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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): July 1, 1996
TJ INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-7469 82-0250992
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(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
200E. Mallard Drive Boise, Idaho 83706
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (208) 345-8500
EXHIBIT INDEX, Page 3
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) On July 1, 1996, the Company announced that it closed the sale of
the assets of its Norco Windows division, to JELD-WEN Inc., a Klamath
Falls, Ore.-based manufacturer of premium wood windows and doors. The
company anticipates proceeds from the transaction to be approximately
$30 million.
Related to this sale, TJ International also announced it will
call its Series 1989 Twin Falls, Industrial Development Revenue Bonds
for redemption on the first optional redemption date of November 1,
1999. The company will continue to pay the bonds as they become due
until that date.
Payment of principal and interest and the redemption price on the
bonds will be made from funds deposited by TJ International with
trustee West One Bank. Bond holders will continue to receive
principal and interest payments as scheduled May 1 and November 1 of
each year until November 1, 1999.
Item 7. EXHIBITS
(c) EXHIBIT NUMBER
1 The Asset Purchase Agreement between TJ International, Inc.,
Norco Windows, Inc., and JELD-WEN, Inc. dated July 1, 1996.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
TJ INTERNATIONAL, INC.
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(Registrant)
Date: July 15, 1996 By: /s/ Valerie A. Heusinkveld
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Valerie A. Heusinkveld
Vice President & Chief
Financial Officer
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EXHIBIT INDEX
Exhibit No. Description Document No.
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1 The Asset Purchase Agreement between 1
TJ International, Inc., Norco Windows,
Inc., and JELD-WEN, Inc. dated July 1, 1996.
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ASSET PURCHASE AGREEMENT
This asset purchase agreement, including all appended exhibits and schedules,
(collectively the "Agreement") is made between:
JELD-WEN, INC., an Oregon corporation("BUYER");
NORCO WINDOWS, INC., a Wisconsin Corporation("SELLER");
AND
T J INTERNATIONAL, INC., a Delaware Corporation("SURETY");
WHEREAS Seller is the owner of all the assets of the business operations of
Norco Windows, Inc.;
WHEREAS, Buyer is desirous of buying from Seller and Seller is desirous of
selling to Buyer certain assets of its Norco operations upon the terms and
conditions and in reliance upon the representations and warranties set forth in
this Agreement;
WHEREAS, Surety is the owner of all of the shares of Seller and will thereby
benefit from the consideration given by Buyer in this Agreement and agrees to
act as surety for all of Seller's obligations herein;
THEREFORE, Buyer and Seller (the "Parties") and the Surety agree as follows:
ARTICLE 1
DEFINED TERMS
1.1 DEFINED TERMS. As used in this Agreement, the following terms shall have
the respective meanings set forth below (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"ACCOUNTS RECEIVABLE" means all accounts receivable, whether designated
as an account or a note reflected on the Section 4.3 audit, and being such
accounts existing at the Effective Time.
"ACQUIRED ASSETS" means all of the assets of Seller which exist at the
Effective Time, whether located at or pertaining to the operations of Seller
(the "Operations"), or otherwise owned or used by Seller, free and clear of any
and all encumbrances,
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including (without limitation) Accounts Receivable, investments, prepaid
expenses, Inventory, all personal and real property, including but not limited
to, land, land improvements, buildings, building improvements, fixtures,
machinery, equipment, rolling stock, supplies, spare parts, contract rights
(including, but not limited to, Seller's rights under any current or past
insurance policies), and all other tangible and intangible assets (including
without limitation the name "NORCO Windows") also including without limitation
the assets specifically listed on the depreciation schedule dated December 31,
1995 (which has been previously delivered to Buyer), wherever located, owned or
used by Seller or necessary for the conduct of Seller's business; PROVIDED,
HOWEVER, nothing herein shall include the Excluded Assets.
In addition, the Acquired Assets shall include ownership of any and all
patents related to Seller or its Operations and any and all trademarks used in
the Operations.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" means the agreement to be executed
by Seller and Buyer at the Closing in the form of attached Exhibit A covering
transfer of Seller's interest in all contracts included in the Acquired Assets
or otherwise specified in this Agreement, including without limitation the sales
orders, purchase orders, and quotes assumed by Buyer pursuant to Section 5.2.
"BILL OF SALE" means the instrument to be executed by Seller and
delivered to Buyer at the Closing in the form of attached Exhibit B.
"BOOK VALUE" shall mean the audited book value of the Acquired Assets,
determined jointly by Seller and Buyer and/or their authorized representatives
pursuant to Section 4.3 herein, prepared in accordance with generally accepted
accounting principles applied on a basis consistent with those currently in use
by Seller.
"CLOSING" has the meaning specified in Article 3 hereof.
"CLOSING DATE" has the meaning specified in Article 3 hereof.
"CLOSING DATE BALANCE SHEET" means the audited balance sheet described in
Section 4.3 herein.
"CONFIDENTIAL INFORMATION" means all information of any kind concerning a
party to this Agreement or their properties or business obtained, directly or
indirectly, from any such party, or any of their respective employees, agents,
accountants, legal counsel or other representatives, except information which
constitutes readily ascertainable public information.
"CONTRACTS" means Seller's interest in the contracts of Seller that Buyer
specifically agrees to assume pursuant to Article 5 herein.
"DISCLOSURE DOCUMENTS" means the schedules and exhibits included with
this Agreement, or any other document or instrument delivered by Seller to Buyer
as required specifically by this Agreement.
"EFFECTIVE TIME" has the meaning specified in Article 3 hereof.
"ENVIRONMENTAL HAZARD" means: (i) any hazardous, toxic, radioactive,
infectious or dangerous substance, material or waste as regulated, defined or
listed under any Environmental Law applicable to the Operations, or (ii) any
material containing more than one percent by weight of asbestos.
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"ENVIRONMENTAL LAW" means any federal, state or local rule, regulation,
ordinance, statute, order, license, permit, judgment or award relating to
pollution of the ambient environment, environmental protection or pollution
control including without limitation, matters relating to air, water or soil
quality, or the control, handling, storage, release or disposal of hazardous
substances, toxic chemicals, herbicides, or pesticides pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Resource Conservation and Recovery Act of 1976, as amended by
the Hazardous and Solid Waste Amendments of 1984, the Toxic Substances Control
Act, and the Federal Insecticide, Fungicide and Rodenticide Act or any similar
federal, state or local statutes or regulations.
"ERISA" means the Employment Retirement Income Security Act of 1974, as
amended.
"ERISA PLANS" means all employee benefit plans of Seller as defined in
section 3 of ERISA, in which any of Seller's employees have participated as the
result of their employment by Seller. The ERISA Plans are listed on Schedule
7.17 attached hereto.
"EXCLUDED ASSETS" means: a) cash and cash equivalents; b) any prepaid
expenses that have no tangible benefit to JELD-WEN following the Closing
contemplated by this Agreement, c) Goodwill; d) a note receivable due from
Shasta Cascade for $104,323; and e) any capitalized fees relating to the
Industrial Revenue Bond transaction for the Twin Falls site.
"INVENTORIES" means all of the inventories of merchandise and stock in
trade of Seller existing as of the Effective Time, including, without
limitation, raw materials, work in process, and finished goods, whether located
at the Operations, in transit or elsewhere.
"KEY MANAGEMENT EMPLOYEES" means the individuals listed on Schedule
1.1(c).
"KNOWLEDGE" shall, as to any Person, refer to all facts of which such
Person shall have notice or actual knowledge.
"PERSON" shall mean an individual, partnership, joint venture,
corporation, bank, trust, unincorporated organization and/or a government or any
department or agency thereof.
"PURCHASE PRICE" has the meaning specified in Section 4.1 hereof.
"REAL PROPERTY" means the real property located at Twin Falls, Idaho,
Hawkins, Wisconsin and Marenisco, Michigan as described in the Real Estate
Purchase Terms attached as Exhibit C.
ARTICLE 2
AGREEMENT TO SELL AND PURCHASE ASSETS
2.1 AGREEMENT TO SELL AND PURCHASE ASSETS. Subject to the terms and
conditions and in reliance upon the representations and warranties contained in
this Agreement, Seller shall sell, transfer and assign to Buyer and Buyer shall
acquire from Seller the Acquired Assets free and clear of any and all
encumbrances, except those which Buyer has specifically agreed to assume
pursuant to the provisions of Section 5.2 hereof.
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ARTICLE 3
CLOSING
3.1 CLOSING PLACE, TIME AND DATE. The sale and purchase of the Acquired
Assets as contemplated by this Agreement (the "Closing") shall take place at
Seller's Boise, Idaho offices at 1:00 p.m. (local time) on July 1, 1996 (or such
other place, date and time as shall be agreed upon by Buyer and Seller). The
date of the Closing is referred to in this Agreement as the "Closing Date".
3.2 EFFECTIVE TIME. When completed, the Closing shall be effective as of
12:01 a.m. (local time) on July 1, 1996 (the "Effective Time").
ARTICLE 4
PURCHASE PRICE AND PAYMENT
4.1 PRICE. Subject to the adjustment provisions provided in Section 4.2 and
4.3 below, the purchase price for the Acquired Assets shall be Twenty-Nine
Million Five Hundred Thousand and no/100ths Dollars ($29,500,000.00) (the
"Purchase Price"), payable at Closing as follows:
a. Twenty-Four Million, Five Hundred Thousand and no/100ths Dollars
($24,500,000.00) shall be payable in immediately available funds of the United
States by wire transfer at the Closing to an account identified in writing by
Seller.
b. Five Million and No/100ths Dollars ($5,000,000.00) (the "Escrowed
Funds") shall be placed into an escrow account by wire transfer as provided in
Section 4.5 hereof.
