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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):
AUGUST 18, 1995
_____________
TRANSTECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-7872 95-4062211
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
incorporation) Number)
700 Liberty Avenue 07083
Union, New Jersey (Zip Code)
(Address of principal
executive offices)
(908) 964-5666
(Registrant's telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On August 18, 1995, the registrant sold substantially all of the
assets of its TransTechnology Electronics Division to Elecsys Incorporated.
The sold assets consist of machinery and equipment, inventories, receivables,
intellectual property rights and other intangibles used in the manufacture and
sale of electrical and electronic interconnection products, including metallic
and non-metallic electrical cable assemblies, conduits, wiring harnesses, and
circular connectors, for use primarily in the military and vehicular market
places.
The purchase price of $14,673,000 was determined as a result of arm's
length negotiations between the parties. The principal owner (Dr. H. Gary
Carlson) of the buyer served as a director of the registrant from 1992 to 1995
and resigned his position on Registrant's Board on the date of the sale. The
transaction, including purchase price, was reviewed by an independent
investment banking firm who issued an opinion as to its fairness to the
Registrant. The vote for approval of the transaction was taken by
disinterested members of the Registrant's Board of Directors.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Pro Forma Condensed Combined Financial Information
Not Applicable - the disposition has been reported as a
discontinued operation and has been fully reflected in the
Financial Statements of the Registrant previously filed with
the Securities and Exchange Commission.
(b) Other Exhibits
Asset Purchase Agreement dated as of August 18, 1995 between
the Registrant and Elecsys Incorporated.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: November 16, 1995
TRANSTECHNOLOGY CORPORATION
/s/ Chandler J. Moisen
---------------------------
Chandler J. Moisen
Senior Vice President, Chief
Financial Officer and Treasurer
GH:1004
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EXHIBIT INDEX
-------------
Exhibit
No. Description
- - - - - ------- -----------
99 Asset Purchase Agreement dated as of August 18, 1995 between
the Registrant and Elecsys Incorporated.
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ASSET PURCHASE AGREEMENT
BETWEEN
TRANSTECHNOLOGY CORPORATION
AND
ELECSYS INCORPORATED
Dated: August 18, 1995
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ASSET PURCHASE AGREEMENT
THIS AGREEMENT is entered into on August 18, 1995, by and
between ELECSYS INCORPORATED, a Delaware corporation, with offices
at 8800 North Allen Road, Peoria, Illinois 61615 ("Buyer"), and
TRANSTECHNOLOGY CORPORATION, a Delaware corporation, with offices
at 700 Liberty Avenue, Union, New Jersey 07083 ("Seller"). Buyer
and Seller are referred to collectively as the "Parties" and
individually as a "party." All capitalized terms used herein and
not otherwise defined herein shall have the meanings ascribed to
them in Section 9 hereof.
RECITALS
A. Seller proposes to convey, transfer and assign to Buyer,
and Buyer proposes to acquire and assume selected assets and
liabilities of the TransTechnology Electronics Division ("TTE") of
Seller except those assets and liabilities specifically excluded by
this Agreement (the "Business") upon the terms and conditions
hereinafter set out.
B. The assets of the Business to be conveyed do not include
title to or any interest in the real property in Wyoming, Illinois.
C. At the Closing the Parties shall also execute and deliver
the documents hereinafter specified for the conveyance of Seller's
assets associated with its Special Connector Inventory as
hereinafter defined.
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D. Buyer acknowledges that the Chairman and Chief Executive
Officer and controlling shareholder of Buyer, H. Gary Carlson, is
familiar with the operations of TTE, the character of the assets
and liabilities of TTE, and with the condition of the Business.
PROVISIONS
NOW, THEREFORE, in consideration of the recitals set out above
and the representations, warranties, covenants and promises herein
contained the Parties agree as follows:
1. Basic Transaction.
(a) Purchase and Sale of the Acquired Assets. On and
subject to the terms and conditions of this Agreement, Buyer shall
purchase and acquire from Seller and Seller shall sell, transfer,
convey, and deliver to Buyer, the Acquired Assets at the Closing
upon the purchase terms specified below in this Section 1.
(b) Assumption of Liabilities. On and subject to the
terms and conditions of this Agreement, Buyer shall assume and
become responsible for the Assumed Liabilities at the Closing.
(c) Assignment of Contracts. Seller will assign to
Buyer those Contracts listed on Schedule 1(c) and Buyer will assume
all the obligations and liabilities thereunder as of the Closing
Date; provided, however, Buyer shall not assume the product
warranty obligations of goods shipped by Seller on or prior to the
Closing Date. To the extent that the assignment of all or any
portion of any Contract by Seller to Buyer shall require the
consent of another party thereto, this Agreement shall not
constitute an assignment of same if an attempted assignment would
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constitute a breach thereof. Seller will use commercially
reasonable efforts to obtain the consent of the other parties to
such Contracts for the assignment thereof to Buyer. If such
consent is not obtained with respect to any such Contract, Seller
will cooperate in reasonable arrangements required by Buyer to
provide Buyer with the benefits under any such Contract.
(d) Purchase Price; Adjustments thereto. Subject to
adjustment as set out in Section 1(h) below, the sum to be paid to
Seller by Buyer at Closing is $14,673,000 (the "Purchase Price").
The Purchase Price shall be paid at Closing as follows:
(i) Buyer shall receive credit against the
Purchase Price equal to $1,514,000, the amount of the
Assumed Liabilities specified on Schedule 1(c), as agreed
at Closing by the Parties;
(ii) Payment of Four Million Four Hundred
Thousand Dollars ($4,400,000) by Federal wire transfer;
and
(iii) Execution and delivery to Seller by
Buyer of the Subordinated Promissory Note in the
principal sum of the balance of the Purchase Price and
substantially in the form attached as Exhibit 1.
(e) Warrant. At the Closing Buyer shall deliver to
Seller a warrant having a value equal to 19.9% of the equity of
Buyer on the Closing Date which warrant shall be in form and
substance as set out in Exhibit 2.
(f) Ceilometer. Intentionally Left Blank By the
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Parties.
(g) Special Connector Inventory. At the Closing, Buyer
shall purchase and acquire from Seller and Seller shall sell,
transfer, convey, and deliver to Buyer the Special Connector
Inventory and Buyer shall assume and become responsible for the
liabilities associated with the Special Connector Inventory and
described on Schedule 1(g) (provided that Buyer expressly does not
assume any liability which may arise from any claim made by
E.M.S.I. or any other third party with respect to any contracts
between Seller or any Affiliate of Seller and E.M.S.I.), upon the
delivery to Seller by Buyer at Closing of the Special Connector
Inventory Promissory Note substantially in the form attached as
Exhibit 3 and bearing a principal amount of $1,022,000.
(h) The Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at
Arter & Hadden, 925 Euclid Avenue, 1100 Huntington Building,
Cleveland, OH 44115 at 10:00 a.m. local time on August 18, 1995, or
such other date as the parties mutually agree in writing (the
actual date of the Closing being referred to herein as the "Closing
Date"). The Closing shall be effective as of the close of business
on the Closing Date.
(i) Deliveries at the Closing. At the Closing, (i)
Seller will deliver to Buyer the various certificates, instruments,
and documents to be delivered by Seller pursuant to Section 4(a)
below, (ii) Buyer will deliver to Seller the various certificates,
instruments, and documents to be delivered by Buyer pursuant to
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Section 4(b) below; and (iii) Buyer will deliver to Seller the
consideration specified in Sections 1(d) and 1(g) and the warrant
specified in Section 1(e) above.
