<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant
to Section 13 of 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) October 6, 1995
---------------
Intermet Corporation
- -------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Georgia
- -------------------------------------------------------------------
(State or Other Jurisdiction of Incorporation)
0-13787 58-1563873
- ----------------------- ------------------------------------
(Commission File Number) (I.R.S. Employer Identification No.)
1450 West Long Lake Road, Suite 150, Troy Michigan 48098
- -------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(810) 952-1503
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(Registrant's Telephone Number, Including Area Code)
N/A
- -------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
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<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 6, 1995, the Registrant's wholly-owned subsidiary, PBM
Industries, Inc. ("PBM"), sold substantially all of its assets to PBM
Acquisition Limited ("Limited") pursuant to an Asset Purchase
Agreement, dated September 6, 1995, as amended, by and among the
Registrant, Intermet Machining, Inc., PBM and Limited. In exchange
therefor, the Registrant received $5.32 million in cash, subject to
certain post-closing adjustments, plus a $2.5 million subordinated
promissory note of Limited (the "Note"). The Note bears interest
at the rate of one percentage point above the prime rate (as defined)
and is repayable in 16 quarterly installments of principal, commencing
on January 1, 1997. As security for the Note, Limited granted the
Registrant a second priority security interest in certain assets
of Limited. Neither PBM nor the Registrant nor any of their affiliates,
directors or officers has any material relationship with Limited,
other than as a result of the Note and related security interest.
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 among Intermet
Corporation, Intermet Machining, Inc., PBM
Industries, Inc. and PBM Acquisition Limited,
dated September 6, 1995, as amended by
Amendments One, Two and Three thereto.
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<TABLE>
<CAPTION>
Intermet Corporation
Pro Forma Consolidated Balance Sheet
July 2, 1995
(Unaudited)
Pro Forma
Historical Adjustment Pro Formas
----------------------------------------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 7,366 $5,320 (a) $ 12,686
Accounts receivable:
Trade, less allowance for
doubtful accounts of $807 75,446 (2,492)(a) 72,954
Other 7,022 -- 7,022
-------------------------------------------
82,468 (2,492) 79,976
Inventories 33,203 (2,034)(a) 31,169
Other current assets 4,236 (465)(a) 3,771
-------------------------------------------
Total current assets 127,273 329 127,602
Property, plant and equipment,
at cost 365,205 (12,394)(a) 352,811
Less:
Foreign industrial development
grants, net of amortization 5,683 -- 5,683
Accumulated depreciation and
amortization 196,640 (5,843)(a) 190,797
--------------------------------------------
Net property, plant and equipment 162,882 (6,551) 156,331
Other noncurrent assets 14,955 2,500 (a) 17,455
--------------------------------------------
$305,110 $(3,722) $301,388
============================================
</TABLE>
P-1
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<TABLE>
<CAPTION>
Intermet Corporation
Pro Forma Consolidated Balance Sheet
July 2, 1995
(Unaudited)
Pro Forma
Historical Adjustment Pro Formas
-----------------------------------------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities:
Accounts payable $ 32,850 $(2,315)(a) $30,535
Income taxes 14,206 -- 14,206
Accrued liabilities 39,586 (105)(a) 39,481
Notes payable 899 -- 899
Long-term debt due within one year 9,395 -- 9,395
----------------------------------------
Total current liabilities 96,936 (2,420) 94,516
Noncurrent liabilities:
Long-term debt due after one year 62,882 -- 62,882
Retirement benefits 44,597 -- 44,597
Other noncurrent liabilities 11,502 -- 11,502
----------------------------------------
Total noncurrent liabilities 118,981 -- 118,981
Minority interests 2,837 -- 2,837
Shareholders equity:
Common stock 2,469 -- 2,469
Capital in excess of par value 52,449 -- 52,449
Retained earnings 27,787 (1,302)(a) 26,485
Accumulated translation adjustments 4,954 -- 4,954
Minimum pension liability adjustment (1,164) -- (1,164)
Unearned restricted stock (139) -- (139)
----------------------------------------
Total shareholders equity 86,356 (1,302) 85,054
----------------------------------------
$305,110 $ (3,722) $301,388
========================================
</TABLE>
SEE ACCOMPANYING NOTES.
P-2
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<TABLE>
<CAPTION>
Intermet Corporation
Pro Forma Consolidated Statements of Operations
Year ended December 31, 1994 and six months ended July 2, 1995
(Unaudited)
Historical Pro Forma Historical Pro Forma
Year ended Year ended Six months Six months
December 31, Pro Forma December 31, ended July 2, Pro Forma ended
1994 Adjustments 1994 1995 Adjustments July 2, 1995
-----------------------------------------------------------------------------------------
(In Thousands of Dollars, except per share data)
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 501,269 $(35,341)(b) $465,928 $302,313 $(20,371)(c) $281,942
Cost of sales 458,823 (37,625)(b) 421,198 253,203 (18,724)(c) 234,479
----------------------------------------------------------------------------------------
Gross profit 42,446 2,284 44,730 49,110 (1,647) 47,463
Operating expenses 40,718 (1,835)(b) 38,883 15,723 (803)(c) 14,920
----------------------------------------------------------------------------------------
Operating profit 1,728 4,119 5, 847 33,387 844 32,543
Other income (expense)
net (6,817) (1,431)(b) (5,386) (4,046) (340)(c) (3,706)
-----------------------------------------------------------------------------------------
Income (loss) before
income taxes (5,089) 5,550 461 29,341 (504) 28,837
Provision for income
taxes 5,896 60(b) 5,956 13,284 (269)(c) 13,015
----------------------------------------------------------------------------------------
Net earnings (loss) $(10,985) $ 5,490 $(5,495) $16,057 $(235) $15,822
========================================================================================
Earnings (loss per share) $(.45) $(.22) $.65 $.64
========= ======================== =======
</TABLE>
SEE ACCOMPANYING NOTES
P-3
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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. (the
"Company") as of that date, including the loss realized on
such sale.
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 Company as if
the sale had occurred at the beginning of each period
presented. However, the statements of operations do not
reflect the loss realized by the Registrant on such sale, and
these results are not necessarily indicative of what would
have occurred had the sale 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 sale of the
Company's assets and that the pro forma adjustments are
properly applied in the unaudited pro forma consolidated
financial statements.
P-4
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<PAGE>
Intermet Corporation
Notes to Pro Forma Consolidated Financial Statements (continued)
(Unaudited)
2. PRO FORMA ADJUSTMENTS
Pro forma adjustments to consolidated balance sheet
<TABLE>
<CAPTION>
DR (CR)
-------
<C> <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
December 31, ended July 2,
1994 1995
DR (CR) DR (CR)
-----------------------------
<C> <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-5
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<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: October 20, 1995 Doretha J. Christoph
Vice President - Finance
(Principal Financial Officer)
<PAGE>
<PAGE>
ASSET PURCHASE AGREEMENT
among
INTERMET CORPORATION
INTERMET MACHINING, INC.
PBM INDUSTRIES, INC.
and
PBM ACQUISITION LIMITED
September 6, 1995
<PAGE>
<PAGE>
TABLE OF CONTENTS
1. SALE AND PURCHASE OF ASSETS
1.1 Purchased Assets. . . . . . . . . . . . . . . . . . . . . . 1
1.1.1 Machinery and Equipment. . . . . . . . . . . . . . 1
1.1.2 Inventory . . . . . . . . . . . . . . . . . . . . . 1
1.1.3 Receivables . . . . . . . . . . . . . . . . . . . . 1
1.1.4 Contract and Certain Other Rights of Seller . . . . 1
1.1.5 Certain Proprietary Rights . . . . . . . . . . . . 2
1.1.6 Other Assets . . . . . . . . . . . . . . . . . . . 2
1.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Documentation . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Corporate Name . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . 2
2. PURCHASE PRICE; ALLOCATION
2.1 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Pre-Closing Adjustment of Purchase Price . . . . . . . . . . 3
2.3 Post-Closing Adjustment of Purchase Price . . . . . . . . . 3
2.3.1 Initial Closing Balance Sheet . . . . . . . . . . . 3
2.3.2 Final Closing Balance Sheet . . . . . . . . . . . . 3
2.3.3 Purchase Price Adjustment . . . . . . . . . . . . . 4
2.4 Allocation of Purchase Price . . . . . . . . . . . . . . . . 5
3. ASSUMPTION OF LIABILITIES
3.1 Liabilities to be Assumed by Buyer . . . . . . . . . . . . . 5
3.1.1 Accounts Payable and Ordinary Course Liabilities . 5
3.1.2 Executory Agreements . . . . . . . . . . . . . . . 5
3.1.3 Other Indebtedness . . . . . . . . . . . . . . . . 5
3.2 Liabilities of Seller Not Assumed . . . . . . . . . . . . . 5
3.2.1 Violation of Representations, Etc. . . . . . . . . 5
3.2.2 Undisclosed Liabilities . . . . . . . . . . . . . . 5
3.2.3 Contingent Liabilities . . . . . . . . . . . . . . 6
3.2.4 Taxes Due on Sale . . . . . . . . . . . . . . . . . 6
3.2.5 Other Taxes . . . . . . . . . . . . . . . . . . . . 6
3.2.6 Pension and Other Employee Plans . . . . . . . . . 6
3.2.7 Personal Injury, Products Liability and
Recall Claims . . . . . . . . . . . . . . . . . . . 6
3.2.8 Environmental Matters . . . . . . . . . . . . . . . 6
3.2.9 Infringements . . . . . . . . . . . . . . . . . . . 6
3.2.10 Indebtedness; Intercompany Obligations . . . . . . 6
3.2.11 Litigation . . . . . . . . . . . . . . . . . . . . 7
3.2.12 Excluded Assets . . . . . . . . . . . . . . . . . . 7
4. CLOSING
4.1 Time and Place . . . . . . . . . . . . . . . . . . . . . . . 7
i<PAGE>
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4.2 Effective Date . . . . . . . . . . . . . . . . . . . . . . . 7
5. REPRESENTATIONS AND WARRANTIES OF SELLER, INTERMET AND MACHINING
5.1 Organization, Power and Qualification . . . . . . . . . . . 7
5.2 Authority . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.3 No Violation . . . . . . . . . . . . . . . . . . . . . . . . 8
5.4 Financial Statements . . . . . . . . . . . . . . . . . . . . 8
5.5 Liabilities and Obligations . . . . . . . . . . . . . . . . 9
5.6 Absence of Certain Changes . . . . . . . . . . . . . . . . . 9
5.7 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.8 Title to and Condition of Assets . . . . . . . . . . . . . . 9
5.9 Real Estate and Leases . . . . . . . . . . . . . . . . . . 10
5.10 Contracts . . . . . . . . . . . . . . . . . . . . . . . . 10
5.11 Inventory . . . . . . . . . . . . . . . . . . . . . . . . 11
5.12 Receivables . . . . . . . . . . . . . . . . . . . . . . . 11
5.13 No Default, Violation or Litigation . . . . . . . . . . . 11
5.14 Insurance . . . . . . . . . . . . . . . . . . . . . . . . 11
5.15 Employment, Labor and Other Relations . . . . . . . . . . 12
5.16 Employee Benefits . . . . . . . . . . . . . . . . . . . . 13
5.17 Patents, Trademarks and Licenses . . . . . . . . . . . . . 13
5.18 Approvals . . . . . . . . . . . . . . . . . . . . . . . . 14
5.19 Environmental Matters . . . . . . . . . . . . . . . . . . 14
5.20 Transactions With Affiliates . . . . . . . . . . . . . . . 16
5.21 Principal Customers and Suppliers . . . . . . . . . . . . 16
5.22 Warranties . . . . . . . . . . . . . . . . . . . . . . . . 16
5.23 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . 16
5.24 Knowledge . . . . . . . . . . . . . . . . . . . . . . . . 16
6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER
6.1 Organization and Good Standing . . . . . . . . . . . . . . 17
6.2 Authority . . . . . . . . . . . . . . . . . . . . . . . . 17
6.3 No Violation . . . . . . . . . . . . . . . . . . . . . . . 17
6.4 Buyer's Financial Statements . . . . . . . . . . . . . . . 17
6.5 Buyer's Management . . . . . . . . . . . . . . . . . . . . 18
6.6 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . 18
6.7 Financing Arrangements . . . . . . . . . . . . . . . . . . 18
7. COVENANTS OF SELLER, INTERMET AND MACHINING
7.1 Conduct of Business: No Material Change . . . . . . . . . 18
7.2 Maintain Business as Going Concern . . . . . . . . . . . . 18
7.3 Investigation . . . . . . . . . . . . . . . . . . . . . . 18
7.4 Preserve Accuracy of Representations and Warranties . . . 19
7.5 Supplements to Exhibits . . . . . . . . . . . . . . . . . 19
7.6 Certain Consents to Assignment . . . . . . . . . . . . . . 19
7.7 Capital Improvements . . . . . . . . . . . . . . . . . . . 19
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7.8 Environmental Remediation. . . . . . . . . . . . . . . . . 19