4.2 PURCHASE PRICE ALLOCATION. Subject to the adjustment contemplated in
Section 4.3, the Purchase Price shall be allocated among the Acquired Assets as
follows:
Current Assets $19,200,000.00
Fixed Assets and other assets 10,300,000.00
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$29,500,000.00
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If and to the extent there is any adjustment to the Purchase Price in
accordance with Section 4.3, the amount allocated to Acquired Assets shall be
correspondingly adjusted upward or downward.
The Parties agree to act in accordance with the foregoing allocations in
any relevant tax returns or filings (including any forms or reports required to
be filed pursuant to Section 1060 of the Internal Revenue Code, the Treasury
regulations promulgated thereunder or any provisions of local, state and foreign
law ("1060 Forms"), and to cooperate in the preparation of any 1060 Forms and to
file such 1060 Forms in the manner required by applicable law.
Notwithstanding the provisions of this Section 4.2, in the event that the
Internal Revenue Service, or any court of competent jurisdiction, shall not
honor the allocation of the Purchase Price as agreed hereto by the Parties and
as filed thereby on Form 1060, the Parties may be required to reallocate the
Purchase Price between the Acquired Assets, however, the total Purchase Price
shall not be adjusted.
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4.3 ASSET AUDIT ADJUSTMENTS.
a. AUDIT. Seller and Buyer and/or their authorized representatives
shall jointly conduct an asset audit of Seller, to determine the Book Value of
the Acquired Assets of the Seller as of the Effective Time. The audit shall be
completed as soon as practicable, but in any event within forty-five (45) days
after the Effective Time in accordance with generally accepted accounting
principles applied on a basis consistent with those currently in use at Seller's
business, SAVE and EXCEPT certain goods such as staples, glue, other maintenance
supplies, office supplies, etc., which are generally expensed by Seller shall be
valued at zero.
In addition to all other calculations and adjustments which have
been made to arrive at the Book Value of the Acquired Assets, the amount
indicated in the fixed asset and other asset category shall be further lowered
by $300,000 before arriving at the Book Value of the Acquired Assets.
b. INVENTORY. All Inventories, regardless of quality and condition,
shall be purchased by Buyer. The Parties acknowledge that, for the purposes of
the Closing Date Balance Sheet, the Inventory value shall be shall be discounted
(including full write-offs if required under GAAP) for any Damaged, Obsolete,
Slow Moving or returned Inventory. All Inventory shall be valued at the lower
of its cost or its net realizable value.
"Damaged" Inventory is Inventory that, in the reasonable judgment
of the Parties is not usable or saleable at full wholesale or retail price
because of physical deterioration or damage.
"Obsolete" Inventory is Inventory that, in the reasonable judgment
of the Parties or their authorized representatives, is not usable or saleable at
its full normal value, because of its relation to discontinued product lines,
legal restrictions, failure to meet specification imposed by any contract, loss
of market or for any other cause. If Buyer acquires Obsolete Inventory which is
valued at zero under this Agreement and later uses it in resolving a Warranty
Claim, Buyer shall value the cost of such Obsolete Inventory at zero when
computing the Costs of such Claim.
"Slow Moving" Inventory is defined as Inventory that is in excess
of one year's supply.
In addition, the total Inventory value shall be discounted by five
percent (5%) in order to finalize the Inventory value for the audit described
hereinabove.
c. DISPUTES. In the event that Buyer and Seller are unable to agree
upon the final audit numbers, then each issue in dispute shall promptly be
referred to the Boise, Idaho offices of Coopers & Lybrand, certified public
accountants, whose decision shall be final and binding on both Seller and Buyer.
The fees and expenses of Coopers & Lybrand shall be shared equally by Seller and
Buyer. Coopers & Lybrand shall have access to all work papers of both parties
reasonably necessary to review and resolve questions regarding the issues in
dispute. Coopers & Lybrand shall complete its review of the matter or matters
submitted to it and render its written determination to the parties within 30
days of the date within which the issue or issues are presented to Coopers &
Lybrand by the parties hereto.
d. PURCHASE PRICE ADJUSTMENT. To the extent that the audited Book
Value of the Acquired Assets is less than Thirty-Three Million Nine Hundred
Thousand and no/100ths Dollars ($33,900,000.00), then the Purchase Price for the
Acquired Assets described in Section 4.1 above shall be reduced, dollar for
dollar, to the extent of such variance.
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If the audited Book Value of the Acquired Assets is greater than
Thirty-Three Million Nine Hundred Thousand and no/100ths Dollars
($33,900,000.00), then the Purchase Price for the Acquired Assets described in
Section 4.1 above shall be increased, dollar for dollar, to the extent of such
variance.
In the event such adjustments are not made at Closing, the entire
dollar amount of such adjustments shall be paid in cash within five (5) days
following the completion by Buyer and Seller of the final mutually agreed upon
audit numbers or upon receipt of Coopers & Lybrand's determination of the audit
numbers upon which such adjustment is based, together with interest on the
amount of such adjustment at the rate of eight percent (8%) per annum from the
date of Closing to the date of payment.
4.4 GUARANTEE OF ACCOUNTS RECEIVABLE. For a period of 150 days following the
Effective Date, Buyer shall use reasonable business efforts, consistent with its
own credit and collection policies, to collect the Accounts Receivable.
During such 150-day period, Buyer shall provide to Seller's
representatives reasonable access during normal business hours to Buyer's
records to determine and verify the posting of payments and cash receipts with
respect to the Accounts Receivable.
To the extent that any Accounts Receivable remain Uncollected at the end
of such 150-day period, Seller shall pay to Buyer, in cash immediately upon
Buyer's request, the amount of the Uncollected Accounts Receivable less the
amount of the bad debt reserve reflected on the Closing Date Balance Sheet,
together with interest on the amount calculated herein at the rate of eight (8%)
per annum from the Closing Date to the date of payment.
If the amount of the bad debt reserve reflected on the Closing Date
Balance Sheet is greater than the Uncollected Accounts Receivable, then there is
no obligation by either Buyer or the Seller under this Section 4.4.
All payments made to Buyer on the Uncollected Accounts Receivable shall
be remitted to the Seller until the total amount remitted to the Seller equals
any payment made to Buyer from Seller pursuant to this Section 4.4. Any amounts
received on the Uncollected Accounts Receivable in excess of any payment made to
Buyer pursuant to this Section 4.4 shall remain the property of Buyer.
The term "Collected" as it relates to the Accounts Receivable guarantee
shall mean the extent to which outstanding Accounts Receivable have been paid to
Buyer in cash or other good funds or any deposits previously paid by Seller to
Buyer. The term "Collected" shall specifically exclude any credits taken by the
customer for prompt pay discounts, credits for defective or damaged goods, goods
not received or other related credit items. The term "Uncollected" shall mean
not Collected.
4.5 ESCROWED FUNDS. The Parties agree that the Escrowed Funds described in
Section 4.1 shall be held in escrow by the main branch of U.S. Bank in Boise,
Idaho (the "Escrow Agent") to be used for the purpose of making post-closing
adjustments, and to satisfy Seller's indemnification obligations pursuant to
Article 14 hereof. The escrow arrangement shall be evidenced by an Escrow
Agreement in the form of Exhibit D, which is attached hereto and shall be
governed by the following terms:
a. ESCROW FUNDS RELEASE. The Escrowed Funds shall be released to
Seller as follows:
i. After any adjustments required by Sections 4.3 and 4.4
hereinabove, the Escrowed Funds shall be reduced or increased as the case may be
to Two Million, Five Hundred Thousand and no/100ths Dollars ($2,500,000.00). If
more than $2,500,000 exists in the Escrowed Funds at such time, the difference
shall be paid to Seller. If less than $2,500,000 exists in the Escrowed Funds
at such time the difference shall be paid into the Escrowed Funds by Seller.
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ii. During the term of the Escrow Agreement, the Escrowed Funds
will be disbursed to Seller on the dates and in the amounts as follows, subject
to and reduced by the sum of (x) any amounts disbursed to Buyer pursuant to the
terms of the Escrow Agreement during any payment period and (y) the amount of
any outstanding Escrow Claims (as defined below) submitted by Buyer prior to
each of the following dates (each of the following, an "Escrow Release Date"):
a) Twelve (12) months from the Closing Date, $700,000;
b) Twenty-four (24) months from the Closing Date,
$550,000; and
c) On July 1, 1999, any remaining Escrowed Funds
existing, including any interest and or dividends
earned thereon, shall be paid to Seller.
iii. Nothing contained in this Section shall limit Seller from
fulfilling any and all obligations to Buyer under this Agreement whether such
obligations can be paid in full out of the Escrowed Funds or not.
b. INVESTMENT OF ESCROWED FUNDS. The Escrow Agent may invest the
Escrowed Funds in United States Treasury Bills, interest bearing certificate of
deposits, interest bearing savings accounts, or money market accounts of a
banking institution with in excess of $100 million in shareholders' equity as
set forth in its most recent audited financial statement; provided, however,
that the Escrowed Funds shall be sufficiently liquid to pay any post-Closing
adjustments under this Agreement. All interest earned on the Escrowed Funds
shall accrue to the benefit of Seller.
c. CLAIMS. Buyer shall be entitled to be paid from Escrowed Funds
for claims under Sections 4.3, 4.4 and Article 14. To make a claim against the
Escrowed Funds (an "Escrow Claim"), Buyer must give written notice to both the
Escrow Agent and Seller. The notice shall specify an estimated amount for the
Escrow Claim, the nature of the claim and the relevant facts supporting the
claim. If there are any Escrow Claims outstanding at the time of an Escrow
Release Date, the Escrow Agent shall withhold an amount equal to the amount of
Buyer's estimated value of the Escrow Claim from payment of the Escrowed Funds
otherwise due Seller on such date.
d. PAYMENT. After receipt of notice of an Escrow Claim the Escrow
Agent shall pay Buyer an amount equal to Buyer's estimated value of the Escrow
Claim unless Seller has objected by notifying the Escrow Agent and Buyer of its
objection in writing within 10 business days of the date it received written
notice of the Escrow Claim.
e. OBJECTION. In the event Seller timely objects to an Escrow Claim,
the Parties shall make a good faith attempt to promptly reach agreement on the
proper amount of the claim. If the Parties reach agreement, they shall so
notify the Escrow Agent.
