<PAGE>
===========================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 17, 1998
THE COLONEL'S INTERNATIONAL, INC.
(Exact name of registrant as specified in charter)
MICHIGAN 2-98277C 38-3262264
(State or other jurisdic- (Commission (IRS Employer
tion of incorporation) File Number) Identification No.)
620 SOUTH PLATT ROAD
MILAN, MICHIGAN 48160
(Address of principal executive offices) (Zip Code)
(734) 439-4200
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
===========================================================================
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On December 17, 1998, The Colonel's, Inc. ("Seller"), a wholly
owned subsidiary of The Colonel's International, Inc. (the "Company"),
completed the sale (the "Sale") of substantially all of Seller's assets
used in the business of manufacturing and selling plastic replacement
bumpers, facias and related parts. The buyer ("Buyer") was AutoLign
Manufacturing Group, Inc. (formerly known as Colonel's Acquisition Corp.),
a newly formed Delaware corporation affiliated with an investor group led
by Philip B. Storm.
The Sale was conducted pursuant to an Amended and Restated Asset
Purchase Agreement dated November 23, 1998, as amended by a First Amendment
to Amended and Restated Asset Purchase Agreement dated December 17, 1998
(collectively, the "Asset Purchase Agreement"). The Sale and the other
transactions contemplated by the Asset Purchase Agreement were approved by
the Company's shareholders at a special meeting held on December 17, 1998
at the Company's headquarters.
Pursuant to the Asset Purchase Agreement, the purchase price for
the assets was $38,000,000. In addition, at the closing of the Sale Buyer
assumed approximately $712,000 of accounts payable and certain of Seller's
other obligations. Under the terms of the Asset Purchase Agreement,
$250,000 of the purchase price was deposited in escrow for the purpose of
satisfying certain environmental investigation and potential cleanup
obligations of Seller following the closing. The purchase price and the
other terms of the Asset Purchase Agreement were arrived at pursuant to
negotiations between the Company and Buyer.
In connection with the Sale, Buyer and 620 Platt Road, L.L.C.
(the "Property Seller") consummated the sale of the facility located at 620
South Platt Road, Milan, Michigan (the "Milan Property"), which was leased
by Seller from the Property Seller. The Property Seller is a Michigan
limited liability company owned by Donald J. Williamson, the Company's
Chairman of the Board and Chief Executive Officer and a major shareholder
of the Company, and his wife, Patsy L. Williamson. The purchase price
for the Milan Property was approximately $12 million.
Also in connection with the Sale, Gary Moore, the Secretary of
Seller and the Company and Seller's head of Customer Relations, Terry
Sheir, Seller's Sales Manager, and Ludwig Rupff, Seller's Plant Manager
became employees of Buyer.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION, AND
EXHIBITS.
(a) Not required.
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<PAGE>
(b) PRO FORMA financial statements relating to the Sale are set forth
in Appendix A to this Report on Form 8-K and are here incorporated by
reference.
(c) Exhibits:
2(a) Amended and Restated Asset Purchase Agreement by and
between Colonel's Acquisition Corp., The Colonel's
International, Inc., The Colonel's, Inc. and Donald J.
Williamson dated November 23, 1998. Incorporated by
reference to Appendix A to the Company's Definitive
Proxy Statement filed with the Securities and Exchange
Commission on December 7, 1998.
2(b) First Amendment to Amended and Restated Asset Purchase
Agreement by and between AutoLign Manufacturing Group,
Inc. (formerly known as Colonel's Acquisition Corp.),
The Colonel's International, The Colonel's, Inc. and
Donald J. Williamson dated December 17, 1998.
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 thereunto duly authorized.
Dated: December 30, 1998 THE COLONEL'S INTERNATIONAL, INC.
By /S/RICHARD S. SCHOENFELDT
Richard S. Schoenfeldt
Vice President-Finance and Chief
Financial Officer
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APPENDIX A
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma financial statements are based upon
the historical financial statements of the Company. The unaudited pro
forma balance sheet has been prepared to give effect to the Sale, as though
it had been consummated on September 30, 1998. The unaudited pro forma
statements of operations give effect to the Sale and the use of the Sale
proceeds as though the Sale had been consummated as of the beginning of the
earliest period presented.
