UNITED STATES
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): February 9, 2000
SECOM GENERAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-14299 87-0410875
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
46035 GRAND RIVER AVENUE, NOVI, MICHIGAN 48374
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (248) 305-9410
Item 2. Acquisition or Disposition of Assets.
On February 9, 2000, Uniflow Corporation ("Uniflow"), a wholly
owned subsidiary of the Registrant, sold substantially all of its operating
assets, business and properties to Alken-Ziegler Livonia, LLC
("Alken-Ziegler") pursuant to an Asset Purchase Agreement dated as of
February 1, 2000 among the Registrant, Uniflow, and Alken-Ziegler.
Alken-Ziegler paid a purchase price of $2.4 million in cash and agreed to
assume Uniflow's obligations under its collective bargaining agreement with
the UAW. In addition, Alken-Ziegler will pay to Uniflow a commission of 3% on
sales made by Alken-Ziegler to certain customers for a period of up to 5
years.
Item 7. Financial Statements and Exhibits. Page No.
(a) Not Applicable.
(b) Proforma Financial Information
Headnote to Proforma Condensed Financial Statements F-2
Proforma Balance Sheet as of December 31, 1999 F-3
Footnotes to Proforma Balance Sheet F-4
Proforma Statement of Operations for the quarter
ended December 31, 1999 F-5
Proforma Statement of Operations for the year
ended September 30, 1999 F-6
(3) Exhibits. See the Exhibit Index on the following page.
2
EXHIBIT LIST
EXHIBIT NO. DESCRIPTION PAGE NO.
- ----------- ----------- --------
2.1 Asset Purchase Agreement dated G - 1
February 1, 2000 among Alken-
Ziegler Livonia, LLC, Uniflow Corporation
and Secom General Corporation
3
SECOM GENERAL CORPORATION AND SUBSIDIARIES
PROFORMA CONDENSED FINANCIAL STATEMENTS
The following unaudited proforma condensed balance sheet as of
December 31, 1999 and statements of operations for the three months ended
December 31, 1999 and the year ended September 30, 1999, give effect to the
Uniflow discontinued operating segment.
The unaudited proforma condensed balance sheet of Secom has been
prepared based on its historical unaudited consolidated balance sheet as of
December 31, 1999. The adjustments shown reflect the elimination of Uniflow's
assets as if the disposal of the Uniflow segment had been completed prior to
December 31, 1999.
The proforma statements of operations may not be indicative of the
results that would have actually occurred if the Uniflow segment had been
discontinued effective as of the beginning of the respective period shown.
The proforma financial statements should be read in conjunction with the
audited consolidated financial statements and notes thereto included in the
Company's Form 10-K and Annual Report for the fiscal year ended September 30,
1999.
F-2
SECOM GENERAL CORPORATION AND SUBSIDIARIES
PROFORMA CONDENSED BALANCE SHEET (UNAUDITED)
December 31, 1999
<TABLE>
<CAPTION>
Historical Proforma
Consolidated Proforma Consolidated
Dec. 31, 1999 Adjustments Dec. 31, 1999
------------- ----------- -------------
<S> <C> <C> <C>
Current assets
Cash $ 1,410,600 $ 2,444,800 (1) $ 3,955,900
100,500 (2)
Accounts receivable, net 3,841,200 3,841,200
Inventories 2,991,200 (713,300)(1) 2,277,900
Other current assets 1,127,800 (31,500)(1) 1,096,300
------------ ------------ ------------
Total current assets 9,370,800 1,800,500 11,171,300
Property, plant and equipment, net 6,646,700 (1,995,600)(1) 4,651,100
Other assets 1,224,300 1,224,300
------------ ------------ ------------
Total assets $ 17,241,800 $ (195,100) $ 17,046,700
============ ============ ============
Current liabilities
Current maturities of long-term debt $ 1,023,300 $ 1,023,300
Accounts payable 1,382,600 1,382,600
Accrued wages and benefits 776,800 776,800
Accrued other 499,900 499,900
------------ ------------ ------------
Total current liabilities 3,682,600 -- 3,682,600
Long-term debt obligations 3,279,400 3,279,400
Other liabilities 401,300 401,300
------------ ------------ ------------
Total liabilities 7,363,300 -- 7,363,300
Stockholders' equity
Common stock 104,400 104,400
Additional paid-in capital 18,757,700 18,757,700
Accumulated deficit (8,983,600) (295,600)(1) (9,178,700)
100,500 (2)
------------ ------------ ------------
Total stockholders' equity 9,878,500 (195,100) 9,683,400
------------ ------------ ------------
Total liabilities and stockholders' equity $ 17,241,800 $ (195,100) $ 17,046,700
============ ============ ============
</TABLE>
F-3
SECOM GENERAL CORPORATION AND SUBSIDIARIES
PROFORMA CONDENSED BALANCE SHEET FOOTNOTES
1. To record the elimination of the Company's Uniflow assets and loss
on the sale of those assets, as if the operation had been had been
discontinued and disposed of prior to December 31, 1999.
2. To record a federal income tax benefit of $100,500 on the sale of
Uniflow's assets and operations. The tax benefit is shown as an
increase in cash. For purposes of this proforma statement a tax
rate of 34% was assumed for the discontinued Uniflow segment.
F-4
SECOM GENERAL CORPORATION AND SUBSIDIARIES
PROFORMA CONDENSED STATEMENT OF OPERATIONS
For the Three Months Ended December 31, 1999
The following unaudited proforma adjustments reflect the
elimination of the results of operations of Uniflow for the three
months ended December 31, 1999. This proforma condensed statement of
operations has been prepared from the Company's unaudited consolidated
results of operations for the three months ended December 31, 1999.
For purposes of this proforma statement a tax rate of 34% was
assumed for the discontinued Uniflow segment.
<TABLE>
<CAPTION>
Historical Proforma
Consolidated Consolidated
Three Months Three Months
Ended Proforma Ended
Dec. 31, 1999 Adjustments Dec. 31, 1999
------------- ----------- -------------
<S> <C> <C> <C>
Net sales $6,029,600 $ 2,274,700 $ 3,754,900
Cost of sales 4,756,700 2,108,900 2,647,800
---------- ----------- -----------
Gross profit 1,272,900 165,800 1,107,100
Selling, general and
administrative expenses 984,200 169,500 814,700
---------- ----------- -----------
Income (loss) from operations 288,700 (3,700) 292,400
---------- ----------- -----------
Other (expense) income
Interest (90,600) (11,900) (78,700)
Other, net 67,400 (76,900) 144,300
---------- ----------- -----------
Other (expense) income - net (23,200) (88,800) 65,600
---------- ----------- -----------
Income (loss) from continuing
operations before
income taxes 265,500 (92,500) 358,000
Income tax (expense) benefit (109,500) 31,400 (140,900)
---------- ----------- -----------
Income (loss) from continuing
operations $ 156,000 $ (61,100) $ 217,100
========== =========== ===========
Income per common share
(basic and diluted) $ 0.15 $ 0.20
========== ===========
Basic and diluted weighted average
shares outstanding 1,044,300 1,044,300
========== ===========
</TABLE>
F-5
SECOM GENERAL CORPORATION AND SUBSIDIARIES
PROFORMA CONDENSED STATEMENT OF OPERATIONS
For the Year Ended September 30, 1999
The following unaudited proforma adjustments reflect the
elimination of the results of operations of Uniflow for the year
ended September 30, 1999. Uniflow was acquired by the Company
effective September 1, 1991. This proforma condensed statement of
operations has been prepared from the Company's audited consolidated
results of operations for the year ended September 30, 1999. For
purposes of this proforma statement a tax rate of 34% was assumed for
the discontinued Uniflow segment.
