, correct and complete list as of the date
hereof of all leases of real estate, identifying separately
each ground lease, to which the Seller is a party as lessee
or tenant or which the Seller uses in the operations of the
Business. Schedule 2.9(b) attached hereto sets forth a list
of all leases of real estate which the Buyer will assume
pursuant to this Agreement (the "Leases") . True, correct
and complete copies of the Leases, and all amendments,
modifications and supplemental agreements thereto, have
previously been delivered by the Seller to the Buyer. The
Leases are in full force and effect, are binding and
enforceable against each of the parties thereto in
accordance with their respective terms and, except as set
forth on Schedule 2.9(b) attached hereto, have not been
modified or amended since the date of delivery to the Buyer.
No party to any Lease has sent written notice to the other
claiming that such party is in default thereunder, which
default remains uncured. Except as set forth on Schedule
2.9(b) attached hereto, there has not occurred any event
which would constitute a material breach of any Lease by
either party thereto, nor has there occurred any event which
with the passage of time or the giving of notice or both
would constitute such a breach. The Seller is not obligated
to pay any leasing or brokerage commission relating to any
Lease and, except as set forth on Schedule 2.9(b) attached
hereto, will not have any enforceable obligation to pay any
leasing or brokerage commission upon the renewal or
extension of any Lease. No material construction,
alteration or other leasehold improvement work with respect
to any of the Leases remains to be paid for or to be
performed by any party under any Lease. The Seller has
fulfilled all material obligations required pursuant to the
Leases to have been performed by the Seller and has no
reason to believe that it will be unable to perform, when
due, all of its remaining obligations under said Leases
after the date hereof to the Closing. There is no pending
or, to the best of the Seller's knowledge, threatened
eminent domain taking or condemnation that will or may
affect any of the properties that are the subject of the
Leases (the "Leased Premises").
2.10 CHANGE IN FINANCIAL CONDITION AND ASSETS. Except
as set forth on Schedule 2.10 attached hereto, since August
6, 1995 (the "Balance Sheet Date"), there has been no change
which materially and adversely affects the Assets or the
business, properties, condition (financial or otherwise) or
prospects of the Business. Neither Seller nor Seller's
Parent have knowledge (excluding knowledge generally
available to the public) of any existing or threatened
occurrence, event or development related to the Assets or
the business, properties, condition (financial or otherwise)
or prospects of the Business which, as far as can be
reasonably foreseen, could have a material adverse effect on
the Assets or the business, properties, condition (financial
or otherwise) or prospects of the Business.
2.11 INTENTIONALLY OMITTED.
2.12 BOOKS AND RECORDS. The general ledgers and books
of account of the Seller with respect to the Business, all
federal, state and local income, franchise, property and
other tax returns filed by the Seller, with respect to the
Assets, and all other books and records of the Seller with
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respect to the Business are in all material respects
complete and correct and have been maintained in accordance
with good business practice and in accordance with all
applicable procedures required by laws and regulations other
than any digression from such practice and procedures which
has no material and adverse effect on the Assets or the
Business, or the valuations thereof for the purposes of this
Agreement, as conducted as of and prior to the Closing Date.
2.13 CONTRACTS AND COMMITMENTS.
a. Schedule 2.13(a) attached hereto contains a
true, complete and correct list and description of the
following contracts and agreements, whether written or
oral, which relate to the Business:
i. All material loan agreements,
indentures, mortgages and guaranties to which the
Seller is a party or by which the Seller or its
property is bound;
ii. All pledges, conditional sale or
title retention agreements, security agreements,
equipment obligations, personal property leases
and lease purchase agreements relating to any of
the Assets to which the Seller is a party or by
which the Seller or any of its property is bound;
iii. All contracts, agreements,
commitments, purchase orders (other than
merchandise deliveries to customers in the normal
course of business upon standard terms) or other
understandings or arrangements to which the Seller
is a party or by which any of its property is
bound which (A) involve payments or receipts by
any of them of more than $50,000 in the case of
any single contract, agreement, commitment,
understanding or arrangement under which full
performance (including payment) has not been
rendered by all parties thereto or (B) which may
materially adversely affect the condition
(financial or otherwise) of the properties,
Assets, business or prospects of the Business;
iv. All collective bargaining
agreements, employment and consulting agreements,
non-competition agreements, trust agreements,
executive compensation plans, employee stock
option or stock purchase plans and group life,
health and accident insurance and other employee
benefit plans, agreements, memoranda of
understanding, arrangements or commitments to
which the Seller is a party or by which the Seller
or any of its property is bound;
v. All agency, distributor, sales
representative and similar agreements to which the
Seller is a party;
vi. All material contracts, agreements
or other understandings or arrangements, whether
written or oral, between the Seller and any
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shareholder, employee, officer or director of the
Seller which may affect the Business as conducted
as of and prior to the Closing Date or the Assets;
vii. All leases, whether operating,
capital or otherwise, under which the Seller is
lessor or lessee which are not reflected on
Schedule 2.9(a);
viii. All contracts, agreements and other
documents or information which are available
relating to past disposal by the Seller of
hazardous waste;
ix. All return policies and product
warranties relating to products or goods
manufactured or distributed by the Business as the
same are currently in effect or may have been in
effect from time to time since March 30, 1992, as
well as any exception to such policies, all
cooperative advertising arrangements and all
rebate, discount or allowance arrangements;
x. All material contracts related to
operation, maintenance or management of the Real
Estate or Leased Premises other than those
reflected on Schedule 2.9(a); and
xi. Any licensing agreements, franchise
agreements and other material agreement or
contract entered into by the Seller.
b. Schedule 2.13(b) attached hereto sets forth a
true, correct and complete list of the contracts and
agreements, whether written or oral, which are to be
assigned from the Seller to the Buyer at the Closing
(collectively, the "Contracts"). Except as set forth on
Schedule 2.13(b) attached hereto:
i. Each Contract is a valid and
binding agreement of the Seller enforceable
against the Seller in accordance with its terms
except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar
laws affecting creditors rights generally, and by
principles of equity (whether considered in a
proceeding at law or in equity) and the Seller has
no knowledge that any Contract is not a valid and
binding agreement of the other parties thereto;
ii. The Seller has fulfilled all
material obligations required pursuant to the
Contracts to have been performed by it prior to
the date hereof, and the Seller has no reason to
believe that it will not be able to fulfill, when
due, all of its obligations under the Contracts
which remain to be performed after the date hereof
to the Closing;
iii. The Seller is not in breach under
any Contract in any material respect, and no event
has occurred which with the passage of time or
giving of notice or both would constitute such a
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breach, result in a loss of rights or result in
the creation of any lien, charge or encumbrance,
thereunder or pursuant thereto;
iv. To the best knowledge of the
Seller, there is no existing breach in any
material respect by any other party to any
Contract, and no event has occurred which with the
passage of time or giving of notice or both would
constitute such a breach by such other party,
result in a loss of rights or result in the
creation of any lien, charge or encumbrance
thereunder or pursuant thereto; and
c. Except as set forth on Schedule 2.2 or
Schedule 2.13(b), the continuation, validity and
effectiveness of each Contract would not be affected by
the transfer thereof to the Buyer under this Agreement
and all such Contracts are assignable to the Buyer
without a consent.
d. True, correct and complete copies of all of
the foregoing contracts and agreements (other than the
documents described in Section 2.13(a)(i) and all
unfilled purchase orders and all unfilled customer
orders), including but not limited to the Contracts,
and a list of all unfilled purchase orders and all
unfilled customer orders, have been made available by
Seller for review and copying by Buyer.
2.14 COMPLIANCE WITH LAWS. The Seller has all material
requisite licenses, permits and certificates, including
environmental, health and safety permits, from federal,
state and local authorities necessary to conduct the
Business and own and operate the Assets (collectively, the
"Permits"). Schedule 2.14 sets forth a true, correct and
complete list of all such Permits, copies of which
previously have been delivered by the Seller to the Buyer.
The Seller has not engaged in any activity which would cause
or permit revocation or suspension of any such Permit and no
action or proceeding looking to or contemplating the
revocation or suspension of any such Permit is pending or
threatened. There are no existing material breaches or
violations or events or state of facts which with notice or
lapse of time or both would constitute a material breach or
violation by the Seller under any Permit. The Seller has no
knowledge of any breach or violation or claimed, purported
or alleged breach or violation or state of facts which with
notice or lapse of time or both would constitute a breach or
violation in the performance of any obligation to be
performed or paid under any Permit. Except as set forth in
Schedule 2.14, the consummation of the transactions
contemplated by this Agreement will in no way affect the
continuation, validity or effectiveness of the Permits or
require the consent of any third party under any such
Permit. The Seller is not in violation of any law,
regulation or ordinance (including but not limited to laws,
regulations or ordinances relating to building, zoning,
environmental, disposal of hazardous substances, land use or
similar matters) relating to its properties, the violation
of which could have a material adverse effect on the Assets
or the business, properties, condition (financial or
otherwise) or prospects of the Seller. The business of the
Seller does not violate, in any material respect, any
federal, state or local laws, regulations or orders, the
enforcement of which would have a material and adverse
effect on the Assets, business, properties, condition
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(financial or otherwise) or prospects of the Seller. Except
as set forth on Schedule 2.14, the Seller has not received
any notice or communication from any federal, state or local
governmental or regulatory authority or otherwise of any
such violation or noncompliance and has not received any
notice prior to such time of any violation that has not been
cured.
2.15 EMPLOYEE RELATIONS.
a. The Seller is in compliance with all material
federal, state and local laws respecting employment and
employment practices, terms and conditions of
employment, and wages and hours, and is not engaged in
any unfair labor practice, and there is no arrearage in
the payment of wages or taxes or workers compensation
assessments or penalties.
b. Except as set forth on Schedule 2.15:
i. None of the Seller's Employees are
represented by any labor union;
ii. There is no unfair labor practice
complaint against the Seller pending before the
National Labor Relations Board or any state or
local agency affecting the Seller;
iii. There is no pending labor strike
or, to Seller's knowledge, other material labor
trouble affecting the Seller (including but not
limited to any organizational campaign);
iv. There is no material labor
grievance pending against or affecting the Seller;
v. There are no pending arbitration
proceedings arising out of or under any collective
bargaining agreement to which the Seller is a
party, or to the best knowledge of the Seller, any
basis for which a claim may be made under any
collective bargaining agreement to which the
Seller is a party affecting the Seller's
Employees; and
vi. There is no pending litigation, or
other proceeding or, to Seller's knowledge, basis
for an unasserted claim against the Seller by any
employee or group of employees which is based on
claims arising out of any employee's or group of
employees' employment relationship with the Seller
(insofar as such relationship pertains to the
business of the Seller), including but not limited
to claims for contract, tort, discrimination,
employee benefits, wrongful termination and any
and all common law or statutory claims.
c. The Seller has previously provided the Buyer
with a true, correct and complete list of the Seller's
current payroll.
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d. The Seller has deducted and remitted to the
relevant governmental authority all income taxes,
unemployment insurance contributions and any taxes or
other amounts which it is required by statute to deduct
and remit to any governmental authority.