(j) Post-closing Adjustment. Within sixty (60) days of
the Closing Date, the Purchase Price shall be increased or reduced,
as the case may be, on a dollar for dollar basis to the extent that
the net book value of the Business as of the Closing Date, as set
forth on a Closing Statement prepared by Buyer and delivered to
Seller no later than thirty (30) days after the Closing Date, shall
have increased or decreased from the net book value of assets
purchased or liabilities assumed shown on the July 31, 1995
Statement of Assets Sold and Liabilities Retained delivered to
Buyer by Seller as of the date of this Agreement, provided that no
adjustments shall be made for changes attributable to charges for
depreciation. If the Purchase Price is adjusted as provided above,
the principal amount of the Subordinated Promissory Note shall be
adjusted accordingly. In the event Buyer and Seller do not agree
upon the amount of the proposed adjustment to the Purchase Price
then the disputed matter shall promptly be submitted to binding
arbitration pursuant to the provisions of Section 7 of this
Agreement.
(k) Allocation of Purchase Price. Buyer and Seller
shall each file Form 8594 (Asset Acquisition Statement under
Section 1060 of the Code) on a timely basis reporting the
allocation of the Purchase Price consistent with an allocation
which will be prepared and agreed by the parties no later than
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ninety (90) days after the Closing Date. Buyer and Seller shall
not take any position on their respective income tax returns that
is inconsistent with the agreed allocation of the Purchase Price,
as adjusted pursuant to subparagraph (j) of this Section 1.
(l) Assumed Liabilities. Except for the Assumed
Liabilities, Buyer shall not assume and shall not be responsible
for any other liability or obligation of Seller, direct or
indirect, known or unknown, absolute or contingent, relating to,
arising out of or associated with the Acquired Assets and/or the
operation of the Business prior to the Closing Date.
(m) Taxes. Seller shall pay when due all income, sales,
use, and transfer taxes, if any, arising out of the transfer to
Buyer of the Acquired Assets.
2. Representations and Warranties of Seller. Seller
represents and warrants to Buyer that the statements contained in
this Section 2 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date
(as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section
2), except as set forth in the "Disclosure Schedule". The
Disclosure Schedule will be arranged in schedules corresponding to
the lettered and numbered paragraphs contained in this Section 2.
(a) Organization of Seller. Seller is a corporation
duly organized, validly existing, and in good standing under the
laws of the State of Delaware and is qualified to do business as a
foreign corporation in the States of Illinois and Texas. Seller
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has all the requisite corporate power and authority to own, lease
and operate the Acquired Assets and to carry on the Business as it
is now being conducted.
(b) Authorization of Transaction. Seller has full power
and authority to execute and deliver this Agreement and to perform
its obligations hereunder. Without limiting the generality of the
foregoing, the board of directors of Seller has duly authorized the
execution, delivery, and performance by Seller of this Agreement
and all other agreements and documents to be executed and delivered
by Seller pursuant to the provisions of this Agreement. This
Agreement and such other agreements and documents constitute valid
and legally binding obligations of Seller enforceable in accordance
with their respective terms. Except as set out in Schedule 2(b),
neither the execution and delivery of this Agreement by Seller, nor
the performance by Seller pursuant hereto, will violate Seller's
Certificate of Incorporation or By-Laws, or will (i) result in a
violation or breach of, or permit any third party to rescind any
term or provision of, or constitute a default under any Contract to
which Seller is a party or by which Seller, or any of the Acquired
Assets, is bound; (ii) violate any judgment, order, writ,
injunction, or decree of any court, administrative agency, or
governmental body applicable to Seller, the Acquired Assets, or the
Business; or (iii) cause, or give any person grounds to cause (with
or without notice, the passage of time, or both), the maturity of
any liability or obligation of Seller to be accelerated or
increased.
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Except as set forth in Schedule 2(b), all consents and
approvals of third parties and of any Governmental Authorities
(exclusive of any consent of any Governmental Authority necessary
to the novation of any Contract) required in connection with the
execution and delivery by Seller of this Agreement and the
consummation by Seller of the transactions contemplated by this
Agreement and such other agreements and documents have been
obtained.
(c) Title to Acquired Assets. Seller has as of the
Closing Date, good and marketable title to all of the Acquired
Assets and the Special Connector Inventory, owned by it and a valid
leasehold interest in all of the Acquired Assets leased by it as
lessee. The Acquired Assets and the Special Connector Inventory
shall be at Closing free and clear of all Liens and Seller shall
transfer the same to Buyer free and clear of all Liens of Seller's
creditors other than the Assumed Liabilities.
(d) Brokers' Fees. Seller has no liability or
obligation to pay any fees or commissions to any broker, finder or
agent with respect to the transactions contemplated by this
Agreement for which Buyer could become liable or obligated.
(e) Legal Compliance. Seller has conducted the Business
at all times in compliance with all applicable laws (including
rules, regulations, and ordinances of federal, state and local
governments (and all agencies thereof) in all material respects,
and there are no defaults or violations under any of such laws
applicable to the Business or the Acquired Assets, except where the
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failure to be in compliance or such default or violation would not
have a material adverse effect on the Business or the Acquired
Assets.
(f) Tax Matters. Seller has filed all foreign,
federal, state and local tax returns that it was required to file
with respect to the Business or the Acquired Assets, and has paid
all Taxes including, without limitation, Income Taxes required to
be paid with respect to such returns. Except as set out in
Schedule 2(f), Seller has not received notice of any tax deficiency
proposed or assessed against it, and Seller has not executed any
waiver of any statute of limitations on the assessment or
collection of any Taxes, none of Seller's tax returns has been
audited by any Governmental Authority in a manner to bring such
audit to Seller's attention, there are no tax liabilities relating
to the Business or the Acquired Assets except those incurred in the
Ordinary Course of Business, and there is no pending or, to
Seller's Knowledge, threatened proceeding relating to taxing
authorities.
(g) Intellectual Property. Schedule 2(g) identifies all
trademarks, trade names, service marks, copyrights, patents, and
applications for any of the foregoing, owned by or licensed to
Seller relating to or used in connection with the Business and
identifies each license, agreement or other permission which Seller
has granted to any third party with respect to the Intellectual
Property. Schedule 2(g) also includes the name under which the
rights are claimed, and the dates of issuance or application, as
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the case may be. Except as set out in Schedule 2(g), Seller owns
all the trademarks, trade names, service marks, copyrights, patents
and applications listed on Schedule 2(g) and all of the other
Intellectual Property and, except as set forth thereon, pays no
royalty (and is not required to pay any) in connection with
Seller's use of any thereof, and has the exclusive right to bring
actions for the infringement thereof. No product made or sold by
the Business violates any license granted to Seller or, to Seller's
Knowledge, infringes any trademark, trade name, service mark,
copyright, trade secret, know-how, patent or other proprietary
technical information of another. There is no pending or, to
Seller's Knowledge, threatened claim or litigation against Seller
contesting the right to use or the validity of any of the
Intellectual property or asserting the misuse thereof. There are
no outstanding options, licenses or agreements of any kind relating
to the foregoing. Except as set out on Schedule 2(g), Seller has
no Knowledge of any facts or claims which may prohibit, impair or
impede the renewal of the registration of any of the registered
patents, trademarks, service marks, trade names or copyrights set
out on Schedule 2(g).
(h) Contracts.
(i) Schedule 2(h)(i) contains a true, correct and
complete list of each contract with customers of Seller for
purchase of products and/or services of the Business which
involves consideration in excess of $5,000 as of August 4,
1995.
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(ii) Schedule 2(h)(ii) contains a true, correct and
complete list of all written contracts with any distributor,
dealer or agent who engages in sales and/or marketing
activities on behalf of Seller with respect to the Business,
or purchases products for resale.
(iii) Schedule 2(h)(iii) contains a true, correct
and complete list of each contract with vendors to Seller for
sale to Seller of products and/or services used in the
Business which involves consideration in excess of $1,000 as
of August 4, 1995.