<TABLE>
<CAPTION>
Historical Proforma
Consolidated Proforma Consolidated
Year Ended Adjustments Year Ended
Sept. 30, 1999 Sept. 30, 1999 Sept. 30, 1999
-------------- -------------- --------------
<S> <C> <C> <C>
Net sales $ 28,226,000 $ 13,012,700 $ 15,213,300
Cost of sales 22,902,900 12,090,100 10,812,800
------------ ------------ ------------
Gross profit 5,323,100 922,600 4,400,500
Selling, general and
administrative expenses 4,469,900 892,900 3,577,000
Restructuring charges 549,600 549,600 --
Gain on sale of product line (1,871,500) (973,800) (897,700)
------------ ------------ ------------
Income from operations 2,175,100 453,900 1,721,200
------------ ------------ ------------
Other (expense) income
Interest (753,200) (201,400) (551,800)
Other, net 106,500 (468,100) 574,600
------------ ------------ ------------
Other (expense) income - net (646,700) (669,500) 22,800
------------ ------------ ------------
Income (loss) from continuing
operations before income
taxes 1,528,400 (215,600) 1,744,000
Income tax (expense) benefit (75,800) 73,300 (149,100)
------------ ------------ ------------
Income (loss) from continuing
operations $ 1,452,600 $ (142,300) $ 1,594,900
============ ============ ============
Income per common share
(basic and diluted) $ 1.37 $ 1.50
============ ============
Basic and diluted weighted average
shares outstanding 1,064,000 1,064,000
============ ============
</TABLE>
F-6
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 officer.
SECOM GENERAL CORPORATION
(Registrant)
By: /s/ Scott J. Konieczny
----------------------
Scott J. Konieczny
Its: Chief Financial Officer
Dated: February 24, 2000
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is made and entered
into as of this 1st day of February, 2000, by and among ALKEN-ZIEGLER
LIVONIA, LLC., a Michigan limited liability company ("Purchaser"), and
UNIFLOW CORPORATION, a Michigan corporation ("Seller"), and SECOM GENERAL
CORPORATION, a Delaware corporation ("Secom"), which is the parent company of
the Seller.
RECITALS
The Seller is engaged in the production and manufacture of cold
formed steel parts and forging business (the "Business"). The Seller desires
to sell to the Purchaser and the Purchaser desires to purchase from the
Seller substantially all of the operating assets, businesses and properties
used by the Seller in the Business and to sublet certain equipment and real
estate from Secom, all on the terms and subject to the conditions set forth
in this Agreement.
COVENANTS
In consideration of the mutual representations, warranties and
covenants and subject to the conditions herein contained, the parties hereto
agree as follows:
1. Purchase and Sale of Assets
1.1 Purchase and Sale of Assets. The Seller agrees to and will
sell, convey, transfer, assign and deliver to the Purchaser at the Closing
(as hereinafter defined), free and clear of all liens, mortgages, pledges,
encumbrances and charges of every kind (other than the Assumed Liabilities or
Sublease), on the terms and subject to the conditions set forth in this
Agreement, the properties, business and assets of the Seller currently owned
or used exclusively by the Seller in connection with or related to the
Business, wherever located, as set forth on Schedule 1.1, as they shall exist
at the Closing Date (as hereinafter defined) (collectively, the "Purchased
Assets"). Without limiting the generality of the foregoing, the Purchased
Assets shall include the following:
1.1.1 all machinery, equipment, tools, supplies,
furniture and fixtures, automobiles and trucks and other fixed assets owned
by the Seller and used in the Business identified on Schedule 1.1;
Asset Purchase Agreement between
Alken-Ziegler, Livonia, LLC and
Uniflow Corporation and Secom General Corporation
G-1
1.1.2 all inventories of the Seller related to and used
in the operation of the Business (i.e., usable raw materials and saleable
finished goods), including work-in-progress, supplies and related items, and
packaging materials, and all perishable and customer-billable tooling, and
replacement and maintenance parts, in each case subject to additions and
deletions in the ordinary course of the Business from the date hereof through
the date of the physical inventory count as provided in Section 2.4 hereof
(the "Purchased Inventory");
1.1.3 all of the rights and benefits accruing to the
Seller under all customer purchase orders for manufactured goods to be
assumed by the Purchaser and made by the Seller in the ordinary course of
business and all the Seller's purchase orders for inventory and other
purchase commitments made by the Seller in the ordinary course of business as
set forth in Schedule 1.1.3 (the "Purchased Contracts");
1.1.4 all operating data and records of the Seller
relating to or arising out of the operation of the Business, including
without limitation customer lists, financial, accounting and credit records,
correspondence, budgets and other similar documents and records of the
Business (the "Purchased Records");
1.1.5 all of the intellectual property rights of the
Seller related to the Business, such as trademarks, trade names (specifically
including "Uniflow Corporation" any part or portion of it, either alone or in
combination with one or more words), patents, patent applications,
transferable licenses thereof, trade secrets, technology, know-how, formulae,
designs and drawings, transferable computer software, slogans, copyrights,
processes, operating rights, customer and prospect lists, telephone numbers,
telephone listings, other licenses and permits, and other similar intangible
property and rights relating to the products produced/manufactured by the
Seller in the operation of the Business as set forth in Schedule 1.1.5 (the
"Purchased Proprietary Rights"); notwithstanding the foregoing, the Purchaser
acknowledges that the Seller currently has affiliates in the tool and die
industry which perform services for the Seller, sell tooling to the Seller,
and own similar and possibly identical proprietary rights which shall not be
diminished or limited in any way whatsoever by this transaction.
1.1.6 all good will.
1.2 Excluded Assets. Notwithstanding Section 1.1 , the
Purchased Assets shall exclude the following assets of the Seller: (i) all
cash or cash equivalents of the Business, including without limitation the
Cash Consideration (as hereinafter defined) and the Seller's other rights
under this Agreement; (ii) all accounts and notes receivables; (iii)
leasehold improvements; (iv) prepaid expenses, deposits or claims for
reimbursement for approximately Thirty-Seven Thousand Two Hundred Fifty
Dollars ($37,250) in advanced development costs relating to parts under
development for American Turn Products pending PPAP approval (v) commission
or royalty agreements on parts attributable to prior asset sales; (vi) real
property; (vii) assets attributable to the General Motors Powertrain
transmission shafts; (vii) assets leased by Seller or Secom under
month-to-month leases or under the Amplicon leases; and (viii) any other
assets not part of the Purchased Assets. Purchaser will use good faith
efforts to submit claims in the ordinary and normal course for tooling,
engineering and development on the American Turn Products projects and
Asset Purchase Agreement between
Alken-Ziegler, Livonia, LLC and
Uniflow Corporation and Secom General Corporation
G-2
promptly reimburse Seller for such specified amount incurred by Seller prior
to closing with respect to such projects when reimbursed by American Turn
Products to Purchaser.
2. Purchase Price; Limited Assumption of Liabilities
2.1 Amount of the Purchase Price. The Purchaser agrees,
subject to the terms, conditions and limitations set forth in this Agreement:
2.1.1 to pay to or for the account of the Seller, in
the manner specified in Section 3.2 hereof, an amount in cash equal to One
Million Seven Hundred Thousand ($1,700,000.00) Dollars as consideration for
the Purchased Assets excluding the Purchased Inventory (the "Consideration");
and
2.1.2 to pay to or for account of the Seller, in the
manner specified in Section 3.2 hereof, the Purchased Inventory Consideration
(as defined below);
2.1.3 to pay the sums to the Seller as set forth in the
Royalty Agreement in the form of the Royalty Agreement that is attached to
Schedule 2.1.3 and incorporated by reference.
2.2 Limited Assumed Liabilities. The Purchaser agrees to and
will at the Closing assume and agree to pay, discharge and perform when
lawfully due only the following (collectively referred to as the "Assumed
Liabilities"):
2.2.1 Those obligations and contracts of the Seller
which are to be paid or performed after the Closing and which are
specifically identified under the Purchased Contracts.
2.2.2 The responsibility for payments to four (4) of
the Seller's employees under the Employment Arrangement Agreements dated
April 20, 1999, payable to Corky MacKenzie, Chris Hojnacki, Rich Hill, and
Marlene Baynes, all of which are attached to Schedule 2-2.2; and
2.2.3 A certain Agreement between Uniflow Corporation
and International Union, United Automotive, Aerospace arid Agricultural
Implement Workers of America dated April 4,1997 and its related and ancillary
agreements ("UAW Collective Bargaining Agreement") which are attached to
Schedule 2.2.3, except as set forth below:
2.2.3.1 The Seller shall pay sixty percent
(60%) and the Purchaser shall pay forty percent (40%) of any amount of fringe
benefits (e.g., tuition reimbursements, vacation and related items) earned by
any employee prior to the Closing Date and paid by the Purchaser after the
Closing Date.