2.16 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as
set forth on Schedule 2.16 attached hereto, since August 6,
1995, the Seller has not entered into any transaction which
is not in the usual and ordinary course of business, and,
without limiting the generality of the foregoing, the Seller
has not:
a. Mortgaged, pledged or subjected to lien,
charge or other encumbrance any of the Assets;
b. Sold or purchased, assigned or transferred
any of its Intangible Property or Fixed Assets;
c. Made any material amendment to or termination
of any Contract or done any act or omitted to do any
act which would cause the breach of any Contract;
d. Suffered any casualty losses, whether insured
or uninsured, and whether or not in the control of the
Seller, in excess of $25,000 in the aggregate, or
waived any rights of any value;
e. Authorized or issued recall notices for any
of its products relating to the Business or initiated
any safety investigations relating to the Business; or
f. Received notice of any litigation, warranty
claim or products liability claims relating to the
Business.
2.17 CUSTOMERS. Schedule 2.17 sets forth a true,
correct and complete list of the names and addresses of the
top 20 customers (determined by sales amounts) of the Seller
during the last 36 months. The Seller is not a party to any
requirements contract relating to the sale of inventory,
finished goods or other property used in the conduct of the
Business. None of the 10 customers which accounted for the
largest dollar volume of purchases from the Seller for the
fiscal year ended December 31, 1994 or for the period
beginning January 1, 1995 and ended August 6, 1995, has
notified the Seller that it intends to discontinue its
relationship with the Seller, nor to the best of the
Seller's knowledge, does there exist any actual or
threatened termination, cancellation or limitation of, or
any modification or change in, the business relationship of
the Seller with any such customer nor does there exist a
present condition or state of facts or circumstances known
to the Seller involving such customers which the Seller can
now reasonably foresee would materially adversely affect the
Business or prevent the Buyer from conducting the Business
after the consummation of the transactions contemplated by
this Agreement in essentially the same manner in which it
has heretofore been conducted by the Seller. Except as
indicated on Schedule 2.17, all customers listed on such
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schedule of Seller have paid all invoices of Seller prior to
60 days after issuance. Schedule 2.17 sets forth all
reductions to or write-offs of accounts receivable in excess
of $15,000 during the last 12 months.
2.18 SUPPLIERS. Schedule 2.18 sets forth a true,
correct and complete list of the names and addresses of the
10 suppliers of the Seller which accounted for the largest
dollar volume of purchases by the Seller for the fiscal year
ended December 31, 1994, or for the period beginning January
1, 1995 and ended August 6, 1995. The Seller is not a party
to any requirements contract relating to the purchase of
inventory, finished goods or other property used in the
conduct of the Business. None of such suppliers has
notified the Seller that it intends to discontinue its
relationship with the Seller nor, to the best of the
Seller's knowledge, does there exist any actual or
threatened termination, cancellation or limitation of, or
any modification or change in, the business relationship of
the Seller with any such supplier, nor does there exist a
present condition or state of facts or circumstances known
to the Seller involving such suppliers which the Seller can
now reasonably foresee would materially adversely affect the
Business or prevent the Buyer from conducting the Business
after the consummation of the transactions contemplated by
this Agreement in essentially the same manner in which it
has heretofore been conducted by the Seller.
2.19 PREPAYMENTS AND DEPOSITS. Except as reflected on
Schedule 2.19, the Seller has no prepayments or deposits
from customers for products to be shipped, or services to be
performed, by the Seller after the Closing Date.
2.20 TRADE NAMES AND OTHER INTANGIBLE PROPERTY.
a. Schedule 2.20 attached hereto sets forth a
true, correct and complete list and, where appropriate,
a description of, all Intangible Property. True,
correct and complete copies of all licenses and other
agreements relating to the Intangible Property have
been previously delivered by the Seller to the Buyer.
The Seller has no knowledge of any default or claimed
or purported or alleged default or state of facts which
with notice or lapse of time or both would constitute a
default on the part of any party in the performance of
any obligation to be performed or paid by any party
under any such license or agreement. Other than as set
forth on Schedule 2.20(a), during the past five years
the only name by which the Seller has been known or
which the Seller has used is its corporate name set
forth in the preamble of this Agreement.
b. Except as otherwise disclosed in Schedule
2.20(b) attached hereto, the Seller is the sole and
exclusive owner, free and clear of all liens, claims
and restrictions, of all Intangible Property and all
designs, permits, labels and packages used on or in
connection therewith. The Intangible Property owned by
the Seller is sufficient to conduct the Business, as
presently conducted. The Seller has received no notice
of, and has no knowledge of any basis for, a claim
against it that any of its operations, activities,
products or publications infringes on any patent,
trademark, trade name, copyright or other property
right of a third party, or that it is illegally or
otherwise using the trade secrets, formulae or any
property rights of others. Except as otherwise
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disclosed in Schedule 2.20(b), the Seller (i) has no
disputes with or claims against any third party for
infringement by such third party of any trade name or
other Intangible Property of the Seller, and (ii) is
not obligated or under any liability whatsoever to make
any payments by way of royalties, fees or otherwise to
any owner or licensee of, or other claimant to, any
patent, trademark, trade name, copyright or other
property right, with respect to the use thereof or in
connection with the conduct of the Business or
otherwise. Except as set forth in Schedule 2.20(b)
hereto, the consummation of the transactions
contemplated by this Agreement (including any required
financing) will in no way affect the continuation,
validity or effectiveness of the Intangible Property or
require the consent of any third party in respect of
the Intangible Property.
2.21 EMPLOYEE BENEFIT PLANS.
a. EMPLOYEE PLANS. Schedule 2.21(a) contains a
true, correct and complete list of all pension, 401(k),
benefit, profit sharing, retirement, deferred
compensation, welfare, insurance, disability, bonus,
vacation pay, severance pay and other similar plans,
programs and agreements, whether reduced to writing or
not, other than any "multiemployer plan" as such term
is defined in Section 4001(a) (3) of ERISA, relating to
the Seller's Employees (the "Employee Plans").
b. MULTIEMPLOYER PLANS. The Seller does not
contribute, and is not required to contribute, or since
March 31, 1992 has not been required to contribute to
any multiemployer plan.
c. RETIREE BENEFITS. Except as set forth on
Schedule 2.21(c), no Employee Plan provides health or
life insurance benefits for retirees.
d. DEFINED BENEFIT PLANS. The Seller does not
contribute, is not required to contribute, or since
March 31, 1992 has not been required to contribute to
any "defined benefit plan" as such term is defined in
Section 3(35) of ERISA.
e. COPIES OF EMPLOYEES PLANS AND RELATED
DOCUMENTS. The Seller has delivered to the Buyer true,
correct and complete copies of all Employee Plans which
have been reduced to writing and written descriptions
of all Employee Plans which have not been reduced to
writing, and all agreements, including trust agreements
and insurance contracts, related to such Employee
Plans, and the Summary Plan Description and all
modifications thereto for each Employee Plan
communicated to the Seller's Employees.
f. CLAIMS AND LITIGATION. Except as set forth
on Schedule 2.21(f), to the best of the Seller's
knowledge there are no threatened or pending claims,
suits or other proceedings by present or former
employees of the Seller, plan participants,
beneficiaries or spouses of any of the above, the
Internal Revenue Service, the Pension Benefit Guaranty
Corporation, or any other person or entity involving
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any Employee Plan including claims against the assets
of any trust, involving any Employee Plan, or any
rights or benefits thereunder, other than ordinary and
usual claims for benefits by participants or
beneficiaries including claims pursuant to domestic
relations orders.
2.22 REAL ESTATE.
a. Schedule 2.22 contains a true, correct and
complete list of the address and legal description of
all Real Estate. Schedule 2.22(a) sets forth a true,
correct and complete list of all liabilities, liens,
encumbrances, easements, restrictions, reservations,
tenancies, agreements or other obligations affecting
the Real Estate (collectively, the "Exceptions").
b. The Seller has good record and marketable
title to the Residential Property (as defined on
Schedule 2.22) free and clear of all such Exceptions,
other than the permitted exceptions set forth on
Schedule 2.22(b) (the "Permitted Exceptions").
c. Except as set forth on Schedule 2.22(c), no
work has been performed on or materials supplied to the
Real Estate within any applicable statutory period
which could give rise to mechanics or materialmen's
liens; all bills and claims for labor performed and
materials furnished to or for the benefit of the Real
Estate for all periods prior to the Closing shall be
paid in full, and the Seller has no knowledge of any
mechanic's or materialmen's liens, whether or not
perfected, on or affecting any portion of the Real
Estate.
d. There is no pending or threatened
condemnation or eminent domain proceeding with respect
to the Real Estate.
e. Except as set forth on Schedule 2.22(e),
there are no taxes or betterment or special assessments
other than ordinary real estate taxes pending or
payable against the Real Estate or Leased Premises and
there are no contingencies existing under which any
assessment for real estate taxes may be retroactively
filed against the Real Estate or Leased Premises; the
Seller has no knowledge of any proposed special
assessment that may affect the Real Estate or Leased
Premises or any part thereof; there are no penalties
due with respect to real estate taxes and/or
impositions, and all real estate taxes and/or
impositions (excepting those for the current year that
are not yet due and payable) with respect to the Real
Estate and Leased Premises have been paid in full;
there are no taxes or levies, permit fees or connection
fees which must be paid respecting existing curb cuts,
sewer hookups, water-main hookups or services of a like
nature.
f. The Real Estate to be acquired by the Buyer
is legally subdivided and consists of separate tax lots
so that it is assessed separate and apart from any
other property.
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g. The Real Estate and the Leased Premises
comply in all material respects with the requirements
of all building, zoning, subdivision, health, safety,
environmental, pollution control, waste products,
sewage control and all other applicable statutes, laws,
codes, ordinances, rules, orders, regulations and
decrees (collectively, the "Government Regulations") of
any and all Government Agencies. The Seller has
obtained and provided to the Buyer all consents,
permits, licenses and approvals required by such
Government Regulations, such consents, permits,
licenses and approvals are in full force and effect,
have been properly and validly issued, and on or prior
to the Closing Date will be assigned to the Buyer by
the Seller. There is no uncured breach of any
condition or requirement imposed by, or pursuant to,
any permit or license issued with respect to the Real
Estate or the Leased Premises which would have a
material adverse affect on such interest. There is no
action pending or, to the best of the Seller's
knowledge, threatened by any Government Agencies
claiming that the Real Estate or the Leased Premises
violates such Government Regulations or threatening to
shut down the Business or the use of the Assets or to
prevent the Assets from being used as presently used.
h. Except as set forth on Schedule 2.22(h) there
are no actions, suits, petitions, notices or
proceedings pending, given or, to the best of the
Seller's knowledge, threatened by any persons or
Government Agencies before any court, Government
Agencies or instrumentalities, administrative or
otherwise, which if given, commenced or concluded would
have a material adverse effect on the value, occupancy,
use or operation of the Real Estate or Leased Premises
or an adverse effect on the Buyer's title to the Real
Estate. The Seller shall give the Buyer prompt written
notice of any such action, suit, petition, notice or
proceeding of which the Seller obtains knowledge after
the date hereof and before the Closing Date.
i. The structural components of all of the
buildings located on or comprising the Real Estate or
Leased Premises are, in all material respects, in good
condition and repair, normal wear and tear excepted.
j. Schedule 2.22(j) sets forth a true, correct
and complete list of all title insurance policies, site
surveys, title reports, engineering studies and
reports, hazardous waste reports, and surveys prepared
with respect to the Real Estate which are available to
the Seller, copies of which have been delivered by the
Seller to the Buyer.
k. There are no agreements of sale (other than
this Agreement), options or other rights of third
parties to acquire the Real Estate or any other
agreement that would otherwise prohibit any disposition
of the Real Estate.