8. CONDITIONS TO CLOSING
8.1 Mutual Conditions . . . . . . . . . . . . . . . . . . . . 19
8.1.1 No Suit . . . . . . . . . . . . . . . . . . . . . 19
8.1.2 Closing . . . . . . . . . . . . . . . . . . . . . 20
8.1.3 Subordination Agreement . . . . . . . . . . . . . 20
8.1.4 Sharing Agreement . . . . . . . . . . . . . . . . 20
8.2 Conditions to Buyer's Obligations . . . . . . . . . . . . 20
8.2.1 Representations and Warranties . . . . . . . . . 20
8.2.2 Certificate . . . . . . . . . . . . . . . . . . . 20
8.2.3 Opinion . . . . . . . . . . . . . . . . . . . . . 20
8.2.4 Consents and Approvals . . . . . . . . . . . . . 20
8.2.5 Instruments of Assignment, Transfer and
Conveyance . . . . . . . . . . . . . . . . . . . 20
8.2.6 Financial Statements . . . . . . . . . . . . . . 21
8.2.7 Environmental Matters . . . . . . . . . . . . . . 21
8.2.8 No Material Change . . . . . . . . . . . . . . . 21
8.2.9 Investigation . . . . . . . . . . . . . . . . . . 21
8.2.10 Financing . . . . . . . . . . . . . . . . . . . . 21
8.2.11 Lease Agreement . . . . . . . . . . . . . . . . . 21
8.2.12 Employment/Non-Compete Agreements . . . . . . . . 21
8.2.13 Capital Improvements . . . . . . . . . . . . . . 21
8.3 Conditions to Seller's Obligations . . . . . . . . . . . . 21
8.3.1 Representations and Warranties . . . . . . . . . 21
8.3.2 Certificate . . . . . . . . . . . . . . . . . . . 22
8.3.3 Opinion . . . . . . . . . . . . . . . . . . . . . 22
8.3.4 Approvals . . . . . . . . . . . . . . . . . . . . 22
8.3.5 Subordinated Note . . . . . . . . . . . . . . . . 22
8.3.6 Lease Agreement . . . . . . . . . . . . . . . . . 22
8.3.7 Computer Support Transition Services . . . . . . 22
9. TERMINATION
9.1 Termination of Agreement . . . . . . . . . . . . . . . . . 22
9.1.1 Mutual Consent . . . . . . . . . . . . . . . . . 22
9.1.2 Breach . . . . . . . . . . . . . . . . . . . . . 22
9.1.3 Respective Conditions . . . . . . . . . . . . . . 23
9.1.4 Mutual Conditions . . . . . . . . . . . . . . . . 23
10. INDEMNIFICATION
10.1 Indemnification of Buyer . . . . . . . . . . . . . . . . . 23
10.2 Indemnification of Seller . . . . . . . . . . . . 24
10.3 Method of Asserting Claims . . . . . . . . . . . . . . . . 24
11. OTHER AGREEMENTS
11.1 Noncompete, Confidentiality and Nonsolicitation . . . . . 25
11.2 Compliance with Bulk Sales Law . . . . . . . . . . . . . . 26
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11.3 Employees . . . . . . . . . . . . . . . . . . . . . . . . 26
12. GENERAL PROVISIONS
12.1 Waiver of Terms . . . . . . . . . . . . . . . . . . . . . 26
12.2 Amendment of Agreement . . . . . . . . . . . . . . . . . . 26
12.3 Payment of Expenses . . . . . . . . . . . . . . . . . . . 26
12.4 Contents of Agreement, Parties in Interest, Assignment . . 27
12.5 Survival . . . . . . . . . . . . . . . . . . . . . . . . . 27
12.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 27
12.7 Commissions and Finder's Fees . . . . . . . . . . . . . . 27
12.8 Severability . . . . . . . . . . . . . . . . . . . . . . . 28
12.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . . 28
12.10 Headings . . . . . . . . . . . . . . . . . . . . . . . . . 28
12.11 Governing Law: Jurisdiction . . . . . . . . . . . . . . . 28
12.12 Instruments of Further Assurance . . . . . . . . . . . . . 28
12.13 Publicity . . . . . . . . . . . . . . . . . . . . . . . . 28
12.14 No Third Party Beneficiaries . . . . . . . . . . . . . . . 28
12.15 Cooperation Regarding Tax Matters . . . . . . . . . . . . 28
12.16.1 Disputes to be Arbitrated . . . . . . . . . . . . 28
12.16.2 Entry of Judgment . . . . . . . . . . . . . . . . 29
12.16.3 Procedures . . . . . . . . . . . . . . . . . . . 29
12.16.4 Excepted Disputes . . . . . . . . . . . . . . . . 29
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EXHIBITS
1.1.1 Machinery and Equipment
1.2 Excluded Assets
2.1 Terms of the Note
2.2 Estimated Net Worth
2.3.1 Adjusted April 2 Balance Sheet
2.4 Allocation of Purchase Price
3.1.3 Other Indebtedness
5.3 Consents Required by Seller
5.4 Financial Statements
5.6 Certain Changes Since March 31, 1995
5.7 Certain Tax Matters
5.8 Title and Condition of Assets
5.9 Description of Real Estate and Leases
5.10 Contracts
5.12 Aged List of Receivables
5.13 Default, Violation or Litigation
5.14 Insurance
5.15 Employees of Seller
5.16 Employee Benefits
5.17 Proprietary Rights
5.18 Approvals
5.19 Environmental Matters
5.20 Transactions With Affiliates
5.21 Principal Customers and Suppliers
5.22 Warranties
7.7 Capital Improvements
8.2.3 Opinion of Kilpatrick & Cody
8.3.3 Opinion of Kohrman Jackson & Krantz
11.1 Product List
v
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<PAGE>
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") dated as of September
6, 1995, is made by and among Intermet Corporation, a Georgia corporation
("Intermet"), Intermet Machining, Inc., a Georgia corporation and wholly-owned
subsidiary of Intermet ("Machining"), PBM Industries, Inc., a Delaware
corporation and wholly-owned subsidiary of Machining ("Seller"), and PBM
Acquisition Limited, an Ohio limited liability company ("Buyer").
RECITALS:
WHEREAS, Seller wishes to sell to Buyer, and Buyer wishes to purchase
from Seller, substantially all of Seller's assets and assume certain
liabilities used in the conduct of the Seller's business upon the terms and
conditions set forth below.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants, warranties, representations and conditions contained in this
Agreement, it is hereby agreed as follows:
1. SALE AND PURCHASE OF ASSETS
1.1 PURCHASED ASSETS. On the terms and subject to the conditions
contained in this Agreement, Seller agrees to sell to Buyer (and Intermet and
Machining agree to cause Seller to sell to Buyer) and Buyer agrees to purchase
from Seller at the Closing and on the Closing Date, as each is defined in
Section 4 below, free and clear of all liens, claims and encumbrances except
as otherwise disclosed in and permitted by this Agreement, all of Seller's
right, title and interest in and to all of the assets and properties, wherever
situated, used in the conduct of the business of Seller, except for those
assets and properties specifically excluded by Section 1.2 (the "Purchased
Assets"). The Purchased Assets will include, but not be limited to, the
following:
1.1.1 MACHINERY AND EQUIPMENT. All machinery and equipment
(including spare parts), data processing hardware and software, vehicles,
fixtures, capital works in process, tools, dies, patterns, furniture and
similar tangible personal property employed by Seller in the conduct of its
business as the same may exist at the Closing, and including but not limited
to those described in attached Exhibit 1.1.1 (the "Equipment").
1.1.2 INVENTORY. All inventories, consisting of raw
materials, work-in-process and finished goods and supplies, employed and
useable by Seller in the conduct of the business of Seller (the "Inventory").
1.1.3 RECEIVABLES. All of Seller's trade receivables, note
receivables and other accounts receivable (excluding any non-trade
intercompany receivables) as the same may exist at the Closing (the
"Receivables").
1
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1.1.4 CONTRACT AND CERTAIN OTHER RIGHTS OF SELLER. All
rights and interests of Seller to and under all contracts between it and any
other party or parties and under contracts which have been acquired by it by
assignment or in any other manner, whether or not disclosed or required to be
disclosed in Exhibit 5.10, and all other claims, rights and causes of action
of Seller against third parties.
1.1.5 CERTAIN PROPRIETARY RIGHTS. All copyrights, data
processing software, licenses, technology, trade secrets, know-how, customer
lists, inventions, patents, patent applications, trademarks (including
registrations and applications therefor), designs, trade names and the
goodwill associated therewith (including applications and registrations
therefor) and other proprietary information and rights, including
specifically, but not by way of limitation, the corporate name "PBM
Industries, Inc." and the assumed name "Motor City Accessories," and all
telephone numbers of Seller, including but not limited to those rights
described in attached Exhibit 5.17.
1.1.6 OTHER ASSETS. All other assets of Seller, whether
real, personal, or tangible, intangible or mixed and whether or not reflected
in the Financial Statements (as defined in Section 5.4 below) or on the books
or records of Seller, including all books, records and files (including all
personal files), rights under executory contracts and purchase and sale orders
to be assumed by Buyer, leasehold improvements and deposits under all leases
assumed by Buyer and any prepaid expenses to the extent properly assignable to
Buyer and permits and licenses to the extent transferable under law.
1.2 EXCLUDED ASSETS. Notwithstanding anything to the contrary
contained in this Agreement, the assets described on Exhibit 1.2 (the
"Excluded Assets") will not be sold to Buyer and all of the Excluded Assets
will be retained by Seller.
1.3 DOCUMENTATION. In order to effectuate the sale, conveyance,
transfer and assignment contemplated by Section 1.1 hereof, Seller will
execute and deliver on the Closing Date all such warranty deeds, bills of sale
and other documents or instruments of conveyance, transfer or assignment as
are necessary or appropriate to vest or confirm in Buyer all right, title and
interest of Seller in and to all of the Purchased Assets, all of which
documents will be in form and substance reasonably satisfactory to counsel for
Buyer.
1.4 CORPORATE NAME. Immediately following the Closing, Seller
will amend its certificate or articles of incorporation so as to change its
name to a name which is not, in the reasonable judgment of Buyer, confusingly
similar to the name "PBM Industries, Inc.," and Intermet, Machining and Seller
will not thereafter use such name or other names acquired by Buyer hereunder
or names confusingly similar.
1.5 TRANSFER TAXES. Seller and Buyer will share equally in the
payment of all sales, transfer, use or similar taxes or assessments of any
kind whatsoever arising from, based upon or related to the sale, transfer or
delivery of the Purchased Assets pursuant to this Agreement whether or not
such taxes or assessments are levied or imposed upon Buyer or Seller. Buyer
represents that it presently intends to use the Purchased Assets for operating
its business in substantially the same manner as the business operated by
Seller prior to the Closing.
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2. PURCHASE PRICE; ALLOCATION
2.1 PURCHASE PRICE. Subject to adjustment as provided in
Sections 2.2 and 2.3 below, Buyer agrees to pay, and Seller agrees to accept,
as the "Purchase Price" for the Purchased Assets (i) the sum of $5,400,000
payable in cash at Closing by wire transfer of immediately available funds to
such account as Seller has designated to Buyer prior to Closing, (ii) Buyer's
five-year subordinated promissory note with the terms described on attached
Exhibit 2.1 in a form agreed to by Buyer and Seller (the "Note") and secured
by a Pledge Agreement pledging the outstanding membership interests of Buyer
and an Exculpated Guaranty Agreement of each member of Buyer each in a form
agreed to by Buyer and Seller and (iii) the assumption, payment, performance
and discharge, when and as due, of the Assumed Liabilities, as defined below.
2.2 PRE-CLOSING ADJUSTMENT OF PURCHASE PRICE. On or immediately
prior to the Closing Date, Buyer and Seller will in good faith estimate the
post-closing adjustment to the Purchase Price to be determined under Section
2.3.3 below based on the most recent available financial information for
Seller and will adjust the amounts to be paid at Closing pursuant to Section
2.1 above in the manner set forth in Section 2.3.3. Such estimate will be
attached to this Agreement as Exhibit 2.2 at the Closing.
2.3 POST-CLOSING ADJUSTMENT OF PURCHASE PRICE. The Purchase
Price will be subject to adjustment following the Closing Date in the manner
described below.
2.3.1 INITIAL CLOSING BALANCE SHEET. As soon as reasonably
practicable after the Closing Date and in any event no later than 30 days
after the Closing Date, Seller will prepare and present to Buyer statements
reflecting the respective values as of 11:59 P.M. Eastern time on the Closing
Date, of the assets and liabilities of Seller, together with appropriate notes
thereto, prepared in accordance with generally accepted accounting principles
applied consistently with the adjusted balance sheet of Seller as of April 2,
1995, attached as Exhibit 2.3.1 and initialed by the parties (the "Adjusted
April 2 Balance Sheet"), except that all known adjustments will be made
without regard to materiality (the "Initial Closing Balance Sheet").
2.3.2 FINAL CLOSING BALANCE SHEET. Upon receipt of the
Initial Closing Balance Sheet, Buyer and its independent accountants, will be
permitted during the succeeding 30 day period to examine the books and records
of Seller and the work papers prepared by Seller or Seller's accountants.