2.2.4 To the extent the Purchaser desires to use any
office equipment or forklifts which are currently on month-to-month leases
with the Seller, then the Purchaser shall pay the Seller monthly rent, in
advance, those amount(s) equal to the Seller's obligation with respect to
such leased equipment.
2.3 Excluded Liabilities. Except for the Assumed Liabilities,
the Seller shall remain solely responsible for and the Purchaser shall not
assume or be obligated in any way to pay, perform or otherwise discharge any
liability or obligation of, or claim against, the Seller or any liability or
obligation or claim arising against the Seller arising in respect of the
Business or the Purchased Assets, whether direct or indirect, known or
unknown, absolute or contingent (collectively, the "Excluded Liabilities").
Asset Purchase Agreement between
Alken-Ziegler, Livonia, LLC and
Uniflow Corporation and Secom General Corporation
G-3
2.4 Purchased Inventory Consideration.
2.4.1 The term "Purchased Inventory Consideration"
shall mean the amount payable by the Purchaser to the Seller at the Closing
for the Purchased Inventory determined by conducting, to the extent
practicable and reasonable, a physical count of the Purchased Inventory on
February 1, 2000 within two days of the Closing Date. The Purchaser and the
Seller will each pay their own costs of conducting the physical inventory.
The Seller and the Seller's accountants will supervise the physical inventory
and representatives of the Purchaser shall be entitled to monitor and verify
the inventory counts. Promptly following completion of the physical inventory
count, the Seller and the Purchaser shall agree to the price of the Purchased
Inventory based upon a fully burdened cost (but not greater than market) ,
except as to all perishable tooling, spare parts, and related supplies, which
shall be valued at zero. The total dollar amount of the Purchased Inventory
determined as provided herein shall be the Purchased Inventory Consideration
payable at Closing.
2.5 Allocation of the Purchase Price among the Purchased
Assets. The Purchase Price (as defined in Section 3.2.5) shall be allocated
among each item or class of the Purchased Assets as specifically set forth in
or determined pursuant to Schedule 2.5. The Seller and the Purchaser agree
that they will prepare and file their federal and any state or local income
tax returns based on such allocation of the Purchase Price. The Seller and
the Purchaser agree that they will prepare and file any notices or other
filings required pursuant to Section 1060 of the Internal Revenue Code of
1986, as amended (the "Code"), and that any such notices or filings will be
prepared based on such allocation of the Purchase Price.
2.6 Taxes and Prorations. The Seller shall pay all personal
property taxes with respect to the Purchased Assets which become due and
payable prior to the Closing Date. All such taxes becoming due and payable on
or after the date on which this Agreement is executed shall be the
Purchaser's responsibility. All such taxes paid by or on behalf of the Seller
in the twelve (12) months preceding closing shall be prorated to, but not
including, the Closing Date on a due-date basis. For purposes of this
proration, such taxes shall be assumed to have been paid in advance for the
twelve (12) months succeeding their Levy Date. The Seller shall be
responsible for that portion of such taxes from the Levy Date or dates to,
but not including, the Closing Date. The Purchaser shall be responsible (and
shall reimburse the Seller) for the remainder. "Levy Date" shall mean, for
purposes hereof, the date on which such taxes first became due and payable.
Where appropriate, interest, rents, utility bills, insurance and the like
shall be prorated and adjusted as of the Closing Date.
3. Closing
3.1 Time and Place of the Closing. The closing of the sale of
the Purchased Assets shall take place at the offices of the Seller at 10:00
a.m., local time, on Thursday , February 3, 2000; provided, however, that if
any of the conditions which are set forth in Articles 9 and 10 of this
Agreement have not been satisfied (or waived) by that date, then the Closing
shall take place on a subsequent date, which shall be determined by the
mutual agreement of the Purchaser and the Seller. Throughout this Agreement,
such event is referred to as the "Closing" and such date and time are
referred to as the "Closing Date."
3.2 Procedure at the Closing. At the Closing, the parties
agree to take the following steps in the order listed below (provided,
however, that upon their completion all such steps shall be deemed to have
occurred simultaneously):
Asset Purchase Agreement between
Alken-Ziegler, Livonia, LLC and
Uniflow Corporation and Secom General Corporation
G-4
3.2.1 The Seller shall deliver to the Purchaser
evidence, in such form as in each case is satisfactory to the Purchaser,
that each of the conditions to the obligation of the Purchaser to purchase
the Purchased Assets from the Seller which is set forth in Article 9 of
this Agreement has been satisfied.
3.2.2 The Purchaser shall deliver to the Seller
evidence, in such form as in each case is satisfactory to the Seller, that
each of the conditions to the obligation of the Seller to sell the Purchased
Assets to the Purchaser which is set forth in Article 10 of this Agreement
has been satisfied.
3.2.3 The Seller shall deliver to the Purchaser such
bills of sale, endorsements, assignments and other instruments, in such form
as in each case is satisfactory to the Purchaser, as shall be sufficient to
vest in the Purchaser good and marketable title to the Purchased Assets, free
and clear of all liens, mortgages, pledges, encumbrances, and charges of
every kind.
3.2.4 The Purchaser and Secom shall execute a lease
agreement for the property located at 46001 - 46039 Grand River Avenue, Novi,
Michigan ("Premises") in the form of the lease agreement that is attached to
Schedule 3.2.4 ("Lease Agreement") and Purchaser, as Tenant, shall deliver
the first month's rent and tax installment.
3.2.5 The Purchaser shall pay to the Seller the
Consideration and the Purchased Inventory Consideration (the "Purchase
Price") by wire transfer or certified or bank cashier's check.
3.2.6 The Purchaser shall deliver to the Seller
instruments, in such form as in each case is satisfactory to the Seller, as
shall be sufficient to effect the assumption by the Purchaser of the Assumed
Liabilities.
3.2.7 The Purchaser and the Seller shall execute and
deliver a cross receipt acknowledging receipt from the other, respectively,
of the Purchased Assets and the Purchase Price.
3.2.8 The Purchaser and Seller shall execute the
Royalty Agreement.
3.2.9 The Purchaser and Secom shall execute a sublease
agreement for the Amplicon leased equipment used by the Seller, in the form
of the sublease agreement that is attached to Schedule 3.2.9 ("Sublease
Agreement") and the Purchaser, as Tenant, shall deliver the first month's
rent and tax installment.
4. Representations and Warranties of the Seller. and Secom In order
to induce the Purchaser to enter into this Agreement and to consummate the
transactions contemplated hereunder, the Seller makes the following
representations and warranties:
Asset Purchase Agreement between
Alken-Ziegler, Livonia, LLC and
Uniflow Corporation and Secom General Corporation
G-5
4.1 Organization, Power and Authority of the Seller. The
Seller is a corporation duly organized and legally existing in good standing
under the laws of the State of Michigan and has full corporate power and
authority (i) to own or lease its properties and to carry on the Business as
it is now being conducted, (ii) to enter into this Agreement and to sell,
convey, transfer, assign and deliver the Purchased Assets to the Purchaser as
provided herein, and (iii) to carry out the other transactions and agreements
contemplated hereby. The Seller is a wholly-owned subsidiary of Secom.
4.2 Intentionally Omitted.
4.3 Tax Matters. The Seller has timely filed all tax returns
and reports required to be filed by it with respect to the Purchased Assets
or the operation of the Business, including without limitation all federal,
state, local and foreign tax returns, and has paid in full or made adequate
provision by the establishment of reserves for all taxes and other charges
which have become due with respect to the Purchased Assets or operation of
the Business. The Seller has no knowledge of any tax deficiency proposed or
threatened against it. There are no tax liens upon any property or assets of
the Seller. The Seller has made all payments of estimated taxes when due in
amounts sufficient to avoid the imposition of any penalty.