The unaudited pro forma financial statements do not purport to be
indicative of the results that would have been obtained had the Sale
described above occurred as of the assumed dates. In addition, the pro
forma statements of operations do not purport to reflect the actual results
that would have been achieved had the Sale been consummated on January 1,
1998 and 1997 or project the Company's results of operations for any future
period.
The unaudited pro forma financial statements should be read in
conjunction with the consolidated financial statements of the Company and
the notes thereto contained in the Company's previous filings with the
Securities and Exchange Commission.
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<PAGE>
<TABLE>
THE COLONEL'S INTERNATIONAL, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
SEPTEMBER 30, 1998
<CAPTION>
PRO FORMA
THE COLONEL'S PRO FORMA CONSOLIDATED
INTERNATIONAL, INC. ADJUSTMENTS SEPTEMBER 30, 1998
------------------- ----------- ------------------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 1,300,241 $ 37,040,000 <Fa> $
(16,428,110) <Fb> 21,912,131
Accounts Receivable - Net of allowance for
doubtful amounts 6,840,629 (2,528,392) <Fa> 4,312,237
Inventories 13,795,542 (5,501,763) <Fa> 8,293,779
Note Receivable - Related Party 200,000 0 200,000
Prepaid Expenses and Other Assets 1,596,414 (584,722) <Fa> 1,011,692
----------- ------------ -----------
23,732,826 11,997,013 35,729,839
NON-CURRENT ASSETS:
Property, Plant and equipment - Net 29,281,569 (13,182,638) <Fa> 16,098,931
----------- ------------ -----------
29,281,569 (13,182,638) 16,098,931
OTHER ASSETS:
Note Receivable - Related Party 746,315 0 746,315
Long-Term Portion of Deferred Compensation 228,176 0 228,176
Deposits 1,360,359 (729,410) <Fa> 630,949
Goodwill 3,152,403 0 3,152,403
Other 1,007,583 250,000 <Fc> 1,257,583
----------- ------------ -----------
6,494,836 (479,410) 6,015,426
TOTAL ASSETS $59,509,231 $ (1,655,035) $57,844,196
=========== ============ ===========
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<PAGE>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes Payable $ 6,450,132 $ (6,350,132) <Fb> $ 100,000
Current Portion of Long-Term Obligations 2,069,598 (547,638) <Fb> 1,521,960
Accounts Payable - Trade 4,500,910 (1,260,000) <Fa> 3,240,910
Accrued Expenses 1,394,296 345,000 <Fa> 1,739,296
Income Taxes Payable - Related to Sale 0 8,472,000 <Fa> 8,472,000
Income Taxes Payable 1,422,514 0 1,422,514
----------- ------------ -----------
15,837,450 659,230 16,496,680
NON-CURRENT LIABILITIES:
Long Term Obligations, Net of Current Portion 13,820,785 (9,530,340) <Fb> 4,290,445
Long-Term Portion of Deferred Compensation 228,176 0 228,176
Deferred Taxes - Long Term 4,655,644 (3,115,000) <Fa> 1,540,644
----------- ------------ -----------
18,704,605 (12,645,340) 6,059,265
STOCKHOLDERS' EQUITY:
Common Stock: 35,000,000 shares authorized at $.01
par value, 24,631,832 shares issued and outstanding, 246,318 0 246,318
Additional Paid-in Capital 9,230,912 0 9,230,912
Gain on Sale of Assets 0 10,321,075 <Fa> 10,321,075
Retained Earnings 15,489,946 0 15,489,946
----------- ------------ -----------
24,967,176 10,321,075 35,288,251
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $59,509,231 $ (1,665,035) $57,844,196
=========== ============ ===========
</TABLE>
See accompanying notes to pro forma condensed consolidated balance sheet.
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<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(a) To reflect the Sale, for an estimated net cash
consideration of $37,290,000 ($38,000,000 less estimated
expenses related to the transaction) and a resulting pretax
gain of $16,399,000.