If Buyer agrees to the Initial Closing Balance Sheet, it will become
the Final Closing Balance Sheet. If Buyer cannot agree to the Initial Closing
Balance Sheet it will within 30 calendar days after delivery of the Initial
Closing Balance Sheet by Seller, prepare and deliver to Seller a list of
disputed adjustments (the "Disputed Adjustments") Buyer believes should have
been recorded on the Initial Closing Balance Sheet, specifying the amount of
each Disputed Adjustment which Buyer believes should have been reflected on
the Initial Closing Balance Sheet. Buyer and Seller will use their best
efforts to resolve the Disputed Adjustments. If Buyer and Seller are able to
reach an agreement on the Disputed Adjustments, the Initial Closing Balance
Sheet will be amended to reflect such agreement and will become the Final
Closing Balance Sheet.
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If Buyer and Seller are unable to reach an agreement on the Disputed
Adjustments within 15 calendar days after receipt by Seller of the Disputed
Adjustments, then the Disputed Adjustments will be immediately submitted by
Buyer and Seller to their independent public accountants, and the parties will
use their reasonable efforts to cause their accountants to promptly review and
assist the parties in resolving the Disputed Adjustments. Buyer and Seller
will each be responsible for the fees, costs and expenses of their respective
independent accountants.
If the independent accountants for Buyer and Seller are unable to
reach an agreement on the Disputed Adjustments within 15 calendar days after
receipt by Seller of such Disputed Adjustments, then the Disputed Adjustments
will be resolved by Deloitte & Touche, LLP or, if such firm is unwilling or
unable to act in such capacity, then by another nationally-recognized firm of
certified public accountants mutually acceptable to the independent
accountants of Buyer and Seller (the "Accounting Referee"). The parties will
use their reasonable efforts to cause the Accounting Referee to promptly
review the Disputed Adjustments and determine the final value of each of the
Disputed Adjustments. In making such determination, the Accounting Referee
will consider only the items or amounts in dispute (and any other items or
amounts relating thereto), and the determination of each Disputed Adjustment's
value, as so computed, will not, in any event, be less than zero or greater
than the amount of the Disputed Adjustments. Such determination will be made
within 15 calendar days after the date on which the Accounting Referee
receives notice of the Disputed Adjustments, or as soon thereafter as
possible. The Initial Closing Balance Sheet will then be amended to reflect
the determination of the final value of each of the Disputed Adjustments and
will become the Final Closing Balance Sheet. The fees, costs and expenses of
the Accounting Referee in conducting such review will be paid equally by Buyer
and by Seller.
The Final Closing Balance Sheet will be deemed to be and will be
conclusive and binding on the parties to this Agreement for purposes of
determining any adjustment of the Purchase Price pursuant to this Section 2.3.
2.3.3 PURCHASE PRICE ADJUSTMENT. Either (i) Seller will
pay to Buyer the amount by which working capital as reflected on the Adjusted
April 2 Balance Sheet plus any increase or less any decrease in the Purchase
Price pursuant to Section 2.2 above exceeds working capital as reflected on
the Final Closing Balance Sheet, or (ii) Buyer will pay to Seller the amount
by which working capital as reflected on the Final Closing Balance Sheet
exceeds working capital as reflected on the Adjusted April 2 Balance Sheet
plus any increase or less any decrease in the Purchase Price pursuant to
Section 2.2 above; provided, however, that there will be no adjustment to the
extent that the difference in working capital as reflected on the Adjusted
April 2 Balance Sheet balance sheet and the Final Closing Balance Sheet is the
result of the new all purpose vehicle and/or C-K truck exhaust manifolds
business.
The Purchase Price Adjustment will be paid within 15 calendar days
after the Final Closing Balance Sheet is determined and becomes final in
accordance with Section 2.3.3, together with interest on the amount of such
payment calculated at the prime rate published by THE WALL STREET JOURNAL on
the Closing Date and extended through the date of payment. The amount, if
any, required to be paid by Buyer will be paid by the delivery of cash at such
time. The amount, if any, required to be paid by Seller will be paid in cash.
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2.4 ALLOCATION OF PURCHASE PRICE. The Purchase Price will be
allocated among the Purchased Assets as set forth on attached Exhibit 2.4.
The parties agree that the allocation set forth in Exhibit 2.4 will be used by
them and respected for all purposes, including income tax purposes, and that
the parties will follow such allocation for all reporting purposes.
3. ASSUMPTION OF LIABILITIES
3.1 LIABILITIES TO BE ASSUMED BY BUYER. At the Closing, Buyer
will assume and agree to perform and discharge when and as due the following
liabilities and obligations, as the same may exist at or accrue following the
Closing Date, and no others (the "Assumed Liabilities"):
3.1.1 ACCOUNTS PAYABLE AND ORDINARY COURSE LIABILITIES.
Accounts payable and accrued liabilities of Seller incurred in the ordinary
course of the business and properly classified as liabilities in accordance
with generally accepted accounting principles, which accounts payables and
ordinary course liabilities will be as reflected on the Final Closing Balance
Sheet.
3.1.2 EXECUTORY AGREEMENTS. Liabilities and obligations
which exist at or accrue following the Closing Date under (i) the Contracts
described in attached Exhibit 5.10; (ii) executory contracts, agreements or
other commitments entered into in the ordinary course of business of Seller
and existing on the date hereof and not required to be disclosed pursuant to
Exhibit 5.10; and (iii) executory contracts, agreements or other commitments
entered into in the ordinary course of business between the date hereof and
the Closing, in accordance with Section 7.1 below.
3.1.3 OTHER INDEBTEDNESS. All other liabilities and
obligations of Seller which are specifically listed on attached Exhibit 3.1.3.
3.2 LIABILITIES OF SELLER NOT ASSUMED. Except as specifically
provided in Section 3.1 above, Buyer will not assume, or in any way become
liable for, any liabilities or obligations of Seller of any kind or nature,
whether accrued, absolute, contingent or otherwise, or whether due or to
become due, or otherwise, whether known or unknown, arising out of events,
transactions or facts which have occurred, arisen or existed on or prior to
the Closing Date, which liabilities and obligations, if ever in existence,
will continue to be liabilities and obligations of Seller. Specifically, but
without limiting the foregoing, Buyer does not assume or is not liable for the
following debts, liabilities and obligations (the "Excluded Liabilities"):
3.2.1 VIOLATION OF REPRESENTATIONS, ETC. Debts,
obligations or liabilities which arise or exist in violation of any of the
representations, warranties, covenants or agreements of Seller contained in
this Agreement or in any statement or certificate delivered to Buyer by or on
behalf of Seller on or before the Closing Date pursuant to this Agreement or
in connection with the transactions contemplated by this Agreement.
3.2.2 UNDISCLOSED LIABILITIES. Debts, obligations or
liabilities of any kind or nature, whether absolute, accrued, contingent or
otherwise, required by this Agreement to be disclosed to Buyer, if not so
disclosed in writing and specifically assumed in writing by Buyer.
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3.2.3 CONTINGENT LIABILITIES. Contingent liabilities of
Seller of any kind arising or existing on or prior to the Closing Date,
including, but not limited to, claims, proceedings or causes of action which
are currently or become the subject of claims, assertions, litigation or
arbitration.
3.2.4 TAXES DUE ON SALE. Except as provided in Section
1.5, debts, obligations or liabilities of Seller for Federal, state, county,
local, foreign or other income, sales, use or transfer taxes or assessments
(including interest and penalties thereon, if any) of any kind whatsoever
arising from, based upon or related to the sale, transfer or delivery of the
Purchased Assets pursuant to this Agreement.
3.2.5 OTHER TAXES. Debts, obligations or liabilities of
Seller, whether absolute, accrued, continent or otherwise, for (i) Federal and
state income taxes; (ii) all taxes relating to any real property; (iii) all
franchise taxes of Seller, (including interest and penalties thereon, if any);
and (iv) any other Taxes (as defined in Section 5.7 below) of Seller;
provided, however, that property taxes on all real and personal property of
Seller shall be pro rated as of the Closing Date.
3.2.6 PENSION AND OTHER EMPLOYEE PLANS. Debts, obligations
or liabilities under any pension, profit sharing, savings, retirement, health,
medical, life, disability, dental, deferred compensation, stock option, bonus,
incentive, severance pay, group insurance or other similar employee plans or
arrangements, or under any policies, handbooks, or custom or practice,
collective bargaining agreement, or any employment agreements, whether express
or implied, applicable to any of Seller's employees at any time through and
including the Closing Date.
3.2.7 PERSONAL INJURY, PRODUCTS LIABILITY AND RECALL
CLAIMS. Debts, expenses, obligations or liabilities of Seller arising out of
any claim for personal injury (including worker's compensation or otherwise),
property damage, product recall, product liability or strict liability,
arising from events (including the shipment of goods) occurring on or prior to
the Closing Date (whether or not such claim is then asserted).
3.2.8 ENVIRONMENTAL MATTERS. Any debts, expenses,
obligations or liabilities arising out of claims alleging damage to the
environment or similar claims with respect to the conduct of the business of
Seller by Seller on or before the Closing Date.
3.2.9 INFRINGEMENTS. Any liability or obligation of Seller
arising out of any wrongful or unlawful violation or infringement of any
proprietary right of any person or entity occurring on or prior to the Closing
Date.
3.2.10 INDEBTEDNESS; INTERCOMPANY OBLIGATIONS. Except as
provided in Section 3.1, any liabilities or obligations in respect of the
borrowing of money or issuance of any note, bond, indenture, loan, credit
agreement or other evidence of indebtedness or direct or indirect guaranty or
assumption of indebtedness, liabilities or obligations of others, whether or
not disclosed in this Agreement or otherwise ("Indebtedness") of Seller,
including, without limitation, any non-trade intercompany obligations or
liabilities of Seller. The parties acknowledge that liabilities as of the
Closing Date resulting from the sales of inventories or services provided by
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Northern Castings Corporation, New River Castings Company and Intermotive
Technologies, Inc. ("Intermotive") in the approximate amounts of $(119.79),
$246,084.33 and $23,520.00, respectively, as of August 6, 1995, will be
assumed by Buyer.
3.2.11 LITIGATION. Debts, expenses, obligations or
liabilities of Seller arising out of any claim, action, suit or proceeding
pending as of the Closing Date or arising out of or relating to matters or
events occurring on or prior to the Closing Date.
3.2.12 EXCLUDED ASSETS. Any liabilities or obligations
arising out of or relating to the Excluded Assets.
4. CLOSING
4.1 TIME AND PLACE. The consummation of the transactions
contemplated by this Agreement (the "Closing") will take place at the offices
of Kohrman Jackson & Krantz, One Cleveland Center, 20th Floor, Cleveland, Ohio
44114, at 10:00 A.M. Eastern time on September 25, 1995, or such other date
and time as Buyer and Seller agree (the "Closing Date").
At the Closing on the Closing Date, Seller will sell, transfer,
assign, convey and deliver to Buyer the Purchased Assets, Buyer will deliver
to Seller the portion of the Purchase Price to be paid at Closing, as provided
in Section 2.1, and the parties will deliver the agreements, certificates,
opinions and other documents required to be delivered pursuant to Section 8
below and elsewhere in this Agreement.
4.2 EFFECTIVE DATE. Title to the Purchased Assets will be deemed
to have been transferred to Buyer at 11:59 P.M. Eastern time on the Closing
Date.
5. REPRESENTATIONS AND WARRANTIES OF
SELLER, INTERMET AND MACHINING
Seller, Intermet and Machining, jointly and severally, represent and
warrant to Buyer as follows:
5.1 ORGANIZATION, POWER AND QUALIFICATION. Seller, Intermet and
Machining are each a corporation duly organized, validly existing and in good
standing under the laws of the state of its jurisdiction of incorporation, and
each has all requisite corporate power and authority to own or hold under
lease its properties and assets and to carry on the business as now conducted.
Seller is duly qualified to do business and is in good standing as a foreign
corporation in the State of Michigan, the only jurisdiction in which the
nature of its activities or properties makes qualifications as a foreign
corporation necessary.
5.2 AUTHORITY. Seller, Intermet and Machining each have all
necessary power and authority, corporate and otherwise, to make, execute and
deliver this Agreement and all other agreements and documents to be executed
and delivered by either of them pursuant to this Agreement; and Seller,
Intermet and Machining have each taken all necessary actions required to be
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taken to authorize it to execute and deliver this Agreement and such other
agreements, and to perform all of its obligations, undertakings and agreements
to be observed and performed by it hereunder and thereunder. This Agreement
has been duly executed and delivered by Seller, Intermet and Machining, and
constitutes the valid and binding agreement of Seller, Intermet and Machining
enforceable in accordance with its terms subject, as to the enforcement of
remedies, to general equitable principles and to bankruptcy, insolvency and
similar laws affecting creditors rights generally.
