SCHEDULE 14C
(Rule 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities
Exchange Act of 1934 (Amendment No. )
Check the appropriate box:
/x/ Preliminary information statement / / Confidential, for use of the
/ / Definitive information statement Commission only (as permitted
by Rule 14c(d)(2))
Secom General Corporation
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(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
/ / No fee required.
/x/ Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
____________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
____________________________________________________________________
(3) per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
1/50 of 1% of a purchase price of $9,600,000
____________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
$9,600,000
____________________________________________________________________
(5) Total fee paid:
$1,920
____________________________________________________________________
Fee paid previously with preliminary materials.
Checkbox if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of filing.
(1) Amount Previously Paid:
____________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
____________________________________________________________________
(3) Filing Party:
____________________________________________________________________
(4) Date Filed:
____________________________________________________________________
<PAGE>
SECOM GENERAL CORPORATION
46035 Grand River Avenue
Novi, Michigan 48374
(248) 305-9410
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INFORMATION STATEMENT
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YOUR VOTE IS NOT REQUIRED
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
This Information Statement is being furnished to the stockholders
of Secom General Corporation, a Delaware corporation (the "Company") in
connection with the approval of an Asset Purchase Agreement, dated March 29,
2000, (the "Agreement") for the sale of substantially all of the Company's
Tooling Segment and related operating assets and real estate (the
"Transaction") by a Written Consent in Lieu of a Special Meeting dated as of
May 10, 2000 (the "Written Consent"). This Information Statement is being
mailed on or about May 26, 2000 to all stockholders of record at the close of
business on May 1, 2000 (the "Record Date"). As of the Record Date, there
were 1,038,229 shares of the Company's common stock, par value $.10 (the
"Common Stock") outstanding, each entitled to one vote on each matter of
business put to a stockholder vote.
The Board of Directors believes that approval of the Agreement and
consummation of the Transaction is in the best interests of the Company and
its stockholders. Accordingly, on March 29, 2000, the Board of Directors
unanimously approved the Agreement.
Under Delaware law, the affirmative vote of the holders of a
majority of the outstanding shares of the Company's Common Stock is required
to approve the Agreement and the Transaction. As of May 10, 2000, in
accordance with Delaware law, the holders of a majority of the issued and
outstanding shares of the Company's Common Stock executed the Written Consent
approving the Agreement. As a result, the Agreement was approved and no
further votes will be needed. ACCORDINGLY, WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY. You do not have appraisal
rights in connection with the approval of the Agreement or the consummation
of the Transaction.
This Information Statement is being provided to you pursuant to
the requirements of Rule 14c-2 promulgated under Section 13 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), which requires that
this Information Statement be mailed or given to the Company's stockholders
at least twenty (20) days prior to giving effect to the action being taken by
the Written Consent.
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Accordingly, the approval of the Agreement by Written Consent will
become effective 20 days from the mailing of this Information Statement and
the closing of the sale of the Tooling Segment will occur as soon as
reasonably practicable thereafter.
SUMMARY
This Summary highlights selected information in this Information
Statement and may not contain all of the information that is important to
you. To fully understand the sale of the Tooling Segment, and for a more
complete description of the Transaction, you should read carefully this
entire document and the documents to which we have referred you. Each item in
this Summary includes a page reference directing you to a more complete
description of that item. The terms "we," "our" and the "Company" as used in
this Information Statement refers to Secom General Corporation and, if
applicable, its subsidiaries. The term "you" refers to the stockholders of
Secom General Corporation.
DESCRIPTION OF THE COMPANY (See pages 7-9)
The Company is a holding company with four wholly owned
subsidiaries: Form Flow, Inc. ("Form Flow"), L&H Die, Inc. ("L&H") and
Micanol, Inc. ("Micanol") (which collectively comprise the "Tooling Segment")
and Uniflow Corporation ("Uniflow") (which comprises the "Metal Parts Forming
Segment"). Substantially all of the operating assets of the Metal Parts
Forming Segment were sold on February 9, 2000.
The Tooling Segment manufactures close tolerance tooling for the
hot and cold metal forming industry. Hot and cold metal forming companies
typically make metal parts from steel coil that is automatically fed through
various stations on a "header" forming machine. A header machine cuts steel
coil and moves it through each die station progressively, using tool inserts
to form the part. Tool life is dependent on the type of material used to make
the part, as well as the size and shape of the part, among other things.
Prior to its sale, the Metal Parts Forming Segment primarily
manufactured automotive and truck parts from steel bar, coil and tubing using
cold forging and forming machines and various types of secondary machining,
such as threadrolling and piercing equipment. Substantially all of the
operating assets of the Metal Parts Forming Segment were sold on February 9,
2000 to Alken-Ziegler Livonia, LLC ("Alken-Ziegler") pursuant to an Asset
Purchase Agreement dated as of February 1, 2000 among the Company, 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.
BACKGROUND AND REASONS FOR THE PROPOSED SALE (See pages 9-11)
In October 1998, we engaged the services of Goldsmith, Agio, Helms
Securities, Inc., an investment banking firm, to assist us in exploring
strategic alternatives to maximize stockholder value, including a potential
sale of the Company. Our Board of Directors believed that the then trading
price of our stock did not accurately reflect the value of the Company.
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After reviewing alternatives, our Board of Directors believed that
stockholder value could best be maximized by a sale of part or all of the
Company. As part of this effort, we sold substantially all of the assets of
our Metal Parts Forming Segment on February 9, 2000. Before the sale of the
Metal Parts Forming Segment, we discussed the possibility of selling the
Tooling Segment with several entities. After entering into a letter of intent
for the purchase of the Metal Parts Forming Segment, Alken-Ziegler also
expressed interest in purchasing the assets of the Tooling Segment. Our Board
of Directors ultimately entered into the Agreement with Alken-Ziegler, and GL
Ziegler Investments, LLC ("GLZ"; GLZ and Alken-Ziegler are collectively
referred to herein as "Purchaser").
CONSIDERATION TO BE RECEIVED; USE OF PROCEEDS (See page 12)
If the Transaction is consummated on the terms contemplated by the
Agreement, we will receive aggregate consideration of $9.6 million in cash,
subject to inventory adjustments and any possible indemnification claims
under the Agreement. Purchaser will also assume certain liabilities in
connection with the Transaction. Subject to stockholder approval, our Board
of Directors anticipates that the proceeds of the sale, after payment of any
related tax obligations and other expenses, would become part of a pool of
assets governed by a Plan of Liquidation and Dissolution.
THE AGREEMENT (See pages 12-16)
The Agreement is the legal document that governs the sale of the
Tooling Segment's assets. The Agreement, excluding any exhibits or schedules
thereto, is attached as Exhibit "A."
THE PARTIES (See page 12)
The parties to the Agreement are Alken-Ziegler and GLZ, as
purchaser, and the Company, Form Flow, L&H and Uniflow, as sellers.
CONDITIONS TO THE CLOSING (See pages 14-15)
Completion of the Transaction is subject to the satisfaction of
certain other customary conditions including, among other things:
o The representations and warranties set forth in the Agreement are
accurate as of the closing date;
o The parties have performed their respective obligations under the
Agreement;
o The parties have delivered all documents required under the Agreement;
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o No litigation restraining, prohibiting or invalidating the sale or
which might materially affect the ability of the prospective purchaser
to own, operate or control the purchased assets has been filed; and
o Purchaser has satisfactorily completed a due diligence review.
TERMINATION RIGHTS (See page 15)
Either the Company or Purchaser may terminate the Agreement under
certain circumstances, including if:
o All parties consent in writing;
o The closing has not taken place by June 15, 2000, provided that the
delay is not caused by the breach of the terminating party; or
o The other party materially breaches any of the provisions of the
Agreement, which breach is not cured within thirty (30) days after
written notice.