If the Parties fail to reach agreement within 15 business days,
the matter shall be submitted by the Parties to binding arbitration pursuant to
Section 17.10. The arbitrator shall notify the Parties and the Escrow Agent of
its decision and the Escrow Agent shall act in accordance with such decision.
f. REMEDIES. The escrow procedure outlined in this Section shall in
no way limit Buyer from exercising any other remedies it may have under this
Agreement or at law or equity, including, but not limited to the right of Buyer
to claim as damages against Seller an amount greater than the amount of money
held in escrow.
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ARTICLE 5
LIABILITIES
5.1 LIABILITIES NOT ASSUMED. As part of its purchase of the Acquired Assets,
Buyer shall assume NO liabilities of Seller as of the date of this Agreement or
which arise after this Agreement except those that Buyer expressly, in writing,
agrees to take or assume (the "Assumed Liabilities").
5.2 LIABILITIES ASSUMED. Buyer expressly agrees to assume the following
liabilities of Seller:
a. PURCHASE CONTRACTS. Buyer agrees to assume Seller's obligations
under any purchase contracts made prior to the Closing for inventory or other
goods in transit, provided that such contracts are reasonable on the basis of
quality, quantity, price, brand, dimensions and other terms, and incurred in the
ordinary course of business by Seller and such inventory or goods in transit
are not included in the Closing Date Balance Sheet. Such contracts are
described in the attached Schedule 5.2 (a).
b. SALE CONTRACTS. Buyer agrees to assume Seller's obligations under
sales contracts arising from:
i. sales orders accepted by Seller from the customers of
Seller prior to the Closing, and
ii. quotes made to customers by Seller prior to the Closing
which are accepted after Closing;
where payment has not yet been received by Seller provided: 1)
that the terms of the contracts were incurred by Seller in the ordinary course
of business on commercially reasonable terms (including without limitation
adequate credit protection), which terms shall be specified to Buyer in the
attached Schedule 5.2 (b) and 2) that Seller has assigned all corresponding
rights under such contracts to Buyer either herein or in another document.
If a payment or deposit has been received by Seller for a contract
it wishes Buyer to assume hereunder, Seller shall pay Buyer, in cash at Closing,
the full amount of such payment or deposit. Any such payment or deposit so paid
to Buyer shall be excluded from Seller's Accounts Receivable detail.
c. OTHER CONTRACTS. Buyer agrees to assume Seller's obligations
under the other contracts specifically reflected on the Assignment and
Assumption Agreement in Exhibit A and specifically described on the attached
Schedule 5.2 (c).
Buyer also agrees to enter a mutually agreeable month to month
sublease agreement with Seller prior to Closing for the Sacramento sales office.
d. PERFORMANCE OF ASSUMED LIABILITIES. If Seller suffers any
liabilities or damages relating to Buyer's nonperformance of any liabilities
assumed under this Agreement, Buyer agrees to indemnify Seller for such
liabilities and damages, but only to the extent such liabilities and damages
were caused by Buyer's negligence, Buyer's breach of contract or under any other
valid legal theory which would impose liability on Buyer. Seller shall remain
liable and indemnify Buyer to the extent such liabilities and damages were
caused by Seller's negligence, Seller's breach of contract or any other valid
legal theory which would impose liability on Seller.
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ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BUYER
6. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby represents and
warrants to Seller as follows:
6.1 ORGANIZATION, STANDING AND AUTHORITY. Buyer is a corporation, duly
organized and validly existing in good standing under the laws of the state of
Oregon, and possesses all requisite corporate power and authority to enter into
and perform this Agreement.
6.2 AUTHORIZATION. The execution, delivery and performance of this Agreement
by Buyer have been duly and validly authorized by all necessary corporate action
on the part of Buyer. This Agreement is a valid, binding and enforceable
obligation of Buyer except as the enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws
affecting or limiting the rights of creditors generally.
6.3 COMPLIANCE WITH LAWS. To the best of Buyer's knowledge, Buyer is in
substantial compliance with all applicable laws, rules and regulations affecting
or relating to the properties or the business of Buyer which could affect
Buyer's ability to perform under this Agreement.
6.4 LITIGATION. There are no actions, suits, proceedings or governmental
investigations pending or, to the knowledge of Buyer, threatened against Buyer
which materially adversely affect or might materially adversely affect the
validity of or Buyer's ability to consummate the transactions described in this
Agreement.
6.5 NOTICES AND CONSENTS. Except for filings and approvals which may be
required by the Hart Scott Rodino Act, no notice or consent of any party or
governmental authority is required in connection with the execution, delivery
and performance of this Agreement by Buyer, other than notices which have been
given and consents which have been obtained prior to the execution of this
Agreement.
6.6 COMPLIANCE WITH INSTRUMENTS. The execution, delivery and performance of
this Agreement by Buyer does not and will not conflict with or result in a
breach of or a default under, or give rise to any right of termination,
cancellation or acceleration with respect to, any of the terms, conditions or
provisions of any indenture, contract, agreement, license, lease or other
instrument or obligation to which Buyer is a party or by which it is bound or
which affects the business or any property of Buyer or violates any order, writ,
injunction or decree applicable to Buyer or conflicts with or results in a
default under any provisions of the Articles of Incorporation or Bylaws of
Buyer.
6.7 NO FINDERS' FEES. Neither Buyer nor any Person acting on Buyer's behalf
has employed any broker or finder or incurred any liability for any brokerage
fees or commissions or any finder's fees in connection with the negotiations
relative to this Agreement or the consummation of the transactions contemplated
hereby.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF SELLER
7. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby warrants and
represents to Buyer as follows:
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7.1 STANDING AND AUTHORITY OF SELLER. Seller is a corporation duly organized
and validly existing in good standing under the laws of the state of Wisconsin
and possesses all requisite corporate power and authority to enter into and
perform this Agreement.
7.2 AUTHORIZATION BY SELLER. The execution, delivery and performance of this
Agreement by Seller has been duly and validly authorized by all necessary action
on the part of Seller and this Agreement is a valid, binding and enforceable
obligation of Seller except as the enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws
affecting or limiting the rights of creditors generally.
7.3 COMPLIANCE WITH LAWS. To the Knowledge of Seller, except as set forth in
Schedule 7.3, Seller is in material compliance with all laws, rules and
regulations affecting or relating to the Acquired Assets, the Operations or
Seller.
7.4 GOVERNMENTAL AND OTHER CONSENTS. Except for any filings and approvals
required by the Hart Scott Rodino Act or as set forth in Schedule 7.4 hereto or
those already acquired by the Seller or which will be acquired by Seller on or
prior to Closing, no certificates, permits, licenses, authorization, consent or
approval of, or registration, qualification or filing with, any governmental
authority or other Person (including but not limited to N.P.D.E.S. permits,
storm water discharge permits, and air discharge permits) are required in
connection with the execution, delivery and performance of this Agreement by
Seller or for the lawful conduct and use, occupation and operation of the
Acquired Assets, consistent with the present conduct and use, occupation and
operation of the Acquired Assets by Seller.
7.5 LITIGATION. Schedule 7.5 hereto describes all actions, suits, proceedings
or governmental investigations pending or, to the Knowledge of Seller,
threatened against Seller which materially adversely affect or might materially
adversely affect any the Acquired Assets or the business or financial condition
of Seller or Seller's ability to consummate this Agreement. Except as set forth
in Schedule 7.5, there are no orders, judgments, decrees of any court or
government agency or authority entered, pending or to the Knowledge of Seller,
threatened against Seller or affecting any of the Acquired Assets.
7.6 COMPLIANCE WITH INSTRUMENTS. Seller is not in default under, or in
breach of any material term or provision of any material contract, lease,
agreement or other instrument to which Seller is a party or by which it or any
of the Acquired Assets are bound. Except as set forth in Schedule 7.6 hereto,
the execution, delivery and performance of this Agreement by Seller does not and
will not conflict with or result in a breach of or a default under, or give rise
to any right of termination, cancellation or acceleration with respect to, any
of the terms, conditions or provisions of any (as so defined) indenture,
contract, agreement, license, lease or other instrument to which Seller is a
party or by which Seller or any of the Acquired Assets may be bound including
the Articles of Incorporation of Seller and the Bylaws of Seller (except for any
such violation or default which has been waived in writing by the other party
and except for any required consents to the assignment of any of Seller's
contracts, leases or other agreements which are part of the Assumed
Liabilities), nor will it violate any order, writ, injunction or decree
applicable to Seller or the Acquired Assets. Required consents for the Assumed
Liabilities are listed in the attached Schedule 7.6.1 and must be acquired by
Seller prior to Closing.
7.7 BROKERS. Except as disclosed in Schedule 7.7, no person acting on behalf
of Seller or under the authority of Seller is or will be entitled to any
broker's, finder's or similar fee, in connection with the asset purchase
contemplated in this Agreement.
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7.8 TITLE AND CONDITION OF ACQUIRED ASSETS. Except as disclosed in this
Agreement or in an attached exhibit or schedule, Seller has now, and will have
at the Closing and at the Effective Time, good, marketable and indefeasible
title to all of the Acquired Assets, free and clear of all mortgages, liens,
charges, claims, leases, restrictions and encumbrances whatsoever, except for:
a) liens for non-delinquent taxes and assessments, b) liens of landlords and
other lessors arising under statute, and c) other liens, claims and encumbrances
or charges that do not materially detract from the value of, or impair the use,
occupancy or transfer of the Acquired Assets, and d) any required consents to
the transfer thereof. There is no agreement of any kind whereby any Person or
Persons have any right to acquire or obtain (by purchase, gift, merger,
consolidation or otherwise) an interest in any of the Acquired Assets, except
for contracts for the sale of products to customers made in the ordinary course
of business.