2.23 PRESERVATION OF ASSETS. The Seller has not sold,
assigned or transferred any of the assets reflected on the
Current Financial Statements, other than in the ordinary
course of business, since August 6, 1995.
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2.24 ENVIRONMENTAL LAW.
a. As used in this Section 2.24 the following
terms shall have the following meanings:
i. "Environmental Laws" means any
federal, state or local law, regulation,
ordinance, or order pertaining to the protection
of the environment and the health and safety of
the public, including but not limited to the
Comprehensive Environmental Response, Compensation
and Liability Act ("CERCLA"), 42 U.S.C. Section 9601
ET SEQ.; the Resource Conservation and Recovery Act
("RCRA"), 42 U.S.C. Section 6901 ET SEQ.; the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801 ET
SEQ. and any other state, federal or local law,
regulation, rule, ordinance or order, whether
currently in existence or hereafter enacted which
govern:
(1) the existence, cleanup and/or
remedy of contamination on property;
(2) the emission or discharge of
Hazardous Substances into the environment;
(3) the control of hazardous wastes; or
(4) the use, generation, transport,
treatment, storage, disposal, removal or
recovery of Hazardous Substances, including
building materials.
ii. "Release" means any spilling,
leaking, pumping, pouring, emitting, emptying,
placing, discharging, injecting, escaping,
leaching, dumping or disposing into the
environment, whether intentional or unintentional.
iii. The term "Hazardous Substances"
shall mean (A) any oil, flammable substance,
explosives, radioactive materials, hazardous
wastes or substances, toxic wastes or substances
or any other wastes, materials or pollutants which
(1) pose a hazard to the Real Estate or Leased
Premises or to persons on or about the Real Estate
or Leased Premises or (2) cause the Real Estate or
Leased Premises to be in violation of any
Environmental Law; (B) asbestos in any form which
is or could become friable, urea formaldehyde foam
insulation, transformers or other equipment which
contain dielectric fluid containing levels of
polychlorinated biphenyls, or radon gas; (C) any
chemical, material or substance defined as, or
included in the definition of "hazardous
substances," "hazardous wastes," "hazardous
materials," "extremely hazardous waste,"
"restricted hazardous waste," or "toxic
substances" or words of similar import under any
applicable local, state or federal law or under
the regulations adopted or publications
-21-<PAGE>
promulgated pursuant thereto, including but not
limited to Environmental Laws; (D) any other
chemical, material or substance, exposure to which
is prohibited, limited or regulated by any
governmental authority; (E) any other chemical,
materials or substance which may or could pose a
hazard to the health and safety of the public or
the occupants of any of the Seller's facilities or
the owners and/or occupants of property adjacent
to or surrounding those facilities, or any other
person coming upon the Seller's facilities or
adjacent property; and (F) any other chemical,
materials or substance which may or could pose a
hazard to the environment.
iv. "Petroleum Products" means
petroleum, gasoline, oil, fuel oil, diesel fuel,
and petroleum solvents.
v. "Disposal" means disposal as
defined by RCRA, and the regulations thereunder.
vi. "Treatment" and "Storage" mean
treatment and storage as defined by RCRA and the
regulations thereunder.
vii. "Hazardous Wastes" means hazardous
wastes as defined by RCRA and the regulations
thereunder.
b. Except as set forth on Schedule 2.24(b),
since March 30, 1992 there have not been, and neither
Seller nor Seller's Parent is aware that prior to March
30, 1992 there had been, at any time any activities, in
violation of any applicable Environmental Law, on or
involving, directly or indirectly, the use, generation,
Treatment, Storage or Disposal of any Hazardous
Substances (i) under, or in the Real Estate whether
contained in soil, tanks, sumps, ponds, lagoons,
barrels, can or other containments, structures or
equipment, (ii) incorporated in the buildings,
structures or improvements located on the Real Estate
including any building material containing asbestos, or
(iii) used in connection with any operation on, in or
at the Real Estate.
c. Except as set forth in Schedule 2.24(c)
attached hereto, since March 30, 1992 there have not
been, and neither Seller nor Seller's Parent is aware
that prior to March 30, 1992 there had been, any
releases or threatened releases, in violation of any
applicable Environmental Law, of any Hazardous
Substances, Petroleum Products, asbestos or
polychlorinated biphenyls at any or from the Real
Estate, there has been no Treatment, Storage, or
Disposal of any Hazardous Substances, Petroleum
Products, asbestos or polychlorinated biphenyls at the
Real Estate and the Real Estate has not been used at
any time by any person as a landfill or waste disposal
site.
d. Except as set forth in Schedule 2.24(d),
since March 30, 1992 there have not been, and neither
Seller nor Seller's Parent is aware that prior to March
30, 1992 there had been, any Hazardous Substances,
Petroleum Products, asbestos, polychlorinated
biphenyls, urea formaldehyde insulation or radioactive
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<PAGE>
materials located in violation of any applicable
Environmental Law in or on the Real Estate, including
but not limited to any groundwater or surface waters
thereon.
e. Since March 30, 1992 there have not been, and
neither Seller nor Sellers Parent is aware that, prior
to March 30, 1992 that had been, any pesticides,
fungicides, insecticides or rodenticides located in
violation of any applicable Environmental Law, in or on
the Real Estate, including but not limited to any
groundwater or surface waters, in concentrations which
may cause harm or damage to the health and safety of
persons or to the environment.
f. Except as set forth in Schedule 2.24(f), the
Seller is now and has at all times, been in material
compliance with all Environmental Laws. The Seller has
all approvals, consents, licenses, permits and orders
necessary to carry out its business as currently
conducted. Except as set forth in Schedule 2.24(f),
there is no pending environmental litigation,
enforcement actions, administrative orders or notices
of violation brought under any Environmental Law
concerning any of the Seller's facilities and the
Seller does not know and has no reason to know of any
threats of such litigation, enforcement actions,
administrative orders or notices of violation.
g. Except as set forth in Schedule 2.24(g), the
Seller has not received any requests for information,
notice of claim, demand or other notification that it
may be potentially responsible for any threatened or
actual release of Hazardous Substances, Petroleum
Products, asbestos or PCBS. To the best knowledge of
the Seller after diligent investigation, the Seller has
not transported or arranged for transportation of
Hazardous Substances, Petroleum Products, asbestos or
PCBs to any location which is the subject of federal,
state or local enforcement actions or other
investigations which may lead to claims against the
Seller for the cost of environmental tests, studies,
investigations, or for remedial work, or for damage to
natural resources or for personal injury claims.
2.25 DISCLOSURE. No representation or warranty by the
Seller in this Agreement or in any exhibit hereto, or in any
list, statement, document or information set forth in or
attached to any schedule delivered or to be delivered
pursuant to this Agreement, contains or will contain any
untrue statement of a material fact or omits or will omit
any material fact necessary in order to make the statements
contained therein not misleading. The Seller has not failed
to disclose to the Buyer any material facts within its
knowledge which in its opinion are material to the
transactions contemplated by this Agreement or to the
Business.
3. REPRESENTATIONS OF THE BUYER. Representations and
warranties made by the Buyer and Ricardo herein or in any
instrument or document furnished in connection herewith shall
survive the Closing, and any investigation made at any time with
respect thereto, for a period of three years after the Closing.
The representations and warranties in this Section 3 or in any
document delivered pursuant to this Agreement are deemed to be
material and the Seller and Seller's Parent are entering into
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<PAGE>
this Agreement relying on such representations and warranties.
If the Buyer assigns its rights and obligations under this
Agreement, as contemplated by Section 15 hereof, the
representations and warranties contained in this Section 3, where
applicable, shall apply to such assignee on and as of the Closing
Date. The Buyer and Ricardo represents and warrants to the
Seller as follows:
3.1 ORGANIZATION AND AUTHORITY. The Buyer is duly
organized and validly existing and in good standing under
the laws of the State of Michigan, and has requisite power
and authority to own its properties and to carry on its
business as now being conducted. The Buyer has full power
to execute and deliver this Agreement, and the Instrument of
Assumption of Liabilities and to consummate the transactions
contemplated hereby and thereby. Ricardo is a public
limited company duly organized, validly existing, in good
standing under the laws of the United Kingdom and has all
requisite power and authority to execute and deliver this
Agreement and the agreements contemplated herein and to
consummate the transactions contemplated hereby. Copies of
the organizational documents of the Buyer, as amended to
date, when delivered to the Seller at Closing, will be
complete and correct, and no amendments will have been made
thereto or will have been authorized since the date of
delivery thereof.
3.2 AUTHORIZATION. The execution and delivery of this
Agreement by the Buyer and Ricardo, and the agreements
provided for herein, and the consummation of all
transactions contemplated hereby, have been duly authorized
by all requisite corporate action. This Agreement and all
such other agreements and written obligations entered into
and undertaken in connection with the transactions
contemplated hereby constitute the valid and legally binding
obligations of the Buyer and Ricardo, enforceable against
each of them in accordance with their respective terms
except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting
creditors rights generally and by principles of equity,
whether considered in a proceeding at law or in equity. The
execution, delivery and performance of this Agreement and
the agreements provided for herein, and the consummation by
the Buyer of the transactions contemplated hereby and
thereby, will not, with or without the giving of notice or
the passage of time or both, (a) violate the provisions of
any law, rule or regulations applicable to the Buyer or
Ricardo; (b) violate the provisions of their respective
organizational documents; (c) violate any judgment, decree,
order or award of any court, governmental body or arbitrator
applicable to the Buyer or Ricardo; or (d) to the extent
that any of the following would have a material adverse
effect on the business or financial conditions of Buyer or
Ricardo, conflict with or result in the breach or
termination of any term or provision of, or constitute a
default under, or cause any acceleration under, or cause the
creation of any lien, charge or encumbrance upon the
properties or assets of the Buyer pursuant to any indenture,
mortgage, deed of trust or other agreement or instrument to
which it or its properties is a party or by which the Buyer
is or may be bound. Schedule 3.2 attached hereto sets forth
a true, correct and complete list of all consents and
approvals of third parties that are required of Buyer in
connection with the consummation by the Buyer of the
transactions contemplated by this Agreement.
3.3 REGULATORY APPROVALS. All consents, approvals,
authorizations and other requirements prescribed by any law,
rule or regulation which must be obtained or satisfied by
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the Buyer and which are necessary for the consummation by
the Buyer of the transactions contemplated by this Agreement
have been, or will be prior to the Closing Date, obtained
and satisfied.
4. ACCESS TO INFORMATION: PUBLIC ANNOUNCEMENTS.
4.1 ACCESS TO MANAGEMENT, PROPERTIES AND RECORDS.
a. From the date of this Agreement until the
Closing Date, the Seller shall afford the officers,
attorneys, accountants and other authorized
representatives of the Buyer free and full access upon
reasonable notice coordinated with the Vice President -
Machining Services and during normal business hours to
all management personnel, offices, properties, books
and records of the Seller, so that the Buyer may have
full opportunity to make such investigation as it shall
desire to make of the management, business, properties
and affairs of the Seller (provided that such access is
not unreasonably disruptive to the normal business
operations of the Seller), and the Buyer shall be
permitted to make abstracts from, or copies of, all
such books and records. The Seller shall furnish to
the Buyer such financial and operating data and other
information as to the Assets and the Business as the
Buyer shall reasonably request.
b. The Seller shall authorize the access to the
Buyer of all files pertaining to the Seller, the Assets
or the Business or its operations held by any federal,
state, county or local authorities, agencies or
instrumentalities.