(iv) Except as otherwise described on Schedules
2(h)(i), 2 (h)(ii) and 2(h)(iii), all contracts set out on such
Schedules are valid, effective and in good standing and there
is no material breach, violation, default or notice of claim
of breach, violation or default by any party thereto. Except
as specifically noted on Schedules 2(h)(i), 2(h)(ii) and
2(h)(iii), each of the contracts set out thereon is assignable
to Buyer without the consent of any third party, and Seller
has not waived or assigned to any other person any of its
rights thereunder.
(i) Accounts Receivable. A true, correct and complete
list of the accounts receivable of the Business as of August 15,
1995 are set out in Schedule 2(i). All such accounts receivable
are good and collectible except to the extent reserved against or
as disclosed on Schedule 2(i). Except as otherwise noted on
Schedule 2(i), all such accounts receivable have been generated in
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the Ordinary Course of Business and reflect a valid obligation due
to Seller for the payment of goods or services provided by the
Business.
(j) Leases. Schedule 2(j) contains a true, correct and
complete list of all leases or lease purchase agreements relating
to the Acquired Assets to which Seller is a party. Except as
identified on Schedule 2(j), (i) each such lease is valid, binding
and in full force and effect; (ii) neither Seller nor any of its
respective lessors is in default under any of such leases nor has
any event occurred which could give the lessor under any of such
leases the right to declare a default under any of such leases; and
(iii) each of said leases is assignable to Buyer without any
consents or approvals.
(k) Litigation. Schedule 2(k) sets forth each instance
in which Seller (i) is subject to any outstanding injunction,
judgment, order, decree or ruling, or (ii) is a party to any
action, suit, proceeding, hearing, or investigation of, in, or
before any court or administrative agency of any federal, state or
local jurisdiction, except where the injunction, judgment, order,
decree, ruling, action, suit, proceeding, hearing, or investigation
would not have a material adverse effect on the Business or impair
the ability of Seller to consummate the transactions contemplated
by this Agreement. To Seller's Knowledge, no such action, suit,
proceeding, hearing or investigation is threatened.
(l) Employment Matters. Except as set out in Schedule
2(l), no current officer or employee of Seller is a party to any
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employment agreement or union or collective bargaining agreement,
and no union has been certified or recognized as the collective
bargaining representative of any of such employees or has attempted
to engage in negotiations with Seller regarding terms and
conditions of employment. No unfair labor practice charge, work
stoppage, picketing or other such activity relating to labor
matters has occurred or is pending. To Seller's Knowledge, there
are no current or threatened attempts to organize or establish any
labor union to represent any employees of Seller working in the
operations of the Business. Except as set out in Schedule 2(l),
Seller is in compliance in all material respects with all
requirements of federal, state and local laws and regulations
governing employee relations which may be applicable to the
Business, including without limitation anti-discrimination laws,
wage and hour laws, labor relations laws and occupational safety
and health laws, and no suits, charges or administrative
proceedings relating to any such law or regulation are pending or,
to Seller's Knowledge, have been threatened.
(m) Employee Benefits. Except as set out in Schedule
2(m), Seller has no employment contracts or pension, retirement,
profit-sharing, employee stock option or stock purchase, bonus,
deferred compensation, incentive compensation, life insurance or
health insurance benefit plan relating and applicable to the
Business or the employees of Seller engaged primarily in the
Business or any consultant or independent contractor serving the
Business ("Employee Benefit plans"). All obligations of Seller to
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contribute to such Employee Benefit Plans on behalf of employees
for the plan years ended prior to June 30, 1995 have been
satisfied.
(n) Statements of Assets and Liabilities. Schedule 2(n)
fairly sets out a statement of the assets and liabilities of the
Business as of March 31, 1995 and was prepared from the books and
records of Seller in accordance with generally accepted accounting
principles as applied by Seller.
(o) Insurance. Seller maintains in effect insurance
covering the Business and the Acquired Assets in the amounts and
coverage set forth in Schedule 2(o), and such insurance coverage
shall be maintained by Seller through the Closing Date.
(p) Business Changes. Except for the transactions
contemplated by this Agreement and except as set forth in Schedule
2(p), since March 31, 1995, Seller has operated the Business in the
Ordinary Course of Business and there has not been: (i) any
material damage, destruction or loss (whether or not covered by
insurance) affecting the Business or the Acquired Assets; (ii) any
sale, lease, abandonment or other disposition of any material Fixed
Assets or other operating property except for disposition of
inventory in the Ordinary Course of Business; (iii) any transfer of
any of the Acquired Assets by Seller to any officer, director,
employee or Affiliate of Seller or any other transfer of Acquired
Assets outside the Ordinary Course of Business; (iv) any increase
in compensation of any officer, director or employee (including,
without limitation, any increase pursuant to any bonus, pension,
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profit sharing or other plan or commitment) or the adoption of any
new benefit program, plan or other arrangement for officers,
directors or employees; (v) any capital expenditure without prior
consultation with Buyer; or (vi) the loss of any material supplier
or customer or the occurrence of any other event or condition of
any character which would have a material adverse effect on the
Business or the Acquired Assets.
(q) Government Licenses and Permits. Except as set out
in Schedule 2(g), Seller has all governmental licenses and permits
necessary to conduct the Business as presently conducted and to own
and use the Acquired Assets, and all such licenses and permits are
in full force and effect. No proceeding is pending nor, to
Seller's Knowledge, threatened regarding revocation or limitation
of any such governmental license or permit.
(r) Environmental Condition. Except as set out on
Schedule 2(r):
(i) The facilities leased and occupied by Seller on
Allen Road in Peoria, Illinois, on the Closing Date (the
"Peoria Facility") are free from contamination from any
Hazardous Materials and any circumstances or conditions giving
rise to Environmental Damages. Seller has not caused or
suffered, nor, to the Knowledge of Seller, has any other party
previously involved in operations at the Peoria Facility
caused or suffered, any Environmental Damages.
(ii) Neither Seller nor, to Seller's Knowledge, any
prior owner or occupant of the peoria Facility has received
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notice of any violation or alleged violation of Environmental
Requirements, or notice of any liability or alleged liability
from Environmental Damages in connection with the Peoria
Facility; and there exists no pending writ, injunction,
decree, order or judgment outstanding nor any claim, suit,
proceeding, citation, fine, penalty, directive, summons or
investigation, relating to the ownership, use, maintenance or
operation of the peoria Facility by any Person, or to a
violation or alleged violation of Environmental Requirements,
or to the presence or suspected presence of Hazardous
Materials thereon.
(iii) Seller has all permits, licenses and
authorizations required under any Environmental Requirements
for the operation of the Business as it is currently operated
and, to Seller's Knowledge, no modification or change to the
operations of the Business will be required upon renewal of
any such permits, licenses and authorizations. Seller has
made all filings as required under any Environmental
Requirements with respect to the emission, discharge, storage,
treatment, removal and/or disposal of Hazardous Materials at
the Peoria Facility.
(iv) The operations of the Business at the peoria
Facility do not involve the generation, transportation,
treatment, storage or disposal of Hazardous Materials.
(s) Related Party Transactions. Except as set out on
Schedule 2(s), no officer, director, employee or Affiliate of
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Seller is currently a party to any transaction with Seller relating
to any aspect of the Business.
(t) Inventories. Except as set forth in Schedule 2(t),
no material portion of the inventories, raw materials, components,
spare parts, work-in-process, and finished goods of the Business
and the Special Connector Inventory consists of items which are not
merchantable or which are not suitable and usable for the
production or completion of merchantable products.
(u) Completeness and Condition of Acquired Assets.
Except for the Excluded Assets, the Acquired Assets and the Special
Connector Inventory include all the properties which are necessary
to conduct the Business as presently conducted, and to perform all
of the contracts, leases, orders, and other arrangements of Seller
to be assumed by Buyer under this Agreement. Except as disclosed
on Schedule 2(u), all items of tools, furniture, machinery,
vehicles, equipment and other items of tangible personal property
of Seller have been maintained in working order, reasonable wear
and tear expected.