Purchaser may terminate the Agreement under certain circumstances,
including if:
o There is a pending or threatened action or proceeding to restrain,
prohibit or invalidate the sale or which might materially affect the
ability of Purchaser to own, operate or control the purchased assets;
or
o Any material part of the purchased assets are damaged by fire or other
casualty.
THE CLOSING (See page 16)
This Information Statement is being sent to you on or about
May 26, 2000. We expect to complete the sale of the Tooling Segment on or
after June 15, 2000 which is 20 days after the mailing date of this
Information Statement.
STRUCTURE OF COMPANY AFTER THE SALE (See pages 16-17)
After the closing of the sale of the Tooling Segment, the Company
will hold:
o Net proceeds from the Transaction approximating $9.6 million (before
payment of federal and state taxes and other expenses which are
currently estimated at $2 million);
o Accounts receivable and accounts payable and accrued liabilities of
the Tooling Segment (estimated net asset amount of approximately $1
million);
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o A promissory note from Delco Remy America currently valued at
approximately $1.2 million. (See the Company's Form 8-K, dated October
27, 1998, incorporated herein by reference and made a part hereof, for
a description of the transaction underlying this promissory note);
o A promissory note from Horizon Technology, L.L.C. currently valued at
approximately $400,000. (See the Company's Form 8-K, dated March 18,
1998, incorporated herein by reference and made a part hereof, for a
description of the transaction underlying this promissory note);
o Three industrial plants in the City of Novi, Michigan which are being
held for sale and which have an aggregate net value of approximately
$1 million;
o Other cash and cash equivalents approximating $3 million; and
o Miscellaneous royalty rights from Alken-Ziegler Livonia, LLC and
Horizon Technology, L.L.C.
Our Board of Directors anticipates that, after consummation of the
Transaction, it will approve a Plan of Liquidation and Dissolution which it
will recommend for approval by you at an annual meeting of the stockholders
to be held in August 2000.
INTERESTS OF CERTAIN PERSONS IN THE PROPOSED SALE (See page 17)
In the past, we have granted stock options to our officers and
employees, some of which are currently exercisable. Because the exercise
price of these options has been greater than the trading price of the Common
Stock, these options generally have not been exercised. Upon completion of
the sale, the trading price of our Common Stock may increase so that the
trading price of the Common Stock is equal to or greater than the exercise
price of some or all of the exercisable stock options. In that event, it is
likely that some or all of those stock options would be exercised.
Information regarding our stock options is set forth in our Form 10-K for the
fiscal year ended September 30, 1999, a copy of which is incorporated herein
by reference and made a part hereof.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES (See page 17)
We currently expect to report a gain for federal income tax
purposes of approximately $4.7 million from the Transaction. We anticipate
that the federal tax liability as a result of the reported gain will be
approximately $1.6 million.
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ACCOUNTING TREATMENT OF THE PROPOSED SALE (See page 17)
The Transaction will be accounted for as a sale of assets.
Financial statements reflecting the Transaction have been prepared to reflect
the Tooling Segment as a discontinued operation and are set forth in the
Company's Form 10-Q for the quarter ended March 31, 2000, incorporated herein
by reference and made a part hereof. A copy of our March 31, 2000 Form 10-Q
is being delivered to you along with this Information Statement.
STOCKHOLDERS' RIGHTS OF DISSENT AND APPRAISAL (See page 17)
Under Delaware law, you do not have dissenters' or appraisal
rights in connection with the sale.
GOVERNMENT REGULATION AND LEGISLATION (See page 18)
Except for compliance by the Company with the applicable rules and
regulations of the Securities and Exchange Commission and Delaware corporate
law, no United States, federal or state regulatory requirements must be
complied with or approvals obtained in connection with the sale of the
Tooling Segment.
RISK OF DELISTING FROM NASDAQ (See page 18)
If the sale is completed and the stockholders approve a Plan of
Liquidation, there can be no assurance that we will be able to maintain
continued compliance with Nasdaq's listing requirements or that Nasdaq will
not request that we voluntarily delist our securities from their Market
System. If our Common Stock is delisted from Nasdaq, trading, if any, would
thereafter be conducted in the over-the-counter market in the so-called `pink
sheets' or the `Electronic Bulletin Board' of the National Association of
Securities Dealers, Inc. and consequently, you may find it more difficult to
dispose of, or to obtain accurate quotations as to the price of the Common
Stock.
FORWARD LOOKING STATEMENTS
THIS INFORMATION STATEMENT CONTAINS STATEMENTS THAT ARE NOT BASED
ON HISTORICAL FACT AND ARE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. AMONG OTHER THINGS,
THEY RELATE TO THE COMPANY'S LIQUIDITY, FINANCIAL CONDITION, OPERATIONAL
MATTERS, CERTAIN STRATEGIC INITIATIVES AND ALTERNATIVES AND THEIR POTENTIAL
OUTCOMES AND THE POTENTIAL VALUE OF THE COMPANY'S PROPERTY AND ASSETS. WORDS
OR PHRASES DENOTING THE ANTICIPATED RESULTS OF FUTURE EVENTS, SUCH AS
"ANTICIPATE," "BELIEVE," "ESTIMATE," "EXPECT," "MAY," "NOT CONSIDERED
LIKELY," "ARE EXPECTED TO," "WILL CONTINUE," "PROJECT" AND SIMILAR
EXPRESSIONS THAT DENOTE UNCERTAINTY ARE INTENDED TO IDENTIFY SUCH
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FORWARD-LOOKING STATEMENTS. THE METHODS USED BY THE BOARD OF DIRECTORS AND
MANAGEMENT IN ESTIMATING THE VALUE OF THE COMPANY'S PROPERTY AND ASSETS DO
NOT RESULT IN AN EXACT DETERMINATION OF VALUE NOR ARE THEY INTENDED TO
INDICATE THE EXACT AMOUNT A STOCKHOLDER MAY RECEIVE IN A LIQUIDATION, IF ANY.
THE PRICES AT WHICH THE COMPANY WILL BE ABLE TO SELL ITS PROPERTY AND ASSETS
DEPENDS LARGELY ON FACTORS BEYOND THE COMPANY'S CONTROL, INCLUDING, WITHOUT
LIMITATION, THE RATE OF INFLATION, CHANGES IN INTEREST RATES, THE CONDITION
OF THE REAL ESTATE AND FINANCIAL MARKETS AND THE AVAILABILITY OF FINANCING TO
A PROSPECTIVE PURCHASER.
THE SALE OF THE TOOLING SEGMENT
The terms and conditions of the sale of the Tooling Segment are
contained in an Asset Purchase Agreement, dated March 29, 2000 (the
"Agreement"). A copy of the Agreement, excluding any exhibits or schedules
thereto, is attached to this Information Statement as Exhibit "A" and is
incorporated into this Information Statement by reference. The description in
this Information Statement of the terms and conditions of the sale is
qualified in its entirety by, and made subject to, the more complete
information set forth in the Agreement.
DESCRIPTION OF THE COMPANY
The Company is a holding company with four wholly owned
subsidiaries: Form Flow, L&H and Micanol (which collectively comprise the
Tooling Segment) and Uniflow (which comprises the Metal Parts Forming
Segment). In July 1998, we significantly reduced the size of Micanol by
selling certain equipment and transferring the remaining assets and business
to L&H. In February 2000, we sold substantially all of the operating assets
of the Metal Parts Forming Segment.