<TABLE>
<CAPTION>
AMOUNT
------
(000)
<S> <C> <C>
Aggregate cash consideration, net of estimated fees and expenses $37,290
TOTAL CONSIDERATION $37,290
=======
CARRYING VALUE OF ASSETS SOLD AND LIABILITIES ASSUMED
Receivables 2,528
Inventories 5,502
Prepaid expenses 209
Deposits 729
Net property, plant and equipment 13,183
Accounts payable and accrued liabilities (1,260)
-------
NET ASSETS SOLD 20,891
-------
PRE-TAX GAIN 16,399
-------
Income Tax expense:
Current Income taxes 8,472
Deferred income taxes (2,739)
-------
5,733
Michigan Single Business Tax 345
-------
Total tax expense 6,078
NET OF TAX GAIN $10,321
=======
</TABLE>
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<PAGE>
(b) To reflect the repayment of borrowings of the Company
($16,428,110 consisting of $6,897,770 classified as current
and $9,530,340 classified as non-current).
(c) To reflect escrow deposit for the purpose of satisfying
certain environmental investigation and potential cleanup
obligations of Seller following the closing.
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<PAGE>
<TABLE>
THE COLONEL'S INTERNATIONAL, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
SEPTEMBER 30, 1998
<CAPTION>
PRO FORMA
THE COLONEL'S PRO FORMA CONSOLIDATED
INTERNATIONAL, INC. ADJUSTMENTS SEPTEMBER 30, 1998
------------------- ----------- ------------------
<S> <C> <C> <C>
Sales $43,333,927 $(21,473,232) <Fa> $21,860,695
Cost of Sales 31,033,227 (14,878,241) <Fa> 16,154,986
----------- ------------ -----------
Gross Profit 12,300,700 (6,594,991) 5,705,709
Selling, General and Administrative
Expenses 7,235,955 (2,146,824) <Fa> 5,089,131
----------- ------------ -----------
Income from Operations 5,064,745 (4,448,167) 616,578
Other Income (Expense)
Interest Expense (1,391,391) 1,033,963 <Fb> (357,428)
Interest Income 61,281 61,281
Rental Income 55,000 55,000
Other (16,537) (8,654) <Fa> (25,191)
----------- ------------ -----------
Net Other Expenses (1,291,647) 1,025,309 (266,338)
Net Income (Loss) Before Taxes 3,773,098 (3,422,858) 350,240
Provision for Income Taxes (Benefit) 1,287,381 (1,287,381) - <Fc>
----------- ------------ -----------
Net Income (Loss) from Continuing
Operations $ 2,485,717 $ (2,135,477) $ 350,240
=========== ============ ===========
Basic and Diluted Earnings Per Share $ 0.10 $ 0.01
=========== ===========
Weighted Average Shares Outstanding 24,355,904 24,355,904
=========== ===========
</TABLE>
See accompanying notes to pro forma condensed consolidated statements
of operations.
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<PAGE>
<TABLE>
THE COLONEL'S INTERNATIONAL, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
DECEMBER 31, 1997
<CAPTION>
PRO FORMA
THE COLONEL'S PRO FORMA CONSOLIDATED
INTERNATIONAL, INC. ADJUSTMENTS DECEMBER 31, 1997
------------------- ----------- -----------------
<S> <C> <C> <C>
Sales $46,350,114 $(34,577,872) <Fa> $11,772,242
Cost of Sales 33,245,888 (23,695,704) <Fa> 9,550,184
----------- ------------ -----------
Gross Profit 13,104,226 (10,882,168) 2,222,058
Selling, General and Administrative
Expenses 6,790,311 (3,060,158) <Fa> 3,730,153
----------- ------------ -----------
Income from Operations 6,313,915 (7,822,010) (1,508,095)
Other Income (Expense)
Interest Expense (1,299,488) 753,968 <Fb> (545,520)
Interest Income 170,101 (158,050) <Fa> 12,051
Rental Income 65,000 65,000
Other 105,231 (108,980) <Fa> (3,749)
----------- ------------ -----------
Net Other Expenses (959,156) 486,938 (472,218)
Net Income (Loss) Before Taxes 5,354,759 (7,335,072) (1,980,313)
Provision for Income Taxes (Benefit) 1,946,000 (1,946,000) - <Fc>
----------- ------------ -----------
Net Income (Loss) from Continuing
Operations $ 3,408,759 $ (5,389,072) $(1,980,313)
=========== ============ ===========
Basic and Diluted Earnings
(Loss) Per Share $ 0.14 $ (0.08)
=========== ===========
Weighted Average Shares Outstanding 24,177,805 24,177,805
=========== ===========
</TABLE>
See accompanying notes to pro forma condensed consolidated statements
of operations.