5.3 NO VIOLATION. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated by this
Agreement will constitute a violation of, or be in conflict with, or result in
a cancellation of, or constitute a default under, or create (or cause the
acceleration of the maturity of) any debt, obligation or liability affecting,
or result in the creation or imposition of any security interest, lien, or
other encumbrance upon any of the Purchased Assets under: (i) any term or
provision of the certificate of incorporation or by-laws (or other
organizational document) of Seller; (ii) any judgment, decree, order,
regulation or rule of any court or governmental authority; (iii) any statute
or law; (iv) any contract, agreement, indenture, lease or other commitment to
which Seller is a party or by which it is bound; or (v) cause any material
change in the rights or obligations of any party under any such contract,
agreement, indenture, lease or commitment.
Except as disclosed in Exhibit 5.3, no consent of, or notice to, any
federal, state or local authority, or any private person or entity, is
required to be obtained or given by Seller in connection with the execution,
delivery or performance of this Agreement or any other agreement or document
to be executed, delivered or performed hereunder by Seller or to enable Buyer
to continue to conduct the business of Seller after the Closing in the manner
in which it is currently conducted.
5.4 FINANCIAL STATEMENTS. Exhibit 5.4 contains true and complete
copies of (i) the unaudited balance sheets of Seller, each together with the
related statements of income and retained earnings and cash flows at and for
each of the two previous fiscal years and for the final 9 months of the fiscal
year ending December 31, 1992 (the "Year End Statements"); and (ii) the
unaudited balance sheet of Seller, together with the related statements of
income and retained earnings and cash flows for the quarterly period ended
June 30, 1995 (the "Interim Statements"). The Year End Statements and the
Interim Statements are collectively referred to herein as the "Financial
Statements."
The Financial Statements, when delivered in accordance with this
Agreement, will be complete and accurate in all material respects and will
fairly present the assets, liabilities and financial condition of Seller in
accordance with generally accepted accounting principles consistently applied
except that the Financial Statements do not contain the footnotes required by
generally accepted accounting principles, and such statements of income and
retained earnings and cash flows will fairly present the results of operations
of Seller as of the respective dates thereof and disclose all costs and
expenses associated with the operation of the business for the periods therein
referred to. Except as otherwise disclosed therein, all such Financial
Statements do not contain any items of extraordinary or non-recurring income
or any other income not earned in the ordinary course of business.
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5.5 LIABILITIES AND OBLIGATIONS. Seller does not have any
liabilities or obligations (direct or indirect, contingent or absolute,
matured or unmatured) of any nature whatsoever, whether arising out of
contract, tort, statute or otherwise, which are not reflected, reserved
against or given effect to in the Financial Statements, except liabilities and
obligations incurred in the ordinary course of business since the respective
dates of the Financial Statements, which are of the same nature as those set
forth on such Financial Statements.
5.6 ABSENCE OF CERTAIN CHANGES. Except as disclosed in Exhibit
5.6, since March 31, 1995, there has not been: (i) any material adverse change
in the condition (financial or otherwise) of the properties, assets,
liabilities, results of operation or business prospects of Seller; (ii) any
damage, destruction or loss (whether or not covered by insurance) materially
and adversely affecting the properties, assets, liabilities, financial
condition, results of operations or business prospects of Seller; (iii) any
declaration, setting aside, or payment of any dividend or other distribution
in respect of Seller's capital stock, or any direct or indirect redemption,
retirement, purchase or other acquisition of any of such stock, (iv) any
increase in the compensation, commissions or perquisites payable or to become
payable by Seller to any officer, employee, or agent of Seller, or any payment
of any bonus, profit sharing or other extraordinary compensation to any
employee of Seller (other than any such increase or payment paid or to become
payable in the ordinary course of business consistent with past practices);
(v) any change in the accounting methods or practices followed by Seller or
any change in depreciation or amortization policies or rates theretofore
adopted; (vi) any cancellation of any debts or receivables owed to or claims
held by Seller; (vii) any sale, lease, abandonment or other disposition by
Seller of any real property, or, other than in the ordinary course of
business, of any machinery, equipment or other operating properties, or any
intangible assets utilized in the business of Seller; (viii) any actual or
threatened termination or cancellation of any material contract with respect
to Seller; or (ix) any material change in the operating practices of Seller.
5.7 TAXES. As used in this Agreement, the term "Taxes" means all
federal, state, county, local and foreign income, excise, property, sales,
use, payroll, employee's income and social security withholding, intangibles,
franchise, transfer, and other taxes of whatever nature, all penalties related
to such taxes and interest on such taxes and penalties, that relate to the
Purchased Assets or could otherwise affect or become a lien upon the Purchased
Assets. Except as set forth in Exhibit 5.7, all Taxes due and payable by
Seller with respect to all periods prior to and through the Closing Date have
been or will be duly and properly computed, reported, fully paid and
discharged and there are not and will not be any unpaid Taxes, with respect to
any period prior to and through the Closing Date, which are or could become a
lien on the Purchased Assets, except for current Taxes not yet due and
payable.
Except as set forth on Exhibit 5.7, there are no known or proposed
penalty, interest or deficiency assessments with respect to Taxes of Seller
that require payment by, relate to or could materially and adversely affect
the Seller or the Purchased Assets. Except as set forth on Exhibit 5.7,
Seller has not waived any law or regulation fixing, or consented to the
extension of, any period of time for the assessment of any Taxes, which waiver
or consent is currently in effect.
5.8 TITLE TO AND CONDITION OF ASSETS. Seller is the owner of and
has good and marketable title to all of the Purchased Assets, free and clear
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of all mortgages, liens, pledges, charges, security interests, encumbrances or
other third party interests of any nature whatsoever, except for: (i) the lien
of current taxes not yet due and payable, and (ii) other title exceptions
disclosed and described in Exhibit 5.8. Except as disclosed in Exhibit 5.8,
the Purchased Assets (including all buildings) are in all material respects in
good operating condition, repair, and ordinary wear and tear excepted, and are
usable in the ordinary course of the business of Seller.
Except as set forth in Exhibit 5.8, the Purchased Assets include all
assets, properties, rights and processes necessary to conduct the business of
Seller substantially as conducted during the fiscal year ended December 31,
1994. Seller has not retained or failed to deliver any material asset or
right of any kind or nature, which it owns or to which it has rights, which
are necessary to, or designed for or used in the conduct of the business of
Seller.
5.9 REAL ESTATE AND LEASES. Seller owns no real property.
Exhibit 5.9 sets forth a description of all real estate (including buildings
and improvements) leased by Seller and used in the conduct of the business of
Seller according to the character of the property and the location thereof and
a brief description (including in each case the annual rent, the expiration
date, a brief description of the property covered and the name of the lessor)
of every lease or agreement (written or oral) under which Seller is lessee of,
or holds or operates, any such real property. Each of such leases and
agreements is in full force and effect and constitutes a legal, valid and
binding obligation of the respective parties thereto. Neither Seller, nor, to
the knowledge of Seller any other party thereto, is in default in any material
respect under any such lease or agreement nor has any event occurred which
with the passage of time or giving of notice or both would constitute such a
default. The real property and the buildings thereon owned or utilized by
Seller in the conduct of the business of Seller do not violate any building,
zoning or other laws or ordinances, or any agreements, applicable thereto, and
no notice of any such violation or claimed violation has been received by
Seller.
5.10 CONTRACTS. Except as set forth in Exhibit 5.10, Seller is
not a party to, or bound by, any oral or written contracts, agreements,
commitments or understandings ("Contracts"): (i) for the employment of any
officer or employee; (ii) for any Indebtedness; (iii) for leasing personal
property (including, without limitation, leases for machinery and office
equipment, furniture, fixtures, vehicles, and tools); (iv) involving the
payment or receipt of in excess of $5,000 per annum by Seller or the term of
which at any time exceeded one year (including, without limitation, vendor
supply contracts or customer "blanket" purchase orders); (v) providing for the
services of dealers, distributors, sales representatives or similar
representatives; (vi) relating to the ownership, use or licensing of any
patents, designs, trademarks, trade names, brand names, copyrights,
inventions, processes, know-how, formulae, trade secrets or other proprietary
rights; (vii) any covenants by or binding Seller not to compete or to not
disclose any confidentiality of other third parties; or (viii) any other
contract that is material to the business of Seller.
All of the Contracts constitute legal, valid and binding obligations
of the respective parties thereto, are in full force and effect, and neither,
Seller, or, to the knowledge of Seller, any other party thereto has violated
any material provision of, or committed or failed to perform in any material
respect any act which with notice, lapse of time or both would constitute a
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default under the provisions of any Contract, the termination of which could
have a material adverse effect upon the properties, assets, liabilities,
financial condition, results of operations or business prospects of Seller.
Correct and complete copies of all written Contracts disclosed on Exhibit 5.10
have been made available to Buyer.
5.11 INVENTORY. The Inventory reflected in the Financial
Statements, and the Inventory acquired since the date thereof, net, in each
case, of provisions for shrinkage and obsolescence, if any, reflected on such
Financial Statements and Seller's books and records, are and will at the
Closing Date consist of items of a quantity and quality which are usable and
salable in the ordinary course of the business of Seller consistent with past
practice.
5.12 RECEIVABLES. All Receivables shown on the Financial
Statements, and any such Receivables which arose since the respective dates
thereof, were and are good and collectible in the ordinary course of business
of Seller in amounts equal to those at which such Receivables were or are
reflected on such Financial Statements, net of provisions for bad debts
reflected on such Financial Statements, or, in the case of currently existing
Receivables, on Seller's current books and records, net of provisions for bad
debts reflected on such books and records, and have arisen in the ordinary
course of Seller's business. An aged list of Receivables outstanding at June
30, 1995 is included as Exhibit 5.12.
5.13 NO DEFAULT, VIOLATION OR LITIGATION. Except as disclosed in
Exhibit 5.13, Seller, in connection with the operation of Seller, is not in
violation of any law, regulation or order of any court or federal, state,
municipal or other governmental department, commission, board, bureau, agency
or instrumentality (including, without limitation, laws, regulations, orders,
restrictions and compliance schedules applicable to environmental standards
and controls, wages and hours, civil rights and occupational health and
safety) which would have a material adverse effect on Seller or the operation
of Seller's business and Seller has not received any notice of claimed
noncompliance. Except as disclosed in Exhibit 5.13, (i) there are no
lawsuits, proceedings, claims or governmental investigations pending or, to
the knowledge of Seller, threatened against or involving, Seller or against or
involving any of the Purchased Assets, or against or involving any officers or
directors of Seller and which could materially affect the business of Seller;
and (ii) there are no judgments, consents, decrees, injunctions, or any other
judicial or administrative mandates outstanding against Seller which
materially and adversely affect the properties, assets, liabilities, financial
condition, results of operations or business prospects of Seller or its right
to conduct its business as presently conducted.
5.14 INSURANCE. Exhibit 5.14 contains a list of all insurance
policies (specifying (i) the insurer, (ii) the amount of the coverage, (iii)
the type of insurance, (iv) the policy number and (v) any currently pending
claims thereunder or any claims asserted thereunder or under similar policies
since January 1, 1993) maintained by or on behalf of Seller on its properties,
assets, business or personnel. All such policies are, and pending Closing
will continue to be, in full force and effect, and Seller is not in default in
any material respect with respect to any provision contained in any insurance
policies, nor has Seller failed to give any notice or present any claim
thereunder in due and timely fashion.
All such insurance is in amounts and against such risks as are usual
and customary to protect the business of Seller and the Purchased Assets. At
no time since March 30, 1992 (the "Acquisition Date"), and to Seller's
knowledge prior to the Acquisition Date has Seller been denied any insurance
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or indemnity bond coverage which it has requested, or received any written
notice from or on behalf of any insurance carrier presently providing
insurance relating to it (i) that insurance rates may or will be substantially
increased, (ii) that there will be no renewal of policies presently in effect,
or (iii) that material alterations to any of the properties or business
operations of Seller are necessary or required by such carrier. None of such
insurance policies are subject to retroactive premium adjustment in respect of
prior periods.
5.15 EMPLOYMENT, LABOR AND OTHER RELATIONS. Exhibit 5.15 sets
forth the name, job classification and total annual compensation (base salary
and bonus) of each of the salaried employees of Seller as of July 27, 1995.
Except for the collective bargaining agreement disclosed on Exhibit
5.15 (the "Collective Bargaining Agreement"), Seller is not a party to or is
otherwise bound by any contract, agreement or collective bargaining agreement
with any labor union or organization or other commitment respecting employment
or compensation of any of its officers, agents or employees, and no employees
of Seller are represented by any labor union or similar organization. Since
the Acquisition Date, and to Seller's knowledge prior to the Acquisition Date,
Seller has not been involved in any labor strike, dispute, slow down or work
stoppage, or union organizing campaign involving its employees and none has
been threatened. Seller has no knowledge not available to the general public
of any existing or threatened labor disturbance by Seller's employees or of
any of Seller's principal suppliers, contractors or customers which could have
a material adverse effect upon the properties, assets, liabilities, financial
condition, results of operations or business prospects of Seller.