The Tooling Segment manufactures close tolerance tooling for the
hot and cold metal forming industry. Hot and cold metal forming companies
typically make metal parts from steel coil that is automatically fed through
various stations on a "header forming" machine. A header machine cuts steel
coil and moves it through each die station progressively, using tool inserts
to form the part. Tool life is dependent on the type of material used to make
the part and the size and shape of the part, among other things.
As part of its sales and service, the Tooling Segment's design and
development staff will advise customers about tooling issues and other
engineering matters related to the production of hot and cold formed parts.
Tool orders (without design services) typically can take 4 to 10 weeks to
complete, while design and development orders can span over a period of
months.
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The Tooling Segment's customers are numerous and cover a wide
variety of industries. The Tooling Segment's customers manufacture items such
as industrial fasteners, hand tools, automotive parts, tubing, consumer
items, munitions and a wide array of OEM assembly parts. The Tooling
Segment's customers include OEM and aftermarket suppliers and are
predominantly related to the automotive industry. Continuing customer
relations are important, as significant revenue is derived from tooling
reorders.
The Tooling Segment operates in fragmented markets with numerous
competitors. Generally, independent competitors are smaller companies ranging
in size from 10 employees to up to 100 employees. The Tooling Segment also
competes with its customers internal tooling capabilities, as customers
typically have their own tool facilities to support production. Management
believes consistent success is dependent principally on tool quality and
durability, on-time delivery and price competitiveness. The Tooling Segment's
design and engineering services allow it to compete for tool development
work. The Tooling Segment sells principally to customers in the United
States.
All tooling orders are manufactured to customer specifications as
indicated on tool drawings. Tools are made from bar stock steel or carbide
blanks and generally are routed through a production sequence that includes
cutting, turning (CNC/lathe work), heat treating, grinding, polishing and
coating.
Form Flow and L&H have separate plant facilities owned by the
Company. Design and engineering services are located at a Form Flow facility,
and are offered by all three subsidiaries comprising the Tooling Segment.
The Tooling Segment employs a total of about 135 full-time
employees: 80% direct and indirect labor (including factory floor
supervision), 3% in engineering, 2% in sales, 10% office and 5% management.
The Tooling Segment operates from the following facilities:
o Form Flow is located in two 12,600 square foot adjacent buildings on
approximately four acres of land (owned by the Company) at 6901 and
6999 Cogswell in Romulus, Michigan 48174. Its telephone number is
(734) 729-3100.
o L&H and Micanol are located in a 17,400 square foot building on
approximately two acres of land (owned by the Company) at 38200 Ecorse
Road, Romulus, Michigan 48174 and its telephone number is (734)
722-8011.
The operating assets of the Metal Parts Forming Segment were sold
on February 9, 2000 to Alken-Ziegler pursuant to an Asset Purchase Agreement
dated February 1, 2000 among Alken-Ziegler, as purchaser, and the Company and
Uniflow, as sellers. 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. The sale of Uniflow's assets is more fully
described in the Company's Form 8-K dated February 9, 2000 which is
incorporated herein by reference and made a part hereof.
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Prior to its sale, the Metal Parts Forming Segment primarily
manufactured automotive and truck parts from steel bar, coil and tubing using
cold forging and forming machines and various types of secondary machining,
such as threadrolling and piercing equipment.
The financial condition and results of operations of the Tooling
Segment and Metal Parts Forming Segment are described in the Company's Form
10-K for the fiscal year ended September 30, 1999 and the Company's
Forms 10-Q for the quarters ended December 31, 1999 and March 31, 2000, all
of which are incorporated herein by reference and made a part hereof,
BACKGROUND OF THE PROPOSED SALE
During the fall of 1998, our Board of Directors engaged the
investment banking firm of Goldsmith, Agio, Helms Securities, Inc. ("GAHS")
to assist us in developing strategic alternatives to increase stockholder
value. Among the alternatives discussed with GAHS was a possible merger, sale
or similar transaction of the entire Company or its subsidiaries. While other
parties expressed an interest in engaging in a transaction with the entire
Company, the price proposed by such parties was below what our Board believed
was fair market value. GAHS also advised our Board that, because of the
different industries represented by our two operating segments, many
potential purchasers would not be interested in purchasing both segments.
Therefore, our Board believed it was necessary to pursue other alternatives
to accomplish its goal of increasing stockholder value, including selling the
Company's assets and properties in separate transactions.
In August 1999, we entered into a letter of intent with a
potential purchaser for the sale of the assets of the Tooling Segment. After
signing the letter of intent, the potential purchaser asked us for certain
concessions on the terms which we were unwilling to provide. The letter of
intent also contained certain contingencies that were not satisfied so the
letter of intent terminated.
At the same time, we were negotiating with Alken-Ziegler for the
sale of the operating assets of the Metal Parts Forming Segment and entered
into a letter of intent for that sale in October 1999. When the letter of
intent with respect to the Tooling Segment terminated, Alken-Ziegler
expressed interest in purchasing the assets of the Tooling Segment. In
November 1999, our Board authorized execution of a non-binding letter of
intent with Alken-Ziegler for the sale of the assets of the Tooling Segment.
At that time, however, we believed that it was in the Company's best interest
to focus on closing the sale of the Metal Parts Forming Segment before
entering into a definitive agreement for the sale of the assets of the
Tooling Segment.
On February 9, 2000, we sold the operating assets of our Metal
Parts Forming Segment to Alken-Ziegler. (For a detailed description of that
transaction, please see the Company's Form 8-K dated February 9, 2000,
incorporated herein by reference and made a part hereof). We then began
negotiating with Purchaser on the terms of a definitive agreement for the
sale of the assets of the Tooling Segment.
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Our Board received periodic informal updates from management on
the sale process and the negotiations with Purchaser. When terms of the
Transaction had been reached by management, the Board reviewed and discussed
the terms of the Transaction and, with respect to the purchase price,
determined that it was consistent with market values as projected by GAHS.
The Board also believed that a cash payment of the entire purchase price was
favorable to our stockholders.
On March 29, 2000, our Board authorized the execution of the
Agreement. The Agreement is subject to certain contingencies, including a
satisfactory due diligence review by Purchaser, all of which must be
satisfied or waived prior to closing.
In reviewing other terms of the Agreement, the Board also
considered Purchaser's request to close on or before June 15, 2000. Given the
Transaction's favorable payment terms, the Board directed management to
prepare for a closing as promptly as practicable. However, it became apparent
that a duly called stockholder meeting, along with the associated timing
requirements, could not be completed prior to the June 15, 2000 deadline.
Accordingly, as of May 10, 2000, stockholders holding at least 51% of the
Company's Common Stock provided their Written Consent approving the Agreement
and the Transaction.
In April 2000, we sold one of our manufacturing facilities in
Novi, Michigan for $1.2 million. In May 2000, we expect to reach a
definitive agreement for the sale of our remaining three manufacturing
facilities in Novi, Michigan for a purchase price of $2.75 million.