All of the Acquired Assets have been maintained in accordance with the
normal maintenance and repair policies of Seller and, to Seller's Knowledge, are
in a state of repair (ordinary wear and tear excepted) which is adequate for the
normal use of such property in the Operations.
7.9 INVENTORIES. The Inventories covered by this Asset Purchase Agreement
consist of items of a quality and condition useable or saleable in the ordinary
course of the business of Seller. This Section is intended only for the purpose
of Seller's warranties and representations, and in no way affects the valuation
of the Inventory under Section 4.3 herein.
7.10 VEHICULAR EQUIPMENT. Schedule 7.10 contains a list of all vehicular
equipment owned or leased by Seller. Such vehicular equipment is in roadworthy
condition and is, and shall be on the Closing Date, capable of satisfying the
inspection requirements and performance standards prescribed by all relevant
state and federal highway laws and regulations for its particular type or class.
7.11 BANK ACCOUNTS. Schedule 7.11 hereto sets forth the name of each bank in
which Seller has an account or safe deposit box and the names of all persons
authorized to draw thereon or have access thereto.
7.12 INSURANCE POLICIES. Schedule 7.12 hereto lists and describes all
policies of insurance held by Seller on the date hereof with respect to the
business, operations or properties of Seller. The amounts of, and risks covered
by, such insurance are consistent with the amounts and risks normally carried
and insured against by Seller. All policies of insurance listed in Schedule
7.12 hereto are in full force and effect.
7.13 TAXES. All taxes, assessments and governmental charges which have been
levied or assessed, or which have become due, with respect to or which may
encumber the Acquired Assets, have been paid before delinquency. All real and
personal property tax returns with respect to applicable Acquired Assets have
been, or will be, timely filed, and are complete and accurate and there are no
disputes over any such returns.
7.14 ENVIRONMENTAL MATTERS. Except as set forth in Schedule 7.14 hereto:
a. COMPLIANCE WITH LAWS. Seller and the Acquired Assets are in
material compliance with the requirements of all Environmental Laws, including,
without limitation, any and all requirements with respect to permits, licenses,
and other authorizations required by any Environmental Law;
b. CONTAMINATION. The Acquired Assets are not contaminated and, to
Seller's Knowledge, there is no eminent threat of contamination of the Acquired
Assets, by any Environmental Hazard;
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c. NO CLAIMS OR INVESTIGATIONS. No investigation or written claim
has been made or, to Seller's Knowledge, threatened against the Operations or
the Acquired Assets by any governmental agency or authority or any other Persons
alleging a violation by Seller of, or a noncompliance of any Acquired Asset
with, any Environmental Law;
d. NO HAZARDS ON PROPERTY. Except for the use, manufacture,
treatment, storage or disposal of Environmental Hazards in the ordinary course
of the business of Seller AND in compliance with all Environmental Laws, no
Environmental Hazard is or has been used, treated, stored, disposed of,
released, spilled, generated, manufactured or otherwise handled by Seller or
otherwise come to be located on or under the Real Property or other property on
or in which Seller has Operations.
e. UNDERGROUND TANKS. Schedule 7.14 (e) sets forth the size,
location, construction, date of installation, use and testing history of all
underground storage tanks (whether or not excluded from regulation under any
Environmental Law and whether or not currently in use) on the Real Property.
7.15 INTELLECTUAL PROPERTY. Schedule 7.15 sets forth all intellectual
property owned by Seller. To the Knowledge of Seller, the present conduct of
the business of Seller does not infringe upon any presently existing rights,
patents, trademarks, copyrights or other trade rights of any Person.
7.16 EMPLOYEES AND LABOR RELATIONS MATTERS. Seller warrants and represents
that at the business of Seller:
a. Seller has complied in all material respects with all labor and
employment laws, including, without limitation, provisions thereof relating to
wages, hours, equal opportunity, collective bargaining and the payment of social
security and other taxes;
b. there is no unfair labor practice charge, complaint, or other
action against Seller pending or, to Seller's Knowledge threatened before the
NLRB and Seller is not subject to any order to bargain by the NLRB;
c. there is no labor strike, dispute, request for representation,
slowdown or stoppage pending or to Seller's Knowledge, threatened against
Seller;
d. there are no grievances that might have a material adverse effect
on the Acquired Assets or the business of Seller and no arbitration proceeding
arising out of or under any collective bargaining agreement is pending and, to
Seller's Knowledge, no basis exists for any such grievance or arbitration
proceeding;
e. to the Knowledge of Seller, no employee of Seller is subject to
any non-compete, nondisclosure, confidentiality, employment, consulting or other
agreement with Persons other than Seller relating to the present business
activities of Seller.
7.17 EMPLOYEE BENEFIT PLANS. Schedule 7.17 hereto lists and describes all
plans, programs, employment contracts or arrangements of Seller, including plans
not maintained by Seller but to which it contributes or is obligated to
contribute relating to bonus, incentive compensation, severance pay, profit
sharing, retirement, pension, group insurance, disability, death benefits or
other benefits, trust agreements or similar arrangements relating to any of
Seller's past or present employees in effect on the date hereof or having a
present or continuing effect on the Operations or the Acquired Assets, even if
discontinued at an earlier date. As of the date of the Closing and except as
stated in Schedule 7.17 hereto:
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a. the ERISA Plans comply in all material respects with the
requirements of ERISA and the IRS tax code;
b. the present value of all accrued benefits under any such plan,
program, employment contract or arrangement does not, as of the date of this
Agreement, exceed the value of the assets of such plan, program, trust or
arrangement allocable to such accrued benefits and Seller has no unfunded
liabilities with respect to any benefits owed under any of the ERISA Plans or
other retirement or employee benefit plan, including without limitation,
retirement benefits, deferred compensation or medical benefits for retired
employees, other than employee-paid benefit contributions required by Part 6 of
Title I of ERISA, and specifically has no unfunded liability with respect to the
Norco Windows, Inc. Hourly Workers Pension Plan in the event of the termination
of said plan;
c. no liability has been incurred by any ERISA Plan under Title IV of
ERISA;
d. Seller shall have no liability under Title IV of ERISA to any of
the ERISA Plans that are a multi-employer pension plan or the Norco Windows,
Inc. Hourly Workers Pension Plan upon having a complete or partial withdrawal
from such plan on the Closing Date;
e. there are no pending or to Seller's Knowledge anticipated claims
against or otherwise involving any of the ERISA Plans, or no suit, action or
other litigation (excluding claims for benefits incurred in the ordinary course
of ERISA Plan activities) have been brought against or with respect to any such
ERISA Plan;
f. all contributions, reserves, or premium payments, required to be
made as of the date hereof to the ERISA Plans or any other retirement or
employee benefit plan have been made or provided for;
g. there are no immaterial liabilities with respect to the ERISA
Plans or any other retirement or employee benefit plan that, when considered in
the aggregate, would constitute a material liability to Seller;
h. No ERISA Plan or trust created thereunder, or any trustee or
administrator thereof, has engaged in a "prohibited transaction" (as such term
is defined in Section 406 and Section 2003 (a) of ERISA) which could subject
such ERISA Plan or any other plan, any trust created thereunder, or any trustee
or administrator thereof, or any party dealing with any ERISA Plan, or any such
trust to the tax or penalty on prohibited transactions imposed by Section 502 or
Section 2003(a) of ERISA;
i. Seller does not have any withdrawal liability to any trust created
pursuant to a multi-employer pension or benefit plan or the Norco Windows, Inc.
Hourly Workers Pension Plan nor would Seller be subject to any such withdrawal
liability if it withdrew from any such plan or if its participation therein were
otherwise terminated;
j. All ERISA Plans and all other retirement or employee benefit plans
of Seller have been modified or amended to comply with ERISA and the IRS Code as
amended, and regulations promulgated thereunder, and there are currently no
modifications or amendments required of such ERISA Plans or other retirement or
employee benefit plans to continue their administration as heretofore
administered and to retain their tax qualified status, and Seller has applied
for and received favorable letters of determination from the Internal Revenue
Service relative to each such plan and all amendments thereto; and
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k. All annual and other returns and reports required of any such
ERISA Plans or all other retirement or employee benefit plans of Seller or any
trust created pursuant to such plan, have been properly prepared and timely
filed with the Internal Revenue Service and the Department of Labor.
7.18 SELLER'S CONTRACTS. Schedule 7.18 hereto describes each material loan
agreement, mortgage, pledge agreement, lease, employment agreement, pension
plan, guarantee, indemnity, contract or other agreement or instrument to which
Seller is a party and by which it or any of the Acquired Assets are bound.
For purposes hereof, a contract or agreement is material only if it calls
for payments or otherwise creates obligations (contingently or otherwise) to or
from Seller of an amount or with a value in excess of Twenty-Five Thousand
Dollars ($25,000.00) during any 12-month period after the date hereof or in an
aggregate amount or value of Fifty Thousand Dollars ($50,000.00) or more over
the lifetime of such contract or agreement.
7.19 FINANCIAL STATEMENTS OF SELLER. Schedule 7.19 contains true and complete
copies of Seller's: a) unaudited December 31, 1995 financial statements and b)
unaudited balance sheet and income statement for the period ended April 30,
1996.
The financial statements referred to in clauses a) and b) above present
fairly the financial condition of Seller and the results of its operations for
the corresponding periods specified above and were, in all material respects,
prepared in accordance with generally accepted accounting principles applied on
a consistent basis. The financial statements are true and correct in all
material respects and do not contain any misstatement of a material fact, or
omit to state any fact known to Seller required to make such financial
statements not misleading.