(v) No Material Omission. Neither this Agreement nor
the Schedules annexed hereto, nor any certificate or other document
furnished by Seller to Buyer, contains any untrue statement of a
material fact or omits to state a material fact necessary to make
the statements contained therein and herein not misleading.
(w) Certain Litigation. There is no action, proceeding
or investigation pending to which Seller is a party or, to Seller's
Knowledge, threatened, against Seller, which questions the validity
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of this Agreement or impairs the ability of Seller to consummate
the transactions contemplated hereby.
3. Representations and Warranties of Buyer. Buyer
represents and warrants to Seller that the statements contained in
this Section 3 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date
(as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section
3), except as set forth in the Disclosure Schedule. The Disclosure
Schedule will be arranged in paragraphs corresponding to the
lettered and numbered paragraphs contained in this Section 3.
(a) Organization of Buyer. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of
the jurisdiction of its incorporation and is qualified to do
business as a foreign corporation in the State of Illinois.
(b) Authorization of Transaction. Buyer has full power
and authority to execute and deliver this Agreement and to perform
its obligations hereunder. Without limiting the generality of the
foregoing, the board of directors of Buyer has duly authorized the
execution, delivery, and performance by Buyer of this Agreement and
all other agreements and documents to be executed and delivered by
Seller pursuant to the provisions of this Agreement. This
Agreement and such other agreements and documents constitute valid
and legally binding obligations of Buyer, enforceable in accordance
with their respective terms.
(c) Brokers' Fees. Buyer has no liability or obligation
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to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for
which Seller could become liable or obligated.
(d) Certain Litigation. There is no action, proceeding
or investigation pending to which Buyer is a party or, to Buyer's
Knowledge, threatened, against Buyer, which questions the validity
of this Agreement or impairs the ability of Buyer to consummate the
transactions contemplated hereby.
(e) Financing. Buyer has adequate financing available
to consummate the transactions contemplated by this Agreement and
has received as of the Closing Date any and all approvals and/or
consents necessary to enable Buyer to consummate such transactions.
4. Conditions to Obligation to Close.
(a) Conditions to Obligation of Buyer. The obligation
of Buyer to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the
following conditions:
(i) the representations and warranties set forth in
Section 2 above shall be true and correct at and as of the
Closing Date;
(ii) Seller shall have performed and complied with
all of its covenants hereunder through the Closing;
(iii) there shall not be an injunction, judgment,
order, decree, or ruling in effect preventing consummation of
any of the transactions contemplated by this Agreement;
(iv) Seller shall have delivered to Buyer a
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certificate to the effect that each of the conditions
specified above in Section 4(a)(i)-(iii) is satisfied in all
respects;
(v) Seller shall have received all necessary
authorizations, consents, and approvals of Governmental
Authorities, if any;
(vi) Buyer shall have closed on the financing
necessary for the contemplated transaction;
(vii) all actions to be taken by Seller in
connection with consummation of the transactions contemplated
hereby and all certificates, instruments, and other documents
required to effect the transactions contemplated hereby will
be reasonably satisfactory in form and substance to Buyer;
(viii) Buyer shall have received satisfactory
evidence that the Acquired Assets are on the Closing Date free
and clear of all Liens and of all claims of Seller's creditors
other than the Assumed Liabilities;
(ix) Seller shall have obtained the landlord's
consent to the sublease for the Allen Road facility in Peoria,
Illinois; and
(x) Seller and Buyer shall have executed and
delivered contemporaneously herewith (1) the promissory notes
attached as Exhibit 1 and Exhibit 3 and the security agreement
and financing statements contemplated by Exhibit 1; (2) the
sublease for the premises occupied by Seller at the Allen Road
facility in Peoria, Illinois in the form attached as Exhibit
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4; and (3) the subleases with respect to equipment used in the
Business and leased from General Electric Credit Corporation
or Bank of Boston in the forms annexed as Exhibits 5 and 6;
and
(xi) Seller shall have delivered a Bill of Sale and
such other conveyance documents and closing documents as
reasonably requested by Buyer.
Buyer may waive any condition specified in this Section
4(a) if it executes a writing so stating at or Prior to the
Closing.
(b) Conditions to Obligation of Seller. The obligation
of Seller to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the
following conditions:
(i) the representations and warranties set forth in
Section 3 above shall be true and correct at and as of the
Closing Date;
(ii) Buyer shall have performed and complied with
all of its covenants hereunder through the Closing;
(iii) there shall not be any injunction, judgment,
order, decree, or ruling in effect preventing consummation of
any of the transactions contemplated by this Agreement;
(iv) Buyer shall have delivered to Seller a
certificate to the effect that each of the conditions
specified above in Section 4(b)(i)-(iii) is satisfied in all
respects;
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(v) Buyer shall have received all necessary
authorizations, consents, and approvals of Governmental
Authorities, if any;
(vi) Buyer shall have closed on the financing
necessary for the contemplated transaction;
(vii) all actions to be taken by Buyer in
connection with consummation of the transactions contemplated
hereby and all certificates, instruments, and other documents
required to effect the transactions contemplated hereby will
be reasonably satisfactory in form and substance to Seller;
(viii) Seller shall have obtained the landlord's
consent to the sublease for the Allen Road facility in Peoria,
Illinois;
(ix) Seller and Buyer shall have executed and
delivered contemporaneously herewith (1) the promissory notes
attached as Exhibit 1 and Exhibit 3 and the security agreement
and financing statements contemplated by Exhibit 1; (2) the
Warrant; (3) the sublease for the premises occupied by Seller
at the Allen Road facility in Peoria, Illinois, in the form
attached as Exhibit 4; and (4) the subleases with respect to
equipment used in the Business and leased from General
Electric Credit Corporation or Bank of Boston in the forms
annexed as Exhibits 5 and 6.
(x) H. Gary Carlson shall have delivered his
resignation as a director of Seller effective the Closing
Date;
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(xi) Receipt by Seller of a fairness opinion from a
qualified third party stating that the transactions
contemplated by this Agreement are fair to Seller from a
financial standpoint;
(xii) Receipt by Seller of (A) an undertaking, in
form and substance satisfactory to Seller and its counsel,
from all the shareholders of Buyer that for so long as any
amount under any and all promissory notes given by Buyer to
Seller or any Affiliate of Seller remains outstanding, a
nominee of Seller reasonably acceptable to Buyer shall serve
on the board of directors of Buyer, and (B) a certified
resolution or unanimous written consent of Buyer's
shareholders electing Seller's nominee to the Board of
Directors effective the Closing Date; and
(xiii) Buyer shall have delivered any other closing
documents as reasonably requested by Seller.
Seller may waive any conditions specified in this section
4(b) if it executes a writing so stating at or prior to the
Closing.
5. Indemnification.
(a) Survival of Representations and Warranties. All of
the representations and warranties of Seller contained in Section
2 of the Agreement, other than subsections (a), (b), (c), (f), and
(r) and the representations and warranties of Buyer in Section
3(c), (d), and (e) shall survive the Closing and continue in full
force and effect for a period of one year thereafter. The
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representations and warranties of Seller contained in Section 2(r)
shall survive the Closing and continue in full force and effect for
a period of two (2) years thereafter. All of the other
representations and warranties of Buyer and Seller contained in
this Agreement (including the representations and warranties of
Seller contained in Section 2(a),(b),(c) and (f) hereof) shall
survive the Closing and continue in full force and effect forever
thereafter (subject to any applicable statutes of limitations).
(b) Indemnification Provisions for Benefit of Buyer.