REASONS FOR THE PROPOSED SALE
At a meeting of our Board of Directors held on March 29, 2000, the
Board determined that the sale of our Tooling Segment upon the terms
described in the Agreement was advisable, fair, and in the best interests of
our stockholders. In reaching its decision to approve the Agreement and to
recommend approval and adoption of the sale by the Company's stockholders,
our Board of Directors consulted with management as well as its financial and
legal advisors and considered a number of factors, including, without
limitation, the following:
o The purchase price is consistent with market values anticipated by our
investment banker and a cash payment of the entire purchase price was
favorable to our stockholders;
o The results of Board and management discussions with various
organizations regarding their interest in a strategic alliance or
other transaction involving the Company;
o Familiarity of Board and management with the Tooling Segment, its
operations, financial condition and results of operations on a
historical and prospective basis;
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o The assessment of opportunities for long-term revenue and earnings
growth in the tooling industry;
o The current maturity stage of the Tooling Segment's business
operations and the fact that the sale of the Tooling Segment would
involve the disposition of the remaining source of the Company's
operating revenues;
o The impact of the Transaction on the liquidity of the market for the
Company's common stock, including the possibility that the Transaction
might result in a delisting of the shares from the Nasdaq Stock Market
and may therefore impair the liquidity in the trading market for the
common stock;
o The fact that the sale of the Company's Tooling Segment combined with
the implementation of an anticipated Plan of Liquidation should
provide a favorable financial return to the Company's stockholders;
o The terms and conditions of the Agreement, including the cash
consideration to be received by the Company and the assumption of
certain liabilities in connection with the Tooling Segment;
o The fact that, subject to standard conditions, the Agreement provides
the Company with a reasonable degree of certainty that the Transaction
ultimately will be consummated; and
o The uncertainty, if the Company rejected this transaction, of
negotiating an alternative transaction on as favorable a basis with
another party within a reasonable time frame.
Each of the foregoing factors was considered by our Board of
Directors during the course of its deliberations prior to executing the
Agreement in light of the Board's knowledge of our business and each
director's business judgment. In its deliberations, our Board of Directors
did not quantify or otherwise attempt to assign relative weights to the
specific factors considered in determining to approve (and to recommend that
the stockholders approve) the Agreement and the Transaction. Rather, the
Company's Board of Directors made its determination based on the total mix of
information available to it, and the judgments of the individual directors
may have been influenced to a greater or lesser degree by different factors.
In considering the recommendation of our Board of Directors with respect to
the Transaction, stockholders should be aware that the interests of certain
directors and executive officers with respect to the sale are or may be
different from or in addition to the interests of our stockholders generally.
The Company's Board of Directors was aware of these interests and took these
interests into account. In light of the foregoing, the Board of Directors
unanimously approved and adopted the Agreement and unanimously recommended
that the Company's stockholders approve the Agreement.
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CONSIDERATION TO BE RECEIVED AND USE OF PROCEEDS
If the Transaction is consummated, we will receive aggregate
consideration of $9.6 million in cash, subject to inventory adjustments and
any possible indemnification claims under the Agreement. Purchaser will also
assume certain liabilities in connection with the sale. If the sale is
completed, our Board of Directors anticipates that it will approve and
recommend for your approval at the Annual Meeting of the Stockholders to be
held in August 2000 a Plan of Liquidation and Dissolution ("Plan of
Liquidation"). This Plan will be more fully described in a proxy statement
for the Annual Meeting. If a Plan of Liquidation is approved, our Board of
Directors anticipates that the proceeds of the Transaction, after payment of
any related tax obligations and other expenses, would become part of a pool
of assets subject to a Plan of Liquidation.
THE AGREEMENT
The Agreement is the legal document that governs the sale of the
Tooling Segment's assets. The entire Agreement, excluding any exhibits or
schedules thereto, is attached as Exhibit "A" and incorporated herein by
reference. The following is a summary of the material terms and conditions of
the Agreement which is qualified in its entirety and subject to the complete
information set forth in the Agreement.
The Parties. The parties to the Agreement are Alken-Ziegler and
GLZ, as purchaser, and the Company, Form Flow, L&H and Uniflow, as sellers.
Purchased Assets. The assets to be sold by the Tooling Segment and
the Company under the Agreement are the properties, business and assets
currently owned or used exclusively by the Tooling Segment in connection with
or related to its business (the "Purchased Assets"), including the following:
o All machinery, equipment, tools, supplies, furniture and fixtures,
automobiles and trucks, real estate and other fixed assets owned by
the Tooling Segment and/or used exclusively in its business;
o All inventories of the Tooling Segment, including raw materials,
work-in-progress, finished goods, supplies and related items, and
packaging materials, and all perishable and customer-billable tooling,
and replacement and maintenance parts;
o All of the interest of and the rights and benefits accruing to the
Company and the Tooling Segment as lessee under all leases or rental
agreements covering machinery, equipment, tools, furniture and
fixtures, automobiles and trucks and other fixed assets, currently
owned or used in connection with or related to the business of the
Tooling Segment (the "Purchased Leasehold Rights");
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o All of the rights and benefits accruing to the Tooling Segment under
all customer purchase orders for manufactured goods to be assumed by
Purchaser and made in the ordinary course of business and all purchase
orders for inventory and other purchase commitments made by the
Tooling Segment in the ordinary course of business (the "Purchased
Contracts");
o All operating data and records of the Tooling Segment relating to or
arising out of the operation of its business;
o All of the intellectual property rights and goodwill of the Tooling
Segment related to its business.
Excluded Assets. The Purchased Assets exclude: (i) all cash or
cash equivalents; (ii) all accounts and notes receivables; (iii) prepaid
expenses or deposits; (iv) intercompany related assets; and (v) any other
assets not part of the Purchased Assets.
Purchase Price. The purchase price is an amount in cash equal to
$9.6 million as consideration for the Purchased Assets, adjusted for any
change in the aggregate inventory level from October 31, 1999.
Assumed Liabilities. Generally, Purchaser agrees to assume those
obligations and contracts with respect to the Purchased Contracts or
Purchased Leasehold Rights. Except for these assumed liabilities, the Company
will remain responsible for any liability or obligation arising against the
Company or its subsidiaries.
Representations and Warranties. The Agreement contains customary
representations and warranties by the parties relating to, among other
things:
o Their respective organizations and similar corporate matters;
o Authorization, execution, delivery, performance and enforceability of
the Agreement; and
o Compliance with organizational documents, certain contracts and
applicable laws.
The Agreement also contains additional representations and
warranties of Form Flow, L&H and the Company relating to, among other things:
o Tax matters;
o Real Estate matters;
o Good title to the Purchased Assets;
13
o Required licenses and permits to operate the business;
o Intellectual property matters;
o Litigation, product liability and product warranty claims involving
the business;
o Records of the business;
o Employment, labor relations, and employee benefits matters;
o Environmental matters;
o The quality and the amount of the inventory of the Tooling Segment.
The Agreement also contains a covenant by Purchaser to deliver a
commitment letter from a financial institution evidencing its ability to
finance the purchase.
Conduct of the Business Pending the Sale. Under the Agreement,
pending the closing of the sale, the Company has generally agreed to operate
its Tooling Segment in the ordinary course and in accordance with past
practice, except as otherwise specifically stated in the Agreement. In
operating the business, the Company will provide Purchaser with key financial
information and access to the facilities, books and records and other
information pertaining to the Tooling Segment.
Conditions. The closing of the Transaction is subject to the
satisfaction of certain customary conditions including, among other things:
o The accuracy as of the closing date of the representations and
warranties set forth in the Agreement;
o The performance by the parties of their obligations under the
Agreement;
o Delivery of all documents, searches, statements, schedules,
resolutions, certificates and consents required under the Agreement;
o The lack of litigation restraining, prohibiting or invalidating the
sale or which might materially affect the ability of the prospective
purchaser to own, operate or control the Purchased Assets; and
o Satisfactory completion of Purchaser's due diligence.
14
Lease Agreement. The Company and Purchaser will enter into a
certain sublease agreement for the use by Purchaser of software and computer
assets to be transferred to Purchaser pursuant to the sale.
Termination. Either the Company or Purchaser may terminate the
Agreement under certain circumstances, including:
o The written consent of all parties;
o The Closing has not taken place by June 15, 2000, if not delayed or
caused by the breach of the terminating party;
o The other party materially breaches any of the provisions of the
Agreement, which breach is not cured within thirty (30) days after
written notice.