4.2 CONFIDENTIALITY. All information, documents or
other material not previously disclosed to the public or
generally known to persons engaged in the business of the
Seller or the Buyer which shall have been furnished by the
Buyer or the Seller to the other party in connection with
the transactions contemplated hereby or as provided pursuant
to this Section 4 ("Information") shall not be disclosed by
such receiving party to any person other than their
respective employees, officers, directors, attorneys,
accountants or financial advisors. Each party will cause
all persons (including any affiliates) to whom any
Information is disclosed not to disclose any of such
Information to others in violation of the foregoing
restrictions. The obligations of this Section shall not
apply to any Information which (a) at the time of disclosure
or thereafter is generally available to and known by the
public (other than as a result of a disclosure directly or
indirectly by the party against whom enforcement of this
Section is sought (the "Disclosing Party")), (b) was
available to the Disclosing Party from a source other than
the other party or its officers, employees, agents or
attorneys, provided that such source is not and was not
bound by a confidentiality agreement or obligation with the
other party, or (c) has been independently developed by the
Disclosing Party without violation of any of its obligations
hereunder. Each Party agrees to cause the Information to be
used only in connection with its analysis and review of the
transactions contemplated in this Agreement. In the event
that Closing does not occur on or before October 31, 1995
(or such later date to which the Closing may be postponed
pursuant to the provisions hereof), or this Agreement is
terminated in accordance with its terms, all Information,
whether or not then in the possession of the party to whom
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<PAGE>
the obligation of confidentiality applies hereunder, and any
copies thereof, or notes or extracts therefrom shall be
returned to the party from whom such Information was
obtained, without retaining any copies thereof, and the
returning party shall destroy, as soon as practicable, all
copies of any analyses, studies, compilations or other
documents prepared by it or any of its officers or employees
to the extent that they contain, reflect or are generated
from any Information.
4.3 PUBLIC ANNOUNCEMENTS. The parties will cooperate
in the issuance of any press releases or otherwise in the
making of any public statements with respect to the
transactions contemplated hereby. The parties agree that
prior to consummation of the transactions contemplated
hereby, except as otherwise required by law, any and all
public announcements or other public communications
concerning this Agreement and the purchase of the Assets by
the Buyer shall be subject to the approval of all parties
hereto, which approval shall not be unreasonably withheld.
5. PRE-CLOSING COVENANTS OF THE SELLER. From and after
the date hereof and until the Closing Date or the termination of
this Agreement in accordance with the terms hereof:
5.1 CONDUCT OF BUSINESS. The Seller shall carry on
the Business diligently and in a normal business manner
consistent with past practice and shall not make or
institute any unusual or new methods of manufacture,
purchase, sale, shipment or delivery, lease, management,
accounting or operation, and shall not ship or deliver any
quantity of products in excess of normal shipment or
delivery levels, except as agreed to in writing by the
Buyer. All of the property of the Seller shall be used,
operated, repaired and maintained in a normal business
manner consistent with past practice. Until the Closing or
the termination of this Agreement in accordance with the
terms hereof the Seller shall not, and shall not agree to,
do any of the following except with the Buyer's written
consent:
a. Mortgage, pledge, or subject to any lien,
charge or any other encumbrance any of the Assets
except for statutory liens for amounts not yet due;
b. Sell, assign, or transfer any of the Assets,
except for inventory sold in the ordinary course of
business and except for excess and obsolete inventory
sold as scrap to parties other than customers and
competitors of the Business;
c. Merge or consolidate with or into any
corporation or other entity;
d. Make, accrue or become liable for any bonus,
profit sharing or incentive payment, except for
accruals under existing plans, if any, or increase the
rate of compensation payable or to become payable by it
to any of its officers;
e. Waive any rights of material value to the
Business;
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f. Modify, amend, alter or terminate any of the
Contracts or the Leases without the prior consent of
Buyer which shall not be unreasonably withheld;
g. Take or omit to take any act constituting a
breach or default under any contract, indenture or
agreement by which any of the Assets are bound;
h. Fail to use best efforts to (i) preserve the
possession, control and good condition of the Assets
and Business, (ii) keep in faithful service its present
officers and key employees, (iii) preserve the goodwill
of its customers, suppliers, agents, brokers and others
having business relations with it, and (iv) keep and
preserve the Business existing on the date hereof until
after the Closing Date;
i. Fail to operate the Business and maintain its
books, accounts and records in the customary manner and
in accordance with past practice;
j. Materially alter the terms, status or funding
condition of any Employee Plan except as contemplated
by this Agreement or by the transactions contemplated
by this Agreement;
k. Enter into any new, or amend or modify any
existing, collective bargaining agreement;
l. Enter into any joint venture or partnership
or any arrangement or agreement that would prevent
Seller from operating the Business in the ordinary
course as presently conducted; or
m. Purchase any assets or securities of any
person, other than in the ordinary course of business.
5.2 NO SHOPPING. Neither the Seller nor Seller's
Parent shall directly or indirectly, through any director,
officer, agent, financial adviser or otherwise, solicit,
initiate or encourage submission of proposals or offers from
any person relating to any acquisition or purchase of all or
a portion of the assets of, or any equity interest in, the
Seller or any business combination with the Seller. Except
in connection with the proper discharge, with the advice of
counsel, by the directors of the Seller and Seller's Parent
of their fiduciary duties under applicable law, neither the
Seller nor Seller's Parent shall participate in any
negotiations regarding, or furnish to any other person any
information with respect to, or otherwise cooperate in any
way with, or assist or participate in, facilitate or
encourage, any effort or attempt by any other person to do
or seek any of the foregoing. Except in connection with the
proper discharge, with the advice of counsel, by the
directors of the Seller and Seller's Parent of their
fiduciary duties under applicable law, each of the Seller
and Seller's Parent shall use its best efforts to cause all
materials previously furnished to any third party to be
promptly returned to the Seller or Seller's Parent and shall
cease any negotiations conducted in connection therewith or
otherwise conducted with any such parties. Each of the
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Seller and Seller's Parent shall promptly notify the Buyer
if any such proposal or officer, or any inquiry or contract
with any person with respect thereto is made.
5.3 SHAREHOLDERS' AUTHORIZATION. The Seller agrees
that, as promptly as reasonably practicable after the date
hereof, it will duly call and hold a meeting of its
shareholders to be held as promptly as possible after the
date hereof for the purpose of acting upon and obtaining
their authorization and approval of this Agreement and the
transactions contemplated hereunder, or, alternatively, will
solicit written consents from its shareholders sufficient to
cause approval of the Agreement under applicable law and its
Articles of Incorporation and Bylaws. The Seller agrees to
include in its proxy or solicitation material the
recommendation of its Board of Directors in favor of such
shareholder approval, will use its best efforts to obtain
the necessary adoption of this Agreement by its shareholders
and will take such other and further actions as may be
required by this Agreement and as may be required by
applicable law to effectuate the transactions contemplated
hereby.
5.4 CONTINUING OBLIGATION TO INFORM. From time to
time prior to the Closing, the Seller will deliver or cause
to be delivered to the Buyer supplemental information
concerning events subsequent to the date hereof which would
render any statement, representation or warranty in this
Agreement or any information contained in any schedule
inaccurate or incomplete in any material respect at any time
after the date hereof until the Closing Date. The Seller
shall cooperate, and shall cause its employees to cooperate,
with the Buyer with respect to making available all
information reasonably requested by the Buyer.
5.5 ASSUMPTION OF LEASES AND CONTRACTS. The Seller
shall use its best efforts to cause the assignment to the
Buyer on the Closing Date of the Leases set forth on
Schedule 2.9(b), and the Contracts set forth on Schedule
2.13(b).
5.6 DELIVERY OF SURVEY AND TITLE POLICY. Within five
days after the date hereof, the Seller shall deliver to the
Buyer copies of the most recent surveys and title policies
with respect to the Real Estate and Leased Premises.
5.7 BEST EFFORTS. The Seller and Seller's Parent
covenant to use their best efforts to obtain satisfaction
of the conditions specified in this Agreement.
5.8 PROVISION OF DOCUMENTS. Seller and Seller's
Parent shall use their best efforts to provide:
a. All warranties and guarantees related to the
Real Estate or any fixtures, equipment or improvements
thereon which are included in the Assets; and
b. Copies of all filings and correspondence with
Government Agencies, results or reports on soil tests
or any other tests, test borings, or similar reports,
information or studies prepared with respect to the
Real Estate.
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6. PRE-CLOSING COVENANTS OF BUYER AND RICARDO. From and
after the date hereof and until the Closing Date or the
termination of this Agreement in accordance with the terms
hereof.
6.1 CONTINUED DUE DILIGENCE. The Buyer and Ricardo
shall diligently continue to investigate, review and conduct
their due diligence on Seller, the Business and the Assets,
the parties agreeing that the items or issues listed on
Schedule 6.1 or items or issues identified or discovered in
reviewing items or issues listed on Schedule 6.1 ("Open
Diligence Items") are the items or issues which require
additional or continued due diligence.
6.2 RELEASE OF SELLER FROM LEASE. Buyer and Ricardo
shall use their best efforts to obtain from the lessor of
the premises at 9059 Samuel Barton Drive, Belleville,
Michigan, a release and discharge of any liability or
obligation which Seller may have under the lease covering
such premises.
6.3 BEST EFFORTS. The Buyer and Ricardo covenant to
use their best efforts to obtain satisfaction of the
conditions specified in this Agreement.
7. CONDITIONS TO OBLIGATIONS OF THE BUYER. The
obligations of the Buyer under this Agreement are subject to the
fulfillment, at the Closing Date (except as otherwise indicated),
of the following conditions precedent, each of which may be
waived in writing in the sole discretion of the Buyer:
7.1 CONTINUED TRUTH OF REPRESENTATIONS AND WARRANTIES
OF THE SELLER AND SELLER'S PARENT; COMPLIANCE WITH COVENANTS
AND OBLIGATIONS. The representations and warranties of the
Seller and Seller's Parent shall be true in all material
respects on and as of the Closing Date as though such
representations and warranties were made on and as of such
date, except for any changes permitted by the terms hereof
or consented to in writing by the Buyer or changes resulting
solely from actions taken by the Buyer and there shall have
occurred no material adverse change in the business, assets,
liabilities, financial condition or operations of the
Business. The Seller shall have performed and complied in
all material respects with all covenants required by this
Agreement to be performed or complied with by it prior to or
at the Closing Date.
7.2 Corporate Proceedings. All corporate and other
proceedings required to be taken on the part of the Seller
or Seller's Parent to authorize or carry out this Agreement
and to convey, assign, transfer and deliver the Assets shall
have been taken including but not limited to the approval of
this Agreement and the sale of the Assets by the Seller's
shareholders in accordance with applicable law.