Except as disclosed on Schedule 7.19, and to the extent reflected or
reserved against in said financial statements, Seller is not aware of any
material liabilities of any nature, whether accrued, absolute, contingent or
otherwise, including without limitation, tax liabilities due or to become due,
whether incurred or measured by Seller's income for any period prior to the
Closing Date, or arising out of transactions entered into, or any state of facts
existing prior thereto, other than potential warranty and product repair
liabilities incurred in the ordinary course of business.
7.20 CONDUCT AND TRANSACTIONS SINCE DECEMBER 31, 1995. Since December 31,
1995 there has been no material adverse change in Seller's financial condition,
assets, liabilities or business and (except as otherwise disclosed in Schedule
7.20 or provided in this Agreement) Seller has done the following:
a. BUSINESS. Conducted its business only in the ordinary course and
substantially in the manner in which such business was being conducted then;
b. INDEBTEDNESS. Not created, incurred, assumed, guaranteed or
otherwise become liable with respect to any indebtedness for borrowed money
other than in the ordinary course of business;
c. TRANSACTION. Not entered into any transactions whatsoever other
than in the ordinary course of business;
d. INSURANCE. Continued to be covered by liability, workers'
compensation, casualty and other insurance of such types and in not less than
such amounts as heretofore carried with respect to the Operations;
e. DISPOSAL OF ASSETS. Not sold, leased, mortgaged, pledged or
otherwise encumbered or disposed of any of its fixed assets or properties or
agreed to do any of the foregoing, except in the ordinary course of business in
arm's length transactions;
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f. WAIVERS. Not waived any material rights of Seller whether or not
such were in the ordinary course of business or were consistent with past
practice
g. EXPENDITURES. Not made or committed to make any capital
expenditures, capital additions or capital improvements aggregating more than
$50,000.00;
h. CONTRACTS. Not entered into, or terminated, any contract,
agreement, commitment or understanding applicable to the Operations with a
value, cost, or commitment in excess of $50,000.00 other than raw material
purchases or sales to the Seller's customers made in the ordinary course of
business.
i. ACQUISITION OF ASSETS. Not purchased or agreed to purchase, or
leased or agreed to lease, or acquired or agreed to acquire, any additional
assets or properties, except for purchases of inventory items, equipment,
materials, and supplies used in the ordinary course of business.
j. EMPLOYEE COSTS. Not made any general increase in salaries, wages,
bonuses or other forms of compensation payable or to become payable to any of
its officers, directors or employees.
7.21 ASSET LISTING. Schedule 7.21 accurately lists all the fixed assets
included in the Acquired Assets and shows the purchase price, date of purchase
and accumulated depreciation on each item.
7.22 PRODUCT WARRANTIES. Schedule 7.22 contains all of the standard product
warranties and service guarantee policies of Seller (the "Product Warranties")
for all products sold by Seller and which were furnished to all customers by
Seller in connection with the products, materials and services supplied by
Seller to its customers up to the Closing. There are no material product or
service guarantees, agreement of guarantees, indemnifications, assumptions or
endorsements, quality guarantees, return policies, customer volume incentive
programs, or rebate policies, or any other customer support committed by Seller
to its customers; save and except the Product Warranties aforesaid.
Schedule 7.22 also contains all architectural manuals, warranty books,
installation instructions and labels used by the company for any of its
products.
Seller's consolidated service and warranty costs for the past three years
preceding Closing have been as follows:
1993 $1,718,000
1994 $2,666,000
1995 $2,536,000
The warranty costs represent the total cost of satisfying warranty claims
and performing all other aspects of customer service including service of a good
will nature.
7.23 FULL DISCLOSURE. Except as reflected in the Disclosure Documents, to
Seller's Knowledge there are no other matters or liabilities, contingent or
otherwise, which materially adversely affect or has a substantial likelihood in
the future of materially adversely affecting the Acquired Assets. To Seller's
Knowledge, no representation or warranty by Seller in this Agreement, nor any
statement or certificate furnished or to be furnished to Buyer pursuant hereto,
or in connection with the transactions contemplated hereby, contains or will
contain any untrue statement of material fact, or omits or will omit to state a
material fact known to Seller necessary to make the statements contained herein
or therein not misleading.
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ARTICLE 8
BUYER'S COVENANTS
8.1 CONDUCT OF OPERATIONS UNTIL CLOSING. Except as expressly provided herein
or as disclosed in Schedule 8.1 or as Seller may otherwise consent in writing,
Buyer agrees that from the date of this Agreement to the Closing Date Buyer will
act in a manner so that, as of the Closing Date, the representations and
warranties described in Article 6 will be true for the period between the date
of this Agreement and the Closing Date.
8.2 NOTICE OF EMERGENCY. Buyer shall notify Seller immediately of any event
or occurrence or emergency material to Buyer's ability to comply with its
obligations hereunder.
8.3 PERMITS, CONSENTS AND APPROVALS. Buyer will cooperate with Seller to
obtain all permits, consents and approvals from any governmental or regulatory
body or any other Person where required for the consummation of the Closing and
the transactions contemplated hereby. Buyer shall render such assistance to
Seller as may be necessary and reasonable to obtain any such consents, permits
or approvals; provided, however, that such assistance shall not require Buyer to
make the payment of monies or consent to material modification of the terms of
any contract or agreement, or the assumption of any obligations or liabilities.
8.4 HART-SCOTT-RODINO FILING. Buyer shall, following the execution of this
Agreement, promptly file its pre-merger notification required by the Hart-Scott-
Rodino Improvements Act of 1976. The filing fee relating to Buyer's filing will
be the responsibility of Buyer.
ARTICLE 9
SELLER'S COVENANTS
9.1 TAXES AND COMPLIANCE OF LAWS. Seller shall promptly and properly file
when due all federal, state, local, foreign, and other tax returns, reports, and
declarations required to be filed by Seller prior to the Closing, and shall pay
or make full and adequate provision for the payment of all taxes and
governmental charges due from or payable by Seller. Seller shall use its best
efforts to comply with all laws and regulations applicable to it and the
Operations.
9.2 UCC REPORTS. At Seller's expense, Seller will provide to Buyer, on or
before 15 days prior to the Closing, copies of a UCC search, covering all
personal property which forms part of the Acquired Assets, and copies of all
recorded instruments and documents referred to therein. Seller shall take all
necessary actions to remove encumbrances with respect to any Acquired Assets
prior to Closing.
9.3 ACCESS TO RECORDS AND PROPERTIES OF SELLER. Subject to the
confidentiality covenant set forth in Section 10.8 hereof, Seller will give
Buyer and its representatives full access during normal business hours to all
premises, books and records of Seller and until the Closing Date will cause, the
officers and employees of Seller to furnish to Buyer such financial and
operating data and other information with respect to the business and properties
of Seller as Buyer has requested or shall from time to time reasonably request;
provided that any such investigation shall be conducted in such manner as not to
interfere unreasonably with the operation of the business of Seller.
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9.4 CONDUCT OF OPERATIONS UNTIL CLOSING. Except as expressly provided herein
or as disclosed in Schedule 9.4 or as Buyer may otherwise consent in writing,
Seller agrees that from the date of this Agreement to the Closing Date Seller
agrees to use its reasonable best efforts to conduct the Operations only in the
ordinary course and substantially as heretofore operated and will act in a
manner so that, as of the Closing Date, the representations and warranties
described in Article 7 will be true for the period between the date of this
Agreement and the Closing Date. Furthermore, Seller shall:
a. use its reasonable best efforts to preserve intact the present
business organization and goodwill of the Operations and its relationship with
Persons having business dealings with Seller including, without limitation,
suppliers, lenders, creditors, distributors, customers and others having
business or financial relationships with Seller, and
b. use its reasonable best efforts to keep available the services of
the Key Management Employees on terms and conditions no less favorable to Seller
than those on which the Key Management Employees are presently employed. This
Section 9.4 shall not give rise to any rights on behalf of Persons not parties
to this Agreement.
9.5 RELATED PARTY TRANSACTIONS. Except as expressly provided herein or as
Buyer may otherwise consent in writing, Seller will not engage in any
transaction with any related parties other than in the ordinary course of
business consistent with prior practice and upon terms no less favorable to
Seller than it would obtain in a comparable arm's length transaction with a
Person not affiliated with Seller.
9.6 NOTICE OF EMERGENCY. Seller shall notify Buyer immediately of any event
or occurrence or emergency material to, and not in the ordinary and usual course
of business of Seller.
9.7 REAL PROPERTY LANDLORD STATEMENT. For all leases assumed under this
Agreement Seller shall obtain a statement from the landlord involved outlining
any items requiring maintenance, cleanup or repair under the terms of the lease
or in the event the lease was terminated and Seller shall obtain releases from
the landlords relieving Buyer and Seller of any liability for all such items
which exist at the date of Closing.
9.8 SURVEYS. Seller shall, at its cost, provide current surveys of each
parcel of the Real Property, showing all structures, roads, parking areas,
easements and geographical features, such as waterways or drainage canals.
9.9 ASSET LISTING. At Closing, Seller shall provide Buyer with an updated
version of Schedule 7.21, as of the Closing Date, listing all the fixed assets
included in the Acquired Assets and showing the purchase price, date of purchase
and accumulated depreciation on each item.
9.10 OTHER NEGOTIATIONS. From the date of this Agreement until the Closing,
the Seller agrees to terminate any and all negotiations and discussions with
other prospective purchasers of Seller's stock or assets and to reject any other
offers which may be open or pending. During this period, no additional
information shall be sent or provided to any prospective purchasers of Seller.