Purchaser may terminate the Agreement under the following circumstances:
o There is a pending or threatened litigation to restrain, prohibit or
invalidate the sale or which might materially affect the ability of
the Purchaser to own, operate or control the purchased assets; or
o Any material part of the purchased assets are damaged by fire or other
casualty.
Indemnification. Generally, the Company and Tooling Segment have
agreed to indemnify Purchaser for all liabilities or expenses arising from:
o Any inaccurate representation or warranty made by the Company or
Tooling Segment in the Agreement;
o Any default in the performance of any of the covenants or agreements
of the Company or Tooling Segment;
o The failure of the Company or Tooling Segment to pay, discharge or
perform any liability or obligation of the Company or Tooling Segment
not expressly assumed by Purchaser; or
o Any claim for brokerage or finder's fees or commissions based upon any
agreement with the Company or Tooling Segment in connection with the
transactions contemplated by the Agreement.
The indemnification obligations of the Company and Tooling Segment
are limited to amounts exceeding $3,000 per event and $40,000 in the
aggregate for all claims other than environmental, products liabilities,
statutory causes of action, successor liability and tax claims.
15
Generally, Purchaser has agreed to indemnify the Company and
Tooling Segment for all liabilities or expenses arising from:
o Any inaccurate representation or warranty made by the Purchaser in the
Agreement; or
o Any default in the performance of any of the covenants or agreements
of the Purchaser.
THE CLOSING
This Information Statement is being sent to you on or about
May 26, 2000. We expect to complete the sale of the Tooling Segment on or
after June 15, 2000 which is 20 days after the mailing date of this
Information Statement.
STRUCTURE OF THE COMPANY AFTER THE SALE
After the closing of the sale of the Tooling Segment, we would no
longer possess any operating units and would hold (in material respect):
o Net proceeds from the Transaction approximating $9.6 million (before
payment of federal and state taxes and other expenses which are
currently estimated at $2 million);
o Accounts receivable and accounts payable and accrued liabilities of
the Tooling Segment (estimated net asset amount of approximately $1
million);
o A promissory note from Delco Remy America currently valued at
approximately $1.2 million. (See the Company's Form 8-K, dated October
27, 1998, incorporated herein by reference and made a part hereof, for
a description of the transaction underlying this promissory note);
o A promissory Note from Horizon Technology, L.L.C. currently valued at
approximately $400,000. (See the Company's Form 8-K, dated March 18,
1998, incorporated herein by reference and made a part hereof, for a
description of the transaction underlying this promissory note);
o Three industrial plants in the City of Novi, Michigan which are being
held for sale and which have an aggregate net value of approximately
$1 million;
o Other cash and cash equivalents approximating $3 million; and
16
o Miscellaneous royalty rights from Alken-Ziegler Livonia, LLC and
Horizon Technology, L.L.C.
INTERESTS OF CERTAIN PERSONS IN THE PROPOSED SALE
In the past, we have granted stock options to our officers and
employees, some of which are currently exercisable. Because the exercise
price of these options has been greater than the trading price of the Common
Stock, these options generally remained unexercised. Upon completion of the
sale, the trading price of our Common Stock may increase so that the trading
price is equal to or greater than the exercise price of some or all of the
exercisable stock options. In that event, it is likely that some or all of
those stock options would be exercised. Information regarding our stock
options is set forth in our Form 10-K for the fiscal year ended September 30,
1999, a copy of which is incorporated herein by reference and made a part
hereof.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
We currently expect to report a gain for federal income tax
purposes of approximately $4.7 million from the Transaction. We anticipate
that the federal tax liability as a result of the reported gain will be
approximately $1.6 million.
ACCOUNTING TREATMENT
The Transaction will be accounted for as a sale of assets.
Financial statements reflecting the Transaction have been prepared to reflect
the Tooling Segment as a discontinued operation and are set forth in the
Company's Form 10-Q for the quarter ended March 31, 2000, incorporated herein
by reference and made a part hereof. A copy of our March 31, 2000 Form 10-Q
is being delivered to you along with this Information Statement.
STOCKHOLDERS' RIGHTS OF DISSENT AND APPRAISAL
Under Delaware law, you do not have dissenters' or appraisal
rights in connection with the proposed sale of the Tooling Segment.
17
GOVERNMENT REGULATION AND LEGISLATION
Except for compliance by the Company with the applicable rules and
regulations of the Securities and Exchange Commission and Delaware Corporate
Law, no United States, federal or state regulatory requirements must be
complied with or approvals obtained with respect to the Transaction.
RISK OF DELISTING FROM NASDAQ
If the sale is completed and the stockholders approve a Plan of
Liquidation, there can be no assurance that we will be able to maintain
continued compliance with Nasdaq's listing requirements or that Nasdaq will
not request that we voluntarily delist our securities from their Market
System. If our Common Stock is delisted from Nasdaq, trading, if any, would
thereafter be conducted in the over-the-counter market in the so-called `pink
sheets' or the `Electronic Bulletin Board' of the National Association of
Securities Dealers, Inc. and consequently, you may find it more difficult to
dispose of, or to obtain accurate quotations as to the price of the Common
Stock.
INCORPORATION BY REFERENCE
All information appearing in this Information Statement is
qualified in its entirety by the information and financial statements
(including notes thereto appearing in the documents which are incorporated by
reference). You can obtain copies of the documents incorporated by reference
to this Information Statement at the SEC's website at www.sec.gov or you can
contact us at (248) 305-9410. You are encouraged to read the documents
incorporated by reference in their entirety.
By Order of the Board of Directors
/s/ Robert A. Clemente
-------------------------------
Robert A. Clemente, Chairman of
Dated: May 10, 2000 the Board of Directors
EXHIBIT "A"
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is made and entered
into as of this 29th of March, 2000, by and among ALKEN-ZIEGLER LIVONIA,
LLC., a Michigan limited liability company ("Purchaser"), GL Ziegler
Investments, LLC, a Michigan limited liability company ("GLZ"), FORM FLOW,
INC., a Michigan corporation ("Form Flow") and L & H DIE, INC., a Michigan
corporation ("L & H" - Form Flow and L & H sometimes collectively referred to
as "Seller"), SECOM GENERAL CORPORATION, a Delaware corporation ("Secom"),
which is the parent company of the Seller, and UNIFLOW CORPORATION, a
Michigan corporation ("Uniflow").
RECITALS
The Seller is engaged in the production and manufacture of
perishable tooling for the cold forming and forging industry (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 GLZ desires to purchase certain 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, and Secom
(with respect to the real estate) agree to and will sell, convey, transfer,
assign and deliver to the Purchaser and GLZ (with respect to the real estate)
at the Closing (as defined below), free and clear of all liens, mortgages,
pledges, encumbrances and charges of every kind, other than the Assumed
Liabilities or Sublease (as defined below), 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 defined below)
(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,
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 1 of 27
automobiles and trucks, real estate and other fixed assets owned by the
Seller and/or used exclusively in the Business identified on Schedule 1.1;
1.1.2 all inventories of the Seller related to
and used in the operation of the Business, including raw materials,
work-in-progress, finished goods, 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 interest of and the rights and
benefits accruing to the Seller and Secom as lessee under all leases or
rental agreements covering machinery, equipment, tools, furniture and
fixtures, automobiles and trucks and other fixed assets, currently owned or
used in connection with or related to the Business as described in Schedules
1.1, and the T-1 line agreement, all such leases and agreements are set forth
in Schedule 1.1.3 (collectively, the "Purchased Leasehold Rights");
1.1.4 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 1.1.4 (the "Purchased Contracts");
1.1.5 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");
1.1.6 all of the intellectual property rights of
the Seller related to the Business, such as trademarks, trade names
(specifically including "Form Flow, Inc." and "L&H Die, Inc." and
"Micanol,"any part or portion of those names, 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 and/or manufactured by the Seller in the
operation of the Business as set forth in Schedule 1.1.6 (the "Purchased
Proprietary Rights").