7.3 Governmental Approvals. All courts of law,
governmental agencies, departments, bureaus, commissions and
similar bodies, the consent, authorization or approval of
which is necessary under any applicable law, rule, order or
regulation for the consummation by the Seller of the
transactions contemplated by this Agreement and the
operation of the Seller's business by the Buyer shall have
consented to, authorized, permitted or approved such
transactions.
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7.4 CONSENTS OF LENDERS, LESSORS AND OTHER THIRD
PARTIES. The Seller shall have received the consents and
approvals of all lenders, lessors and other third parties
whose consent or approval is required in order for the
Seller to consummate the transactions contemplated by this
Agreement and for which the failure to obtain may have a
material adverse effect on the Business or Seller.
7.5 ADVERSE PROCEEDINGS. No action or proceeding by
or before any court or other governmental body shall have
been instituted by any governmental body or person
whatsoever which shall seek to restrain, prohibit or
invalidate the transactions contemplated by this Agreement
or which might affect the right of the Buyer to own or use
the Assets after the Closing.
7.6 OPINION OF COUNSEL. The Buyer and Ricardo shall
have received an opinion of Kilpatrick & Cody, counsel to
the Seller, dated as of the Closing Date, in form and
substance reasonably satisfactory to the Buyer and its
counsel.
7.7 THE ASSETS. Except for the Permitted Exceptions,
at the Closing the Buyer shall receive (a) good and
marketable title to the Real Estate and (b) good and
marketable title to all Assets other than the Real Estate,
free and clear of all liens, mortgages, pledges, security
interests, restrictions, prior assignments, encumbrances and
claims of any kind or nature whatsoever. The Seller shall
have executed and delivered to the Buyer all documents,
including but not limited to deeds, bills of sale, vehicle
title documents and other instruments of conveyance, as the
Buyer shall reasonably determine are necessary to transfer
such title to all of the Assets to the Buyer in such manner.
7.8 UPDATE. The Seller shall have provided the Buyer
with a true, correct and complete list and amount, as of the
Closing Date, of:
a. The Fixed Assets;
b. All unfilled purchase orders; and
c. All other categories of assets as may
reasonably be requested by the Buyer.
7.9 TECHNICAL SERVICES AGREEMENT. Seller's Parent and
Buyer shall have entered a Technical Services Agreement in
the form attached hereto as Exhibit C pursuant to which
Seller's Parent shall purchase engineering services from
Buyer for a five (5) year period in the following minimum
amounts:
a. years 1-2, $425,000 in aggregate; and
b. years 3-5, $1 per year.
7.10 EMPLOYEE MATTERS. Effective as of the Closing
Date, the Seller, if it has not already done so, will cease
its conduct of the Business and will terminate the
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employment of each Employee as of such date unless the
parties have otherwise agreed.
7.11 FIRE, CASUALTY OR EMINENT DOMAIN. If the Real
Estate and/or any of the other Assets are, prior to the
Closing Date, either damaged by fire or other casualty
insured against or taken, in whole or in part, by eminent
domain proceedings, and the Buyer shall have elected to
accept said Real Estate and/or other Assets in their damaged
or diminished condition, the Seller shall have delivered an
assignment to the Buyer of all insurance and/or condemnation
proceeds payable with respect to such fire, casualty or
loss.
7.12 DUE DILIGENCE REVIEW. The Buyer shall have
completed its review of the Open Diligence Items, the
results of which review are reasonably satisfactory to the
Buyer.
7.13 WORK-IN-PROGRESS SCHEDULE. The Buyer and Seller
shall have agreed upon and executed and delivered a Work-in-
Progress Schedule at least two (2) days prior to the Closing
Date.
7.14 ESCROW AGREEMENT. The Seller and Escrow Agent
shall have executed and delivered the Escrow Agreement.
7.15 SUBLEASE LETTER. The Seller shall have executed
and delivered the sublease letter, in the form attached
hereto as Exhibit D (the "Sublease Letter"), pertaining to
the use by Buyer of the pattern shop building and premises
at 11895 Wayne Road, Romulus, and certain CAD equipment and
software after the closing.
7.16 PROOF OF NAME CHANGE. The Seller shall have
delivered to Buyer an amendment of its Articles of
Incorporation and other documents reasonably requested by
Buyer, each duly authorized and executed and appropriate for
filing changing its name so that it cannot be reasonably
confused with the name "InterMotive".
7.17 Lease. The Buyer and the owner of the premises at
9059 Samuel Barton Drive, Belleville, Michigan shall have
entered a lease on mutually agreeable terms.
7.18 Closing Deliveries. The Buyer shall have received
at or prior to the Closing each of the following documents:
a. All technical data, formulations, product
literature and other documentation relating to the
Seller's business, all in form and substance
satisfactory to the Buyer;
b. Such contracts, files and other data and
documents pertaining to the Assets or the Business as
the Buyer may reasonably request;
c. Proof as required by Section 1.4(d);
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d. Copies of the general ledgers and books of
account of the Seller related to the Business, and all
federal, state and local income, franchise, capital,
property and other tax returns filed by the Seller with
respect to the Assets since January 1, 1993 and such of
the foregoing items related to periods prior to January
1, 1993, but not prior to January 1, 1990, as may be in
Seller's possession.
e. Such certificates of the Seller's officers
and such other documents evidencing satisfaction of the
conditions specified in Section 7 as the Buyer shall
reasonably request (which certificates may also be
relied upon by the Buyer's lenders);
f. Estoppel certificates from each lessor under
the Leases set forth in Schedule 2.9(b) attached hereto
(i) consenting to the assignment of such Lease to the
Buyer; (ii) representing that there are no outstanding
claims against the Seller under any such Lease, and no
outstanding defaults or events which, with notice or
the passage of time, or both, may become defaults;
(iii) representing or specifying such other matters as
the Buyer may reasonably require;
g. A certificate of the Seller stating that the
Seller has not received any notice of noncompliance
with respect to any federal environmental,
occupational, work place disclosure or right to know
laws;
h. A marked up commitment to issue a title
policy or policies (together, the "Title Policy") from
one or more title companies reasonably acceptable to
the Buyer (the "Title Insurer"), in form and substance
reasonably satisfactory to the Buyer covering the
Residential Property;
i. Such estoppel certificates as the Title
Insurer may require in order to issue the Title Policy,
and such affidavits executed by the Seller as the Title
Insurer may reasonably require in order to omit from
the Title Policy all exceptions for (i) judgments or
other returns against persons or entities whose names
are the same as or similar to the Seller; (ii) parties
in possession other than under rights to possession
granted under the Leases; and (iii) mechanics' liens;
j. The originals, if in the Seller's possession,
of all building permits, certificates of occupancy, and
other governmental licenses, permits and approvals, and
all plans and specifications relating to the Real
Estate or Leased Premises not previously delivered to
the Buyer;
k. A certificate of the Secretary of State of
the State of Michigan as to the fact that Seller is in
good standing in Michigan; and
l. A cross receipt executed by the Buyer and the
Seller.
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8. CONDITIONS TO OBLIGATIONS OF THE SELLER. The
obligations of the Seller under this Agreement are subject to the
fulfillment, at the Closing Date, of the following conditions
precedent, each of which may be waived in writing at the sole
discretion of the Seller:
8.1 CONTINUED TRUTH OF REPRESENTATIONS AND WARRANTIES
OF THE BUYER AND RICARDO; COMPLIANCE WITH COVENANTS AND
OBLIGATIONS. The representations and warranties of the
Buyer and Ricardo in this Agreement shall be true on and as
of the Closing Date as though such representations and
warranties were made on and as of such date, except for any
changes consented to in writing by the Seller. Each of the
Buyer and Ricardo shall have performed and complied with all
covenants required by this Agreement to be performed or
complied with by it prior to or at the Closing Date.
8.2 CORPORATE PROCEEDINGS. All corporate, legal and
other proceedings required to be taken on the part of the
Buyer or Ricardo to authorize or carry out this Agreement
shall have been taken.
8.3 GOVERNMENTAL APPROVALS. All governmental
agencies, departments, bureaus, commissions and similar
bodies, the consent, authorization or approval of which is
necessary under any applicable law, rule, order or
regulation for the consummation by the Buyer of the
transactions contemplated by this Agreement shall have
consented to, authorized, permitted or approved such
transactions.
8.4 CONSENTS OF LENDERS, LESSORS AND OTHER THIRD
PARTIES. The Buyer shall have received all requisite and
material consents and approvals of all lenders, lessors and
other third parties whose consent or approval is required in
order for the Buyer to consummate the transactions
contemplated by this Agreement, including but not limited to
those set forth on Schedule 3.2 attached hereto.
8.5 ADVERSE PROCEEDINGS. No action or proceeding by
or before any court or other governmental body shall have
been instituted by any governmental body or person
whatsoever which shall seek to restrain, prohibit or
invalidate the transactions contemplated by this Agreement
or which might affect the right of the Seller to transfer
the Assets.
8.6 WORK-IN-PROGRESS. The Buyer and Seller shall have
agreed upon and executed and delivered a Work-in-Progress
Schedule at least two (2) days prior to the Closing Date.
8.7 ESCROW AGREEMENT. The Buyer and the Escrow Agent
shall have executed and delivered the Escrow Agreement.
8.8 SUBLEASE LETTER. The Buyer shall have executed
and delivered the Sublease Letter.
8.9 RELEASE FROM LEASE. The owner of the premises
located at 9059 Samuel Barton Drive, Belleville, Michigan
shall have released and discharged Seller from any liability
or obligation under any lease of such premises.
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8.10 SENIOR LENDER. Seller shall have received the
approval of Seller's Parent senior lenders to consummate the
transactions contemplated by this Agreement.
8.11 CLOSING DELIVERIES. The Seller shall have
received at or prior to the Closing each of the following
documents:
a. Such certificates of the Buyer's officers and
such other documents evidencing satisfaction of the
conditions specified in this Section 8 as the Seller
shall reasonably request;
b. A certificate of the Secretary of State of
the State of Michigan as to the good standing of the
Buyer;
c. A certificate of the Secretary of the Buyer
attesting to the incumbency of the Buyer's officers,
the authenticity of the resolutions authorizing the
transactions contemplated by this Agreement, and the
authenticity and continuing validity of the
organizational documents delivered pursuant to Section
3.1.
d. Payment to the Seller of amount indicated in
Section 1.5(b);
e. A cross receipt executed by the Buyer and the
Seller;
f. An opinion of the Buyer's counsel in form and
substance reasonably satisfactory to the Seller and its
counsel;
g. Such other documents, instruments or
certificates as the Seller may reasonably request.
9. POST-CLOSING AGREEMENTS. The Seller agrees that from
and after the Closing Date:
9.1 PROPRIETARY INFORMATION.
a. The Seller and Seller's Parent shall hold in
confidence, and use its best efforts to have all
officers, shareholders, directors and personnel hold in
confidence, all knowledge and information of a secret
or confidential nature with respect to the Business,
and shall not disclose, publish or make use of the same
without the consent of the Buyer, except to the extent
that such information shall have become public
knowledge other than by breach of this Agreement by the
Seller or by any other persons who have agreed not to
disclose, publish or make use of such information.
b. The Seller agrees that the remedy at law for
any breach of this Section 9.1 would be inadequate and
that the Buyer shall be entitled to injunctive relief
in addition to any other remedy it may have upon breach
of any provision of this Section 9.1.