Except as set forth in Exhibit 5.15, there are no charges or
complaints involving any federal, state or local civil rights enforcement
agency or court; complaints or citations under the Occupational Safety and
Health Act or any state or local occupational safety act or regulation; unfair
labor practice charges or complaints with the National Labor Relations Board;
or other claims, charges, actions or controversies pending, or, to the
knowledge of Seller, threatened or proposed, involving Seller and any
employee, former employee or any labor union or other organization
representing or claiming to represent such employees interests, which could
materially and adversely affect the business of Seller.
Seller is and has been in compliance in all material respects with all
laws, rules and regulations respecting employment and employment practices,
terms and conditions of employment and wages and hours, the sponsorship,
maintenance, administration and operation of (or the participation of its
employees in) occupational safety and health programs, and Seller is not
engaged in any violation of any law, rule or regulation related to employment,
including unfair labor practices or acts of employment discrimination, which
could materially and adversely affect the business of Seller.
Seller has not had a plant closing or mass lay-off (as those terms are
defined in the Worker Adjustment and Retraining Notification Act of 1988)
affecting in whole or in part any facility, operating unit or employee of
Seller since the Acquisition Date, and to Seller's knowledge prior to the
Acquisition Date.
5.16 EMPLOYEE BENEFITS. As used herein, the term Employee Plan
includes any pension, retirement, savings, disability, medical, dental,
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health, life (including any individual life insurance policy on which Seller
makes premium payments, whether or not Seller is the owner, beneficiary or
both of such policy), death benefit, group insurance, profit sharing, deferred
compensation, stock option, bonus, incentive, vacation pay, severance pay, or
other employee benefit plan, trust, arrangement, contract, agreement, policy
or commitment, including without limitation, any pension plan ("Pension Plan")
as defined in Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and any welfare plan as defined in Section 3(1) of
ERISA ("Welfare Plan"), whether any of the foregoing is funded, insured or
self-funded, written or oral, (i) to which Seller is a party or by which
Seller, or any of the rights, properties or assets of Seller, is bound or (ii)
with respect to which Seller has made any payments, contributions or
commitments since the Acquisition Date, or may otherwise have any liability
(whether or not Seller still maintains such plan, trust, arrangement,
contract, agreement, policy or commitment). With respect to the Employee
Plans:
(a) There are no Employee Plans or any employees entitled to
retiree benefits under any Welfare Plans except as disclosed in Exhibit 5.16;
(b) Seller has no employee manuals or other written statements
of policies or practices relating to employment, except as disclosed in
Exhibit 5.16, and true and correct copies of such manuals or policies have
been furnished to Buyer;
(c) Seller has not received any notice to correct any violation
of any applicable laws, rules or regulations relating to any of said plans,
programs or policies described in Exhibit 5.16 or the manner in which they are
administered, with which it has not complied; and the provisions and
operations of all such plans, programs and policies are in compliance with all
applicable laws and governmental rules and regulations; and
(d) Seller does not maintain or contribute to, and has not
maintained or contributed to, an employee pension benefit plan subject to the
provisions of Title IV of ERISA. Seller does not and has not had an
obligation to contribute to any multi-employer plan (within the meaning of
Section 3(37) of ERISA). Seller maintains no employee welfare benefit plan
(as described in Section 3(1) of ERISA) except as set forth in Exhibit 5.16.
The PBM Industries, Inc. Hourly Employees 401(k) Savings and Retirement Plan
and Trust and the Group Benefit Plans for the Hourly Employees of PBM
Industries, Inc. (the "Collectively Bargained Plans") are maintained pursuant
to a collective bargaining agreement. No litigation or other administrative
proceeding is pending or threatened involving such Collectively Bargained
Plans.
5.17 PATENTS, TRADEMARKS AND LICENSES. Exhibit 5.17 lists and
identifies correctly and completely the current interests of Seller in all
patents, trademarks, service marks, copyrights (whether or not registered) and
registrations and applications therefor, trade names, trade secrets,
confidential know-how, inventions, discoveries, formulae and similar
proprietary information owned or used in or in any way relating to any of the
business of Seller other than the "Intermet" trade-mark/service mark
("Proprietary Information"); and a list of all licenses, franchise agreements
and other similar agreements relating to any of the foregoing or otherwise
owned, used in or in any way relating to the business of Seller ("Licenses").
The parties acknowledge that no license will be granted to Buyer with respect
to the "Intermet" trade-mark/service mark.
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Except as indicated in Exhibit 5.17, Seller is the sole and exclusive
owner thereof, free and clear of all liens, claims, charges, mortgages,
pledges, security interests and has the sole and exclusive right to use all
designs, permits, labels, packages and displays used in connection therewith,
and has all of the rights and interests described in Exhibit 5.17 relating
thereto, including but not limited to the right to receive the payments of
fees and royalties described therein and the right to freely assign its
interests. No other person or entity owns any right, title or interest not
specified in Exhibit 5.17, or has any right to a royalty or payment of any
kind from Seller with respect to any items set forth in Exhibit 5.17 except as
expressly stated therein. There has been no asserted claim or litigation
challenging or threatening to challenge the right, title and interest of
Seller with respect to any items set forth in Exhibit 5.17.
The operation of the business of Seller does not violate any rights of
others in such Proprietary Information and/or Licenses, no further rights or
licenses with respect thereto are required by Seller for the conduct of the
business of Seller, and, to Seller's knowledge, the rights of Seller are not
being violated or infringed by others. Seller is in compliance in all
respects with all Licenses, and, to Seller's knowledge, there are no defaults
by other parties with respect to such Licenses. Such Licenses are valid and
binding obligations of the respective parties thereto and are enforceable in
accordance with their respective terms. The consummation of the transactions
contemplated by the Agreement will not alter or impair Seller's rights with
respect to the Proprietary Information and Licenses.
5.18 APPROVALS. Seller possesses or has applied for all material
governmental and other permits, licenses, consents, certificates, orders,
authorizations and approvals (the "Approvals") to own or hold under lease and
operate properties and assets and to carry on the business of Seller as now
conducted. Seller has not received any notice of proceedings relating to the
revocation or modification of any such Approvals which, singly or in the
aggregate, if the subject of an unfavorable ruling or finding, could
materially adversely affect the properties, assets, financial condition,
results of operation or business prospects of Seller. The Approvals are
identified in Exhibit 5.18. Seller is operating in compliance with the
provisions, terms and conditions of the Approvals.
5.19 ENVIRONMENTAL MATTERS.
(a) Since the Acquisition Date and to Seller's knowledge prior to
the Acquisition Date, except as disclosed in Exhibit 5.19, all facilities used
or operated by Seller or any predecessor in interest at such facility have
been, and continue to be, used or operated in compliance in all material
respects with all applicable federal, state and local environmental laws,
regulations and guidelines as enacted, amended or reauthorized, promulgated,
published or proposed.
(b) Exhibit 5.19 identifies since the Acquisition Date and to
Seller's knowledge prior to the Acquisition Date (i) all environmental audits,
assessments or occupational health studies undertaken by, or at the direction
of, governmental agencies, Seller, or any predecessor in interest at the
facilities used or operated by Seller; (ii) the results of the most recent
analyses of water (including groundwater analyses), soil, air or asbestos
samples where non-compliance or contamination is indicated; (iii) the most
recent inspection of each operating facility by the Environmental Protection
Agency or other relevant environmental authority; (iv) written communications
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with environmental agencies relating to issues of noncompliance or
contamination; and (v) any written claim or complaint concerning environmental
matters of Seller.
(c) Except as disclosed in Exhibit 5.19, since the Acquisition
Date and to Seller's knowledge prior to the Acquisition Date, Seller has
reported promptly to appropriate authorities each unauthorized "Release" of a
reportable quantity of any "Hazardous Substance" at any facility used or
operated by Seller or any predecessor in interest of such facility. Each such
reported unauthorized "Release" of a reportable quantity of any "Hazardous
Substance: is also disclosed in Exhibit 5.19. For purposes hereof, "Release"
will have the meanings assigned to it in the Comprehensive Environmental
Response Compensation and Liability Act of 1980, as amended ("CERCLA").
"Hazardous Substance" will have the meanings assigned to it in CERCLA and, in
addition, will include fuel oil and petroleum and any constituent thereof and
any petroleum-based product.
(d) Since the Acquisition Date and, to Seller's knowledge prior
to the Acquisition Date, except as disclosed in Exhibit 5.19, neither Seller
nor any predecessor in interest of the facilities used or operated by Seller
has disposed, treated, or arranged for the storage, disposal or treatment of,
any "Hazardous Substance" or other waste at a site or location, or has leased,
used, owned a site or location including but not limited to any site which,
pursuant to CERCLA or other similar state law: (i) has been placed on the
National Priorities List or its state equivalent; (ii) the Environmental
Protection Agency or relevant state authority has proposed, or is proposing,
to place on the National Priorities List or state equivalent; (iii) is on
notice of, or subject to a claim, administrative order or other demand either
to take "removal" or "remedial" action as those terms are defined by CERCLA,
or to reimburse any person who has taken "removal" or "remedial" action in
connection with that site; (iv) has filed (or has had filed) with respect to
that site a notification of hazardous waste activities; or (v) is on the
Comprehensive Environmental Response Compensation Liability Information System
List.
(e) Exhibit 5.19 sets forth the age, contents or former contents
of any storage tanks located on the premises operated by Seller. Except as
set forth in Exhibit 5.19 Seller has since the Acquisition Date, and to
Seller's knowledge prior to the Acquisition Date, not owned or operated, or
presently owns or operates, any underground storage tanks as defined in RCRA.
Since the Acquisition Date, and to Seller's knowledge prior to the Acquisition
Date, except as set forth in Exhibit 5.19, all tanks and pipes pertinent
thereto are presently and have been in the past in good condition and do not
leak.
(f) Since the Acquisition Date, and to Seller's knowledge prior
to the Acquisition Date, there have been no hazardous wastes, drums or
containers disposed of or buried by Seller or, to Seller's knowledge, any
other person, on, in or under the ground or any surface waters located on the
premises operated by Seller. Since the Acquisition Date, and to Seller s
knowledge prior to the Acquisition Date, none of Seller or any party acting on
behalf of the Seller disposed of or buried, or arranged to dispose of or bury,
any waste, drums or containers in or on the premises of a third party other
than those pursuant to and in compliance with RCRA.
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(g) Except as set forth in Exhibit 5.19, since the Acquisition
Date, and to Seller's knowledge prior to the Acquisition Date, there have been
no polychlorinated biphenyls, friable asbestos or urea formaldehyde, or to
Seller's knowledge, non-friable asbestos, in or on premises owned or operated
by Seller.
5.20 TRANSACTIONS WITH AFFILIATES. Except as set forth in Exhibit
5.20, there are no contracts or arrangements (formal or informal, written or
oral), directly or indirectly, between the Seller, on the one hand, and
Intermet or Machining or any persons controlling, under common control with or
controlled by Intermet or Machining, on the other hand. Except as set forth
in Exhibit 5.20, neither Seller, Intermet, Machining nor any of their
affiliates has any direct or indirect interest in any entity involved in any
business which is competitive with the business of Seller.
5.21 PRINCIPAL CUSTOMERS AND SUPPLIERS. Exhibit 5.21 sets forth a
separate list of the ten largest customers and suppliers of Seller in terms of
purchases and sales during the fiscal years ended December 31, 1994 and 1993,
respectively, showing in each case the approximate total purchases and sales
by or from each such customer or supplier during such period. There has not
been any material adverse change in the business relationship of Seller with
any such named customer or supplier, or any other customer or supplier since
September 30, 1993. Seller is not required to provide bonding or any other
security agreements in connection with any transactions with any of its
current customers or suppliers.
5.22 WARRANTIES. A description or copies of the forms of all
express warranties and disclaimers of warranties used during the past three
years with respect to products or services of Seller are set forth on Exhibit
5.22.
5.23 DISCLOSURE. No representation or warranty of Seller made
hereunder or in the Exhibits or in any certificate, statement or other
document delivered by or on behalf of Seller hereunder contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein or therein, not misleading.
Copies of all documents referred to herein or in the Exhibits have been
delivered or made available to Buyer, are true, correct and complete copies,
and include all amendments, supplements or modifications thereto or waivers
thereunder.
5.24 KNOWLEDGE. For purposes of this Agreement, where the term
"knowledge" is used in connection with Seller, Intermet or Machining,
"knowledge" means the knowledge of Daryl R. Marsh, James W. Rydel, Michael J.
Mahoney, Doretha J. Christoph, Peter C. Bouxsein, J. Peter Aldred, Les Irvin,
Raymond Strosinski, John Doddrige, Michael J. Campbell, Verne M. Harris,
Thomas M. Himmel, Daniel R. McFarland, Belinda G. O'Connor, Gwen H. Pogue,
Douglas Szymanski, Richard Acre, Paul Downey, Darryl Johnson, Thomas E.
McLeod, Alexander P. Primavera and Thomas F. Schultes but no other employee or
director of Intermet, Machining or Seller.