4.4 Real Estate of the Business.
4.4.1 Schedule 4.4 contains an accurate illustration
and the legal description of the Premises, identification of Building 3,
Building 4, and additional parking spaces that the Purchaser will lease from
Secom, and the Micanol Building to which the Purchaser shall have use for a
limited period of time
4.4.2 Secom has good and marketable title to the
Premises and has the power and authority to enter into and comply with the
Lease Agreement. The Premises are not subject to any lease interest;.
4.5 Good Title to and Condition of the Purchased Assets.
4.5.1 The Seller has good and marketable title to
all of the Purchased Assets, free and clear of all liens, mortgages, pledges,
security interests, encumbrances or charges of every kind, nature, and
description whatsoever, other than Assumed Liabilities and except those set
forth in Schedule 4.5, all of which shall be discharged and released at the
Closing.
Asset Purchase Agreement between
Alken-Ziegler, Livonia, LLC and
Uniflow Corporation and Secom General Corporation
G-6
4.5.2 To the Best of Seller's Knowledge, in all
material respects, the Purchased Inventory consists of items of a quality
and/or quantity usable and/or saleable in the normal course of the Business
at values in the aggregate at least equal to the values at which such items
are carried on the Seller's books, stating inventories at the lower of cost
or market on a first-in/first-out basis, all determined in accordance with
generally accepted accounting principles. The values of obsolete or slow
moving inventory (without underlying customer purchaser order commitments)
and inventory of below standard quality, if any, have been written down to
the lower of cost or realizable market values or have been written off.
Claims, if any, by Purchaser with respect to inventory would be on an
aggregate basis taking into account and netting both positive and negative
adjustments.
4.6 Intentionally Omitted.
4.7 Licenses and Permits of the Seller. To the Best of
Seller's Knowledge, (i) the Seller and Secom possesses all licenses and other
required governmental or official approvals, permits or authorizations, the
failure to possess which would have a material adverse effect on the
Business, (ii) such licenses, approvals, permits and authorizations are in
full force and effect, except as to a requirement imposed on either the
Seller or Secom to submit a "Sewer Run-Off Plan" to the Michigan Department
of Environmental Quality ("DEQ") and test the "community water system"; (iii)
the Seller and Secom are in compliance with their requirements; and (iv) no
proceeding is pending or threatened to revoke or amend any of them. If
required for the Purchaser's continued use of the Premises under the Lease
Agreement, the Seller and/or Secom shall submit a Sewer Run-Off Plan and
shall also periodically test the "community water system" at the Premises in
order to comply with local and federal law. The Purchaser agrees to
periodically test the "community water system", as required while the
Purchaser is in possession of the Premises. The Purchaser's personnel
familiar with this process will assist the Seller in the testing process. For
purposes of this Agreement the phrase "Best of the Seller's Knowledge" or
words of similar import, shall mean such knowledge as the Seller or Secom, as
the case may be, would have after inquiry into the matter in question
exercising due diligence.
4.8 Proprietary Rights of the Seller.
4.8.1 The Purchased Proprietary Rights include all
proprietary rights of the Seller. Schedule 4.8 contains a complete list of
all of the Purchased Proprietary Rights known to Seller.
Asset Purchase Agreement between
Alken-Ziegler, Livonia, LLC and
Uniflow Corporation and Secom General Corporation
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4.8.2 To the Best of the Seller's Knowledge, except as
set forth on Schedule 4.8, (i) the Seller owns all right, title and interest
in and to all of the Purchased Proprietary Rights, (ii) there have been no
claims made against the Seller for the assertion of the invalidity, abuse,
misuse, or enforceability of any Purchased Proprietary Rights.
4.9 Adequacy of the Purchased Assets, the Seller's
Relationships with its Customers and Suppliers. The Purchased Assets and the
Premises constitute, in the aggregate, the material tangible assets the
Seller uses regularly in the Business Schedule 4.9 sets forth a complete list
of all of the customers of the Seller which have purchased goods or services
from the Business in the last twelve (12) months.
4.10 Intentionally Omitted.
4.11 Litigation Involving the Business. Except as set forth on
Schedule 4.11, to the Best of the Seller's Knowledge, (i) there are no
actions, suits, claims, governmental investigations, charges or complaints or
grievances or arbitration proceedings pending or threatened against or
affecting the Business or any of the Purchased Assets which would have a
material adverse effect on the Purchased Assets or the operation of the
Business,(ii) there is no basis for any of the foregoing, and (iii) there are
no outstanding orders, decrees or stipulations issued by any federal, state,
local or foreign judicial or administrative authority in any proceeding
affecting the Business to which the Seller is a party which would have a
material adverse effect on the Purchased Assets or the Business.
4.12 The Records of the Business. To the Best of the Seller's
Knowledge, the Purchased Records are accurate and complete in all material
respects and there are no material matters as to which appropriate entries
have not been made in the Purchased Records.
4.13 Intentionally Omitted.
Asset Purchase Agreement between
Alken-Ziegler, Livonia, LLC and
Uniflow Corporation and Secom General Corporation
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4.14 Intentionally Omitted.
4.15 Compliance with Laws by the Seller Except as otherwise
disclosed in this Agreement or set forth below to the Best of the Seller's
Knowledge, the Seller is in compliance with all laws, regulations and orders
applicable to the Business or the Purchased Assets, the Seller has not
received notification of any asserted past or present failure to comply with
any such laws, and no proceeding with respect to any such violation is
contemplated. However, the Seller and Secom have not provided the DEQ with a
Sewer Run-Off Plan, as referenced in Section 4.7.
4.16 Environmental Matters; To the Best of Seller's Knowledge,
and subject to the information set forth in the Phase I and Phase II
Environmental Reports attached to Schedule 4.16:
4.16.1 the Seller has not disposed of, or
allowed or arranged for any third parties to dispose of, Hazardous Substances
or other waste upon the Premises in violation of applicable federal, state or
local environmental laws. For purposes of this Section 4.16, the term
"Hazardous Substances" shall have the meaning given it in the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. Sections
9601 et seq.), as amended, and the regulations promulgated pursuant thereto
("CERCLA"), or any similar state law. The operation of the Business does not
involve the generation, transportation, treatment or disposal of Hazardous
Substances in violation of applicable federal, state or local environmental
laws.
4.16.2 there has not occurred, nor is there
presently occurring, a Release of any Hazardous Substance on, into or beneath
the surface of the Premises in violation of applicable federal, state or
local environmental laws. For purposes of this Section 4.16, the term
"Release" shall mean releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing or
dumping.
4.16.3 the operation of the Business complies with all
applicable federal, state and local environmental, health and safety statutes
and regulations, except as referenced in Section 4.15, and the Seller has all
environmental permits, licenses and approvals necessary to the operation of
the Business and the Seller is in full compliance with them.
4.16.4 Except for a septic tank that is
not operational located under Building 3, the Seller does not use, and has
not used, any Underground Storage Tanks on the Premises, and there are not
now nor have there ever been any Underground Storage Tanks on the Premises.
Removal of all Underground Storage Tanks has been accomplished
Asset Purchase Agreement between
Alken-Ziegler, Livonia, LLC and
Uniflow Corporation and Secom General Corporation
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in compliance with all applicable law. For purposes of this Section 4.16, the
term "Underground Storage Tanks" shall have the meaning given it in the
Resource Conservation and Recovery Act (42 U.S.C. Sections 6901 et seq.).
4.17 Labor Relations of the Seller. Except as set forth in
Schedule 2.3.3, the Seller is not a party to or bound by any collective
bargaining agreement or any other agreement with a union covering employees
of the Business. Except as otherwise known to Purchaser or disclosed in this
Agreement, to the Best of the Seller's Knowledge, there is not pending or
threatened any labor dispute, strike or work stoppage which may materially
affect the Business or which may materially interfere with its continued
operation, To the Best of Seller's knowledge, neither the Seller nor any
agent, representative, or employee of the Seller has within the last
twenty-four (24) months committed any unfair labor practice, as defined in
the National Labor Relations Act, as amended, with respect to employees of
the Business, and there is not now pending, or, to the Best of the Seller's
Knowledge, threatened any charge or complaint against the Seller by or with
the National Labor Relations Board or any representative thereof with respect
to employees of the Business, except as set forth on Schedule 4.11 or
otherwise in this Agreement.