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9.2 NON-COMPETITION AGREEMENT.
a. For a period of two years after the Closing
Date, none of the Seller, Seller's Parent nor any
corporate affiliate thereof shall directly or
indirectly engage in, manage, operate, be connected
with or acquire any interest in, as an employee,
consultant, advisor, agent, owner, partner, co-
venturer, principal, director, shareholder, lender or
otherwise, any business which provides engine
engineering contract services (a "Competitive
Business"), in the United States, Canada or any other
country in which the Seller conducted business during
the two years prior to the Closing Date, except that
the Seller, Seller's Parent and its corporate
affiliates may own, in the aggregate, not more than ten
percent (10%) of the outstanding shares of any publicly
held corporation which is a Competitive Business which
has shares listed for trading on a securities exchange
registered with the Securities and Exchange Commission
or through the automatic quotation system of a
registered securities association.
b. The parties hereto agree that the duration
and geographic scope of the non-competition provision
set forth in this Section 9.2 are reasonable. In the
event that any court determines that the duration or
the geographic scope, or both, are unreasonable and
that such provision is to that extent unenforceable,
the parties hereto agree that the provision shall
remain in full force and effect for the greatest time
period and in the greatest geographic area that would
not render it unenforceable. The Seller agrees that
damages are an inadequate remedy for any breach of this
provision and that the Buyer shall, whether or not it
is pursuing any potential remedies at law, be entitled
to equitable relief in the form of preliminary and
permanent injunctions. If the Seller, Seller's Parent
or any corporate affiliate shall violate this Section
9.2, the duration of this Section 9.2 automatically
shall be extended as against such violating party for a
period equal to the period during which such party
shall have been in violation of this Section 9.2. The
covenants contained in this Section 9.2 are deemed to
be material and the Buyer is entering into this
Agreement relying on such covenants.
9.3 SHARING OF DATA. The Seller and Seller's Parent
shall have the right for a period of three years following
the Closing Date to have reasonable access to such books,
records and accounts, including financial and tax
information, correspondence, production records, employment
records and other similar information as are transferred to
the Buyer pursuant to the terms of this Agreement for the
limited purposes of concluding its involvement in the
business of the Seller prior to the Closing Date and for
complying with its obligations under applicable
environmental, employment or other laws and regulations and
for an unlimited period for complying with securities and
tax laws or related to third party litigation except that
Buyer may dispose of or destroy records in the ordinary
course of its business. The Buyer and Ricardo shall have
the right for a period of three years following the Closing
Date to have reasonable access to those books, records and
accounts, including financial and tax information,
correspondence, production records, employment records and
other records which are retained by the Seller or Seller's
Parent pursuant to the terms of this Agreement to the extent
that any of the foregoing relates to the Business
transferred to the Buyer hereunder or is otherwise needed by
the Buyer or Ricardo in order to comply with its obligations
under applicable environmental, employment or other laws and
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regulations and for an unlimited period for complying with
securities and tax laws or related to third party litigation
except that Seller and Seller's Parent may dispose of or
destroy records in the ordinary course of their respective
businesses.
9.4 NON-RECRUITMENT.
a. For a period of two years commencing on the
Closing Date, neither the Seller nor Seller's Parent
shall solicit or encourage the solicitation for the
purpose of hiring or employing, either as an employee,
agent or independent contractor, any person who becomes
an employee of the Buyer on or at anytime after the
Closing Date.
b. For a period of two years commencing on the
Closing Date, neither the Buyer nor Ricardo shall
solicit or encourage the solicitation for the purpose
of hiring or employing, either as an employee, agent or
independent contractor, any employee of Seller or
Seller's Parent or any of their affiliates, other than
those employees of Seller hired by Buyer within one
week after the Closing Date.
10. INDEMNIFICATION AND REIMBURSEMENT.
10.1 INDEMNIFICATION.
a. The Seller and Seller's Parent ("Indemnifying
Party") hereby agree jointly and severally to
indemnify, defend and hold harmless the Buyer, Ricardo
and any parent, subsidiary or affiliate thereof and all
directors, officers, employees, agents and consultants
of each of the foregoing (collectively, the
"Indemnified Parties" and individually an "Indemnified
Party") from and against all demands, claims, actions
or causes of action, assessments, losses, damages,
liabilities (whether absolute, accrued, contingent or
otherwise), costs and expenses, including but not
limited to, interest, penalties and attorneys' fees and
expenses (collectively, "Damages"), asserted against,
imposed upon or incurred by any Indemnified Party,
directly or indirectly, by reason of or resulting from
or relating to any of the following:
i. Any liability, claim, obligation,
expense, debt, indebtedness or right relating to
operation of the Business or use or ownership of
the Assets prior to the Closing Date including any
claim by or obligation to any supplier, employee,
contractor, customer, agent, financial
institution, lender, lessor, governmental
authority or agency or related to any Work-in-
Progress performed prior to the Closing Date;
ii. Misrepresentation or breach of
warranty or covenant or agreement by the Seller or
Seller's Parent made or contained in this
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<PAGE>
Agreement or in any certificate or other
instrument furnished or to be furnished to the
Buyer under this Agreement;
iii. Litigation or other claim arising
from acts, failures to act or events relating to
the Business which occurred prior to the Closing
Date;
provided, however, that the Seller and Seller's Parent
shall not be obligated to the Indemnified Parties under
this Section 10.1(a) unless and until the Buyer's
Damages for all claims made hereunder shall exceed
$75,000.
Except for any claim, liability, expense or
obligation arising out of or related to federal, state
or local tax matters, environmental matters (including
compliance with applicable laws or the condition of any
premises) or products liability or warranty matters for
which no limit shall exist, the liability of Seller and
Seller's Parent shall under this clause not exceed the
amount of the Purchase Price.
b. The Buyer and Ricardo ("Indemnifying Party")
hereby agree jointly and severally to indemnify, defend
and hold harmless the Seller, Seller's Parent and any
parent, subsidiary or affiliate thereof and all
directors, officers, employees, agents and consultants
of each of the foregoing (collectively the "Indemnified
Parties" and individually an "Indemnified Party") from
and against all demands, claims, actions, or causes of
action, assessments, losses, damages, liabilities
(whether absolute, accrued, contingent or otherwise),
costs and expenses, including but not limited to,
interest, penalties and attorneys' fees and expenses
(collectively, "Damages"), asserted against, imposed
upon or incurred by any Indemnified Party, directly or
indirectly, by reason of or resulting from any
liability assumed by the Buyer hereunder after the
Closing Date.
10.2 NOTICE AND DEFENSE OF CLAIMS. The obligations and
liabilities of each indemnifying party hereunder with
respect to claims resulting from the assertion of liability
by any Indemnified Party or third parties shall be subject
to the following terms and conditions:
a. NOTICE. The Indemnified Party shall give
prompt written notice to the Indemnifying Party of any
claim or event known to it which does or may give rise
to a claim by the Indemnified Party against the
indemnifying party for which the Indemnified Party
believes it is entitled to indemnification pursuant to
Section 10.1 of this Agreement, stating the nature and
basis of said claims or events and the amounts thereof,
to the extent known, and in the case of any claim,
action, suit or proceeding brought by any third party,
a copy of any claim, process or legal pleadings with
respect thereto promptly after any such documents are
received by the Indemnified Party. Such notice shall
be given in accordance with Section 14 hereof.
b. THIRD PARTY CLAIMS OR ACTIONS.
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i. In the event any claim, action,
suit or proceeding is made or brought by any third
party against any Indemnified Party, with respect
to which an indemnifying party may have liability
under Section 10 of this Agreement, the
Indemnifying Party shall, at its own expense, be
entitled to participate in and, to the extent that
it shall wish, jointly and with any other
Indemnifying Party, to assume the defense, with
independent counsel reasonably satisfactory to the
Indemnified Party, provided that in assuming the
defense of any such third party claim, action,
suit or proceeding, the Indemnifying Party
acknowledges in writing to the Indemnified Party
that the Indemnifying Party shall thereafter be
liable for any Damages with respect to such claim,
action, suit or proceeding.
ii. If the Indemnifying Parties elect
to assume control of such defense or settlement,
they shall conduct such defense or settlement in a
manner reasonably satisfactory and effective to
protect the Indemnified Party fully; such
companies and their counsel will keep the
Indemnified Party fully advised as to their
conduct of such defense or settlement, and no
compromise or settlement shall be agreed or made
without the Indemnified Party's written consent.
In any case, the Indemnified Party shall have the
right to employ its own counsel and such counsel
may participate in such action, but the reasonable
fees and expenses of such counsel shall be at the
expense of the Indemnified Party, when and as
incurred, unless (A) the employment of counsel by
the Indemnified Party has been authorized in
writing by the Indemnifying Parties, (B) the
Indemnified Party shall have reasonably concluded
that there may be a conflict of interest between
the Indemnifying Parties and the Indemnified Party
in the conduct of the defense of such action, (C)
the Indemnifying Parties shall not in fact have
employed independent counsel reasonably
satisfactory to the Indemnified Party to assume
the defense of such action and shall have been so
notified by the Indemnified Party, (D) the
Indemnified Party shall have reasonably concluded
and specifically notified the Indemnifying Party
either that there may be specific defenses
available to it which are different from or
additional to those available to the Indemnifying
Party or (E) the Indemnifying Parties fail to
conduct such defense or settlement in a manner
reasonably satisfactory to protect the Indemnified
Party fully. If clause (B), (C), (D) or (E) of
the preceding sentence shall be applicable, then
counsel for the Indemnified Party shall have the
right to participate fully in the defense of such
claim, action, suit or proceeding on behalf of the
Indemnified Party and the reasonable fees and
disbursements of such counsel shall constitute
Damages hereunder.
iii. If the Indemnifying Parties do not
elect to assume the defense or settlement in a
manner reasonably satisfactory to protect the
Indemnified Party fully, the Indemnified Party may
engage independent counsel selected by the
Indemnified Party to assume the defense and may
contest, pay, settle or compromise any such claim
on such terms and conditions as the Indemnified
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Party may determine. The fees and disbursements
of such counsel shall constitute Damages
hereunder.
iv. The Indemnified Party and the
indemnifying party, as the case may be, shall be
kept fully informed of such claim, action, suit or
proceeding at all states thereof whether or not
such party is represented by its own counsel.
10.3 COOPERATION. The parties hereto agree to render
to each other such assistance as they may reasonably require
of each other and to cooperate in good faith with each other
in order to ensure the proper and adequate defense of any
claim, action, suit or proceeding brought by any third
party. Where counsel has been selected by the Indemnifying
Parties or by an Indemnified Party pursuant to Section 10.2,
the indemnifying parties or the Indemnified Party, as the
case may be, shall be entitled to rely upon the advice of
such counsel in the conduct of the defense.
10.4 CONFIDENTIALITY. The parties agree to cooperate
in such a manner as to preserve in full the confidentiality
of all confidential business records and the attorney-client
and work-product privileges. In connection therewith, each
party agrees that (a) it will use its best efforts, in any
action, suit or proceeding in which it has assumed or
participated in the defense, to avoid production of
confidential business records (consistent with applicable
law and rules of procedure) and (b) all communications
between any party hereto and counsel responsible for or
participating in the defense of any action, suit or
proceeding shall, to the extent possible, be made so as to
preserve any applicable attorney-client or work-product
privilege.