9.11 CONTINUOUS DISCLOSURE. Seller shall promptly advise Buyer, in writing,
of any material adverse change coming to its attention of either in the
business, financial condition or properties of Seller between December 31, 1995
and the Closing, whether arising from matters occurring in the usual course of
business or otherwise, including, but not limited to, information (including
copies of all documents and records relating thereto) concerning material
changes in the customer base or customer contracts of Seller, or concerning all
claims, actions, suits or proceedings instituted or threatened against Seller.
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9.12 HART-SCOTT-RODINO FILING. Seller shall, following the execution of this
Agreement, promptly file its pre-merger notification required by the Hart-Scott-
Rodino Improvements Act of 1976.
9.13 DRUM DISPOSAL. Prior to Closing, Seller shall have disposed of
approximately 125 55-gallon drums of paint and glue wash located at the Hawkins
facility.
ARTICLE 10
MUTUAL COVENANTS
10.1 TRANSFER TAXES AND FEES. Seller shall be responsible for any real estate
excise tax and documentary stamp tax applicable to the transfer of the Acquired
Assets, together with related fees for recording of any necessary conveyances.
Buyer shall pay to Seller, and Seller shall timely remit to the
applicable state any sales or use tax due on the sale of the Acquired Assets.
10.2 ESCROW AGREEMENT. Buyer, Seller, and the Escrow Agent shall sign and
deliver the Escrow Agreement in the form attached hereto as Exhibit D.
10.3 NO INCONSISTENT ACTIONS. Buyer and Seller will not voluntarily undertake
any course of action inconsistent with the provisions or intent of this
Agreement, and each such Party will promptly do all acts and take all such
measures as may be appropriate to comply, as soon as practicable, with the
terms, conditions and provisions of this Agreement.
10.4 FURTHER COOPERATION. After the Closing, each Party, at the request of
the other and without additional consideration, shall execute and deliver or
cause to be executed and delivered from time to time such further instruments
and shall take such further action as the requesting Party may reasonably
require in order to carry out more effectively the intent and purpose of this
Agreement.
10.5 PUBLIC ANNOUNCEMENTS. No Party shall make, nor permit any of its
affiliates or representatives to make, any news release or other public
disclosure pertaining to this Agreement or the transactions contemplated hereby
without the prior approval of the other Party or Parties as to both form and
content, which approval shall not be unreasonably withheld.
10.6 CONFIDENTIALITY COVENANTS. Prior to the Effective Time, if this
Agreement is terminated, each Party hereto will, and will cause its employees,
agents, accountants, legal counsel and other representatives to, hold in strict
confidence all Confidential Information except as reasonably required by law or
by this Agreement. Furthermore, each Party will return to the other all
Confidential Information documents, work papers and other materials and copies
thereof.
ARTICLE 11
CONDITIONS TO SELLER'S OBLIGATION TO CLOSE
11. CONDITIONS TO SELLER'S OBLIGATION TO CLOSE. The obligation of Seller to
transfer, assign, and deliver the Acquired Assets to Buyer pursuant to this
Agreement is subject to the satisfaction (unless waived in writing by Seller) of
each of the following conditions at and as of the Closing:
11.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties of Buyer contained in Article 6 hereof shall be true and correct in
all material respects on and as of the date of this Agreement and at and as of
the Closing as though made at and as of the Closing, except as affected by the
transactions contemplated by this Agreement.
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11.2 PERFORMANCE OF OBLIGATIONS BY BUYER. Buyer shall have performed and
complied with in all material respects all agreements and conditions required to
be performed or complied with by Buyer under this Agreement, including the
covenants in Articles 8 and 10, prior to or at the Closing.
11.3 COMPLIANCE CERTIFICATE. Buyer shall have delivered to Seller a
certificate, dated the Closing Date, of a duly authorized officer of Buyer
certifying that the conditions specified in Sections 11.1 and 11.2 hereof have
been satisfied in all material respects .
11.4 PURCHASE PRICE. Seller shall have received, the Purchase Price as
described in Section 4.1 herein.
11.5 CONSENTS AND NOTICES. Buyer shall have obtained or effected all
consents, approvals, waivers, notices and filings required in connection with
the execution and delivery by Buyer of this Agreement or consummation by Buyer
of the transactions contemplated thereby, and any notice or waiting period
relating thereto shall have expired with all requirements lawfully imposed
having been satisfied in all material respects.
11.6 ABSENCE OF LITIGATION. No order, stay, judgment or decree shall have
been issued, and be in effect, by any court restraining or prohibiting the
Closing and no action, suit or proceeding shall have been commenced, and be
pending, by any governmental or regulatory body seeking to restrain or prohibit
(or questioning the validity or legality of) the consummation of the
transactions contemplated by this Agreement.
11.7 ASSIGNMENT AND ASSUMPTION. Seller and Buyer shall execute an Assignment
and Assumption Agreement transferring all Contracts substantially in the form of
Exhibit A;
11.8 CONSENTS AND APPROVALS. As soon as possible following the execution of
this Agreement, Seller and Buyer shall each have used reasonable efforts to
obtain the consent or approval of each Person whose consent or approval shall be
required in order to permit the purchase and sale of the Acquired Assets as
contemplated herein. Buyer will have used reasonable efforts, in good faith, to
satisfy or cause to be satisfied each of the conditions to Closing set forth in
Article 11 hereof.
11.9 TRANSPORTATION AGREEMENT. Within 5 business days of the date of this
Agreement, Buyer shall have entered a transportation agreement with Bill Rands
Trucking Company and Seller shall have obtained a release from its
transportation agreement with Bill Rands Trucking Company. Satisfaction of this
subsection shall be a condition to both Seller's and Buyer's obligations to
close.
ARTICLE 12
CONDITIONS TO BUYER'S OBLIGATION TO CLOSE
12. CONDITIONS TO BUYER'S OBLIGATION TO CLOSE. The obligation of Buyer to
purchase the Acquired Assets from Seller pursuant hereto is subject to the
satisfaction (unless waived in writing by Buyer) of each of the following
conditions at and as of the Closing:
12.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties of Seller contained in Article 7 hereof shall be true and correct in
all material respects on and as of the date of this Agreement and at and as of
the Closing as though made at and as of the Closing, except as affected by the
transactions contemplated by this Agreement.
12.2 PERFORMANCE OF OBLIGATIONS BY SELLER. Seller shall have performed and
complied in all material respects with all agreements and conditions required to
be performed or complied with by Seller under this Agreement, including the
Covenants in Articles 9 and 10, prior to or at the Closing.
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12.3 DELIVERY OF AGREEMENTS. Seller shall have executed and delivered to
Buyer all agreements and documents required under this agreement including, but
not limited to: a duly executed Bill of Sale; Assignment and Assumption
Agreement; specific assignments of intellectual property included in the
Acquired Assets; certified copy of resolutions of the Board of Directors of
Seller authorizing it to enter into and perform this Agreement; Seller's
Noncompetition Agreement and Opinion of Seller's Counsel.
12.4 COMPLIANCE CERTIFICATE. Seller shall have delivered to Buyer a
certificate, dated the Closing Date, certifying that the conditions specified in
Section 12.1 and 12.2 hereof have been satisfied.
12.5 MISCELLANEOUS DOCUMENTS. Buyer shall have received all documents Buyer
may reasonably request relating to the existence of Seller and Seller's
authority to execute, deliver and perform this Agreement, including without
limitation, a list of Seller's officers and directors.
12.6 CONSENTS AND NOTICES. The applicable waiting period under the HSR Act
with respect to this asset purchase will have expired or been terminated by
appropriate governmental authorities. Seller shall have obtained or effected
all other consents, approvals, waivers, notices and filings required in order to
permit the purchase and sale of the assets as contemplated herein, and any
notice or waiting period relating thereto shall have expired with all
requirements lawfully imposed having been satisfied in all material respects.
12.7 ABSENCE OF LITIGATION. No order, stay, judgment or decree shall have
been issued, and be in effect, by any court restraining or prohibiting the
Closing and no action, suit or proceeding shall have been commenced, and be
pending, by any governmental or regulatory body seeking to restrain or prohibit
(or questioning the validity or legality of) the consummation of the
transactions contemplated by this Agreement.
12.8 KEY MANAGEMENT EMPLOYEE AGREEMENTS. Buyer shall not be obligated to
close the Asset Purchase contemplated in this Agreement unless it shall have
reached agreement by the Closing Date, in form and substance satisfactory to
Buyer for Buyer's employment of the Key Management Employees after the Effective
Time.
12.9 SELLER'S COVENANT NOT TO COMPETE. In consideration of the covenants and
conditions contained herein, Seller shall have executed a covenant not to
compete in the form of the attached Exhibit E.
12.10 INTELLECTUAL PROPERTY ASSIGNMENTS. Seller shall have executed specific
assignments in form reasonably satisfactory to Buyer of Seller's interest in the
trademarks, trade names, patents, licenses, copyrights and other intellectual
property included in the Acquired Assets.
12.11 TITLE INSURANCE. At Seller's expense, Seller shall have provided Buyer
with an ALTA policy of title insurance with extended coverage from First
American Title Company for each parcel of Real Property purchased as one of the
Acquired Assets. The policies shall be in the following amounts and insure all
but immaterial exceptions:
Property Location Insured Amount
----------------- --------------
a. Twin Falls, Idaho $3,000,000
b. Hawkins, Wisconsin $6,000,000
c. Marenisco, Michigan $1,000,000
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It is understood that if First American Title Company is unable to
deliver a policy of title insurance satisfactory to Buyer, Seller shall have the
opportunity to arrange for the delivery of a substitute title policy that is
satisfactory to Buyer from another title insurance company.
12.12 REAL ESTATE PURCHASE TERMS. Seller shall have complied with the Real
Estate Purchase Terms appended as Exhibit C, attached hereto and by this
reference made a part hereof.