4.18 Employee Benefits.
4.18.1 The Seller maintains the "employee benefit
plans," and "welfare benefit plans" as defined in Section 3 of the Employee
Retirement Income Security Act of 1974 ("ERISA"), covering employees of the
Business set forth on Schedule 4.18 ("Plan(s)").
4.18.2 To the Best of Seller's Knowledge, the Plans
comply in form and in operation in all material respects with the requirements
of ERISA, and the Plans meet any applicable requirement for favorable tax
treatment under the Code, except where the failure to comply would not have a
material adverse effect on the financial condition of the Purchaser taken as
a whole.
4.18.3 All contributions which are due have been paid
to each such Plan. Further, the contributions (and allocable income thereto)
to the National Industrial Group Pension Plan equal or exceed the present
value of liabilities thereunder to the Seller's hourly employees (determined
in accordance with then current funding assumptions).
4.18.4 The Seller has performed all obligations
required to be performed by it under the Plans (including, but not limited
to, the making of all contributions that have been due) and is not in default
under and has no knowledge of any default by any other party to any Plan.
4.18.5 No proceeding has been initiated to terminate
the Plans.
4.18.6 The Purchaser agrees that, as of the Closing
Date, the Purchaser shall assume sponsorship and liability of the Plans,
except as limited by Section 2.2.3.3, and shall take such action as may be
reasonable or necessary to document such change of the sponsor and assumption
of the Plan(s) with any administrator of the Plan(s). With respect to any
employee of the Business who is a participant in any Plan(s), the Purchaser
shall continue to recognize, for all purposes, service with the Seller and
its Affiliates prior to the Closing Date to the extent such Service is
recognized under the Plan in effect on such date.
4.18.7 The Purchaser shall within thirty (30) days of
the Closing Date, establish or designate a trust that is exempt from tax
under Code section 501 (a) and satisfies the terms of any applicable
collective bargaining agreement to receive the assets of the 401(k) Plan. The
Seller shall direct the trustee of the 401(k) Plan to transfer the Plan
assets, valued as of the date required by the 401(k) Plan, to such trust as
soon as practicable after the Closing Date and the establishment of such
trust, but in no event later than sixty (60) days after the Closing Date.
Asset Purchase Agreement between
Alken-Ziegler, Livonia, LLC and
Uniflow Corporation and Secom General Corporation
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4.18.8 The Seller represents that, had Seller withdrawn
from the NIGPP Plan as of the Closing Date, there would be no Multi-Employer
Pension Act withdrawal liability.
4.18.9 The Seller shall fully Cooperate with the
Purchaser in effecting the changes to the Plans as the Purchaser may deem
reasonably necessary.
4.19 Product Liability Claims; Product Warranties. To the Best
of Seller's Knowledge, there are no product liability claims for injury or
damage to persons or property which are pending or threatened against the
Seller with respect to products sold by the Seller in the operation of the
Business. The Seller has extended to its customers product warranties,
indemnifications or guarantees but only with respect to products
produced/manufactured by the Business as set forth in the Purchased Contracts
and those imposed by law (such as the Uniform Commercial Code), which are
being assumed by the Purchaser.
4.20 Due Authorization; Binding Obligation. The execution,
delivery and performance of this Agreement and each of the other agreements
contemplated hereby and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action of the
Seller. This Agreement has been duly executed and delivered by the Seller and
is a valid and binding obligation of the Seller and, enforceable in
accordance with its terms. To the Best of Seller's Knowledge, neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will: (i) conflict with or violate any
provision of any of the Seller's Articles of Incorporation or bylaws, or of
any law, ordinance or regulation or any decree or order of any court or
administrative or other governmental body which is either applicable to,
binding upon or enforceable against the Seller; (ii) result in any breach of
or default under any mortgage, contract, agreement, indenture, will, trust or
other instrument which is either binding upon or enforceable against the
Seller, or the Purchased Assets or the Premises, other than those matters
addressed or discharged with closing proceeds or with respect to Assumed
Liabilities which prohibit any assumption or transfer, or with respect to the
Amplicon leases and the Met Life/GE Capital mortgage; or (iii) violate any
legally protected right of any individual or entity or give to any individual
or entity a right or claim against the Purchaser, the Purchased Assets, or
the Premises.
4.21 Accuracy of Information Furnished by the Seller. To the
Best of Seller's knowledge, no representation, statement or information made
or furnished by the Seller in this Agreement and the various schedules
attached hereto and the other information and statements referred to herein,
contains or shall contain any untrue statement of a material fact which would
have a material adverse effect on the Purchased Assets or the Business taken
as a whole.
4.22 Secom. Secom shall be deemed to have made the
representations and warranties on Sections 4.3, 4.4, 4.7, 4.15, 4.16, and
4.18 as though stated verbatim, replacing "the Seller" with "Secom".
Asset Purchase Agreement between
Alken-Ziegler, Livonia, LLC and
Uniflow Corporation and Secom General Corporation
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5. Representations and Warranties of the Purchaser. In order to
induce the Seller to enter into this Agreement and to consummate the
transactions contemplated hereunder, the Purchaser makes the following
representations and warranties:
5.1 Organization, Power and Authority of the Purchaser. The
Purchaser is a limited liability company duly organized and validly existing
under the laws of the State of Michigan, with full power and authority to
enter into this Agreement and perform its obligations hereunder. Attached to
Schedule 5.1 are accurate financial statements of the Purchaser.
5.2 Due Authorization; Binding Obligation. The execution,
delivery and performance of this Agreement and all other agreements
contemplated hereby and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary action of the Purchaser.
This Agreement has been duly executed and delivered by the Purchaser and is a
valid and binding obligation of the Purchaser, enforceable in accordance with
its terms. Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will: (i) conflict with
or violate any provision of the Articles of Organization of the Purchaser, or
of any decree or order of any court or administrative or other governmental
body which is either applicable to, binding upon or enforceable against the
Purchaser; or (ii) result in any breach of or default under any mortgage,
contract, agreement, indenture, will, trust or other instrument which is
either binding upon or enforceable against the Purchaser.
6. Additional Covenants of the Seller.
6.1 Best Efforts. The Seller will use its best efforts to
cause to be satisfied as soon as practicable and prior to the Closing Date
all of the conditions set forth in Article 9 to the obligation of the
Purchaser to purchase the Purchased Assets from the Seller and lease the
Premises from Secom.
6.2 Conduct of Business Pending the Closing. From and after
the execution and delivery of this Agreement and until the Closing Date,
except as otherwise provided by the prior written consent of the Purchaser:
6.2.1 the Seller will conduct the business and
operations of the Business in the manner in which the Business has heretofore
been conducted, and it will use its best efforts to (i) preserve the business
organization of the Business intact, (ii) keep available to the Purchaser the
services of the Business officers, employees, agents and distributors, and
(iii) preserve the Business relationships with customers, suppliers and
others having dealings with the Business;
Asset Purchase Agreement between
Alken-Ziegler, Livonia, LLC and
Uniflow Corporation and Secom General Corporation
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6.2.2 the Seller will maintain the Business properties
in customary repair, order and condition, reasonable wear and use and damage
by unavoidable casualty excepted, and will maintain insurance of such types
and in such amounts upon all of the Business properties and with respect to
the conduct of the Business as are in effect on the date of this Agreement;
6.2.3 the Seller will not (i) sell or transfer any of
the Purchased Assets other than in the ordinary course of business; (ii)
cause the Business to make or obligate the Business to make capital
expenditures aggregating more than $5,000 other than in the ordinary course
of business; or (iii) cause the Business to incur any material obligations or
liabilities or enter into any material transaction other than in the ordinary
course of business.
6.3 Access to the Seller's Plants, Properties and Records.
From and after the execution and delivery of this Agreement, the Seller will
afford to the representatives of the Purchaser access, during normal business
hours and upon reasonable notice, to the Seller's Premises sufficient to
enable the Purchaser to inspect the Purchased Assets and the Premises, and
the Seller will furnish to such representatives during such period all such
information relating to the foregoing investigation as the Purchaser may
reasonably request; provided, however, that any furnishing of such
information to the Purchaser and any investigation by the Purchaser shall not
affect the right of the Purchaser to rely on the representations and
warranties made by the Seller and Secom in or pursuant to this Agreement,
and, provided further that the Purchaser will hold in strict confidence all
documents and information concerning the Seller so furnished, and, if the
sale of the Purchased Assets pursuant hereto shall not be consummated, such
confidence shall be maintained in accordance with the confidentiality
provisions set forth in the Memorandum of Agreement between the Purchaser and
the Seller dated October 7, 1999.