10.5 AFFILIATES AS BENEFICIARIES. The Affiliates of
the Buyer and Seller, and their respective assigns and
successors, are third party beneficiaries of Section 10 of
this Agreement in accordance with its terms. Any
modification of Section 10 of this Agreement executed by the
signatories shall be binding upon such persons, and any
consent or action taken by any signatory on its own behalf
shall be binding upon such persons of such signatory, for
purposes of this Agreement. Section 10 of this Agreement is
not intended to, nor shall it be deemed to, create any
rights in any persons except for the Buyer, Affiliates of
the Buyer, Seller, Affiliates of the Seller and their
respective successors and assigns.
11. TERMINATION OF AGREEMENT.
11.1 TERMINATION BY LAPSE OF TIME. This Agreement
shall terminate if the transactions contemplated hereby have
not been consummated by 5:00 p.m., local Michigan time, on
October 31, 1995 (the "Termination Date"), unless such date
is extended by the written consent of all of the parties
hereto.
11.2 TERMINATION BY AGREEMENT OF THE PARTIES. This
Agreement may be terminated by the mutual written agreement
of the parties hereto. In the event of such termination by
agreement, the Buyer and Ricardo shall have no further
obligation or liability to the Seller or Seller's Parent
under this Agreement, and the Seller and Seller's Parent
-39- <PAGE>
shall have no further obligation or liability to the Buyer
or Ricardo under this Agreement.
11.3 TERMINATION BY REASON OF BREACH.
a. This Agreement may be terminated by the
Seller on behalf of itself and Seller's Parent if, at
any time prior to the Closing, there shall occur (i) a
material breach of any of the representations,
warranties or covenants of the Buyer or Ricardo
contained herein, or (ii) the material failure by the
Buyer or Ricardo to perform any condition or obligation
contained in herein.
b. This Agreement may be terminated by the Buyer
on behalf of itself and Ricardo if, at any time prior
to the Closing, there shall occur (i) a material breach
of any of the representations, warranties, covenants or
obligations of the Seller or Seller's Parent contained
herein, or (ii) the material failure of the Seller or
Seller's Parent to perform any condition or any
obligation contained herein.
c. This Agreement may be terminated by the Buyer
on behalf of itself and Ricardo if at any time prior to
the Closing there shall occur any failure of any
condition or obligation enumerated in Section 7.12
(with respect to the Buyer's satisfaction with its due
diligence review) at any time that satisfaction of such
condition is required.
11.4 EFFECT OF TERMINATION. Upon termination of this
Agreement for any reason, the obligations on the parties
hereunder shall terminate and be of no further force and
effect except:
a. The obligations under Section 4.2 and 9.4
shall survive termination; and
b. In the event the termination arises out of
the breach by any party of its obligations hereunder,
such termination shall not release or discharge any
person from any liability, obligation, restriction,
claim, expense or cause of action related to or arising
from any such breach.
12. TRANSFER AND SALES TAX. The Buyer shall be responsible
for and shall pay all filing and recording, sales, use and
transfer taxes and fees, if any, upon the sale or transfer of any
of the Assets hereunder.
13. BROKERS.
13.1 FOR THE BUYER. All negotiations relative to this
Agreement and the transactions contemplated hereby have been
carried on by the Buyer without the intervention of any
other person in such manner as to give rise to any valid
claim for a finder's fee, brokerage commission or other like
payment. The Buyer and Ricardo agree to indemnify and hold
harmless the Seller against any claims or liabilities
-40- <PAGE>
asserted against it by any person acting or claiming to act
as a broker or finder on behalf of the Buyer.
13.2 FOR THE SELLER. All negotiations relative to this
Agreement and the transactions contemplated hereby have been
carried on by the Seller without the intervention of any
other person in such manner as to give rise to any valid
claim for a finder's fee, brokerage commission or other like
payment. The Seller and Seller's Parent agree to indemnify
and hold harmless the Buyer against any claims or
liabilities asserted against it by any person acting or
claiming to act as a broker or finder on behalf of the
Seller.
14. KNOWLEDGE. Whenever this Agreement refers to the
knowledge of Seller or Seller's Parent or the awareness of Seller
or Seller's Parent, it shall mean information or fact within the
actual knowledge of those which could be obtained by the exercise
of reasonable but not extraordinary due diligence or
investigation of the following persons:
a. With respect to the Seller, David Ballard,
Tom Valen, Al Elie, Gordon Dollar, Robert Neighbors, and
Thomas Kerr; and
b. With respect to the Seller's Parent, Doretha
Christoph, John Doddridge, Daryl Marsh and Peter Aldred.
15. NOTICES. Any notices or other communications required
or permitted hereunder shall be sufficiently given if in writing
(including telecommunications) and delivered personally or sent
by telex, telecopy or other wire transmission (with request for
assurance in a manner typical with respect to communications of
that type), federal express or other overnight air courier
(postage prepaid), registered or certified mail (postage prepaid
with return receipt requested), addressed as follows or to such
other address of which the parties may have given notice:
To the Seller: InterMotive Technologies, Inc.
5445 Corporate Drive, Suite 200
Troy, Michigan 48098
Attn: Chief Executive Officer
To the Seller's Parent: Intermet Corporation
5445 Corporate Drive, Suite 200
Troy, Michigan 48098
Attn: Chief Executive Officer
With a copy to: Rupert Barkoff, Esquire
Kilpatrick & Cody
1100 Peachtree Street
Atlanta, Georgia 30309
-41-
<PAGE>
To Ricardo: Ricardo Group plc
1 Watling Drive
Sketchly Business Park
Hinckley, Leicestershire LE10 3EY
England
Attn: Rodney Westhead
With a copy to: Butzel Long
150 West Jefferson, Ste. 900
Detroit, MI 48226-4430
Attn: James L. Hughes
To the Buyer: Ricardo North America Detroit, Inc.
41461 Eleven Mile Road
Novi, MI 48375-1855
Attn: Oliver Johnson
With a copy to: Butzel Long
150 West Jefferson, Ste. 900
Detroit, MI 48226-4430
Attn: James L. Hughes
Unless otherwise specified herein, such notices or other
communications shall be deemed received (a) on the date
delivered, if delivered personally or by wire transmission; (b)
on the next business day after mailing or deposit with an
overnight air courier; or (c) five business days after being
sent, if sent by registered or certified mail.
16. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns. Neither the Seller nor
the Buyer may assign all or a portion of its rights and
obligations hereunder without the prior written consent of the
other party, except that the Buyer may assign all or a portion of
its rights and obligations hereunder to an Affiliate of the
Buyer. Any such assignment will not release Buyer from its
obligations hereunder. Any assignment in contravention of this
provision shall be void.
17. ARBITRATION.
a. Any controversy, claim or dispute arising out
of or in any way relating to this Agreement or its
breach or the transactions contemplated hereby,
including without limitation any claim that this
Agreement or any of its parts is invalid, illegal or
otherwise voidable or void, shall be submitted to
arbitration before and, unless otherwise provided
herein, in accordance with the Commercial Arbitration
Rules of the American Arbitration Association (the
"AAA"). Notwithstanding any provision of this
Agreement relating to which state laws govern this
-42-
<PAGE>
Agreement, all issues relating to arbitrability or the
enforcement of the agreement to arbitrate contained
herein shall be governed by the Federal Arbitration Act
(9 U.S.C. Section 1 ET SEQ.) and the federal common law of
arbitration.
b. Judgment upon an arbitration award may be
entered in any court having competent jurisdiction and
shall be final, binding and non-appealable. The
parties hereby waive to the fullest extent permitted by
law any right to or claim for any punitive or exemplary
damages against the other and agree that in the event
of a dispute between them, each shall be limited to the
recovery of only the actual damages sustained.
c. The arbitration provisions of the Section 17
are self-executing and shall remain in full force and
effect after the expiration or termination of this
Agreement. If either party fails to appear at any
properly noticed arbitration proceeding, an award may
be entered against such party by default or otherwise,
notwithstanding such failure to appear. Unless
otherwise agreed to in writing by the parties, such
proceeding shall take place in Detroit, Michigan. With
respect to any dispute involving $100,000 or more,
arbitration proceedings shall be conducted before three
(3) neutral arbitrators. With respect to any dispute
involving less than $100,000, arbitration proceedings
shall be conducted by a single arbitrator in accordance
with the Expedited Rules of the AAA.
d. The obligation herein to arbitrate shall not
prevent either party from seeking temporary restraining
orders, preliminary injunctions or other procedures in
a court of competent jurisdiction to obtain interim
relief when deemed necessary by such court to preserve
the status quo or prevent irreparable injury pending
resolution by arbitration of the actual dispute.
18. ENTIRE AGREEMENT; AMENDMENTS; ATTACHMENTS.
a. This Agreement, all schedules and exhibits
hereto, and all agreements and instruments to be
delivered by the parties pursuant hereto represent the
entire understanding and agreement between the parties
hereto with respect to the subject matter hereof and
supersede all prior oral and written and all
contemporaneous oral negotiations, commitments and
understandings between such parties except as expressly
provided herein. The Buyer and the Seller may amend or
modify this Agreement, in such manner as may be agreed
upon, by a written instrument executed by the Buyer and
the Seller.
b. If the provisions of any schedule or exhibit
to this Agreement are inconsistent with the provisions
of this Agreement, the provisions of the Agreement
shall prevail. The exhibits and schedules attached
hereto or to be attached hereafter are hereby
incorporated as integral parts of this Agreement.
-43- <PAGE>
19. EXPENSES. Except as otherwise expressly provided
herein, the Buyer and the Seller shall each pay their own
expenses in connection with this Agreement and the transactions
contemplated hereby.
20. GOVERNING LAW. This agreement shall be governed by and
construed in accordance with the internal laws of the State of
Michigan, without reference to choice of laws rules or
principles.
21. SECTION HEADINGS. The section headings of this
Agreement are for the convenience of the parties only and in no
way alter, modify, amend, limit, or restrict the contractual
obligations of the parties.
22. SEVERABILITY. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
23. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an
original, but all of which shall constitute one and the same
Agreement.
24. JOINT AND SEVERABILITY. Wherever this Agreement
provides that more than one party may be liable or obligated,
such liability shall be joint and several.
-57- <PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties hereto as of and on the date first above written.