12.13 BILL OF SALE. Seller shall have executed a Bill of Sale transferring to
Buyer all of the Acquired Assets, except the Contracts, free of all liens and
encumbrances substantially in the form of Exhibit B.
12.14 OPINION OF SELLER'S COUNSEL. Buyer shall have received an opinion, dated
the Closing Date, of counsel to Seller, substantially in the form of Exhibit F.
12.15 ASSIGNMENT AND ASSUMPTION. Seller and Buyer shall have executed an
Assignment and Assumption Agreement transferring all Contracts substantially in
the form of Exhibit A;
12.16 CONSENTS AND APPROVALS. As soon as possible following the execution of
this Agreement, Seller and Buyer shall each have used reasonable efforts to
obtain the consent or approval of each Person whose consent or approval shall be
required in order to permit the purchase and sale of the Acquired Assets as
contemplated herein. Seller will have used reasonable efforts, in good faith,
to satisfy or cause to be satisfied each of the conditions to Closing set forth
in Article 12 hereof.
ARTICLE 13
LIMITATIONS ON LIABILITIES
13.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties made in this Agreement by Seller and by Buyer and in any certificates
delivered by Seller hereunder shall survive for a period of three (3) years
after the Closing, after which time no claims shall be made by Buyer against
Seller which are based solely on a breach of such representations and
warranties. Notwithstanding the foregoing, the language in this Section 3.1 and
its three year time limit described herein shall not apply to or in any way
affect any of the indemnification provisions described in Sections 14.2, 14.3,
14.4, 14.5 or 14.6.
13.2 INSURED CLAIMS. A Party shall have no liability for any claim which is
wholly covered by insurance maintained by or for the benefit of such Party
(including, in the case of Buyer, any such insurance coverage applicable to the
Acquired Assets) which was in effect on the Closing Date, provided Buyer
actually receives the benefit of any such coverage.
ARTICLE 14
INDEMNIFICATION
14. SELLER'S INDEMNIFICATION. Subject to the limitations in Article 13 and
in this Section, Seller agrees to defend, indemnify and hold harmless Buyer
against and in respect of any and all liabilities, losses, damages,
deficiencies, actions, suits, proceedings and demands resulting from or relating
to any of the following:
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14.1 BREACH OF REPRESENTATION, WARRANTY, OR COVENANT. Any breach or
nonfulfillment of any representation, warranty or covenant contained in this
Agreement, the attached exhibits, schedules, or any other certificates or
documents furnished or to be furnished by Seller including, but not limited to,
those representations, warranties and covenants specified in Articles 7, 9, 10
and 15.
Buyer shall not be precluded or limited from receiving indemnification
from Seller under Sections 14.2, 14.3, 14.4, 14.5, or 14.6 for the reason that
Seller did not breach a representation or warranty with respect to such claim.
14.2 PRODUCT CLAIMS. All claims arising from or related to products produced,
purchased, sold or distributed by Seller prior to the Effective Time ("Product
Claims"). Product Claims which result in lawsuits shall be governed by the
terms in this Article 14, especially Section 14.10. Product Claims which do not
initially involve a lawsuit shall be governed by the specific procedures for
tracking and indemnification for claims listed in Schedule 14.2.
14.3 ENVIRONMENTAL CLAIMS. The use, treatment, storage or disposal of any
Environmental Hazard; the non-compliance by Seller with any Environmental Law;
or any other environmental claim pertaining to Seller's ownership or use of the
Acquired Assets or the business of Seller prior to the Closing ("Environmental
Claims"). Specific procedures for tracking and indemnification for claims under
this Section 14.3 are listed in Schedule 14.3.
Notwithstanding any other terms in this Agreement, except for the costs
and liabilities relating to the known pentachlorophenol spill at Hawkins,
Wisconsin, Seller shall not be required to reimburse Buyer for the first $15,000
of Environmental Claims at each of the following sites of the Operations: Twin
Falls, Idaho; Hawkins, Wisconsin; and Marenisco Michigan. Seller shall be
responsible for all the costs and liabilities relating to the known
pentachlorophenol spill at Hawkins, Wisconsin.
14.4 EMPLOYMENT AND LABOR LIABILITIES. All payments for wages, benefits or
other obligations due to Seller's employees under any applicable law or any
breach of the covenants in Article 15.
14.5 BULK SALES ACT. Any compliance required under the Bulk Sales Act and any
liabilities resulting from noncompliance; however, Seller and Buyer believe that
compliance with the bulk sales provision of the Uniform Commercial Code or any
other applicable state statute relating to bulk transfers is not necessary.
14.6 OTHER LIABILITIES. All other liabilities of Seller, relating to the
Acquired Assets or the business of Seller, of any nature, whether accrued,
absolute, contingent or otherwise, existing on or arising out of Seller's
conduct prior to the Effective Time.
14.7 FULL INDEMNITY. Seller's agreement to indemnify Buyer under Article 14
and its subsections shall include in each case penalties, costs or expenses,
including, without limitation, reasonable attorneys' fees and interest.
14.8 BUYER'S INDEMNIFICATION. Buyer agrees to defend, indemnify and hold
harmless Seller against and in respect of any and all liabilities, losses,
damages, deficiencies, actions, suits proceedings and demands resulting from or
relating to any claims by any inaccuracy in, or breach of, or nonfulfillment of,
any representation, warranty or covenant of Buyer under this Agreement which
survives Closing.
14.9 GENERAL INDEMNIFICATION PROCEDURE. If a party ("Indemnified Party")
determines that it is entitled to indemnification under this Article 14, such
Indemnified Party shall notify the other party ("Indemnifying Party") in writing
of its right to indemnification (the "Indemnity Claim"). Any notice pursuant to
this Section 14.9 shall set forth the relevant information respecting the
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Indemnity Claim. If the Indemnity Claim arises prior to the final Escrow
Release Date, Buyer shall be entitled to submit an Escrow Claim Notice of such
Indemnity Claim to the Escrow Agent in accordance with and subject to Section
4.5 and the Escrowed Funds shall be paid in accordance with Section 4.5.
If no amount is paid by the Escrow Agent, or if the amount paid by the
Escrow Agent to Buyer is less than the total amount required by the Escrow Claim
procedure, Seller shall pay such excess amount forthwith to Buyer.
If the entitlement arises after the Escrow Release Date Seller shall pay
the amount of the Indemnity Claim forthwith to Buyer.
Furthermore, Buyer shall have a general claim against Seller in respect
of any Indemnity Claim not compensated for out of the Escrowed Funds and shall
have any other remedy at any time available against Seller as provided by
applicable law, including interest on amounts due.
14.10 CONTESTING LAWSUITS. Indemnifying Party shall be entitled at its cost
and expense to contest and defend by all appropriate legal proceedings any
Indemnity Claim with respect to which it is called upon to indemnify Indemnified
Party under the provisions of this Agreement; provided, however, that notice of
the intention so to contest shall be delivered by Indemnifying Party to
Indemnified Party within 20 days from the date of receipt by Indemnifying Party
of notice from the Indemnified Party of the assertion of the Indemnity Claim.
a. ATTORNEYS. Any such contest may be conducted in the name and on
behalf of Indemnifying Party or the Indemnified Party as may be appropriate.
Such contest shall be conducted by attorneys employed by Indemnifying Party, but
Indemnified Party shall have the right to participate in such proceedings and to
be represented by attorneys of its own choosing at its cost and expense.
So long as Indemnifying Party is conducting the defense of a
Indemnity Claim in accordance with this Article 14, the Indemnified Party will
not consent to the entry of any judgment or enter into any settlement with
respect to such Indemnity Claim without the prior written consent of the
Indemnifying Party (not to be unreasonably withheld).
b. INDEMNIFIED PARTY CONTEST. If after notice as provided for
herein, Indemnifying Party does not elect to contest or defend any Indemnity
Claim as provided in this Section 14.10, Indemnifying Party shall be bound by
the result obtained with respect thereto by Indemnified Party and the
Indemnified Party may (but shall have no obligation to) contest any such
Indemnity Claim. At any time after the commencement of defense of any Indemnity
Claim, Indemnifying Party may request Indemnified Party to agree in writing to
the abandonment of such contest or to the payment or compromise by Indemnifying
Party of the asserted Indemnity Claim, whereupon such action shall be taken
unless Indemnified Party so determines that the contest should be continued, and
so notifies Indemnifying Party in writing within 15 days of such request from
Indemnifying Party.
In the event that Indemnified Party determines that the contest
should be continued, Indemnifying Party shall be liable hereunder only to the
extent of the lesser of i) the amount which the other party to the contested
Indemnity Claim had agreed to accept in full and complete payment or compromise
as of the time Indemnifying Party made its request therefor to Indemnified Party
or ii) such amount for which Indemnifying Party may be liable with respect to
such Indemnity Claim by reason of the provisions hereof.
If requested by Indemnifying Party, Indemnified Party shall
cooperate with Indemnifying Party and its counsel in contesting any Indemnity
Claim which Indemnifying Party elects to contest or, if appropriate, in making
any counterclaim against the Person asserting the Indemnity Claim, or any
cross-complaint against any Person, but Indemnifying Party will reimburse
Indemnified Party for any expenses incurred by it in so cooperating.
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c. COOPERATION. Indemnified Party agrees to afford Indemnifying
Party and its counsel the opportunity to be present at, and to participate in,
conferences with all Persons, including governmental authorities, asserting any
Indemnity Claim against Indemnified Party or conferences with representatives of
or counsel for such Persons.
14.11 PAYMENT OF INDEMNITY CLAIMS. Indemnifying Party shall pay to Indemnified
Party, upon demand, the amount of any damages to which Indemnified Party may
become entitled by reason of the provisions of this Article 14, together with
interest at the rate of eight percent (8%) per annum on any amounts due to or
actually expended by the Indemnified Party from the date said amounts become due
or were expended until payment in full is made. Such payment to be made in cash
or other immediately available funds at the address of Indemnified Party
specified in this Agreement.