7. Intentionally Omitted.
8. Additional Covenants of the Purchaser; Best Efforts. The
Purchaser will use its best efforts to cause to be satisfied as soon as
practicable and prior to the Closing Date all of the conditions set forth in
Article 10 to the obligation of the Seller to sell the Purchased Assets
pursuant to this Agreement.
9. Conditions to the Obligation of the Purchaser. The obligation
of the Purchaser to purchase the Purchased Assets shall be subject to the
fulfillment at or prior to the Closing Date of each of the following
conditions:
9.1 Accuracy of Representation and Warranties and Compliance
with Obligations. The representations and warranties of the Seller contained
in this Agreement shall have been true and correct at and as of the date
hereof, and they shall be true and correct at and as of the Closing Date with
the same force and effect as though made at and as of that time. The Seller
shall have performed and complied with all of its obligations required by
this Agreement to be performed or complied with at or prior to the Closing
Date. The Seller shall have delivered to the Purchaser a
Asset Purchase Agreement between
Alken-Ziegler, Livonia, LLC and
Uniflow Corporation and Secom General Corporation
G-13
certificate, dated as of the Closing Date and signed by the Seller's
authorized officer, certifying that such representations and warranties are
thus true and correct and that all such obligations have been thus performed
and complied with.
9.2 Certified Resolutions. The Seller shall have delivered to
the Purchaser copies of resolutions adopted by the board of directors and
shareholders of the Seller authorizing the transactions contemplated by this
Agreement, certified in each case as of the Closing Date by an authorized
representative.
9.3 Receipt of Necessary Consents. All necessary consents or
approvals of third parties to any of the transactions contemplated hereby,
the absence of which would materially affect the Purchaser's rights
hereunder, shall have been obtained and shown by written evidence
satisfactory to the Purchaser or otherwise waived by the Purchaser.
9.4 No Adverse Litigation. There shall not be pending or
threatened any action or proceeding by or before any court or other
governmental body which shall seek to restrain, prohibit or invalidate the
sale of the Purchased Assets to the Purchaser or any other transaction
contemplated hereby, or which might materially affect the right of the
Purchaser to own, operate in their entirety or control the Purchased Assets
and lease the Premises.
10. Conditions to Obligations of the Seller. The obligations of the
Seller to sell the Purchased Assets shall be subject to the fulfillment at or
prior to the Closing Date of each of the following conditions:
10.1 Accuracy of Representations and Warranties and Compliance
with Obligations. The representations and warranties of the Purchaser
contained in this Agreement shall have been true and correct at and as of the
date hereof, and they shall be true and correct at and as of the Closing Date
with the same force and effect as though made at and as of that time. The
Purchaser shall have performed and complied with all of its obligations
required by this Agreement to be performed or complied with at or prior to
the Closing Date. The Purchaser shall have delivered to the Seller a
certificate, dated as of the Closing Date and signed by one of its officers,
certifying that such representations and warranties are thus true and correct
and that all such obligations have been thus performed and complied with.
10.2 Certified Resolutions. The Purchaser shall have delivered
to the Seller a copy of resolutions adopted by the members of the Purchaser
authorizing the transactions contemplated by this Agreement, certified as of
the Closing Date by an authorized manager.
11. Certain Actions After the Closing.
Asset Purchase Agreement between
Alken-Ziegler, Livonia, LLC and
Uniflow Corporation and Secom General Corporation
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11.1 Purchaser to Act as Agent for Seller. This Agreement
shall not constitute an agreement to assign any claim, contract, license,
lease, commitment, sales order or purchase order if any attempted assignment
of the same without the consent of the other party thereto would constitute a
breach thereof or in any way affect the rights of the Seller thereunder. If
such consent is not obtained or if any attempted assignment would be
ineffective or would affect the Seller's rights thereunder so that the
Purchaser would not in fact receive all such rights, then subject to the
terms and conditions of Section 11. 3 hereof the Purchaser shall act as the
agent for the Seller in order to obtain for the Purchaser the benefits and
the obligations thereunder.
11.2 Delivery of Property Received After Closing. From and
after the Closing the Purchaser shall have the right and authority to
collect, for the account of the Purchaser, all items which shall be
transferred or are intended to be transferred to the Purchaser as part of the
Purchased Assets as provided in this Agreement. The Seller agrees that it
will cooperate with the Purchaser and transfer or deliver to the Purchaser,
promptly after the receipt thereof, any property which the Seller or any of
its Affiliates receives after the Closing Date in respect of any claims,
contracts, licenses, leases, sales orders, purchase orders, or any other
items transferred or intended to be transferred to the Purchaser as part of
the Purchased Assets under this Agreement. As used in this Agreement, the
term "Affiliate" means, with respect to a specified person, any other person
which directly, or indirectly through one or more intermediaries, controls or
is controlled by, or is under common control with, the person specified (as
hereinafter defined) has any direct or indirect interest in any customer,
supplier or competitor of the Business or in any person from whom or to whom
the Business leases real or personal property, or in any person with whom the
Business is doing business.Further, the Purchaser agrees that it will
cooperate with the Seller and transfer or deliver to the Seller, promptly
after the receipt thereof, any property which the Purchaser or any of its
affiliates receives after the Closing Date in respect of any claims,
contracts, licenses, leases, assets or any other items not transferred or
intended to be transferred to the Purchaser as part of the Purchased Assets
under this Agreement.
11.3 Accounts Receivable. The Purchaser shall promptly remit
to the Seller, without endorsing or negotiating, all payments the Purchaser
receives after the Closing Date on accounts receivables owing to the Seller.
The Purchaser acknowledges that it is not purchasing the Seller's accounts
receivables. The Seller shall promptly remit to the Purchaser, without
endorsing or negotiating, all payments the Seller receives after the Closing
Date on accounts receivables owing to the Purchaser. Unless payment to the
Purchaser is specified as payment for an invoice submitted by the Purchaser,
or otherwise specified as payment to the Purchaser, the Purchaser agrees that
any payments on account shall be first applied to amounts owing to the Seller
with respect to such accounts receivable and that the Purchaser shall not
encourage or advise any customer to pay monies owing to the Purchaser in
advance of the accounts receivable owing to the Seller.
Asset Purchase Agreement between
Alken-Ziegler, Livonia, LLC and
Uniflow Corporation and Secom General Corporation
G-15
11.4 Execution of Further Documents. From and after the
Closing, upon the reasonable request of the Purchaser the Seller, as the
case may be, the other party shall execute, acknowledge and deliver all such
further acts, deeds, bills of sale, assignments, transfers, conveyances,
powers of attorney and assurances as may be reasonable and necessary to
out the transactions contemplated by this Agreement.
11.5 Employment by Purchaser of Seller's Employees.
11.5.1 The Seller shall use its best efforts to aid the
Purchaser in engaging such of the Business employees as are employed on the
Closing Date, and, except with the written consent of the Purchaser, neither
the Seller nor any Affiliate of the Seller shall employ, for a period of one
(1) years after the Closing Date, any person employed by The Seller at the
Business at the Closing Date unless such person was either not offered
employment by the Purchaser or was terminated by The Purchaser.
11.5.2 The Purchaser shall employ most of the persons
currently employed by the Seller at the Business and shall continue any
vacation, severance, incentive, bonus, profit sharing, pension or any other
employee benefit plan or program of the Seller until the Purchaser initiates
a plan to modify the number of employees of the Business or initiates a
replacement benefit package for the employees.