1.1.7 all goodwill.
1.2 Excluded Assets. Notwithstanding Section 1.1, the
Purchased Assets shall
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 2 of 27
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) prepaid expenses or deposits (such
as the Amplicon equipment lease deposit and the T-1 line agreement deposit)
(iv) intercompany related assets (such as notes receivables) (v) any other
assets not part of the Purchased Assets.
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
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 Nine Million Six Hundred
Thousand ($9,600,000) Dollars as consideration for the Purchased Assets (the
"Consideration").
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 or Purchased Leasehold
Rights.
2.2.2 The responsibility for payment of one-half
(1/2) of the Seller's obligation to one of the Seller's employees under an
Employment Arrangement payable to Martin Eidemiller, in the amount of Ninety
One Thousand Two Hundred and Fifty Dollars ($91,250.00) [i.e., the
Purchaser's obligation shall be Forty Five Thousand Six Hundred Twenty Five
Dollars ($45,625.00)], which is attached to Schedule 2.2.2.
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
Secom or any liability or obligation or claim arising against the Seller or
Secom arising in respect of the Business or the Purchased Assets, whether
direct or indirect, known or unknown, absolute or contingent (collectively,
the "Excluded Liabilities").
2.4 Purchased Inventory.
2.4.1 The term "Purchased Inventory " shall mean
the amount of inventory determined by conducting, to the extent practicable
and reasonable, a physical count of all of the inventory within two (2) 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
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 3 of 27
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), consistent with the valuation methods and procedures used by the
Seller. The total dollar amount of the Purchased Inventory determined as
provided herein shall be the Purchased Inventory Cost. The Consideration
shall be reduced by the shortfall in the event the Purchased Inventory Cost
is less than the inventory levels as of October 31, 1999 as disclosed on the
Seller's financial statements and previously provided to the Purchaser [that
inventory level being Two Million Three Hundred and One Thousand Four Hundred
Fifty One and 00/100 Dollars ($2,301,451.00)], and the Consideration shall be
increased by any applicable surplus. The parties intend that the aggregate
inventory value at Closing will be comparable with the inventory value on
October 31, 1999.
2.5 Allocation of the Purchase Price among the Purchased
Assets. The Purchase Price (as defined in Section 3.2.4) 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 and Secom, as the
case may be, shall pay all personal and real 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 and Secom, as the case may be, in the
twelve (12) months preceding Closing Date 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 and Secom, as the
case may be, shall be responsible for that portion of such taxes from the
Levy Date or dates to, but not including, the Closing Date. The Purchaser and
GLZ, as the case may be, 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 as soon as practical after 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 June 15, 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
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 4 of 27
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):
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 and Secom shall deliver to the
Purchaser and GLZ such bills of sale, deeds, endorsements, assignments and
other instruments, in such form as in each case is satisfactory to the
Purchaser and GLZ, as shall be sufficient to vest in the Purchaser and GLZ
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 GLZ shall pay to the
Seller and Secom the Consideration (the "Purchase Price") by wire transfer or
certified or bank cashier's checks consistent with Schedule 2.5.
3.2.5 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.
3.2.6 The Purchaser, GLZ, the Seller, and Secom
shall execute and deliver a cross receipt acknowledging receipt from the
other, respectively, of the Purchased Assets and the Purchase Price.
3.2.7 The Purchaser and Secom shall execute a
sublease agreement for the Amplicon leased equipment used by the Seller, as
disclosed on Schedule 1.1.3, in the form of the sublease agreement that is
attached to Schedule 3.2.7 ("Sublease Agreement") and the Purchaser, as
tenant, shall deliver the first month's rent and tax installment to Secom.
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 5 of 27
4. Representations and Warranties of the Seller and Secom. In order
to induce the Purchaser and GLZ to enter into this Agreement and to
consummate the transactions contemplated hereunder, the Seller and Secom make
the following representations and warranties:
4.1 Organization, Power and Authority of the Seller. Each
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. Each 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 accurately sets forth, with
respect to the real estate that is included in the Purchased Assets
("Premises"): (i) the owner; (ii) the location, including address, thereof,
(iii) the legal description and approximate size thereof, (iv) a brief
description (including size, approximate year of completion, and function) of
the principal improvements and buildings thereon, all of which are within the
property, setback and building lines; (v) the approximate year acquired; and
(vi) the nature and amount of any mortgages, tax liens or other liens thereon
(including without limitation any environmental liens).
4.4.2 The Premises compromise all of the real
property used by the Seller in the operation of the Business. Secom has good
and marketable title to the Premises free and clear of all liens, mortgages,
pledges, encumbrances, charges, assessments, restrictions, covenants and
easements (collectively, "Liens and Encumbrances"), except for (i) Liens and
Encumbrances set forth on Schedule 4.4, (ii) liens for real estate taxes not
yet due and payable, and (iii) such other Liens and Encumbrances as are not
substantial in character, amount or extent and do not materially detract from
the value, or interfere with the present use, of the Premises or otherwise
impair the operations of the Business in any material respect. The Premises
are not subject to any lease interest.
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 6 of 27
4.4.3 Secom has good and marketable title to the
Premises and the Premises are not subject to any lease interest.
4.4.4 The Seller, at its sole cost and expense,
shall provide the Purchaser at Closing with an owner's policy of title
insurance, without standard exceptions, covering the Premises in the amount
of the purchase price for the Premises, consistent with Schedule 2.5.
(a) Title Commitment. After the last party
signs this Agreement, the Seller shall cause to be issued and delivered to
GLZ a commitment (referred to as the "Commitment") for an owner's policy of
title insurance without standard exceptions (referred to as the "Title
Policy") to be issued at Closing by the title insurer, through a title
company mutually agreed upon by the parties, in the full amount of the
purchase price. The Seller shall pay the premium for the Title Policy at or
before Closing.
(b) Objections to Title. The Purchaser
shall have fourteen (14) days from the date it receives the Commitment to
notify the Seller, in writing, of the Purchaser's objections to any
exceptions, other than permitted exceptions. If the Purchaser objects to the
Seller's title as disclosed by the Commitment within the time and in the
manner required by this section, the Seller shall have fourteen (14) days
after receiving written notice of the particular defect(s) claimed either:
(1) to remedy the Title Policy to the satisfaction of the Purchaser, or (2)
to obtain a Commitment for title insurance "insuring over" the defects in
title. If the Seller fails or refuses to remedy the defects, or fails or
refuses to obtain a Commitment for title insurance "insuring over" the
defects without reduction of the purchase price, then the Purchaser may
terminate this Agreement.
(c) Current Survey. The Purchaser may
obtain, at the Purchaser's expense, an ALTA survey of the Premises. If the
survey discloses any substantial encroachment which materially or adversely
affects the Purchaser's intended use of the Premises, the Purchaser may
object to such encroachment by following the procedures set forth in Section
4.4.3(b) above. If the Purchaser makes any objection to the survey within
fourteen (14) days of the survey in the manner required by Section 4.4.3(b)
above, then the Seller shall have fourteen (14) days after receiving the
written notice to remedy the defects in the same manner provided in Section
4.4.3(b) above, and with the same consequences.