Except as expressly set forth in this Agreement and the Exhibits, or
in the Financial Statements, or in the certificates or other documents
delivered pursuant hereto, Seller has no knowledge of any facts or conditions,
including without limitation, any actual or competitive factors in the market
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in which Seller operates, which will or may reasonably be expected to have any
material adverse effect on the value of the assets, properties, business or
goodwill of Seller, or upon any of its prospects or earning power.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER
Buyer represents and warrants to Seller, Intermet and Machining as
follows:
6.1 ORGANIZATION AND GOOD STANDING. Buyer is a limited liability
company duly organized and existing under the laws of the State of Ohio, and
has all requisite power and authority to own or hold under lease its
properties and assets and to carry on its business as now conducted.
6.2 AUTHORITY. Buyer has all necessary power and authority to
make, execute and deliver this Agreement and all other agreements and
documents to be executed and delivered by it pursuant hereto; and Buyer has
taken all necessary actions required to be taken to authorize it to execute
and deliver this Agreement and such other agreements, and to perform all of
its obligations, undertakings and agreements to be observed and performed by
it hereunder and thereunder. This Agreement has been duly executed and
delivered by Buyer, and constitutes the valid and binding agreement of Buyer
enforceable in accordance with its terms subject, as to the enforcement of
remedies, to general equitable principles and to bankruptcy, insolvency and
similar laws affecting creditors rights generally.
6.3 NO VIOLATION. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby will
constitute a violation of, or be in conflict with, or result in a cancellation
of, or constitute a default under, or create (or cause the acceleration of the
maturity of) any debt, obligation or liability affecting, or result in the
creation or imposition of any security interest, lien, or other encumbrance
upon any of the assets owned or used by Buyer under: (i) any term or provision
of the articles of organization, operating agreement or by-laws (or other
organizational document) of Buyer; (ii) any judgment, decree, order,
regulation or rule of any court or governmental authority; (iii) any statute
or law; (iv) any contract, agreement, indenture, lease or other commitment to
which Buyer is a party or by which it is bound; or (v) cause any material
change in the rights or obligations of any party under any such contract,
agreement, indenture, lease or commitment.
No consent of, or notice to, any federal, state or local authority, or
any private person or entity, is required to be obtained or given by Buyer in
connection with the execution, delivery or performance of this Agreement or
the consummation of the transactions contemplated hereby.
6.4 BUYER'S FINANCIAL STATEMENTS. At least seven days prior to
the Closing, Buyer shall furnish to Seller a true and complete copy of Buyer s
estimated unaudited opening balance sheet which will fairly present the
assets, liabilities and financial condition of Buyer in accordance with
generally accepted accounting principles consistently applied. At the
Closing, Buyer shall furnish to Seller a true and complete copy of Buyer s
unaudited opening balance sheet which will fairly present the assets,
liabilities and financial condition of Buyer in accordance with generally
accepted accounting principles consistently applied.
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6.5 BUYER'S MANAGEMENT. Buyer has furnished to Seller certain
biographical information concerning Buyer's management, including all
employment arrangements between Buyer and its management personnel.
6.6 DISCLOSURE. No representation or warranty of Buyer made
hereunder or in the Exhibits or in any certificate, statement or other
document delivered by or on behalf of Buyer contains or shall contain any
untrue statement of a material fact or omits or shall omit to state a material
fact necessary in order to make the statements contained herein or therein not
misleading. Copies of all documents referred to herein or in the Exhibits
which have been delivered or made available to Seller, Intermet or Machining
are true, correct copies, and include all amendments, supplements or
modifications thereto.
6.7 FINANCING ARRANGEMENTS. Buyer shall furnish to Seller at the
Closing copies of all loan agreements and other instruments and documents
executed pursuant thereto by Buyer. At least seven days prior to the Closing,
Buyer shall furnish to Seller true and complete copies of all financial
projections provided by Buyer to its lender.
7. COVENANTS OF SELLER, INTERMET AND MACHINING
Seller, Intermet and Machining covenant and agree with Buyer that from
the date of this Agreement until the Closing or other termination of this
Agreement, without the prior written consent of Buyer:
7.1 CONDUCT OF BUSINESS: NO MATERIAL CHANGE. Seller will conduct
its business only in the ordinary course and will not (i) make any material
change in its business or operations, (ii) make any change in the compensation
of any officer or other employees of Seller unless required under the
Collective Bargaining Agreement, (iii) hire any new employees other than in
the ordinary course of business, (iv) enter into any material contracts or
commitments involving the payment or receipt of in excess of $10,000 by Seller
or the term of which exceeds 30 days other than in the ordinary course of
business, and (v) enter into any contract or commitment, waive any rights, or
enter into any other transaction affecting the business of Seller other than
in the ordinary course of business and in conformity with past practices.
Without limiting the foregoing, Seller will use its best efforts to avoid any
change in its business which, if occurring prior to the date hereof, would
have been subject to disclosure pursuant to Section 5.6(i) through (ix) of
this Agreement.
7.2 MAINTAIN BUSINESS AS GOING CONCERN. Seller will use its best
efforts to preserve its business organization and keep available the services
of the present officers, employees, and agents thereof and to preserve the
goodwill of its suppliers, customers and others having business relations
therewith.
7.3 INVESTIGATION. Seller will allow Buyer and its
representatives full access to all plants, warehouses, operations, machinery,
equipment, inventories, property, offices, books, contracts, commitments,
records and affairs of Seller for the purpose of familiarizing themselves with
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the operation and conduct of all aspects of Seller's business and for the
purpose of reasonable inspection, examination, audit, counting and copying;
such access will not unreasonably interfere with the operation and conduct of
Seller's business.
7.4 PRESERVE ACCURACY OF REPRESENTATIONS AND WARRANTIES. Seller
will refrain, from taking any action which would render any representation
and/or warranty contained in Section 5 of this Agreement in any material
respect inaccurate as of the Closing Date, except for changes therein
specified in, permitted or contemplated by this Agreement.
7.5 SUPPLEMENTS TO EXHIBITS. From time to time prior to the
Closing Date, Seller will promptly supplement or amend any Exhibits provided
for in this Agreement (i) if any matter arises which, if existing or occurring
at or prior to the date of this Agreement, would have been required to be set
forth or described in any such Exhibit, or (ii) if it becomes necessary to
correct any information in any such Exhibit which has become inaccurate;
provided, however, that no such supplement or amendment to any Exhibit will be
considered in determining satisfaction of the conditions set forth in
Section 8.2.1 of this Agreement.
7.6 CERTAIN CONSENTS TO ASSIGNMENT. Seller agrees that after the
execution of this Agreement, at the request of Buyer, it will use its best
efforts to obtain consents to assignment for all contracts or agreements,
which require consent to assignment, and which are being transferred to Buyer,
whether or not Buyer has agreed to waive such consents as a condition to
Closing, including but not limited to those consents described in Exhibit 5.3.
7.7 CAPITAL IMPROVEMENTS. Prior to the Closing, Seller will use
its best efforts to purchase and install the capital improvements and
equipment described on attached Exhibit 7.7.
7.8 ENVIRONMENTAL REMEDIATION. Seller agrees at Seller's cost,
to test for and remediate the following environmental conditions in a manner
reasonably acceptable to Buyer as soon as is practicable: (i) Chlorinated
hydrocarbons and volatile organic compounds present in the soil and
groundwater of the facility operated by Seller (the "Facility"); and (ii)
Environmental contamination associated with the "Chip Shed" located on the
north wall of the Facility, including the parking lot in the vicinity of the
shed, and the waste coolant holding tank(s) and the associated bermed area.
Buyer agrees to do all things reasonably necessary to assist the
Seller in the testing and remediation described above.
8. CONDITIONS TO CLOSING
8.1 MUTUAL CONDITIONS. The respective obligations of each party
to consummate the transactions contemplated by this Agreement are subject to
the fulfillment at or prior to Closing of each of the following conditions:
8.1.1 NO SUIT. No suit, action or other proceeding or
investigation will, to the knowledge of any party hereto, be threatened or
pending before or by any governmental agency or by any third party questioning
the legality of this Agreement or the consummation of the transactions
contemplated hereby in whole or in part.
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8.1.2 CLOSING. The Closing will have occurred by September
25, 1995, or such later date as may be agreed to by Buyer and Seller in
writing.
8.1.3 SUBORDINATION AGREEMENT. Seller will have executed
and delivered to Buyer's senior lender a subordination agreement in a form
acceptable to Buyer, Seller and Buyer's senior lender.
8.1.4 SHARING AGREEMENT. Seller and Buyer will have
entered into a mutually acceptable Profit Sharing Agreement providing that (i)
Seller will immediately pay $119,000 to Buyer upon Seller's receipt from
General Motors Corporation ("GM") of the profits resulting from tooling on the
all purpose vehicle and C-K truck exhaust manifold business and (ii) Seller
and Buyer will share equally in the refund from GM relating to the SBFM
increased tooling costs.
8.2 CONDITIONS TO BUYER'S OBLIGATIONS. The obligations of Buyer
to consummate the transactions contemplated by this Agreement are subject to
the fulfillment at or prior to Closing of each of the following conditions:
8.2.1 REPRESENTATIONS AND WARRANTIES. All representations
and warranties made by Seller contained in this Agreement will be true and
correct on the date hereof and as of the Closing Date as though such
representations and warranties were made as of the Closing Date, and Seller
will have duly performed or complied with all of the obligations to be
performed or complied with by it under the terms of this Agreement on or prior
to Closing.
8.2.2 CERTIFICATE. Seller will have delivered to Buyer a
certificate dated as of the Closing Date certifying that: (i) all of the
representations and warranties made by it under this Agreement and the
attached Exhibits, and in all other documents given or delivered by or on
behalf of it to Buyer pursuant hereto, are accurate, true and complete, and
(ii) all of the covenants, obligations and conditions to be performed as of
the Closing on their part under this Agreement have been duly performed.
8.2.3 OPINION. Buyer will have received from Kilpatrick &
Cody, counsel to the Seller, an opinion of such counsel, dated the Closing
Date, in the form attached as Exhibit 8.2.3.
8.2.4 CONSENTS AND APPROVALS. All material authorizations,
consents, waivers, approvals or other action required in connection with the
execution, delivery and performance of this Agreement by Seller and the
consummation by such parties of the transactions contemplated hereby, all as
so indicated in Exhibit 5.3, will have been obtained, and Seller will have
obtained any authorizations, consents, waivers, approvals or other action
required in connection with the execution, delivery and performance of this
Agreement to prevent a material breach or default by Seller under any contract
to which Seller is a party and for the continuation of any agreement to which
Seller is a party and which relates and is material to the business of Seller.
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8.2.5 INSTRUMENTS OF ASSIGNMENT, TRANSFER AND CONVEYANCE.
Seller will have delivered to Buyer all instruments of assignment, transfer
and conveyance of the Purchased Assets, and such other Closing documents as
have been reasonably requested by Buyer, all in form and substance reasonably
acceptable to Buyer's counsel.
8.2.6 FINANCIAL STATEMENTS. Buyer will have received
financial statements of Seller for the years ended December 31, 1994, 1993 and
1992 and for the quarterly periods ended March 31, 1995 and June 30, 1995.
8.2.7 ENVIRONMENTAL MATTERS. Buyer will have received and
be satisfied, in its sole discretion, with the results of the environmental
assessment and report to be obtained by Seller pursuant to Section 7.7 above.
Buyer shall notify Seller in writing at least three days prior to Closing of
any objections it has to the contents of such report. Except as and to the
extent Seller submits such an objection to Seller in writing within the time
period specified above, Buyer shall be deemed to have found such report
satisfactory.
8.2.8 NO MATERIAL CHANGE. No material adverse change will
have occurred (whether or not covered by insurance) in the assets, financial
condition or prospects of the business of Seller.
8.2.9 INVESTIGATION. Buyer will have completed and be
satisfied, in its sole discretion, with the results of its investigation of
the operation and conduct of the business of Seller. Buyer shall notify
Seller in writing at least three days prior to Closing of any objections it
has as a result of such investigation. Except as and to the extent Seller
notifies Buyer of any objections in writing within the time period specified
above, Buyer shall be deemed to be satisfied with the results of such
investigation.
8.2.10 FINANCING. At least two days prior to Closing, Buyer
will have obtained commitments of its lenders to provide financing on terms
and conditions acceptable to Buyer, in its sole discretion, in an amount
sufficient for it to complete the transactions contemplated by this Agreement.
8.2.11 LEASE AGREEMENT. Buyer and George R. and Laura D.
Lees will have entered into a lease on such terms and conditions as are
acceptable to the parties at least three days prior to the Closing.
8.2.12 EMPLOYMENT/NON-COMPETE AGREEMENTS. At least two days
prior to Closing, Buyer will have entered into employment, consulting or
non-compete agreements with such employees of Seller as Buyer deems
appropriate, on terms and conditions satisfactory to Buyer, in its sole
discretion.
8.2.13 CAPITAL IMPROVEMENTS. Seller will have purchased and
installed the Capital Improvements and equipment described on attached Exhibit
7.7 at least three days prior to the Closing.