11.6 Restrictive Covenants.
11.6.1 In order to assure that the Purchaser will
realize the value and goodwill inherent in the Purchased Assets, the Seller
agrees with the Purchaser that neither the Seller nor any of its subsidiaries
shall:
11.6.1.1 directly or indirectly, for a period of
three (3) years following the Closing Date: (i) induce any customer of the
Business at the Closing Date to patronize any business for the same products
and services provided by the Business at the Closing Date; (ii) canvass,
solicit or accept from any customer of the Seller at the Closing Date any
business that entails the same products and services provided by the Business
at the Closing Date; or (iii) request or advise any individual or company
which is a customer of the Business at the Closing Date to withdraw, curtail
or cancel any such customer's business with the Purchaser; or
11.6.1.2 directly or indirectly, at any time
following the Closing Date, in any way utilize, disclose, copy, reproduce or
retain in its or his possession any of the Purchased Proprietary Rights or
the Purchased Records.
11.6.2 If any provision of paragraph 11.6.1 of this
Section 11.6, as applied to any party or to any circumstances, is adjudged by
a court to be invalid or unenforceable, those invalid or unenforceable terms
will in no way affect any other provision of paragraph 11.6.1 or any other
part of this Agreement, the application of such provision in any other
circumstances or the validity or enforceability of this Agreement. If any
such provision, or any part thereof, is held to be unenforceable because of
the duration of such provision or the area covered thereby, the parties agree
that the court making such determination will have the power to reduce the
duration and/or area of such provision, and/or to delete specific words or
phrases, and in its reduced form such provision will then be enforceable and
will be enforced. Upon breach of any provision of paragraph 11.6.1 of this
Section 11.6, the Purchaser will be entitled to injunctive relief, since the
remedy at law would be inadequate and insufficient. In addition, the
Purchaser will be entitled to such damages as it can show it has sustained by
reason of such breach.
Asset Purchase Agreement between
Alken-Ziegler, Livonia, LLC and
Uniflow Corporation and Secom General Corporation
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11.6.3 Notwithstanding this Section 11, its provisions shall
not cause or in any way be interpreted to limit: (a) Form Flow, Inc., L & H
Die, Inc.; or Micanol, Inc. (Secom's Tool Group) from operating its business
as currently conducted or (b) Secom's ability to sell its assets, stock or
otherwise enter into a business combination with a prospective buyer.
11.7 Purchaser's Cooperation
11.7.1 The Purchaser will maintain and provide the
Seller access to and copies, as required, of all records of the Business
which may be required by the Seller in connection with any tax or other audit
of the Seller's operation of the Business (or any other business purpose of
the Seller or Secom) or transfer such records or copies thereof to the
Purchaser, at the Seller's expense.
11.7.2 In the event of any claim against the Seller
related to or arising out of the conduct of the Business, the Purchaser shall
provide such assistance to Seller as it may be able to reasonably provide
including, without limitation, providing fact witnesses, providing testing or
access for testing and providing copies of such documentary and other
information as may be available to it. The Seller shall reimburse the
Purchaser for any out-of-pocket costs the Purchaser incurs in rendering such
assistance.
12. Indemnification
12.1 Agreement by the Seller and Secom to Indemnify. The
Seller agrees that it will indemnify and hold the Purchaser harmless in
respect of the aggregate of all indemnifiable damages of the Purchaser. For
this purpose, "indemnifiable damages" of the Purchaser means the aggregate of
all expenses, losses, costs, deficiencies, liabilities and damages (including
related counsel fees and expenses) reasonably incurred or suffered by the
Purchaser resulting from: (i) any inaccurate representation or warranty made
by the Seller in or pursuant to Article 4 hereof, (ii) any default in the
performance of any of the covenants or agreements made by the Seller in this
Agreement, or (iii) the failure of the Seller to pay, discharge or perform
any liability or obligation of the Seller which is not expressly assumed by
the Purchaser pursuant to this Agreement, including, but not limited to, the
Excluded Liabilities, or which result from any dispute concerning any such
liability or obligation. Secom agrees that it will indemnify and hold the
Purchaser harmless in respect of the aggregate of all indemnifiable damages
of the Purchaser. For this purpose, "indemnifiable damages" of the Purchaser
means the aggregate of all expenses, losses, costs, deficiencies, liabilities
and damages (including related counsel fees and expenses) reasonably incurred
or suffered by the Purchaser resulting from: (i) any inaccurate
representation or warranty made by Secom in or pursuant to Article 4 hereof,
(ii) any default in the performance of any of the covenants or agreements
made by Secom in this Agreement, or (iii) the failure of Secom to pay,
discharge or perform any liability or obligation of Secom which is not
expressly assumed by the Purchaser pursuant to this Agreement, including, but
not limited to, the Excluded Liabilities, or which result from any dispute
concerning any such liability or obligation. The Seller and Secom shall be
referred to as "Seller Indemnifying Parties". The foregoing obligation of the
Seller and Secom to indemnify the Purchaser shall be subject to each of the
following principles or qualifications:
Asset Purchase Agreement between
Alken-Ziegler, Livonia, LLC and
Uniflow Corporation and Secom General Corporation
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12.1.1 Each of the representations and warranties made
by the Seller and Secom in this Agreement or pursuant hereto, shall survive
for a period of three (3) years after the Closing Date (except for the
representations and warranties made by the Seller in Section 4.16 hereof,
which shall survive for a period of five (5) years after the Closing Date),
notwithstanding any investigation at any time made by or on behalf of the
Purchaser, and thereafter all such representations and warranties shall be
extinguished, provided, however, that the representations and warranties made
by the Seller in Section 4.3 hereof shall in each case survive until the
first anniversary of the later of (i) the date on which applicable period of
limitation on assessment or refund of tax has expired, or (ii) the date on
which the applicable taxable year (or portion thereof) has been closed. No
claim for the recovery of indemnifiable damages may be asserted by the
Purchaser against the Seller Indemnifying Parties or their successors in
interest after such representations and warranties shall be thus
extinguished; provided, however, that claim first asserted in writing within
the applicable period shall not thereafter be barred.
12.1.2 The Purchaser shall give prompt written notice
to the Seller Indemnifying Parties of each claim for indemnifiable damages
which it believes it has suffered; provided, however, that no delay in the
giving of such notice shall affect the rights of the Purchaser to recover
indemnifiable damages hereunder, except in the event and to the extent that
such delay substantially prejudices either of the Seller Indemnifying Party's
position in defending such claim.
12.1.3 In the event of inaccuracies by the Seller
Indemnifying Parties of their representations and warranties set forth in
Section 4.16 as it relates to remediation or clean up of the Premises, the
amount of indemnifiable damages for which the Purchaser shall be entitled to
be indemnified hereunder shall not exceed the amount necessary to remediate
or clean-up the Premises to a standard that permits use of the Premises
consistent with its use as of the Closing Date in accordance with applicable
law.
12.1.4 Notwithstanding the above, the Seller
Indemnifying Parties shall not have any obligation to indemnify until the
Purchaser has suffered indemnifiable damages in excess of a $3,000 deductible
per event and in excess of a $40,000 aggregate ceiling (after which point the
Seller Indemnifying Parties will have an obligation to indemnify the
Purchaser.
12.2 Agreements by the Purchaser to Indemnify.
12.2.1 The Purchaser agrees to indemnify and hold the
Seller harmless in respect of the aggregate of all indemnifiable damages of
the Seller. For this purpose, "indemnifiable damages" of the Seller means the
aggregate of all expenses, losses, costs, deficiencies, liabilities and
damages (including related counsel fees and expenses) incurred or suffered by
the Seller resulting
Asset Purchase Agreement between
Alken-Ziegler, Livonia, LLC and
Uniflow Corporation and Secom General Corporation
G-18
from any inaccurate representation or warranty made by the Purchaser in
Article 5 or resulting from any default in the performance of any of the
covenants or agreements made by the Purchaser in this Agreement. The Seller
shall give prompt written notice to the Purchaser of each claim for
indemnifiable damages which it believes it has suffered; provided, however,
that no delay in giving of such notice shall affect the rights of the Seller
to recover indemnifiable damages hereunder, except in the event and to the
extent that such delay substantially prejudices the Purchaser's position in
defending such claim.