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<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(a) To give effect to the Sale and remove results of operations.
(b) To give effect to the elimination of interest expense attributable
to the repayment of current and long-term debt from the proceeds
on the Sale.
(c) The tax effects of the pro forma net operating loss carryforward
have not been reflected as an income tax benefit due to the
uncertainty of future realization.
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<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DOCUMENT
- ------ --------
2(a) Amended and Restated Asset Purchase Agreement by and
between Colonel's Acquisition Corp., The Colonel's
International, Inc., The Colonel's, Inc. and Donald J.
Williamson dated November 23, 1998. Incorporated by
reference to Appendix A to the Company's Definitive
Proxy Statement filed with the Securities and Exchange
Commission on December 7, 1998.
2(b) First Amendment to Amended and Restated Asset Purchase
Agreement by and between AutoLign Manufacturing Group,
Inc. (formerly known as Colonel's Acquisition Corp.),
The Colonel's International, The Colonel's, Inc. and
Donald J. Williamson dated December 17, 1998.
<PAGE>
EXHIBIT 2(b)
FIRST AMENDMENT TO
AMENDED AND RESTATED ASSET PURCHASE AGREEMENT
THIS First Amendment to Amended and Restated Asset Purchase Agreement
is made on December 17, 1998, by and among AUTOLIGN MANUFACTURING GROUP,
INC. (f/k/a COLONEL'S ACQUISITION CORP.), THE COLONEL'S, INC., THE
COLONEL'S INTERNATIONAL, INC., AND DONALD J. WILLIAMSON.
RECITALS:
A. AUTOLIGN MANUFACTURING GROUP, INC. (f/k/a COLONEL'S ACQUISITION
CORP.), THE COLONEL'S, INC., THE COLONEL'S INTERNATIONAL, INC., AND DONALD
J. WILLIAMSON wish to amend the Amended and Restated Asset Purchase
Agreement, dated as of November 23, 1998.
B. Pursuant to Section 12.09 of the Asset Purchase Agreement and in
consideration of the mutual covenants and agreements set forth below, the
Asset Purchase Agreement is hereby amended by the parties as follows:
AMENDMENT
1. Section 2.23 is hereby amended to replace the words "Section
2.23" in the first line of the section with the word "Agreement."
2. Section 2.23 is amended to add the following paragraphs:
"(j) Except as described in Schedule 2.23, Seller is not in
possession of any environmental reports, recommendations,
site assessments or other information describing the known
or suspected condition of the soil or groundwater at the
Leased Premises, including but not limited to any reports
prepared in or about 1993 in connection with the acquisition
of one or more of the Leased Premises by 620 Platt, L.L.C.
or occupancy thereof by Seller, nor does Seller have
knowledge of the location or availability of any such
reports or the contents, findings or recommendations
contained therein.
"(k) Seller has no knowledge about the installation of any
monitoring wells on the Leased Premises at 620 Platt Road,
Milan, Michigan, other than three monitoring wells located
directly west of the main building which were installed in
connection with the removal of underground storage tanks in
1992.
<PAGE>
"(l) Schedule 2.23(l) contains a complete listing of all material
safety data sheets required to be maintained by Seller with
respect to all hazardous substances used, stored or
otherwise located at the Leased Premises at 620 Platt Road,
Milan, Michigan at any time on or after January 1, 1998
until December 16, 1998."
3. Section 9.01 is amended to delete the words "Lease Real Property"
in clause (c) and insert the words "Leased Premises" in their place.
4. Section 9.04 is amended to insert the words "Except as set forth
in Sections 9.09 and 9.11 hereof," at the beginning of the first sentence
of the section.
5. Section 9.07 is amended to delete the words "Section 2.22" in
clause (ii) and insert the words "Section 2.23" in their place.