(d) Permitted Exceptions. Subject to the
Purchaser's rights above, the Seller shall convey the Premises to GLZ subject
only to the following exceptions, all of which shall be permitted exceptions:
(i) Those exceptions which are affirmatively approved by the Purchaser in
writing; (ii) Those exceptions which the title insurer will "insure over"
with affirmative coverage acceptable to the Purchaser; (iii) Easements for
water, sanitary sewer, storm sewer, electricity, telephone, and any other
utility purposes, if any, which do not interfere with the Purchaser's
intended use of the Premises; and (iv) Real estate taxes subject to the tax
proration
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 7 of 27
provisions of this Agreement.
4.5 Good Title to and Condition of the Purchased
Assets.
4.5.1 The Seller or Secom, as the case may be,
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 which shall be
discharged and released at the Closing.
4.5.2 To the Best of the 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 and the values of obsolete or
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. The
Purchaser's claims against the Seller, if any, with respect to inventory
valuations shall be determined on an aggregate basis taking into account and
netting both positive and negative adjustments. The Purchaser acknowledges
that the Seller maintains a substantial "will-call" inventory for its
customers in order to support them and provide customers with an expedited
turn-around time. Accordingly, the Purchased Inventory includes some slow
moving inventory necessary for customer support. However, the Seller
represents and warrants that the inventory, in the aggregate, shall be
comparable in amounts and values to such inventory as of October 31, 1999.
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.
4.6 Inventory Cost. The Seller's inventory cost as of
February 29, 2000 was Two Million Five Hundred and Thirteen Thousand Four
Hundred Sixty Three and 00/100 Dollars ($2,513,463.00).
4.7 Licenses and Permits of the Seller. To the Best of the
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, (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.
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 8 of 27
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 the Seller.
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, and(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 Seller, the Business or any of the Purchased Assets, (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 At Will Employees. To the Best of the Seller's
Knowledge, all of the Seller's employees may be terminated at any time in
accordance with the written policies of the Seller. To the Best of the
Seller's Knowledge, the Seller further represents that none of Seller's
employees have ever received assurances or communications from the Seller, or
the Seller's officers or managers, suggesting their employment is anything
other than as expressed in the written policies. No retired employees of the
Seller are receiving or are entitled to receive any payments or health or
other benefits from the Seller other than normal COBRA benefits or qualified
plan benefits.
4.14 Intentionally Omitted.
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 9 of 27
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.
4.16 Environmental Matters. To the Best of the Seller's
Knowledge, and subject to the information set forth in 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 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 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. 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. 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 the
Seller's Knowledge, neither the Seller nor
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 10 of 27
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, Schedule
4.17 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 the 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 requirements 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.
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 of the Plans, 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).
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) 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.
4.18.8 The Seller shall fully cooperate with the
Purchaser in effecting the changes to the Plans as the Purchaser may deem
reasonably necessary.
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 11 of 27
4.19 Product Liability Claims; Product Warranties. To the
Best of the 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. All product warranty claims made after the
Closing Date shall be the responsibility of 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, subject to approval of Secom's shareholders. To
the Best of the 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 (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 or GLZ, the Purchased Assets, or the Premises.
4.21 Accuracy of Information Furnished by the Seller. To
the Best of the 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, the
Premises or the Business taken as a whole.
4.22 Secom. Secom shall be deemed to have made the
representations and warranties in Sections 4.1, 4.3, 4.4, 4.5, 4.7, 4.15,
4.16, 4.18, 4.20, and 4.21 as though stated verbatim, replacing "the Seller"
with "Secom" and further modifying Section 4.1 such that Secom is represented
as being a Delaware corporation.
5. Representations and Warranties of the Purchaser and GLZ. 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:
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 12 of 27
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.
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.
5.3 GLZ. GLZ shall be deemed to have made the
representations and warranties in Section 5.1 and 5.2 as though stated
verbatum, replacing "the Purchaser" with "GLZ".
6. Additional Covenants of the Seller and Secom.
6.1 Best Efforts. The Seller and Secom 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 and GLZ to purchase the Purchased Assets from the Seller and
Secom, as the case may be..
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;
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;
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 13 of 27
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 and GLZ access, during normal
business hours and upon reasonable notice, to the Seller's Premises
sufficient to enable the Purchaser and GLZ 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 and GLZ may reasonably request; provided, however, that any
furnishing of such information to the Purchaser or GLZ and any investigation
by the Purchaser or GLZ shall not affect the right of the Purchaser or GLZ 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 and GLZ
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 November 22, 1999.
7. Intentionally Omitted.
8. Additional Covenants of the Purchaser; Best Efforts. The
Purchaser and GLZ 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 and GLZ, as the case may be, 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 and Secom shall have performed and complied with all of their
obligations required by this Agreement to be performed or complied with at or
prior to the Closing Date. The Seller and Secom shall have delivered to the
Purchaser a certificate, dated as of the Closing Date and signed by the
Seller's authorized officer, and Secom's authorized officer, certifying that
such representations and warranties
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 14 of 27
are thus true and correct and that all such obligations have been thus
performed and complied with.
9.2 Certified Resolutions. The Seller and Secom shall have
delivered to the Purchaser copies of resolutions adopted by the board of
directors and shareholders of the Seller and Secom 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 or GLZ's
rights hereunder, shall have been obtained and shown by written evidence
satisfactory to the Purchaser and GLZ or otherwise waived by the Purchaser or
GLZ.
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 GLZ or any other transaction
contemplated hereby, or which might materially affect the right of the
Purchaser and GLZ to own, operate in their entirety or control the Purchased
Assets.
9.5 Due Diligence. For a period ending May 15, 2000 ("Due
Diligence Period"), the Purchaser and their officers, attorneys, accountants
and other authorized representatives, shall be afforded free and full access,
on reasonable prior notice and during normal business hours, to all
management personnel, offices, properties, books and records of or related to
the Seller so that the Purchaser and GLZ will have a reasonable opportunity
to conduct such reviews and make such investigations as it desires into the
management, Businesses, properties and affairs of the Seller and Secom ("Due
Diligence Review"). During the Due Diligence Review, Secom and the Seller
will promptly furnish to the Purchaser such relevant financial, operating and
other information relating to the Seller that the Purchaser or GLZ reasonably
requests. Before the end of the Due Diligence Period, the Purchaser shall
either terminate this Agreement, in their sole discretion, or shall be deemed
satisfied with the results of such review, including, but not limited to, the
results of any environmental audit or survey of the Premises. No later than 5
p.m. on May 15, 2000, the Purchaser will provide to Secom a copy of a
commitment letter from a financial institution wherein said financial
institution commits to provide financing to Purchaser for the contemplated
transaction in an amount not less Nine Million Dollars ($9,000,000.00). The
commitment to provide financing will be subject to usual and customary
conditions for closing. If such a commitment letter is not provided by the
Purchaser, Secom may forthwith terminate the Purchaser's rights hereunder.
9.6 Lien Search. The Purchaser shall have received UCC
lien searches in form and content satisfactory to the Purchaser.
9.7 Intentionally Omitted.
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 15 of 27
9.8 MESC Contribution Liability. The Seller shall have
provided to the Purchaser a statement form the Commissioner of the Michigan
Employment Security Commission certifying the status of Seller's contribution
liability under Section 15(g) of the Michigan Employment Security Act, MCLA
421.15(g), MSA 17.515[g].
9.9 Environmental Investigation. The Purchaser shall have
received, at its cost and expense, a written report of a site assessment and
environmental audit, prepared by an independent, competent, and qualified
engineer, that in its scope, forms, and substance is satisfactory to the
Purchaser. The Purchaser shall also receive, at its cost and expense, any
updates it deems necessary or appropriate, including a Baseline environmental
certified by the Michigan Department of Environmental Quality, if necessary.