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8.3 CONDITIONS TO SELLER'S OBLIGATIONS. The obligations of
Seller to consummate the transactions contemplated by this Agreement are
subject to the fulfillment at or prior to the Closing on each of the following
conditions:
8.3.1 REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Buyer contained in this Agreement will be true and correct
on the date of this Agreement and as of the Closing Date as though such
representations and warranties were made as of the Closing Date, and Buyer
will have duly performed or complied with all of the obligations to be
performed or complied with by it under the terms of this Agreement on or prior
to Closing.
8.3.2 CERTIFICATE. Buyer will have delivered to Seller a
certificate of one of its duly authorized officer, dated as of the Closing
Date certifying that: (i) all of the representations and warranties made by
Buyer under this Agreement, the attached Exhibits, and in all other documents
given or delivered by Buyer to Seller pursuant hereto are accurate, true and
complete, and (ii) all of the covenants, obligations and conditions to be
performed as of the Closing on the part of Buyer under this Agreement have
been duly performed.
8.3.3 OPINION. Seller will have received from Kohrman
Jackson & Krantz, counsel to Buyer, an opinion of such counsel, dated the
Closing Date, in the form attached as Exhibit 8.3.3.
8.3.4 APPROVALS. All material authorizations or approvals
or other action required in connection with the execution, delivery and
performance of this Agreement by Buyer, and the consummation by Buyer of the
transactions contemplated hereby, all as so indicated in Section 6.3 and any
related Exhibit 6.3, will have been obtained.
8.3.5 SUBORDINATED NOTE. Buyer shall have delivered to
Seller the Note, which shall have been duly executed by the President of
Buyer.
8.3.6 LEASE AGREEMENT. At least two days prior to Closing,
Buyer shall have notified Seller in writing either that it is satisfied with
the lease for the premises at which Seller currently conducts its business, or
that Buyer and the landlord with respect to such premises have made
arrangements satisfactory to Buyer to amend such lease and for the lease to be
assumed by Buyer.
8.3.7 COMPUTER SUPPORT TRANSITION SERVICES. Buyer and
Intermotive shall have entered into an agreement, in a form agreed to by Buyer
and Intermotive, to provide that for consideration of $500 per month Buyer
shall provide computer support services to Intermotive for up to twelve months
from the Closing Date.
9. TERMINATION
9.1 Termination of Agreement. This Agreement and the
transactions contemplated hereby may be terminated at any time prior to
Closing, as follows:
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9.1.1 MUTUAL CONSENT. By mutual consent of all of the
parties hereto.
9.1.2 BREACH. By Buyer or by Seller by reason of the
breach by the other in any material respect of any of its representations,
warranties, covenants or agreements contained in this Agreement.
9.1.3 RESPECTIVE CONDITIONS. By Buyer or by Seller if the
conditions precedent to their respective obligations contained in Sections 8.2
or 8.3 have not been met in all material respects through no fault of the
terminating party.
9.1.4 MUTUAL CONDITIONS. By Buyer or by Seller if any of
the conditions described in Section 8.1 have not been fulfilled through no
fault of the terminating party.
10. INDEMNIFICATION
10.1 INDEMNIFICATION OF BUYER. Seller, Intermet and Machining,
jointly and severally, covenant and agree with Buyer that they will reimburse,
indemnify and hold harmless Buyer from, against and in respect of the
following:
(a) any and all damage, loss, liability, costs and expenses
(collectively, "Losses"), incurred by Buyer to the extent that the Losses are
in excess of $50,000 in the aggregate and (i) result from, or exist or arise
due to, any untruth, inaccuracy, breach or omission of, from or in, the
representations and warranties made to Buyer herein; or (ii) any
nonfulfillment of any covenant or agreement of Seller, Intermet or Machining
under this Agreement; or from any untruth, inaccuracy, breach or omission of,
from or in, any representation or warranty; or (iii) any nonfulfillment of any
covenant or agreement made by Seller, Intermet or Machining in the Exhibits or
any other written statement, list, certificate or other instrument furnished
to Buyer by or on behalf of Seller, Intermet or Machining pursuant to this
Agreement; or (iv) any liabilities and obligations of Seller that are not
Assumed Liabilities; and
(b) any fees, expenses or other payments incurred or owed by
Seller, Intermet or Machining to any brokers or comparable third parties
retained or employed by it in connection with the transactions contemplated by
the Agreement;
(c) the failure to comply with statutory provisions relating to
bulk sales and transfers, if applicable;
(d) any severance benefits payable to Seller's employees by
reason of the consummation of the transaction contemplated by this Agreement;
(e) any claim relating to the operation of the business of Seller
on or prior to the Closing Date;
(f) any claim made by a third party alleging facts which, if
true, would entitle Buyer to indemnification pursuant to the above; and
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(g) any and all actions, suits, claims, proceedings,
investigations, audits, demands, assessments, fines, judgments, costs and
other expenses (including, without limitation, reasonable audit and legal
fees) incurred by Buyer resulting from the circumstances described in
paragraph 10.1(a) through (f) above.
(h) Seller, Intermet and Machining will not jointly or severally
be liable for more than (i) $5,400,000, plus (ii) the amount of principal
paid on the Note at the time indemnification is paid, plus (iii) any Losses
resulting from environmental conditions of which Seller, Intermet or Machining
has knowledge, including, without limitation, all environmental matters
disclosed on Exhibit 5.19 and in any reports referenced therein, plus (iv) any
Losses resulting from fraud committed by Seller, Intermet or Machining.
(i) If Seller, Intermet or Machining is required to indemnify
Buyer pursuant to this Section 10.1, then either Seller, Intermet and
Machining or Buyer may elect to set off the amount of indemnification sought
against the amount of principal due on the Note within six months of the date
that indemnification is sought by giving written notice to the other parties.
10.2 INDEMNIFICATION OF SELLER. Buyer covenants and agrees with
Seller, Intermet or Machining that it will reimburse, indemnify and hold
harmless Seller, Intermet and Machining from, against and in respect of the
following:
(a) any and all Losses incurred by Seller, Intermet or Machining
to the extent that the Losses are in excess of $50,000 in the aggregate
(unless such Losses result from Buyer's breach of the terms of the Note) and
result from, or exist or arise due to, any untruth, inaccuracy, breach or
omission of, from or in, the representations and warranties made to Seller,
Intermet or Machining herein; or any nonfulfillment of any covenant or
agreement of Buyer under this Agreement; or any liabilities and obligations of
Seller that are Assumed Liabilities;
(b) any fees, expenses or other payments incurred or owed by
Buyer to any brokers or comparable third parties retained or employed by it in
connection with the transactions contemplated by the Agreement;
(c) any claim relating to the operation of the business of Seller
after the Closing Date;
(d) any claim made by a third party alleging facts which, if
true, would entitle Seller to indemnification pursuant to the above; and
(e) any and all actions, suits, claims, proceedings,
investigations, audits, demands, assessments, fines, judgments, costs and
other expenses (including, without limitation, reasonable audit and legal
fees) incurred by Seller resulting from the circumstances described in
paragraph 10.2(a) through (d) above.
10.3 METHOD OF ASSERTING CLAIMS. The party seeking
indemnification ("Indemnitee") will give prompt written notice to the party
from whom indemnification is being sought ("Indemnitor") of any claim
("Claim") which it discovers or of which it receives notice after the Closing
and which might give rise to a Claim by it against Indemnitor under Section
10, stating the nature, basis and (to the extent known) amount thereof;
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<PAGE>
provided that failure to give prompt notice will not jeopardize Indemnitee s
right to indemnification unless such failure materially prejudices the ability
of Indemnitee to defend the Claim.
In case of any Claim or suit by a third party or by any governmental
body, or any legal, administrative or arbitration proceeding with respect to
which Indemnitor may have liability under the indemnity agreement contained in
this Section 10, Indemnitor will be entitled to participate therein, and, to
the extent desired by Indemnitor, to assume the defense thereof. The parties
will render to each other such assistance as may reasonably be required of
each other at Indemnitor's expense in order to insure proper and adequate
defense of any such suit, Claim or proceeding. If Indemnitor actually assumes
the defense of Indemnitee, Indemnitee will not make any settlement of any
Claim which might give rise to liability of Indemnitor under the indemnity
agreements contained in this Section 10 or otherwise without the written
consent of Indemnitor, which consent will not be unreasonably withheld; and
Indemnitor will not agree to a compromise or settlement of any such suit,
Claim or proceeding that would require the payment of any amounts by
Indemnitee, or would affect the manner in which Buyer may conduct the business
of Seller, without the written consent of Buyer.
11. OTHER AGREEMENTS
11.1 NONCOMPETE, CONFIDENTIALITY AND NONSOLICITATION.
(a) For a period ending three years after the Closing Date,
Seller, Intermet, Machining and their respective affiliates will not, without
the prior written consent of Buyer, directly or indirectly as an owner,
consultant, manager, associate, partner, agent or otherwise, or by means of
any corporate or other device, solicit, quote or engage in the business of the
machining of (i) the products currently produced or scheduled to be produced
by Seller, identified by part number of Exhibit 11.1, (ii) any new products
which replace any of those products listed on Exhibit 11.1, whether due to
obsolescence or otherwise, or (iii) any intake or exhaust engine manifolds to
be used by any of Seller's customers as of the date of this Agreement;
provided however that if Seller, Interment or Machining or any of their
affiliates acquire substantially all of the assets or a controlling interest
in any then-existing business engaged in machining (the "Acquired
Business") (whether through merger, consolidation, asset lease or acquisition
or otherwise), the Acquired Business shall not be subject to the provisions of
Section 11.1(a)(iii) hereof if the Acquired Business, prior to its acquisition
by Seller, Intermet, Machining or their affiliates, was engaged in machining
that would have been prohibited by this Section 11.1.
(b) For a period ending three years after the Closing Date,
Seller, Intermet or Machining or their affiliates will not solicit for
employment any employee of Seller who continued employment with Buyer after
the Closing Date.
(c) Seller, Intermet and Machining further acknowledge that they
have had access to confidential information of Seller. Seller, Intermet and
Machining each covenant and agree that they will not use for its own behalf or
divulge to any third party any confidential information or trade secrets of
Seller. As used herein, confidential information will consist of all
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information, knowledge or data relating to Seller (including without limit all
information relating to Seller, production methods, customer and prospective
customer lists, prices and trade practices) which is not in the public domain
or otherwise published or publicly available. Seller, Intermet and Machining
agree to deliver to Buyer at the Closing all material (and all copies thereof)
which contains or relates to confidential information.
(c) Seller, Intermet and Machining acknowledge that the
restrictions contained in this Section 11.1 are reasonable and necessary to
protect the legitimate interests of Buyer, do not cause Seller, Intermet or
Machining undue hardship, and that any violations of any provision of this
Section 11.1 will result in irreparable injury to Buyer and that, therefore,
Buyer is entitled to preliminary and permanent injunctive relief in any court
of competent jurisdiction and to an equitable accounting of all earnings,
profits and other benefits arising from such violation, which rights will be
cumulative and in addition to any other rights or remedies to which Buyer may
be entitled.
11.2 COMPLIANCE WITH BULK SALES LAW. Seller and Buyer hereby
waive compliance with their respective obligations under applicable bulk sales
laws of any state or jurisdiction in which compliance may be required.
11.3 EMPLOYEES. Except for employees subject to the Collective
Bargaining Agreement described on Exhibit 5.15, Buyer will have the right, but
be under no obligation, to offer employment as employees-at-will to any or all
of Seller's employees, provided that Seller will remain responsible for all
wages and benefits payable to such employees for services prior to Closing,
including but not limited to, all wages, severance pay, vacation pay and other
employee benefits.
12. GENERAL PROVISIONS
The parties further covenant and agree as follows:
12.1 WAIVER OF TERMS. Any of the terms or conditions of this
Agreement may be waived at any time by the party or parties entitled to the
benefit thereof but only by a written notice signed by the party or parties
waiving such terms or conditions.
12.2 AMENDMENT OF AGREEMENT. This Agreement may be amended,
supplemented or interpreted at any time only by written instrument duly
executed by each of the parties hereto.
12.3 PAYMENT OF EXPENSES. The parties will each pay its or their
own expenses, including, without limitation, the expenses of its or their own
counsel, investment bankers and accountants, incurred in connection with the
preparation, execution and delivery of this Agreement and the other agreements
and documents referred to herein and the consummation of the transactions
contemplated hereby and thereby; provided, however, that Buyer shall reimburse
Seller at Closing for the costs and expenses incurred by Seller in preparing
the environmental report and asset appraisals prepared at Buyer's request.
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All expenses of the parties in enforcing any of the provisions of this
Agreement and the other agreements and documents referred to herein, including
reasonable attorneys' fees, will be borne as determined by the court or
arbitrator deciding any dispute under this Agreement in accordance with their
determination of what is fair and equitable under the circumstances.