In the event Seller breaches any of its representations,
warranties, and covenants contained in this Agreement, and, if
there is an applicable survival period pursuant to Section 5(a)
above, provided that Buyer makes a written claim for
indemnification within such survival period(or on or within thirty
(30) days thereafter, then Seller shall indemnify and hold Buyer
harmless from and against any Adverse Consequences and all other
liabilities and obligations other than the Assumed Liabilities;
provided, however, that Seller shall not have any obligation to
indemnify and hold Buyer harmless from and against any Adverse
Consequences caused by the breach of any representation or warranty
of Seller until Buyer has suffered Adverse Consequences by reason
of such breaches in excess of a $50,000 aggregate deductible (and
in no event shall Seller be obligated to indemnify Buyer from and
against such Adverse Consequences falling within the first $50,000
of such Adverse Consequences), and provided, further, that Seller
shall have no obligation to indemnify Buyer from and against any
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such Adverse Consequences to the extent the Adverse Consequences
Buyer has suffered by reason of all such breaches exceeds the
Purchase Price as an aggregate ceiling (after which point Seller
will have no obligation to indemnify Buyer from and against further
such Adverse Consequences).
(c) Indemnification provisions for Benefit of Seller. In
the event Buyer breaches any of its representations, warranties,
and covenants contained in this Agreement, and, if there is an
applicable survival period pursuant to section 5(a) above, provided
that Seller makes a written claim for indemnification against Buyer
within such survival period (or on or within thirty (30) days
thereafter), then Buyer agrees to indemnify and hold Seller
harmless from and against any Adverse Consequences; provided,
however, that Buyer shall not have any obligation to indemnify and
hold Seller harmless from and against any Adverse Consequences
caused by the breach of any representation or warranty of Buyer
until Seller has suffered Adverse Consequences by reason of such
breaches in excess of a $50,000 aggregate deductible (and in no
event shall Buyer be obligated to indemnify Seller from and against
such Adverse Consequences falling within the first $50,000 of such
Adverse Consequences), and provided further that Buyer shall have
no obligation to indemnify Seller from and against any such Adverse
Consequences to the extent the Adverse Consequences Seller has
suffered by reason of all such breaches exceeds the Purchase Price
as an aggregate ceiling (after which point Buyer will have no
obligation to indemnify Seller from and against further such
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Adverse consequences).
(d) Matters Involving Third Parties.
(i) If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third
Party Claim") which may give rise to a claim for
indemnification against any other Party (the "Indemnifying
Party") under this Section 5, then the Indemnified Party shall
promptly (and in any event within thirty (30) business days
after receiving notice of the Third Party Claim) notify the
Indemnifying Party thereof in writing.
(ii) The Indemnifying Party will have the right at
any time to assume and thereafter conduct the defense of the
Third Party Claim with counsel of its choice reasonably
satisfactory to the Indemnified Party provided, however, that
the Indemnifying party will not consent to the entry of any
judgment or enter into any settlement with respect to the
Third Party Claim without the prior written consent of the
Indemnified party (which consent shall not be withheld
unreasonably) unless the judgment or proposed settlement
involves only the payment of money damages and does not impose
an injunction or other equitable relief upon the Indemnified
party.
(iii) Unless and until the Indemnifying Party
assumes the defense of the Third party Claim as provided in
Section (d)(ii) above, however, the Indemnified Party may
defend against the Third Party Claim in any manner it
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reasonably may deem appropriate.
(iv) In no event will the Indemnified Party consent
to the entry of any judgment or enter into any settlement with
respect to the Third party Claim without the prior written
consent of the Indemnifying Party (which consent shall not be
withheld unreasonably).
(e) Exclusive Remedy. The Parties acknowledge and agree
that with respect to Third Party Claims the foregoing
indemnification provisions in this Section 5 shall be the exclusive
remedies of the respective parties for any breach of the
representations and warranties in Sections 2 and 3 of this
Agreement.
(f) Environmental Indemnification for Seller's
facilities at Wyoming, Illinois. Seller hereby agrees to defend,
indemnify and hold Buyer and its officers, directors, and employees
harmless from and against any and all claims, lawsuits,
liabilities, losses, damages and expenses (including but not
limited to reasonable attorneys' fees arising by reason of any of
the aforesaid or an action against Seller under this indemnity)
arising directly or indirectly from out of or by reason of (i) any
spills or discharges of Hazardous Materials, as defined in Section
9 below, but without reference to the Peoria Facility which is not
the subject of the indemnification set out in this Section 5(f), on
or about the facility occupied by Seller in Wyoming, Illinois,
which occur prior to the Closing Date or which occur on or after
the Closing Date and are caused by Seller, its employees or agents,
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or (ii) the failure of Seller or any predecessor of Seller to
comply with Environmental Requirements with respect to the
occupancy of or operations at the facility occupied by Seller in
Wyoming, Illinois.
6. Further Agreements.
(a) Seller's Covenant Not to Compete. For a period of
five (5) years from and after the Closing Date, Seller and its
Affiliates will not engage directly or indirectly (whether as a
shareholder, partner, owner, manager, agent or otherwise) in the
manufacture and/or sale of products or the performing of services
of the type included within the Business on the Closing Date in the
United States of America; provided, however, that ownership of less
than 5% of the outstanding stock of any publicly traded corporation
shall not be deemed to constitute engaging in any such business.
If the final judgment of a court of competent jurisdiction declares
that any term or provision of this Section 6(a) is invalid or
unenforceable, the Parties agree that the court making the
determination of invalidity or unenforceability shall have the
power to reduce the scope, duration, or area of the term or
provision, to delete specific words or phrases, or to replace any
invalid or unenforceable term or provision with a term or provision
that is valid and enforceable and that comes closest to expressing
the intention of the invalid or unenforceable term or provision,
and this Agreement shall be enforceable as so modified after the
expiration of the time within which the judgment may be appealed.
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(b) Hiring Employees.
(i) Buyer shall, in its sole discretion, effective
the Closing Date offer employment to certain persons who at
the Closing are employees of Seller at its facilities at
Wyoming, Illinois or at Allen Road in Peoria, Illinois
("Employees") as employees of Buyer.
(ii) Effective the Closing Date, Buyer shall assume
as to each such Employee hired by Buyer all vacation,
purchased vacation, and commissions (collectively
"Compensation") for all periods prior to and including the
Closing Date to which such person is entitled. Effective the
Closing Date, Seller shall have no further obligation for
payment of any Compensation to any such hired Employee or for
any severance to which any such hired Employee may become
entitled.
(c) Assignments, Novations, etc. Seller shall use its
best efforts to assist Buyer to obtain such consents to
assignments, novations or other transfers of interests in Contracts
associated with the Business and included in the Acquired Assets.
If any such consent or novation is not obtained in respect of any
Contract being assumed by Buyer, Seller will cooperate in
reasonable arrangements calculated to provide Buyer with the
benefits under such Contract. Buyer shall cooperate with Seller by
providing accounting support and such related documentary backup
reasonably necessary to facilitate the payment by or to Seller of
all cancellation fees and consummation of all acts due from
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customers or suppliers with respect to any contract which is
terminated or suspended prior to or at the Closing under a
contractual termination for convenience or like provision.
(d) Storage at Wyoming, Illinois. Buyer may store at
Seller's facility in Wyoming, Illinois Acquired Assets located at
the facility on the Closing Date for three (3) months from and
after the Closing Date for a monthly storage fee of $1,000 per
month payable on the first of each month. Buyer may continue to
store said Acquired Assets at the Wyoming facility upon Buyer's
thirty (30) day written notice for each of four (4) additional
three (3) months periods for the same monthly storage fee of $1,000
per month. Seller assumes no responsibility for loss or damage to
any goods of any type or nature stored by Buyer at the Wyoming
facility, and Buyer acknowledges that such storage shall be at
Buyer's risk (except where caused by Seller's negligence or
intentional misconduct). Buyer agrees to hold Seller harmless for
any loss or damage to goods stored at the Wyoming facility. Buyer
hereby agrees to indemnify and hold harmless Seller against and
from any claim, loss, damage, other liability or expense (including
without limitation reasonable attorneys' fees) arising from or
incurred in connection with any act or omission (including without
limitation any act or omission related to the observance of any law
or regulation for the protection or regulation of the environment)
of Buyer, its directors, officers, employees, agents, contractors
or invitees on, about or related to the Wyoming Facility.