6. Section 10.06 is amended to delete the third sentence thereof and
insert the following in its place:
In addition, to the extent that any Environmental Matter has not
been successfully remediated as of the Closing Date, Seller shall promptly
complete the successful remediation thereof after the Closing Date. Buyer
agrees to consider any reasonable request of Seller to modify Schedule 9.09
after the Closing, based upon information provided by Seller to Buyer. By
no later than three business days after selection of the Environmental
Consultant (as provided in Schedule 9.09), Seller and Buyer shall meet with
the Environmental Consultant to discuss the nature and scope of
environmental work to be performed by the Environmental Consultant.
Prior to the implementation of Seller's investigation or
remediation of the real property and subject to Buyer's approval, which
approval shall not be unreasonably withheld, Seller shall provide Buyer
with a proposed scope of work, schedule for implementation and completion
of Seller's remediation, and estimated costs to perform Seller's
remediation. Seller shall incorporate Buyer's reasonable requests into its
scope of work and schedule. Seller and Buyer agree to cooperate so as to
minimize the additional costs which need to be incurred by Buyer in its
performance of a baseline environmental assessment for the property, which
shall include using their best efforts to conduct those soil and
groundwater testing and soil removal actions at such time so that Buyer may
use the results thereof in its preparation of a baseline environmental
assessment (it being understood that some of Seller's environmental work
may not be conducted until after the deadline for Buyer's conduct of its
baseline environmental assessment). Nothing herein shall obligate Buyer to
conduct a baseline environmental assessment or impose liability on Buyer in
connection therewith.
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<PAGE>
Seller agrees to provide Buyer with copies of all correspondence,
notifications, reports, analyses and/or other information Seller sends to
or receives from any applicable agency, or as otherwise developed, in
connection with Seller's remediation, within two business days of receipt
or sending thereof by Seller or the Environmental Consultant. Upon
reasonable notice, Seller shall have the right to enter the Property at all
reasonable times, as necessary, to complete Seller's remediation, and in a
manner which shall not unreasonably interfere with Buyer's use of and
operations at the Property. To the extent legally permitted, Seller shall
procure and maintain in its own name any permits, licenses, or other
regulatory authorization necessary to perform Seller's remediation,
provided that Buyer shall cooperate with Seller in the procurement and
maintenance of any such required authorizations and shall, if required by
law, obtain needed permits and execute and file (if required by law) all
waste manifests in its own name. Buyer agrees to cooperate and execute
such documents legally necessary to achieve an unrestricted industrial
closure of the property pursuant to MCL 324.20101, et. seq., and also
agrees, if reasonably necessary, to consent to the imposition of reasonable
restrictive covenants in order to assist Seller in obtaining clean closure
in accordance with applicable law. Specifically, Buyer agrees that
restrictive covenants may include the following: (i) an agreement not to
install or use groundwater wells on the Milan Property; (ii) the
maintenance of any impermeable barriers or existing buildings on the Milan
Property, subject to Buyer's reasonable objections; (iii) the maintenance
of fences to restrict access; and (iv) any other reasonable restrictive
covenant consistent with Buyer's use and development of the Milan Property
for industrial purposes that Buyer and Seller agree to negotiate in good
faith. The terms of a restrictive covenant shall include a mechanism to
remove the restrictions under appropriate circumstances. Any maintenance
required under this section shall not result in expenses to Buyer that
would not be incurred in the ordinary course of Buyer's business.
To assure performance of Seller's obligation to complete Seller's
remediation subsequent to the Closing Date, Seller and Buyer agree to the
creation of an Environmental Escrow Fund as provided in section 9.11.
For purposes of this Agreement, each Environmental Matter shall
be considered "successfully remediated" when, unless waived by Buyer in
writing as to each Environmental Matter, (a) the Environmental Consultant
certifies to Buyer that the real property, method of operation or other
property or activity affected by such Environmental Matter is in full
compliance with all applicable Environmental Requirements (as that term is
defined in SECTION 2.23), and (b) as to the condition of the real property
affected by the Environmental Matter which causes some or all of the real
property to be considered a "facility" pursuant to MCL 324.20101, et. seq.,
and unless waived by Buyer in writing as to each Environmental Matter, the
investigation, remediation or other response activity has been completed to
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<PAGE>
the reasonable satisfaction of Buyer and the written satisfaction of the
Michigan Department of Environmental Quality ("MDEQ"). Seller's
investigation and remediation of the Milan Property to be performed by
Seller shall be the most economically reasonable response action required
under applicable law, subject to the limitations contained herein. Seller
shall not be responsible to remediate any environmental contamination below
applicable cleanup criteria. Seller shall have no obligation or liability
with respect to any environmental liabilities arising out of (i) any
environmental contamination which results from any event which arises after
the Closing Date or (ii) any environmental contamination that Seller is
unable to address as a result of any unreasonable interference by Buyer or
any unreasonable refusal by Buyer to provide access requested by Seller.