12.3 Participation in Proceedings - Third Party Claims. In the
event any third party claim is made against a party hereunder (the
"Indemnified Party") which could give rise to any indemnity claim, the
Indemnified Party shall reasonably and promptly thereafter give written
notice thereof to the other party (the "Indemnifying Party"), and shall give
the Indemnifying Party, at its own expense, the opportunity to defend,
discharge, or compromise such claim. The Indemnifying Party shall advise the
Indemnified Party in writing within ten (10) days after delivery of such
notice if it intends to defend such claim; failing which, the Indemnified
Party shall be entitled to dispose of such claim in the manner desired by it,
and to seek its right to indemnification by the Indemnifying Party. If the
Indemnifying Party elects to defend, the Indemnified Party shall have the
right, upon written notice to the Indemnifying Party, to participate, at its
own expense, in the defense of such claim, provided, however, that decisions
by the Indemnifying Party with respect to any such defense shall control.
Notwithstanding the foregoing, neither the Indemnifying Party nor the
Indemnified Party may settle or compromise any claim over the objection of
the other; provided, however, that consent to settlement or compromise shall
not be unreasonably withheld.
12.4 Non-Third Party Claims. With respect to non-third party
claims, if within twenty (20) days after receiving the notice described in
paragraph 12.1.2 or 12.2 hereof, the parties cannot reach agreement, the
matter shall be resolved by binding arbitration before a single arbitrator
selected by the parties in good faith in an arbitration held in accordance
with rules and procedures of the American Arbitration Association. Any such
arbitration shall take place in Novi, Michigan. The arbitrator shall assess
costs and expenses of the arbitration (including legal fees) against the
party not prevailing in the arbitration or in an equitable manner in his or
her discretion.
13. Miscellaneous
13.1 Brokers' Commission. The Purchaser will indemnify and
hold harmless the Seller from the commission, fee or claim of any person,
firm or corporation employed or retained or claiming to be employed or
retained by the Purchaser to bring about, or to represent it in, the
transactions contemplated hereby. The Seller will indemnify and hold harmless
the Purchaser from the commission, fee or claim of any person, firm or
corporation employed or retained or claiming to be employed or retained by
the Seller to bring about, or to represent it in, the transactions
contemplated hereby.
Asset Purchase Agreement between
Alken-Ziegler, Livonia, LLC and
Uniflow Corporation and Secom General Corporation
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13.2 Amendment and Modification. The parties hereto may amend,
modify and supplement this Agreement in such manner as may be agreed upon by
them in writing.
13.3 Termination.
13.3.1 Anything to the contrary herein notwithstanding,
this Agreement may be terminated and the transaction contemplated hereby may
be abandoned:
13.3.1.1 by the mutual written consent of all of
the parties hereto at any time prior to the Closing Date;
13.3.1.2 by the Purchaser at any time prior to
the Closing Date if there shall be a pending or threatened action or
proceeding by or before any court or other governmental body which shall seek
to restrain, prohibit or invalidate the sale of the Purchased Assets to the
Purchaser or any other transaction contemplated hereby, or which might
materially affect the right of the Purchaser to own, operate in their
entirety, or control the Purchased Assets;
13.3.1.3 by any party in the event of the
material breach by any other party of any provision of this Agreement, which
breach is not remedied by the breaching party within thirty (30) days after
receipt of notice thereof from the terminating party; or
13.3.1.4 by any party hereto if the Closing has
not taken place by February 8, 2000, if not delayed or caused by the breach
of the terminating party. If this Agreement is terminated pursuant to clauses
13.3.1.1 or 13.3.1.2 of this paragraph 13.3.1, then no party shall have any
liability for any costs, expenses, loss of anticipated profit or any further
obligation for breach of warranty or otherwise to any other party to this
Agreement. Any termination of this Agreement pursuant to clauses 13.3.1.3 or
13.3.1.4 of this paragraph 13.3.1 shall be without prejudice to any other
rights or remedies of the respective parties.
13.3.2 The risk of any loss to the properties to be
sold by the Seller hereunder and all liability with respect to injury and
damage occurring in connection therewith shall be the sole responsibility of
the Seller until the completion of the Closing. If any material part of the
Purchased Assets or the Premises shall be damaged by fire or other casualty
prior to the completion of the Closing hereunder, the Purchaser shall have
the right and option:
13.3.2.1 to terminate this Agreement, without
liability to any party thereto; or
13.3.2.2 to proceed with the Closing hereunder,
in which event such casualty shall not constitute a breach by the Seller of
any representation, warranty or covenant in this Agreement, and the Purchaser
shall be entitled to receive and retain the insurance proceeds arising
from such casualty and specifically attributable to the Purchased Assets.
Asset Purchase Agreement between
Alken-Ziegler, Livonia, LLC and
Uniflow Corporation and Secom General Corporation
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13.4 Assignability. This Agreement may not be assigned by the
Purchaser or the Seller without the written consent of the non-assigning
parties. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, assigns, heirs and legal
representatives.
13.5 Entire Agreement. This instrument and the exhibits and
schedules attached hereto, the Memorandum of Agreement between the Purchaser
and the Seller dated October 7, 1999, and a certain side agreement between
the Purchaser and Secom, contain the entire agreement of the parties hereto
with respect to the purchase of the Purchased Assets and the other
transactions contemplated herein, and supersede all prior understandings and
agreements of the parties with respect to the subject matter hereof. Any
reference herein to this Agreement shall be deemed to include the schedules
and exhibits attached hereto.
13.6 Headings. The descriptive headings in this Agreement are
inserted for convenience only and do not constitute a part of this Agreement
and are not to be considered in interpreting it.
13.7 Execution in Counterpart. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an original.
13.8 Notices. Any notice, request, information or other
document to be given hereunder to any of the parties by any other party shall
be in writing and delivered personally or sent by Federal Express, as
follows:
If to Seller or Secom addressed to:
Uniflow Corporation
c/o Secom General Corporation
46035 Grand River
Novi, MI 48374
with a copy to:
Robert Clemente, Esq.
Hardy, Lewis & Page, P.C.
401 South Old Woodward Ave.
Suite 400
Birmingham, MI 48009
Phone: (248) 645-0800
Fax: (248) 645-2602
Asset Purchase Agreement between
Alken-Ziegler, Livonia, LLC and
Uniflow Corporation and Secom General Corporation
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If to the Purchaser, addressed to:
Alken-Ziegler Livonia, LLC.
c/o Alken-Ziegler, Inc.
Attention: Gilbert L. Ziegler
406 South Park Drive
Kalkaska, MI 49646
Phone: (231) 258-4906
Fax: (231) 258-5484
with a copy to:
Smith Haughey Rice & Roegge P.C.
George F. Bearup, Esq.
202 East State Street
P.O. Box 848
Traverse City, MI 49685
Phone: (231) 929-4878
Fax: (231) 929-4182
Any party may change the address to which notices hereunder are to be sent to
it by giving written notice of such change of address in the manner herein
provided for giving notice. Any notice delivered personally shall be deemed
to have been given on the date it is so delivered, and any notice delivered
by registered or certified mail or overnight courier service shall be deemed
to have been given on the date it is received.
13.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Michigan applicable to
contracts made and to be performed therein.
13.10 Publicity. No press release or other public announcement
related to this Agreement or the transactions contemplated hereby will be
issued by any party hereto without the prior approval of the other parties,
except that the Seller may make such public disclosure which it believes in
good faith to be required by law or by the terms of any listing agreement
with a securities exchange (in which case the Seller will consult with the
Purchaser prior to making such disclosure).
Asset Purchase Agreement between
Alken-Ziegler, Livonia, LLC and
Uniflow Corporation and Secom General Corporation
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13.11 As Is. Except as otherwise set forth in this Agreement,
the Purchaser shall accept the Purchased Assets in "as is" condition.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
UNIFLOW CORPORATION
/s/ Paul D. Clemente
-----------------------------
By: Paul D. Clemente
Its: Authorized Agent and Chairman
of the Board of Directors
SECOM GENERAL CORPORATION
/s/ Robert A. Clemente
-----------------------------
By: Robert A. Clemente
Its: Authorized Agent and Chairman
of the Board of Directors
ALKEN-ZIEGLER LIVONIA, LLC.
By: /s/ Gilbert L. Ziegler
-----------------------------
Gilbert L. Ziegler
Its: Manager
Asset Purchase Agreement between
Alken-Ziegler, Livonia, LLC and
Uniflow Corporation and Secom General Corporation
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