(e) Availability of Records to Seller. Buyer shall make
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available to Seller copies, except where the original is required
in which case the original shall be made available, of such
documents, books, records or information relating to the Acquired
Assets and Assumed Liabilities or to the Business as may be
reasonably required after the Closing in connection with any tax
determination, claim against, or defense of, Seller relating to the
conduct of the Business prior to the Closing or governmental
investigation of Seller or any of its Affiliates. Buyer agrees not
to destroy any files or records which are subject to this Section
6(d) without giving reasonable notice to Seller, and within fifteen
(15) business days of receipt of such notice, Buyer may cause to be
delivered to Seller the records intended to be destroyed, at
Seller's expense.
(f) Buyer's post-closing Covenants. Until such time as
all amounts under any and all promissory notes given by Buyer to
Seller or any Affiliate of Seller have been paid in full, including
all interest thereon and charges, if any, associated therewith,
Buyer shall:
(i) provide forty-five (45) days after the close of
each fiscal quarter a financial statement of Buyer certified
by Buyer's president or treasurer and one hundred twenty (120)
days after the close of each fiscal year, an audited financial
statement of Buyer;
(ii) not (x) increase the compensation of any
officer or director of Buyer, including without limitation,
increasing any salary, bonus entitlement, or allowances, (y)
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declare any cash dividend or otherwise distribute all or any
portion of its assets other than in the Ordinary Course of
Business, or (z) loan or otherwise advance any cash or other
property to any shareholder, director or officer of Buyer,
except to the extent expressly permitted by the documentation
for the financing contemplated by sections 4(a)(vii) and
4(b)(vii) of this Agreement ("Loan Documentation"), and if the
Loan Documentation is silent as to such item, only upon the
prior written consent of Seller; and
(iii) punctually and completely perform all
covenants to be performed by Buyer pursuant to the Loan
Documentation.
(g) Best Efforts. Subject to the terms and conditions
of this Agreement, each of the parties shall use its best efforts
to take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary or desirable to consummate the
transactions provided for in this Agreement. Without limiting the
generality of the foregoing, Buyer shall exercise its best efforts
to sell the Special Connector Inventory and may from time to time
present Seller with opportunities to sell a sizeable portion of the
inventory at a net price less than inventory cost.
(h) Receipts. Buyer shall immediately forward to Seller
in the manner received all remittances, including without
limitation all checks and other instruments, received by Buyer in
full or partial payments of (i) any outstanding account receivable
of the Business which was more than ninety (90) days old on the
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Closing Date, (ii) foreign accounts receivable outstanding on the
Closing Date, and (iii) government accounts receivable (except for
the UNICOR accounts receivable) outstanding on the Closing Date.
(i) Breeze Illinois. Seller consents to the use by
Buyer from and after the Closing Date of the name "Breeze Illinois"
by Buyer provided that Buyer shall discontinue use of such name as
soon as commercially reasonable. Seller also consents to the
utilization by Buyer of all existing packaging, catalogs, brochures
and blueprints (but not stationery) in existence on the Closing
Date and bearing the name TransTechnology Electronics, provided
that Buyer shall not reproduce same with the name TransTechnology
Electronics upon exhaustion of supplies existing on the Closing
Date. Nothing herein shall be construed or deemed to be a
conveyance or license of any trademark, trade-name or logo used,
owned by or licensed to Seller, including without limitation the
name "Breeze" and "TransTechnology", standing alone or in
combination with any other word.
(j) Further Assurances. Seller, after the Closing,
without further consideration, shall execute, acknowledge, and
deliver any further assignments, conveyances, and other assurances,
documents, and instruments of transfer (including certain patent
assignments in the United States and in Canada), reasonably
requested by Buyer, and shall take any other action consistent with
the terms of this Agreement that may reasonably be requested by
Buyer for the purpose of assigning, transferring, granting,
conveying, and confirming the Acquired Assets and the Special
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Connector Inventory, or any part thereof.
(k) Survival. The provisions of this Section 6 shall
survive the Closing.
7. Dispute Resolution.
(a) Arbitration. If a dispute, controversy or claim
arises out of this Agreement or any breach or alleged breach
hereof, and if such dispute cannot be settled through direct
discussions between the Parties, such dispute shall be settled by
final and binding arbitration administered by the American
Arbitration Association ("AAA") in accordance with it Commercial
Arbitration Rules, and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction
thereof. Arbitration will be conducted by a single arbitrator
selected by the parties from a panel provided by the AAA, or, upon
a failure of the Parties to agree upon such selection, appointed
pursuant to the procedures of the AAA. The arbitration shall be
conducted at the facilities of the AAA in Delaware. This
arbitration provision shall not apply to any action to enforce the
provisions of any promissory note given by Buyer to Seller.
(b) Fees. All fees and expenses (including transcripts,
room rental and fees of the arbitrators) of arbitration shall be
paid as determined by the arbitrators. Each party shall pay its
own legal fees, costs and disbursements.
8. Miscellaneous.
(a) Press Releases and Public Announcements. No Party
shall issue any press release or make any public announcement
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relating to the subject matter of this Agreement prior to the
Closing without the prior written approval of the other Party;
provided, however, that a Party may make any public disclosure it
believes in good faith is required by Applicable Law or any listing
or trading agreement concerning its publicly-traded securities or
those of any Affiliate (in which case the disclosing party will use
its reasonable best efforts to advise the other Party prior to
making the disclosure).
(b) No Third-Party Beneficiaries. Except as provided
below in subparagraph (d) of this Section 8, this Agreement shall
not confer any rights or remedies upon any Person other than the
Parties and their respective successors and permitted assigns.
(c) Entire Agreement. This Agreement (including the
documents referred to herein) constitutes the entire agreement
between the Parties and supersedes any prior understandings,
agreements, or representations by or between the parties, written
or oral, to the extent they are related in any way to the subject
matter hereof.
(d) Succession and Assignment. This Agreement shall be
binding upon and inure to the benefit of the Parties named herein
and their respective successors and permitted assigns. No Party
may assign either this Agreement or any of its rights, interests,
or obligations hereunder without the prior written approval of the
other party. Seller hereby consents to the collateral assignment
by Buyer of Buyer's rights and benefits under this Agreement to
National Canada Finance Corp.
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(e) Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original but
all of which together will constitute one and the same instrument.
(f) Headings. The section headings contained in this
Agreement are inserted for convenience only and shall not affect in
any way the meaning or interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims and
other communications hereunder will be in writing. Any notice,
request, demand, claim, or other communication hereunder shall be
deemed duly given five (5) business days after it is sent by
registered or certified mail, return receipt requested, postage
prepaid, and addressed to the intended recipient as set forth
below:
If to Seller:
Valentina Doss, Esq.
Vice President, Secretary
and General Counsel
TransTechnology Corporation
700 Liberty Avenue
Union, NJ 07083
Copy to: Gerald C. Harvey, Esq.
Pfaltz & Woller, P.A.
382 Springfield Avenue
Summit, NJ 07901
If to Buyer:
Mr. H. Gary Carlson, Chairman and
Chief Executive Officer
Elecsys Incorporated
8800 Allen Road
Peoria, IL 61615
Copy to: James Phillips, Esq.