The Purchaser shall be satisfied, in its sole and absolute discretion, that
there will not be at and after the Closing any basis for the imposition on
the Purchaser of any liability under any Environmental Laws.
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 and GLZ 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 and GLZ 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 and GLZ 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 and GLZ shall
have delivered to the Seller a copy of resolutions adopted by the members of
the Purchaser and GLZ authorizing the transactions contemplated by this
Agreement, certified as of the Closing Date by an authorized manager.
10.3 Shareholder Approval. Secom shall have obtained
shareholder approval for the contemplated transaction at a duly called
shareholder meeting.
11. Certain Actions After the Closing.
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
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 16 of 27
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 and GLZ would not in fact receive all such rights, then subject
to the terms and conditions of Section 11. 3 hereof the Purchaser or GLZ
shall act as the agent for the Seller in order to obtain for the Purchaser or
GLZ 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.
11.4 Execution of Further Documents. From and after the
Closing, upon the reasonable request of the Purchaser, GLZ, the Seller or
Secom, 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 carry out the transactions contemplated by this Agreement.
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 17 of 27
11.5 Employment by Purchaser of the 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) year 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 anticipates hiring most of
the persons currently employed by the Seller at the Business and the
Purchaser will provide a similar benefit plan to those 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 Secom, 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 person or entity
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 possession any of the Purchased Proprietary Rights
or the Purchased Records.
11.6.1.3 Covenant Not to Compete. For a
period of three (3) years from the Closing Date, the Seller, on its behalf,
and Secom, on its behalf, and on behalf of their Affiliates, shall not
directly or indirectly, individually or jointly, or in any way whatsoever,
own, manage, operate, invest in, lend money to, join, advise, control, or
participate in the ownership, management, operation or control of, or
otherwise, any competing business within the continental United States,
except as to those contractual obligations and commitments in effect as of
the Closing Date and incurred in the ordinary course of business relating to
past manufacturing activities, such as the Seller's royalty agreement with
Horizon and collection on a note receivable and accounts receivable. For
purposes of this Agreement, "competing business" shall be defined as any
business, trade or operation similar to the business of production machining
and cold forming. If the Seller or
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 18 of 27
Secom breaches this Agreement, the Purchaser may proceed in the circuit court
or any other tribunal having equitable jurisdiction over the Seller or Secom
to obtain any appropriate equitable remedies, including but not limited to an
ex parte restraining order and injunctive orders during litigation and
following judgment. In addition, the Purchaser may simultaneously seek all
other remedies provided by law or in equity for the breach of this Agreement.
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.
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 the Seller as it may be able to
reasonably provide including, without limitation, providing fact witnesses,
providing reasonable 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 reasonable costs the Purchaser incurs
in rendering such assistance.
11.8 Off-Set From Royalty Payments to Uniflow. The
Purchaser shall have a right to off-set against royalty payments the
Purchaser owes, or will owe, to Uniflow pursuant to a certain Royalty
Agreement dated February 1, 2000 between the Purchaser and Uniflow for any
unpaid taxes, of any kind and nature (including penalties and interest), of
the Seller or Secom for which the Purchaser is notified by a taxing authority
that it may be liable as a successor entity or otherwise. Uniflow executes
this Agreement for the purpose of granting this right of off-set.
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 19 of 27
12. Indemnification.
12.1 Agreement by the Seller and Secom to Indemnify. The
Seller agrees that it will indemnify and hold the Purchaser and GLZ harmless
in respect of the aggregate of all indemnifiable damages of the Purchaser and
GLZ. For this purpose, "indemnifiable damages" of the Purchaser and GLZ 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 and GLZ resulting from: (i) any inaccurate
representation or warranty made by the Seller and GLZ 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 and GLZ harmless in
respect of the aggregate of all indemnifiable damages of the Purchaser and
GLZ. For this purpose, "indemnifiable damages" of the Purchaser and GLZ 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 and GLZ 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 and GLZ shall be subject to each
of the following principles or qualifications:
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 GLZ, 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 and GLZ 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 and GLZ, as the case may be,
shall give prompt written
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 20 of 27
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 and GLZ
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. However, such limitations on Seller Indemnifying Parties' set
forth in this Section 12.1.4 shall not apply to claims, demands, expenses, or
liabilities relating to any of the following: environmental and products
liabilities, statutory causes of action, successor liability claims, and
taxes (including interest and penalties).
12.2 Agreements by the Purchaser to Indemnify.
12.2.1 The Purchaser agrees to indemnify and hold
the Seller and Secom harmless in respect of the aggregate of all
indemnifiable damages of the Seller or Secom. For this purpose,
"indemnifiable damages" of the Seller or Secom means the aggregate of all
expenses, losses, costs, deficiencies, liabilities and damages (including
related counsel fees and expenses) incurred or suffered by the Seller or
Secom resulting 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 or Secom 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 or Secom 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
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 21 of 27
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 and irrevocable 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. A judgment of any Circuit Court
may be rendered upon the award. The arbitrator shall have no power to make
any award inconsistent with or contrary to the terms and provisions of this
Agreement.
13. Miscellaneous.
13.1 Brokers' Commission. The Purchaser and GLZ will
indemnify and hold harmless the Seller and Secom 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 or GLZ to bring about, or to
represent them in, the transactions contemplated hereby. The Seller and Secom
will indemnify and hold harmless the Purchaser and GLZ 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 or Secom to bring about, or
to represent them in, the transactions contemplated hereby.
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.
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 22 of 27
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, or the Seller fails to timely
provide the schedules referenced in Section 14.
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 June 15, 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 Purchased
Assets to be sold by the Seller and Secom hereunder and all liability with
respect to injury and damage occurring in connection therewith shall be the
sole responsibility of the Seller and Secom 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 and GLZ 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 or Secom 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.
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
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 23 of 27
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 November 22, 1999, 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 the Seller or Secom or Uniflow addressed to:
Form Flow, Inc.
L & H Die, Inc.
Uniflow Corporation
c/o Secom General Corporation
46035 Grand River
Novi, MI 48374
with a copy to:
Robert A. 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
If to the Purchaser or GLZ, addressed to:
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 24 of 27
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:
George F. Bearup, Esq.
Smith Haughey Rice & Roegge P.C.
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).
13.11 As Is. Except as otherwise set forth in this
Agreement, the Purchaser and GLZ shall accept the Purchased Assets in "as is"
condition.
14. Schedules. The parties acknowledge that none of the referenced
schedules are attached to this Agreement. The Seller and Secom shall provide
the Purchaser and GLZ with all schedules within fourteen (14) days from the
date of this Agreement, and the Seller and Secom shall
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 25 of 27
provide the Purchaser and GLZ with updated schedules at the Closing. Should
the Purchaser or GLZ object to any of the schedules, the Purchaser or GLZ may
terminate this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 26 of 27
FORM FLOW, INC.
/s/ Paul D. Clemente
--------------------
By: Paul D. Clemente
Its: Authorized Agent and Chairman
of the Board of Directors
L & H DIE, INC.
/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
UNIFLOW CORPORATION
/s/ Paul D. Clemente
--------------------
By: Paul D. 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
GL ZIEGLER INVESTMENTS, LLC
By: /s/ Gilbert L. Ziegler
----------------------
Gilbert L. Ziegler
Its: Manager
Asset Purchase Agreement between
Alken-Ziegler Livonia, LLC, GL Ziegler Investments, LLC, Form Flow, Inc.,
L & H Die, Inc., Uniflow Corporation
and Secom General Corporation
Page 27 of 27