14.12 TERMS. For purposes of Article 14, the term "Indemnifying Party" as to a
particular Indemnity Claim shall mean the Party having an obligation to
indemnify the other Party or Parties with respect to such Indemnity Claim
pursuant to this Article 14. The term "Indemnified Party" as to a particular
Indemnity Claim shall mean the Party or Parties having the right to be
indemnified with respect to such Indemnity Claim by the other Party or Parties
pursuant to Article 14.
14.13 SURETYSHIP. Surety hereby agrees to act as a surety for all of Seller's
obligations under this Agreement (which includes all exhibits and schedules
appended hereto). Should Seller breach this agreement in any way, Buyer may
pursue Surety immediately, without first pursuing Seller for satisfaction of
such breach.
ARTICLE 15
EMPLOYEE MATTERS
15.1 TERMINATIONS. Seller shall terminate all employees of Seller prior to or
on the Closing Date and Seller shall be responsible for payment of all wages,
vested vacation and any other obligation under applicable law, Seller's
employment policies or procedures, or under its collective bargaining agreement.
15.2 NO HIRING OBLIGATIONS. Buyer shall have no obligation under this
Agreement to interview, offer employment to, or to employ, any salaried or
hourly employee of Seller, but shall be entitled to do so in its sole business
judgment and discretion.
15.3 UNION. This Agreement shall not be construed to obligate Buyer to
assume, continue, or renew any employee union contract or collective bargaining
agreement, if any, which is currently in effect at the business of Seller or to
which Seller is a party.
15.4 BENEFITS. Buyer is not assuming the assets or liabilities of any
pension, profit sharing, bonus, welfare, insurance or other benefit plan
maintained at any time by Seller for the benefit of its employees. Buyer shall
not be deemed a successor employer for the purposes of any such plan.
15.5 FORMER SELLER EMPLOYEES HIRED BY BUYER. Any former employees of Seller
who are employed by Seller up to the Closing Date and who are hired by Buyer,
shall be treated as follows.
a. For Seller's former employees, Buyer shall also offer to waive any
exclusions in its health benefit plan for preexisting conditions and the 3 month
waiting period usually required to qualify for coverage.
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b. Buyer shall also offer to allow such employees to use the date
they were hired by Seller for the purpose of calculating the amount of vacation
time they will receive under Buyer's plan.
c. Finally, Buyer shall offer such employees discounted deductibles
for the balance of the calendar year 1996 for its health care plan, which are
less than half of the yearly deductible amounts.
Notwithstanding the foregoing, nothing in this Agreement shall entitle
any future employees of Buyer to any rights under this Agreement.
15.6 FORMER SELLER EMPLOYEES NOT HIRED BY BUYER. Any former employees of
Seller who are employed by Seller up to the Closing Date and who are not hired
by Buyer within 30 days after the Closing Date, shall receive from Seller
severance pay as if the employee had continued to work for Seller for up to an
additional eight weeks after the Closing Date. Such severance pay shall be
based on each employee's rate of pay and benefits as were in place at the time
the employee was terminated by Seller. Seller's expenditures on severance pay
to employees who would not otherwise receive severance shall, in total, be no
lower than $300,000.
Notwithstanding the foregoing, nothing in this Agreement shall entitle
any future employees of Buyer to any rights under this Agreement.
Any liability relating to the Workers Adjustment and Reemployment
Notification Act arising out of the termination of or failure of Buyer to hire
any employees of Seller shall be the sole responsibility of Seller; except to
the extent such liability exceeds $200,000, in which case, Buyer shall be
responsible for one half of the amount exceeding $200,000.
ARTICLE 16
TERMINATION
16.1 TERMINATION. This Agreement and the transactions contemplated hereby may
be terminated at any time prior to the Closing:
a. By written mutual consent of Seller and Buyer,
b. By Buyer upon the giving of written notice to Seller, if
i. the Closing has not occurred on or before August 1, 1996;
ii. Seller has breached this Agreement, or any representation
or warranty made by Seller is untrue or if any covenant or condition contained
in this Agreement has not been met by Seller as of the Closing Date (unless any
of the above have been caused by Buyer's actions or inactions), provided Seller
shall have a reasonable opportunity to cure any such default or untruth; or
iii. Buyer finds any fact or matter which, to the extent not
committed or caused by Buyer, has a material adverse effect on the Acquired
Assets or the condition of the Operations taken as a whole; or
c. By Seller upon the giving of written notice to Buyer, if Buyer has
breached this Agreement, any representation or warranty made by Buyer is untrue,
or if any covenant or conditions contained in this Agreement has not been met by
Buyer as of the Closing Date, provided Buyer shall have a reasonable opportunity
to cure any such default or untruth (unless such condition has not been met due
to Seller's actions or inactions).
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16.2 EFFECT OF TERMINATION. In the event of the termination of this Agreement
pursuant to this Article, this Agreement shall become void and have no effect,
without any liability on the part of any Party or its directors, officers or
stockholders.
16.3 INACCURACY OF REPRESENTATIONS AND WARRANTIES PRIOR TO CLOSING. Prior to
Closing, termination of this Agreement shall be the exclusive remedy of any
Party in the event of any inaccuracy of any representation or warranty of any
other Party.
ARTICLE 17
MISCELLANEOUS PROVISIONS
17.1 EXPENSES. Each Party will be responsible for its own attorneys,
accounting and other professional fees incurred in connection with the asset
purchase contemplated in this Agreement.
17.2 DESCRIPTIVE HEADINGS. The descriptive headings of the several sections
of this Agreement are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
17.3 AMENDMENTS AND WAIVERS. Any term or provision of this Agreement may be
waived without affecting any of the rights, conditions, or limitations relating
to the other terms and conditions of this Agreement at any time by an instrument
in writing signed by the Party which is entitled to the benefits thereof and
this Agreement may be amended or supplemented at any time by an instrument in
writing signed by all Parties hereto.
17.4 ASSIGNMENT AND BINDING EFFECT. The Agreement shall be binding upon and
inure to the benefit of and be enforceable by each of the Parties hereto and
their respective successors and assigns. Neither this Agreement nor any
obligation hereunder shall be assigned or assignable by Seller without the prior
written consent of the other Parties hereto. At Buyer's option, Buyer may elect
to acquire the Seller's assets through a subsidiary or affiliated corporation.
17.5 NOTICES. All notices, consents, requests, instructions, approvals and
other communications provided for herein and all legal process in regard hereto
shall be validly given, made or served if in writing and if given by any of the
following methods: i) delivered personally or sent by certified or registered
mail, postage prepaid, addressed as follows:
To Buyer: To Seller:
JELD-WEN, inc. Attn: Jody B. Olson
Attn: Doug Kintzinger c/o TJ International, Inc.
3250 Lakeport Blvd. 200 E. Mallard Drive
Klamath Falls, Oregon 97601 Boise, Idaho 83706
ii) sent to the above address via an established national overnight
delivery service, charges prepaid, or iii) sent via any electronic
communications method, provided the sender obtains written confirmation of
receipt of the communication by the electronic communication equipment of the
officer at the address listed above; provided also that, if this method is used,
the party shall immediately follow such notice with a second notice in one of
the methods set forth in clauses i) or ii) above.
Notices shall be effective on the third day after posting if sent by
mail, on the next day after posting if sent by express courier, and on the day
of dispatch if manually delivered within regular business hours or if
transmitted within regular business hours by electronic communication methods.
Any Party may hereinafter from time to time designate in writing,
delivered in a like manner, other addresses to which notice must or may be sent
hereunder.
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17.6 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the Parties hereto with respect to the transactions contemplated hereby
and supersedes and is in full substitution for any and all prior agreements and
understandings between any of said Parties relating to such transactions.
17.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF OREGON.
17.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
17.9 ATTORNEY'S FEES. In the event legal action is taken to enforce this
Agreement or any provision thereof, or as a result of any breach of warranty or
representation or other default of either Party, the prevailing Party in such
action shall be entitled to receive its reasonable attorney's fees, in addition
to all other costs or charges allowed, which shall be fixed by the court or
courts in which the suit or action, including any appeal thereon, is tried,
heard or decided.
17.10 ARBITRATION. All disputes, claims, counterclaims and defenses based on
or arising from any Product Claims or Environmental Claims, as defined in
section 14.2 and 14.3, respectively, shall be settled by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association and Title 9 of the U.S. Code. All such Product and Environmental
Claims will be subject to any statutes of limitation applicable which would be
applicable if such Claims were litigated. All arbitration hearings will be
conducted in Seattle, Washington for claims arising out of the Twin Falls
operation and Minneapolis, Minnesota for all other claims, by the American
Arbitration Association. In addition to all other powers, the arbitrator shall
have the exclusive right to determine all issues of arbitrability. Judgment on
any arbitration award may be entered in any court with jurisdiction. The cost
of arbitration shall be borne equally by the Parties.
17.11 CHANGE OF CONTROL. In the event the shares of either Party to this
Agreement shall be purchased or otherwise become controlled in an amount greater
than 50% by an entity or person other than those who currently control each
Party, the other Party may, at its option, terminate its obligations under this
Agreement, except those relating to confidentiality.
The Parties whose signatures appear below agree to be bound by all of the
terms herein as of the last date entered below.
BUYER: SELLER:
JELD-WEN, inc. Norco Windows, Inc.
By: /s/ Douglas P. Kintzinger By: /s/Jody B. Olson
Its Secretary Its Chairman
Date: July 1, 1996 Date: July 1, 1996
-------------------------- --------------------------
SURETY:
T J International, Inc.
By: /s/ Jody B. Olson
Its: VP of Corporate Development
Date: July 1, 1996
---------------------------
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