SELLER:
INTERMOTIVE TECHNOLOGIES, INC.,
a Michigan corporation
By: /s/ John Doddridge
Its: President
SELLER'S PARENT
INTERMET CORPORATION,
a Georgia corporation
By: /s/ Daryl Marsh
Its: Vice President
BUYER:
RICARDO NORTH AMERICA DETROIT, INC.
a Michigan corporation
By: /s/ Oliver Johnson
Its: President
RICARDO:
RICARDO GROUP, plc,
a public limited company
organized under the laws of
the United Kingdom
By: /s/ Rodney Westhead
Its: Finance Director
-46- <PAGE>
SCHEDULES
1.1(a)(vii) - Fixed Asset
1.1(b) - Excluded Assets
1.3(a) - Accrued Expenses and Withholdings
1.7 - Allocation of Purchase Price
2.1 - Capitalization; Qualification
2.2 - Seller's Consents and Approvals
2.3 - Encumbrances
2.4 - Procedures to Establish Final Balance Sheet
2.5 - Litigation
2.6 - Insurance
2.8 - Fixed Assets
2.9(a) - Leases
2.9(b) - Leases to be Assumed
2.10 - Adverse Change
2.13(a) - Contracts and Agreements
2.13(b) - Contracts to be Assumed
2.14 - Permits
2.15 - Employee Relations
2.16 - Certain Changes or Events
2.17 - Customers
2.18 - Suppliers
2.19 - Prepayment/Deposits
2.20 - Intangible Property
2.20(a) - Previous Names of Seller
2.20(b) - Limitations for Claims on Intangible Ownership
2.21(a) - Employee Benefit Plans
2.21(c) - Retiree Benefits
2.21(f) - Employee Plan Claims and Litigation
2.22 - Description of Real Estate; Residential Property
2.22(a) - Exceptions
2.22(b) - Permitted Exceptions
2.22(c) - Mechanics or Materialmen's Liens
2.22(e) - Real Estate Taxes or Assessments
2.22(h) - Actions or Proceedings Relating to Real Estate
2.22(j) - Title Insurance and Related Property Matters
2.24(b) - Environmental Matters
2.24(c) - Hazardous Releases
2.24(d) - Hazardous Conditions
2.24(f) - Environmental Compliance and Environmental Litigation
2.24(g) - Environmental Notice
3.2 - Buyer's Consents and Approvals
6.1 - Open Diligence Items
-46- <PAGE>
EXHIBITS
Exhibit A Bill of Sale
Exhibit B Escrow Agreement
Exhibit C Technical Services Agreement
Exhibit D Sublease letter
-47- <PAGE>
<PAGE>
TABLE OF CONTENTS
Page
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1. Sale and Delivery of the Assets . . . . . . . . . . . . 1
1.1 Delivery of the Assets. . . . . . . . . . . . . . . 1
1.2 Further Assurances . . . . . . . . . . . . . . . . 3
1.3 No Assumption of Liabilities . . . . . . . . . . . 3
1.4 Work-in-Progress . . . . . . . . . . . . . . . . . 5
1.5 Purchase Price . . . . . . . . . . . . . . . . . . 6
1.6 The Closing . . . . . . . . . . . . . . . . . . . . 6
1.7 Allocation of Purchase Price . . . . . . . . . . . 6
1.8 Prorations . . . . . . . . . . . . . . . . . . . . 7
2. Representations of the Seller . . . . . . . . . . . . . 7
2.1 Organization . . . . . . . . . . . . . . . . . . . 7
2.2 Authorization . . . . . . . . . . . . . . . . . . . 8
2.3 Assets . . . . . . . . . . . . . . . . . . . . . . 9
a. Assets Owned . . . . . . . . . . . . . . . . . 9
b. Necessary Assets . . . . . . . . . . . . . . . 9
2.4 Financial Statements . . . . . . . . . . . . . . . 9
2.5 Litigation . . . . . . . . . . . . . . . . . . . . 10
2.6 Insurance . . . . . . . . . . . . . . . . . . . . . 10
2.7 Intentionally Omitted . . . . . . . . . . . . . . . 10
2.8 Fixed Assets . . . . . . . . . . . . . . . . . . . 10
2.9 Leases . . . . . . . . . . . . . . . . . . . . . . 11
2.10 Change in Financial Condition and Assets . . . . . 11
2.11 Intentionally Omitted . . . . . . . . . . . . . . . 11
2.12 Books and Records . . . . . . . . . . . . . . . . . 11
2.13 Contracts and Commitments . . . . . . . . . . . . . 12
2.14 Compliance With Laws . . . . . . . . . . . . . . . 14
2.15 Employee Relations . . . . . . . . . . . . . . . . 15
2.16 Absence of Certain Changes or Events . . . . . . . 16
2.17 Customers . . . . . . . . . . . . . . . . . . . . . 16
2.18 Suppliers . . . . . . . . . . . . . . . . . . . . . 17
2.19 Prepayments and Deposits . . . . . . . . . . . . . 17
2.20 Trade Names and Other Intangible Property. . . . . 17
2.21 Employee Benefit Plans. . . . . . . . . . . . . . . 18
a. Employee Plans . . . . . . . . . . . . . . . . 18
b. Multiemployer Plans . . . . . . . . . . . . . 18
c. Retiree Benefits . . . . . . . . . . . . . . . 18
d. Defined Benefit Plans . . . . . . . . . . . . 18
e. Copies of Employees Plans and Related
Documents . . . . . . . . . . . . . . . . . . 18
f. Claims and Litigation . . . . . . . . . . . . 18
2.22 Real Estate . . . . . . . . . . . . . . . . . . . . 19
2.23 Preservation of Assets . . . . . . . . . . . . . . 20
2.24 Environmental Law . . . . . . . . . . . . . . . . . 21
2.25 Disclosure . . . . . . . . . . . . . . . . . . . . 23
-i- <PAGE>
Page
----
3. Representations of the Buyer . . . . . . . . . . . . . . 23
3.1 Organization and Authority . . . . . . . . . . . . 24
3.2 Authorization . . . . . . . . . . . . . . . . . . . 24
3.3 Regulatory Approvals . . . . . . . . . . . . . . . 24
4. Access to Information: Public Announcements . . . . . . 25
4.1 Access to Management, Properties and Records. . . . 25
4.2 Confidentiality . . . . . . . . . . . . . . . . . . 25
4.3 Public Announcements . . . . . . . . . . . . . . . 26
5. Pre-Closing Covenants of the Seller . . . . . . . . . . 26
5.1 Conduct of Business . . . . . . . . . . . . . . . . 26
5.2 No Shopping . . . . . . . . . . . . . . . . . . . . 27
5.3 Shareholders' Authorization . . . . . . . . . . . . 28
5.4 Continuing Obligation to Inform . . . . . . . . . . 28
5.5 Assumption of Leases and Contracts . . . . . . . . 28
5.6 Delivery of Survey and Title Policy . . . . . . . . 28
6. Pre-Closing Covenants of Buyer and Ricardo . . . . . . . 29
6.1 Continued Due Diligence . . . . . . . . . . . . . . 29
6.2 Release of Seller from Lease . . . . . . . . . . . 29
7. Conditions to Obligations of the Buyer . . . . . . . . . 29
7.1 Continued Truth of Representations and Warranties
of the Seller and Seller's Parent; Compliance With
Covenants and Obligations . . . . . . . . . . . . . 29
7.2 Corporate Proceedings . . . . . . . . . . . . . . . 29
7.3 Governmental Approvals . . . . . . . . . . . . . . 29
7.4 Consents of Lenders, Lessors and other Third
Parties . . . . . . . . . . . . . . . . . . . . . . 30
7.5 Adverse Proceedings . . . . . . . . . . . . . . . . 30
7.6 Opinion of Counsel . . . . . . . . . . . . . . . . 30
7.7 The Assets . . . . . . . . . . . . . . . . . . . . 30
7.8 Update . . . . . . . . . . . . . . . . . . . . . . 30
7.9 Technical Services Agreement . . . . . . . . . . . 30
7.10 Employee Matters . . . . . . . . . . . . . . . . . 30
7.11 Fire, Casualty or Eminent Domain . . . . . . . . . 31
7.12 Due Diligence Review . . . . . . . . . . . . . . . 31
7.13 Work-in-Progress Schedule . . . . . . . . . . . . . 31
7.14 Escrow Agreement . . . . . . . . . . . . . . . . . 31
7.15 Sublease Letter . . . . . . . . . . . . . . . . . . 31
7.16 Proof of Name Change . . . . . . . . . . . . . . . 31
7.17 Lease . . . . . . . . . . . . . . . . . . . . . . . 31
7.18 Closing Deliveries . . . . . . . . . . . . . . . . 31
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<PAGE>
Page
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8. Conditions to Obligations of the Seller . . . . . . . . 33
8.1 Continued Truth of Representations and Warranties
of the Buyer and Ricardo; Compliance With
Covenants and Obligations . . . . . . . . . . . . . 33
8.2 Corporate Proceedings . . . . . . . . . . . . . . . 33
8.3 Governmental Approvals . . . . . . . . . . . . . . 33
8.4 Consents of Lenders, Lessors and other Third
Parties . . . . . . . . . . . . . . . . . . . . . . 33
8.5 Adverse Proceedings . . . . . . . . . . . . . . . . 33
8.6 Work-in-Progress . . . . . . . . . . . . . . . . . 33
8.7 Escrow Agreement . . . . . . . . . . . . . . . . . 33
8.8 Sublease Letter . . . . . . . . . . . . . . . . . . 33
8.9 Release from Lease . . . . . . . . . . . . . . . . 33
8.10 Senior Lender . . . . . . . . . . . . . . . . . . . 34
8.11 Closing Deliveries . . . . . . . . . . . . . . . . 34
9. Post-Closing Agreements . . . . . . . . . . . . . . . . 34
9.1 Proprietary information . . . . . . . . . . . . . . 34
9.2 Non-Competition Agreement . . . . . . . . . . . . . 35
9.3 Sharing of Data . . . . . . . . . . . . . . . . . . 35
10. Indemnification and Reimbursement. . . . . . . . . . . . 36
10.1 Indemnification . . . . . . . . . . . . . . . . . . 36
10.2 Notice and Defense of Claims . . . . . . . . . . . 37
a. Notice . . . . . . . . . . . . . . . . . . . . 37
b. Third Party Claims or Actions . . . . . . . . 37
10.3 Cooperation . . . . . . . . . . . . . . . . . . . . 39
10.4 Confidentiality . . . . . . . . . . . . . . . . . . 39
10.5 Affiliates as Beneficiaries . . . . . . . . . . . . 39
11. Termination of Agreement . . . . . . . . . . . . . . . . 39
11.1 Termination by Lapse of Time . . . . . . . . . . . 39
11.2 Termination by Agreement of the Parties . . . . . . 39
11.3 Termination by Reason of Breach . . . . . . . . . . 40
11.4 Effect of Termination . . . . . . . . . . . . . . . 40
12. Transfer and Sales Tax . . . . . . . . . . . . . . . . . 40
13. Brokers . . . . . . . . . . . . . . . . . . . . . . . . 40
13.1 For the Buyer . . . . . . . . . . . . . . . . . . . 40
13.2 For the Seller . . . . . . . . . . . . . . . . . . 41
14. Knowledge. . . . . . . . . . . . . . . . . . . . . . . . 41
15. Notices . . . . . . . . . . . . . . . . . . . . . . . . 41
-iii-
<PAGE>
Page
----
16. Successors and Assigns . . . . . . . . . . . . . . . . . 42
17. Arbitration . . . . . . . . . . . . . . . . . . . . . . 42
18. Entire Agreement; Amendments; Attachments . . . . . . . 43
19. Expenses . . . . . . . . . . . . . . . . . . . . . . . . 44
20. Governing Law . . . . . . . . . . . . . . . . . . . . . 44
21. Section Headings . . . . . . . . . . . . . . . . . . . . 44
22. Severability . . . . . . . . . . . . . . . . . . . . . . 44
23. Counterparts . . . . . . . . . . . . . . . . . . . . . . 44
24. Joint and Severability . . . . . . . . . . . . . . . . . 44
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