12.4 CONTENTS OF AGREEMENT, PARTIES IN INTEREST, ASSIGNMENT. This
Agreement and the other agreements and documents referred to herein set forth
the entire understanding of the parties with respect to the subject matter
hereof. Any previous agreements or understandings between the parties
regarding the subject matter hereof are merged into and superseded by this
Agreement. All representations, warranties, covenants, terms and conditions
of this Agreement and the documents contemplated hereby will be binding upon
and inure to the benefit of and be enforceable by the respective heirs, legal
representatives, successors and permitted assigns of the parties hereto;
provided, however, that none of the rights or obligations of any of the
parties hereto may be assigned without the prior written consent of the other
party hereto, which consent will not unreasonably be withheld; provided,
however, that Seller may arbitrarily withhold such consent so long as the Note
is outstanding.
12.5 SURVIVAL. The representations and warranties made by the
parties in Sections 1.5 and 5, other than 5.7, 5.8, 5.16, and 5.19, and 6
above will survive the Closing for a period of 18 months at which time they
will expire except for claims previously made with respect to breaches of such
representations and warranties. Notwithstanding anything in this Article 12
to the contrary, the representations and warranties of Seller contained in
Section 5.19 shall survive the Closing for a period of three years, and those
contained in Sections 5.7, 5.8 and 5.16 shall survive until the expiration of
the applicable statute of limitations.
12.6 NOTICES. All notices, requests, demands and other
communications required or permitted to be given hereunder will be by
hand-delivery, certified or registered mail, return receipt requested;
telecopier, or overnight courier to the parties set forth below. Such notices
will be deemed given at the time personally delivered, if delivered by hand or
by courier; at the time received if sent certified or registered mail; and
when sent if telecopied.
If to Seller: c/o Intermet Corporation Copy to: Kilpatrick & Cody
2589 Paces Ferry Road, N.W. 1100 Peachtree Street
Atlanta, Georgia 30339-5744 Ste. 2800
Atlanta, Georgia 30309-4530
Attn: John Doddrige Telecopier (404) 815-6555
Attn: Rupert M. Barkoff, Esq.
If to Buyer: c/o Edgewater Group Copy to: Kohrman Jackson & Krantz
One Cleveland Center, One Cleveland Center
20th Floor 20th Floor
Cleveland, Ohio 44114 Cleveland, Ohio 44114
Telecopier (216) 621-6536 Telecopier (216) 621-6536
Attn: Christopher Childres Attn: Robert H. Jackson, Esq.
12.7 COMMISSIONS AND FINDER'S FEES. Buyer and Seller represent
and warrant that they have not retained or used the services of any
individual, firm or corporation in such a manner as to entitle such
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individual, firm or corporation to any compensation for brokers or finders
fees with respect to the transactions contemplated hereby for which the other
would be liable.
12.8 SEVERABILITY. In the event that any one or more of the
provisions contained in this Agreement is invalid, illegal or unenforceable in
any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and of the remaining provisions of this
Agreement will not be in any way impaired.
12.9 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
12.10 HEADINGS. The headings of the Sections and the subsections
of this Agreement are inserted for convenience of reference only and do not
constitute a part hereof.
12.11 GOVERNING LAW: JURISDICTION. This Agreement will be
governed, construed and enforced in accordance with the internal laws of the
State of Ohio, excluding any choice of law rules which may direct the
application of the laws of another jurisdiction.
12.12 INSTRUMENTS OF FURTHER ASSURANCE. Each of the parties hereto
agrees, upon the request of any of the other parties, from time to time to
execute and deliver to such other party or parties all such instruments and
documents of further assurance or otherwise as are reasonable under the
circumstances, and to do any and all such acts and things as may reasonably be
required to carry out the obligations of such requested party hereunder.
12.13 PUBLICITY. No notices to third parties or other publicity,
including press releases, concerning any of the transactions provided for
herein will be made by any party hereto unless planned and coordinated jointly
among the parties, except to the extent otherwise in the opinion of counsel
for either party required by law.
12.14 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement is
intended nor will it be construed to give any person, firm, corporation or
other entity, other than the parties hereto and their respective successors
and permitted assigns, any right, remedy or claim under or in respect of this
Agreement or any provisions hereof.
12.15 COOPERATION REGARDING TAX MATTERS. Buyer agrees that it
shall make the books, records, accounts and properties which Seller has hereby
conveyed to Buyer available to Seller, Machining or Intermet, or any of their
affiliates, as may be reasonably necessary in order for Seller, Machining,
Intermet or their affiliates to prepare their respective financial statements,
to prepare tax returns or defend any tax disputes that may arise involving any
of them, to defend or prosecute any other claims any one or more of them may
have, or as may be otherwise reasonably needed by any of them for valid
business purposes, and shall render such assistance as Seller, Machining and
Intermet or any of their affiliates may require with respect to any of the
foregoing.
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12.16.1 DISPUTES TO BE ARBITRATED. 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
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.
12.16.2 ENTRY OF JUDGMENT. 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.
12.16.3 PROCEDURES. The arbitration provisions of this
Section 12.16 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.
12.16.4 EXCEPTED DISPUTES. 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.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties as of the date first written above.
INTERMET CORPORATION
/s/ Daryl R. Marsh
___________________________________________
By Daryl R. Marsh, Vice President-Machining
Services
INTERMET MACHINING, INC.
/s/ Daryl R. Marsh
_________________________________________________
By Daryl R. Marsh, Vice President
PBM INDUSTRIES, INC.
/s/ Daryl R. Marsh
________________________________________________
By Daryl R. Marsh, Vice President
PBM ACQUISITION LIMITED
/s/ Michael Helm
________________________________________________
By Michael Helm, President
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EXHIBIT 2.1
TERMS OF THE NOTE
Buyer"s Note to Seller (the "Note") will have the following terms:
1. The principal amount of the Note will be equal to the dollar
amount of the 1995 capital expenditure requirements of the all purpose vehicle
and/or C-K truck exhaust manifolds business financed by Seller after March 31,
1995, less any monies reimbursed Seller by General Motors for such capital
expenditures. However, the principal amount of the Note will not exceed
$2,500,000.
2. The Note will bear interest at the prime rate published in
THE WALL STREET JOURNAL plus one percentage point, payable and adjusted
quarterly.
3. The term of the Note will be five years, the principal
amortization of the Note will be as follows: year one--0%; year two--10%,
year three--25%; year four--30%, year five--35%.
4. The Note will be assignable to an unrelated third party.
5. The Note will contain other terms and restrictions reasonable
to Seller and Buyer which are customary in a subordinated note, including
appropriate financial covenant.<PAGE>
<PAGE>
AMENDMENT TO ASSET PURCHASE AGREEMENT
This Amendment (this "Amendment") dated as of September 19, 1995 to
the Asset Purchase Agreement (the "Agreement") dated as of September 6, 1995,
is made by and among Intermet Corporation, a Georgia corporation, Intermet
Machining, Inc., a Georgia corporation and wholly-owned subsidiary of
Intermet, PBM Industries, Inc., a Delaware corporation and wholly-owned
subsidiary of Machining, and PBM Acquisition Limited, an Ohio limited
liability company.
WHEREAS, the parties desire to extend the "Closing Date," as defined
the Agreement.
NOW, THEREFORE, the parties agree as follows:
The "Closing Date," as defined in Section 4.1 of the Agreement, is
hereby extended from September 25, 1995 to September 30, 1995, and the date
September 25, 1995 in Section 8.1.2 of the Agreement is replaced with
September 30, 1995. All other terms of the Agreement remain unchanged
in full force and effect. Each of the parties agrees to use its best
efforts to close the transactions contemplated by the Agreement on or
before the Closing Date as extended by this Amendment.
IN WITNESS WHEREOF, this Amendment has been duly executed by the
parties as of the date first written above.
INTERMET CORPORATION
/s/ Daryl R. Marsh
_________________________________________
By Daryl R. Marsh, Vice President-Machining
Services
INTERMET MACHINING, INC.
/s/ Daryl R. Marsh
__________________________________________
By Daryl R. Marsh, Vice President
PBM INDUSTRIES, INC.
/s/ Daryl R. Marsh
__________________________________________
By Daryl R. Marsh, Vice President
PBM ACQUISITION LIMITED
/s/ Michael Helm
__________________________________________
By Michael Helm, President<PAGE>
<PAGE>
AMENDMENT NUMBER TWO
TO ASSET PURCHASE AGREEMENT
This Amendment Number Two (this "Amendment") dated as of September 29,
1995 to the Asset Purchase Agreement dated as of September 6, 1995, as amended
(the "Agreement"), is made by and among Intermet Corporation, a Georgia
corporation, Intermet Machining, Inc., a Georgia corporation and wholly-owned
subsidiary of Intermet, PBM Industries, Inc., a Delaware corporation and
wholly-owned subsidiary of Machining, and PBM Acquisition Limited, an Ohio
limited liability company.
WHEREAS, the parties desire to extend the "Closing Date," as defined
the Agreement, and make certain other changes to terms of the Agreement.
NOW, THEREFORE, the parties agree as follows:
1. CLOSING DATE. The "Closing Date," as defined in Section 4.1
of the Agreement, is hereby extended from September 30, 1995 to October 4,
1995, and the date September 30, 1995 in Section 8.1.2 of the Agreement is
replaced with October 4, 1995.
2. PLEDGE AND GUARANTY. The language ". . . secured by a Pledge
Agreement pledging the outstanding membership interests of Buyer and an
Exculpated Guaranty Agreement of each member of Buyer each in a form agreed to
by Buyer and Seller . . ." contained in Section 2.1(ii) of the Agreement is
hereby replaced with ". . . secured by a Security Agreement granting a
subordinated security interest in the assets of Buyer in a form agreed to by
Buyer and Seller . . . ."
3. OTHER TERMS. All other terms of the Agreement remain
unchanged in full force and effect. Each of the parties agrees to use its
best efforts to close the transactions contemplated by the Agreement on or
before the Closing Date as extended by this Amendment.
IN WITNESS WHEREOF, this Amendment has been duly executed by the
parties as of the date first written above.
INTERMET CORPORATION
/s/ Daryl R. Marsh
__________________________________________
By Daryl R. Marsh, Vice President-Machining
Services
INTERMET MACHINING, INC.
/s/ Daryl R. Marsh
__________________________________________
By Daryl R. Marsh, Vice President
PBM INDUSTRIES, INC.
/s/ Daryl R. Marsh
__________________________________________
By Daryl R. Marsh, Vice President
PBM ACQUISITION LIMITED
/s/ Michael Helm
__________________________________________
By Michael Helm, President<PAGE>
<PAGE>
AMENDMENT NUMBER THREE
TO ASSET PURCHASE AGREEMENT
This Amendment Number Three (this "Amendment") dated as of October 4,
1995 to the Asset Purchase Agreement dated as of September 6, 1995, as amended
(the "Agreement"), is made by and among Intermet Corporation, a Georgia
corporation, Intermet Machining, Inc., a Georgia corporation and wholly-owned
subsidiary of Intermet, PBM Industries, Inc., a Delaware corporation and
wholly-owned subsidiary of Machining, and PBM Acquisition Limited, an Ohio
limited liability company.
WHEREAS, the parties desire to extend the "Closing Date," as defined
the Agreement, and make certain other changes to terms of the Agreement.
NOW, THEREFORE, the parties agree as follows:
1. CLOSING DATE. The "Closing Date," as defined in Section 4.1
of the Agreement, is extended from October 4, 1995 to October 6, 1995, and the
date October 4, 1995 in Section 8.1.2 of the Agreement is replaced with
October 6, 1995.
2. EFFECTIVE DATE. The language ". . . the Closing Date" in
Section 4.2 is replaced with ". . . as of September 30, 1995."
3. PURCHASED ASSETS. The language "...during the fiscal year
ended December 31, 1994" contained in the first sentence of the second
paragraph of Section 5.8 is replaced with "on the Closing Date."
4. SURVIVAL OF INDEMNIFICATION. The following sentence is added
to the end of Section 12.5 "The indemnification provided for in Section 10 of
this Agreement shall survive the Closing."
5. PURCHASE PRICE. In Section 2.1, $5,400,000 is replaced with
$5,320,000.
6. PURCHASE PRICE ADJUSTMENT. The following language is added
to the end of the first sentence of the second paragraph of Section 2.3.3 ";
provided, however, that if the Purchase Price Adjustment is determined prior
to December 31, 1995, the Purchase Price Adjustment shall be paid on or before
December 31, 1995."
7. OTHER TERMS. All other terms of the Agreement remain
unchanged in full force and effect. Each of the parties agrees to use its
best efforts to close the transactions contemplated by the Agreement on or
before the Closing Date as extended by this Amendment.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, this Amendment has been duly executed by the
parties as of the date first written above.
PBM INDUSTRIES, INC. INTERMET CORPORATION
/s/ Daryl R. Marsh /s/ Daryl R. Marsh
________________________________ ____________________________________
By Daryl R. Marsh, Vice President By Daryl R. Marsh,
Vice President Machining Services
PBM ACQUISITION LIMITED INTERMET MACHINING, INC.
/s/ Michael Helm /s/ Daryl R. Marsh
_________________________________ ____________________________________
By Michael Helm, President By Daryl R. Marsh, Vice President<PAGE>