Arter & Hadden
925 Euclid Avenue
Suite 1100
Cleveland, OH 44115-1475
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Any party may send any notice, request, demand, claim, or
other communication hereunder to the intended recipient at the
address set forth above using any other means (including personal
delivery, expedited courier, messenger service, telecopy, telex,
ordinary mail, or electronic mail), but no such notice, request,
demand, claim, or other communication shall be deemed to have been
duly given unless and until it actually is received by the intended
recipient. Any Party may change the address to which notices,
requests, demands, claims, and other communications hereunder are
to be delivered by giving the other Party notice in the manner
herein set forth.
(h) Governing Law. This Agreement shall be governed by
and construed in accordance with the domestic laws of the State of
Delaware (other than the choice of law principles thereof).
(i) Amendments and Waivers. No amendment of any
provision of this Agreement shall be valid unless the same shall be
in writing and signed by Buyer and Seller. No waiver by any party
of any default, misrepresentation, or breach of warranty or
covenant hereunder, whether intentional or not, shall be deemed to
extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any
rights arising by virtue of any prior or subsequent such
occurrence.
(j) Severability. Any term or provision of this
Agreement that is invalid or unenforceable in any situation in any
jurisdiction shall not affect the validity or enforceability of the
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remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) Expenses. Each of Buyer and Seller will bear its
own costs and expenses (including legal and accounting fees and
expenses) incurred in connection with this Agreement and the
transactions contemplated hereby. Nothing herein shall impair the
rights of the parties under Sections 5 and 7 above.
(l) Construction. The Parties have participated jointly
in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the Parties
and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state,
local, or foreign statute or law shall be deemed also to refer to
all rules and regulations promulgated thereunder, unless the
context requires otherwise. The word "including" shall mean
including without limitation.
(m) Incorporation of Exhibits and Schedules. The
Exhibits and Schedules identified in this Agreement are
incorporated herein by reference and made a part hereof. Disclosure
of any information in any Schedule or Exhibit hereto shall be
deemed disclosure of such information for all Schedules and
Exhibits hereto.
(n) Bulk Transfer Laws. Buyer acknowledges that Seller
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will not comply with the provisions of any bulk transfer laws of
any jurisdiction in connection with the transactions contemplated
by this Agreement, and Buyer waives such compliance. Seller agrees
to indemnify and hold Buyer harmless from and against all Adverse
Consequences which Buyer shall suffer arising out of Seller's
failure to pay any of its liabilities to creditors of the Business
other than the Assumed Liabilities.
9. Definitions.
"Acquired Assets" means all of the right, title and
interest in the hereinafter described assets used in connection
with the Business: (a) tangible property such as machinery,
equipment, tooling, dies, molds, furniture, fixtures, vehicles,
inventories of raw materials and supplies, manufactured and
purchased parts, goods in process and finished goods, (b)
Intellectual property, goodwill associated therewith, licenses and
sublicensees granted and obtained with respect thereto, (c) those
contracts and contractual rights including the Contracts listed in
Schedule 1(c) and rights thereunder, (d) accounts, notes, and other
receivables, (e) permits and licenses, exclusive of permits and
licenses relating to the Excluded Assets, obtained from any
Governmental Authority to the extent the same are transferable or
assignable under Applicable Law, (f) documents, correspondence,
lists, (including lists of past, present and prospective
customers), drawings and specifications, computer software, books
or other records and other printed or written materials, (g)
prepayments, advances, deposits or investments related to the
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Business, and (h) all other tangible and intangible assets; and
provided further that the Acquired Assets shall not include the
Excluded Assets.
"Adverse Consequences" means all actions, suits, proceedings,
hearings, investigations, charges, complaints, claims, demands,
injunctions, judgments, orders, decrees, rulings, damages, dues,
penalties, fines, costs, reasonable amounts paid in settlement,
liabilities, obligations, taxes (including but not limited to taxes
for unemployment insurance, disability insurance and other payroll
taxes), liens, losses, expenses and fees, including court costs,
reasonable attorneys' fees and expenses and costs of investigating
claims arising under or relating to the Business, the Acquired
Assets, and/or the provisions of this Agreement.
"Affiliate" means, when used with reference to a specified
Person, (i) any person that directly or indirectly through one or
more intermediaries controls or is controlled by or is under common
control with the specified Person (ii) any Person that is an
executive officer of, partner in, or trustee of, or serves in a
similar capacity with respect to, the specified Person or of which
the specified Person is an officer (other than serving in an
administerial position such as Secretary of Buyer), partner or
trustee, or with respect to which the specified Person serves in a
similar capacity, and (iii) when used with reference to a natural
Person, any Person that is related to the specified Person by blood
or marriage in the first degree of consanguinity; provided,
however, that no natural Person shall be deemed to be controlled by
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any other Person.
"Applicable Law" means all applicable provisions of all (i)
constitutions, treaties, statutes, laws, rules, regulations,
ordinances or orders of any Governmental Authority, (ii)
governmental approvals and (iii) orders, decisions, judgments,
awards and decrees of any Governmental Authority.
"Assumed Liabilities" means the Assumed Liabilities listed in
Schedule 1(d), obligations arising under the Contracts after the
Closing Date to the extent provided in Section 1(c) of this
Agreement; provided, however, that Buyer shall not assume the
product warranty obligations, if any, for goods shipped under the
Contracts prior to the Closing Date), all orders placed by TTE with
vendors in the Ordinary Course of Business, all leases for Fixed
Assets concluded in the Ordinary Course of Business, and the lease
for the Allen Road facility in Peoria, Illinois.
"Business" shall have the meaning set out in recital A of this
Agreement.
"Closing" has the meaning set forth in Section 1(f) above.
"Closing Date" has the meaning set forth in Section 1(f)
above.
"Closing Statement" means the balance sheet for the Business
as of the Closing Date prepared by Buyer within sixty (60) days
after the Closing Date as contemplated by section 1(j).
"Code" means the Internal Revenue code of 1986, as amended.
"Contract" means any written contract, lease, license,
certificate, sales confirmation, purchase order or other agreement
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relating to the Business and excluding licenses and/or permits
issued by any Governmental Authority.
"Disclosure Schedule" has the meaning set forth in Section 2
above.
"Environmental Damages" means all claims, judgments, damages,
losses, penalties, fines, liabilities (including strict liability),
costs, and expenses, including costs and expenses of defense or
investigation of any claim and of any settlement of claims,
including, without limitation, reasonable attorneys' fees and
consultants' fees, which arise out of the use of the Acquired
Assets at any time prior to the Closing Date as a result of the
existence of Hazardous Materials upon, about or beneath the Peoria
Facility or migrating to or from the peoria Facility, or arising
out of any violation of Environmental Requirements pertaining to
the Peoria Facility and the operations of the Business, including
without limitation:
(i) damages for personal injury, or injury to
property or natural resources including but not limited to
claims brought by or on behalf of employees of the Business;
(ii) fees and expenses incurred for the service of
attorneys, consultants, contractors, experts, laboratories and
all other costs and liabilities (including liabilities to
indemnify any person for costs) incurred in connection with
the investigation or remediation of such Hazardous Materials
or violation of Environmental Requirements which arise out of
the use of the Acquired Assets or the operation of the
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Business at the Peoria Facility including, but not limited to,
the preparation of any feasibility studies or reports or the
performance of any cleanup, remedial, removal, containment,
restoration or monitoring work required by any Governmental
Authority, or necessary to make use of the Acquired Assets;
(iii) damages and claims resulting from the off-
site disposal of Hazardous Materials which derived from the
use, generation, storage, treatment, transportation or
disposal of Hazardous Materials by Seller in connection with
the Business.