Any such response activity shall be deemed completed when the MDEQ provides
Seller with a letter confirming that (i) all remedial activities necessary
to satisfy "unlimited industrial" criteria established pursuant to MCL
324.20201, et. seq. (or "limited industrial" criteria applied consistently
with this section), have been satisfied for the Milan Property and all
agreements or notices required in connection with such approval have been
completed (subject only to execution by Buyer, if required), and (ii) all
wells have been decommissioned and removed in accordance with law."
8. Section 9.11 is hereby inserted as follows:
9.11 ENVIRONMENTAL ESCROW.
(a) An Environmental Escrow Fund in the amount of Two Hundred
Fifty Thousand Dollars ($250,000.00) shall be established at Closing
and fully funded by Seller to secure performance of Seller's
obligations under Section 9.09 above. Seller and Buyer shall execute
the Environmental Escrow Fund Agreement attached hereto as Exhibit
9.11 at the Closing.
(b) The funds in the Environmental Escrow Fund shall be released
periodically and paid directly to the Environmental Consultant upon
approval by Buyer and Seller or approval is deemed provided pursuant
to the Environmental Escrow Fund Agreement. Buyer shall be reasonable
and cooperative with respect to exercising its approval of the
Environmental Consultant's request for payment of invoices. After the
Closing, all reasonable costs of the Environmental Consultant shall be
paid from the Environmental Escrow Fund. Seller shall be permitted to
replace the Environmental Consultant with another environmental
consultant, provided that Buyer first approves of any successor
Environmental Consultant, which approval shall not be unreasonably
withheld or delayed.
(c) If Seller fails, refuses or delays to engage an acceptable
environmental consultant or direct the payment of funds necessary to
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<PAGE>
complete the remediation or satisfaction of Environmental Matters
required by this Agreement to the satisfaction of Buyer, then Buyer
may engage its environmental consultant to perform any or all of the
required environmental activities and make claims for such costs
against the Environmental Escrow Fund in the same manner as Seller, as
provided in the Environmental Escrow Fund Agreement. In such case,
Seller shall receive notice of Buyer's filed claim against the Fund,
in the same manner as Buyer would receive for claims made by Seller.
9. Section 9.08 is amended to delete the words "SECTION 9.09" and
insert in their place the words "SECTIONS 9.09 AND 9.12."
10. The following is added as a new 9.12 of the Agreement:
9.12. OSHA MATTERS. Buyer shall be entitled to full
indemnification from Seller, and Seller shall fully and completely
indemnify Buyer for any demands, claims, actions, or causes of action,
assessments, losses, settlements, fines, penalties, forfeitures,
expenses (including reasonable attorneys' fees), damages and
liabilities, including the cost of any corrective measures required in
connection therewith, arising from the inspection prior to the Closing
by State or Federal authorities pursuant to the Michigan Industrial,
Occupational, Safety and Health Act ("MIOSHA") and/or the Federal
Occupational, Safety and Health Act ("OSHA").
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<PAGE>
Except as set forth herein, the terms and conditions of the Asset
Purchase Agreement remain in full force and effect.
"BUYER"
AUTOLIGN MANUFACTURING GROUP, INC.
f/k/a Colonel's Acquisition Corp.
By: /S/ PHILIP B. STORM
Philip B. Storm, President
and Chief Executive Officer
"SELLER"
THE COLONEL'S, INC.
By: /S/ DONALD J. WILLIAMSON
Donald J. Williamson
Its Director and Attorney-in-Fact
"TCI"
THE COLONEL'S, INTERNATIONAL, INC.
By: /S/ DONALD J. WILLIAMSON
Donald J. Williamson
Its Chief Executive Officer
"SHAREHOLDER"
/S/ DONALD J. WILLIAMSON
Donald J. Williamson
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