"Environmental Requirements" means all Applicable Laws
relating to the protection of human health or the environment,
including, without limitation:
(i) the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. 9601 et seq., as
amended by the Superfund Amendments and Reauthorization Act of
1986, Pub. L. 99-499 ("CERCLA");
(ii) all requirements pertaining to reporting,
licensing, permitting, investigation or remediation of
emissions, discharges, releases or threatened releases of
Hazardous Materials into the air, surface water, groundwater
or land, or relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials; and
(iii) all requirements pertaining to the protection
of the health and safety of employees or the public.
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"Excluded Assets" means any (i) cash, (ii) investment by
Seller (or an Affiliate thereof) in any other Affiliate of Seller,
(iii) any rights of Seller under this Agreement (or under any other
agreement between Seller and Buyer entered into on or after the
date of this Agreement), (iv) all real property specified in
Recital B, (v) all accounts receivable which are over ninety (90)
days old on the Closing Date, (vi) all foreign accounts receivable,
(vii) all government accounts receivable (except for the UNICOR
accounts receivable which Buyer will purchase and acquire
hereunder), and (viii) all trademarks, trade names, and service
marks used in or associated with the Business which utilize or
incorporate the name "Breeze" or "TransTechnology".
"Fixed Assets" means all machinery, tools, electronic devices,
equipment, tooling, dies, molds, spare parts, supplies, furniture
and furnishings, and other tangible personal property used or held
for use in the Business, but excluding any Excluded Assets.
"Governmental Authority" means the government of the United
States of America, any state or other political subdivision thereof
and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government, including, without limitation, any agency, department,
board, commission or instrumentality of the United States, any
state of the United States or any political subdivision thereof.
"Hazardous Materials" means any chemical substance;
(i) the presence of which requires investigation,
removal or remediation under any Applicable Law; or
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(ii) which is or becomes defined as a "hazardous
waste" or "hazardous substance" under any Environmental
Requirements, including, without limitation, CERCLA; or
(iii) which is toxic, explosive, corrosive,
flammable, carcinogenic, mutagenic, or otherwise hazardous and
is regulated by Environmental Requirements; or
(iv) arising out of the use of the Acquired Assets
at their current locations, the presence of which causes or
threatens to cause a nuisance upon the Peoria Facility or to
adjacent properties or poses a hazard to the peoria Facility,
or the health or safety of any person on or about the Peoria
Facility; or
(v) without limitation, which contains gasoline or
diesel fuel; or
(vi) without Limitation, which contains PCBs or
asbestos; or
(vii) underground storage tanks subject to
regulation under Environmental Requirements.
"Income Tax" means any federal, state, local, or foreign
income tax, including any interest, penalty or addition thereto,
whether disputed or not.
"Intellectual Property" means all patents, trademarks, service
marks, trade names, and copyrights (and applications for any of the
foregoing) and all technical know-how, trade secrets, inventions,
processes, formulas, ideas, confidential information and other
similar intangible assets owned, held or used by Seller in
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connection with the Business.
"Judgment" means any judgment, writ, order or decree of or by
any court, judge, justice, magistrate or arbitrator(s), including
any bankruptcy court or judge, and any order of any Governmental
Authority.
"Knowledge" means actual knowledge of the executive management
of Buyer or Seller, as the case may be, after making reasonable
inquiry of officers or senior management employees having
responsibility for those operations or transactions to which such
representation and warranty relates.
"Law" means the common law and any statute, ordinance, code or
other law, rule, regulation, order, technical or other standard,
requirement or procedure enacted, adopted, promulgated, applied, or
followed by any Governmental Authority or court.
"Lien" means any security agreement, financing statement,
conditional sale or other title retention agreement, any
consignment or bailment given for security purposes, any mortgage,
charge, pledge, option, constructive trust or other trust,
attachment, encumbrance, exception to or defect in title or other
ownership interest of any kind which:.
(i) creates or confers or purports to create or
confer an interest in property to secure payment or
performance of a liability, obligation or claim, or which
retains or reserves or purports to retain or reserve such an
interest for such purpose;
(ii) grants to any Person the right to purchase or
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otherwise acquire, or obligates any person to sell or
otherwise dispose of, or otherwise results or may result in
any Person acquiring, any property or interest therein; or
(iii) restricts the transfer of, or the exercise of
any rights or the enjoyment of any benefits arising by reason
of ownership of, any property.
Lien shall not include (a) mechanic's, materialmen's, and
similar liens, attaching to any property which arise from the
performance of work which is not yet due and payable, (b) liens for
taxes not yet due and payable or for taxes that the taxpayer
contesting in good faith through appropriate proceedings, and (c)
other liens arising in the ordinary Course of Business and not
incurred in connection with the borrowing of money or the deferred
purchase price of any asset.
"Ordinary Course of Business" means the ordinary course of
Seller's business consistent with past customs and practices of
Seller.
"Party" has the meaning set forth in the preface above.
"Person" means an individual, a partnership, corporation, an
association, a joint stock company, a trust, a joint venture, an
unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
"Purchase Price" has the meaning set forth in Section 1(d)
above.
"Subordinated Promissory Note" means a promissory note in the
form of Exhibit 1.
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"Taxes" means any tax, charge, assessment, penalty, late
charge or interest charged by a Governmental Authority, including
but not limited to unemployment and disability premiums.
ARBITRATION ACKNOWLEDGMENT
THE PARTIES EACH AFFIRM THAT THEY UNDERSTAND THAT THIS
AGREEMENT CONTAINS AN AGREEMENT TO ARBITRATE. AFTER SIGNING THIS
AGREEMENT, THEY UNDERSTAND THAT THEY WILL NOT BE ABLE TO BRING A
LAWSUIT CONCERNING ANY DISPUTE THAT MAY ARISE WHICH IS COVERED BY
THE ARBITRATION AGREEMENT, UNLESS IT INVOLVES A QUESTION OF
CONSTITUTIONAL OR CIVIL RIGHTS. INSTEAD THEY AGREE TO SUBJECT ANY
SUCH DISPUTE TO IMPARTIAL ARBITRATION.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first above written.
ELECSYS INCORPORATED
By: /s/ H. Gary Carlson
H. Gary Carlson, Chairman
and Chief Executive Officer
TRANSTECHNOLOGY CORPORATION
By: /s/ Michael J. Berthelot
Name: Michael J. Berthelot
Title: Chairman
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LIST OF EXHIBITS
TO THE ASSET PURCHASE AGREEMENT
EXHIBIT 1 Subordinated Promissory Note
EXHIBIT 2 Warrant
EXHIBIT 3 Special Connector Inventory Promissory Note
EXHIBIT 4 Sublease of Facility Located at Peoria, Illinois
EXHIBIT 5 General Electric Equipment Sublease/Assignment
EXHIBIT 6 Bank of Boston Sublease
<PAGE> 51
LIST OF SCHEDULES
TO THE ASSET PURCHASE AGREEMENT
Schedule 1(c) Assigned Contracts
Schedule 1(d) Assumed Liabilities
Schedule 1(g) Special Connector Inventory Liabilities
Schedule 2(b) Required Consents
Schedule 2(f) Tax Exceptions
Schedule 2(g) Intellectual Property
Schedule 2(h)(i) Customer Contracts with consideration of not
less than $5,000.00
Schedule 2(h)(ii) Distributor, Dealer, or Agent Agreements
Schedule 2(h)(iii) Vendor Contracts with consideration of not
less than $5,000.00
Schedule 2(i) Accounts Receivable
Schedule 2(j) Leases
Schedule 2(k) Litigation
Schedule 2(l) Employment Matters
Schedule 2(m) Employee Benefits
Schedule 2(n) Statements of Assets and Liabilities
Schedule 2(o) Insurance
Schedule 2(p) Business Changes
Schedule 2(q) Government Licenses and permits
Schedule 2(r) Environmental Condition
Schedule 2(s) Related Party Transactions
Schedule 2(t) Exceptions to Saleable Inventory
Schedule 2(u) Exceptions to Maintenance of Equipment
