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Asset Purchase Agreement

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Sectors: Electronics and Miscellaneous Technology
Governing Law: Minnesota, View Minnesota State Laws
Effective Date: October 29, 1999
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EXHIBIT 10.1


ASSET PURCHASE AGREEMENT


between


GLASSTITE INC.


as Seller


and


RAVEN INDUSTRIES, INC.


as Shareholder


and


PENDA GLASSTITE, INC.
(a wholly owned subsidiary of PENDA CORPORATION)


as Purchaser


and


PENDA CORPORATION


As Parent


Dated as of October 29, 1999


TABLE OF CONTENTS


1. Defined Terms and Other Definitional Provisions...........................1


(a) Definitions..........................................................1
(b) Other Definitional and Interpretive Provisions......................10


2. Sale and Purchase of Assets..............................................11


(a) Basic Transaction...................................................11
(b) Purchase Price......................................................11
(c) Net Working Capital Adjustment......................................11
(d) 90 Day Past Due Receivable And Future Dating Holdback...............15
(e) Accrued Liability Escrow............................................15
(f) Assumed Obligations.................................................15
(g) Allocation of Certain Items.........................................16
(h) Open Checks.........................................................16
(i) Allocation of Purchase Price........................................16
(j) Transfer Taxes......................................................16
(k) Non-Assignable Assets...............................................17
(l) Guaranty of Parent..................................................17
(m) Guaranty of Shareholder.............................................17


3. Closing..................................................................17


(a) Date and Place of Closing...........................................17
(b) Deliveries by Seller at the Closing.................................17
(c) Deliveries by the Purchaser at the Closing..........................18


4. Representations and Warranties of the Purchaser..........................19


(a) Organization/Power and Authority to Conduct Business................19
(b) Authorization of Transaction........................................19
(c) Noncontravention....................................................19
(d) Brokers Fees........................................................20


5A. Representations and Warranties of the Shareholder........................20


(a) Organization/Power and Authority to Conduct Business................20
(b) Binding Obligation..................................................20
(c) Noncontravention....................................................20
(d) Ownership of Stock..................................................20
(e) Brokers Fees........................................................20


5B. Representations and Warranties of the Seller.............................20


(a) Organization/Power and Authority to Conduct Business................21
(b) Authorization of Transaction........................................21
(c) Noncontravention....................................................21
(d) Brokers' Fees.......................................................21


(e) Financial Statements; Undisclosed Liabilities.......................21
(f) Absence of Developments.............................................22
(g) Legal Compliance....................................................23
(h) Seller Permits......................................................24
(i) Certain Business Relationships......................................24
(k) Title to Real Property and Leased Real Property.....................24
(l) Intellectual Property...............................................24
(m) Material Contracts..................................................25
(n) Accounts Receivable and Inventory...................................26
(o) Insurance...........................................................26
(p) Litigation..........................................................26
(q) Labor Relations.....................................................26
(r) ERISA Matters.......................................................27
(s) Environmental, Health and Safety Matters............................28
(t) Customers and Suppliers.............................................29
(u) Products Liability..................................................29
(v) Tax Matters.........................................................29
(w) Dunnell Minnesota Sewer Assessment..................................30


6. Pre-Closing Covenants....................................................31


(a) General.............................................................31
(b) Notices and Consents................................................31
(c) Operation of Business...............................................31
(d) Preservation of Business............................................31
(e) Full Access.........................................................31
(f) Notice of Developments..............................................31
(g) No Shop.............................................................32
(h) Non-Solicitation of Seller's Employees..............................32
(i) Press Releases and Public Announcements.............................32


7. Post-Closing Covenants...................................................32


(a) General.............................................................32
(b) Litigation Support..................................................32
(c) Employee Matters....................................................33
(d) Tax Information.....................................................34
(e) Tax Notices.........................................................34
(f) Tax Examinations....................................................34
(g) Access..............................................................35
(h) Noncompetition......................................................35
(i) Confidentiality.....................................................36
(j) Non-Solicitation of Employees and Customers.........................37
(k) Change of Name......................................................37
(l) Services of Mr. Jim Groninger.......................................37
(m) Use of Shareholder Computers........................................37
(n) Environmental Investigation and Remediation at Dunnell Minnesota....37
(o) Compliance with MPCA NOV............................................38


ii


(p) Communication concerning MPCA NOV and other response action.........38
(q) Product Returns And Warranty........................................38
(r) Purchaser and Parent's Confidentiality Obligations..................38


8. Conditions to Obligation to Close........................................39


(a) Conditions to Obligation of the Purchaser...........................39
(b) Conditions to Obligation of the Seller..............................40


9. Indemnifications and Remedies............................................40


(a) Survival of Representations, Warranties, and Indemnifications.......40
(b) Indemnification.....................................................41


10. Termination..............................................................42


(a) Termination of Agreement............................................42
(b) Effect of Termination...............................................43


11. Miscellaneous............................................................43


(a) Press Releases and Public Announcements.............................43
(b) No Third-Party Beneficiaries........................................43
(c) Entire Agreement....................................................43
(d) Succession and Assignment...........................................43
(e) Counterparts........................................................44
(f) Notices.............................................................44
(g) Governing Law.......................................................45
(h) Waiver of Jury Trial................................................45
(i) Amendments and Waivers..............................................45
(j) Severability........................................................45
(k) Equitable Remedies..................................................45
(l) Expenses............................................................46
(m) Construction........................................................46
(n) Incorporation of Disclosure Schedule and Exhibits...................46
(o) Prevailing Parties..................................................46
(p) Bulk Transfer Laws..................................................46


EXHIBITS


EXHIBIT A Bill of Sale, Assignment and Assumption Agreement


EXHIBIT A-2 Bill of Sale and Assignment Agreement


EXHIBIT B Real Estate Lease And Purchase Agreement


EXHIBIT C Software License Agreement


EXHIBIT D Trademark License Agreement


iii


EXHIBIT E Patent Assignment


EXHIBIT F Patent And Trademark Assignment


EXHIBIT G Trademark Assignment


SCHEDULES


Disclosure Schedule


[The Exhibits and Schedules have been intentionally omitted.]


iv


ASSET PURCHASE AGREEMENT


This Agreement is made and entered into as of October 29, 1999, by and between GLASSTITE INC., a Minnesota corporation (the "Seller"), RAVEN INDUSTRIES, INC., a South Dakota corporation (the "Shareholder"), PENDA GLASSTITE, INC., a Florida corporation (the "Purchaser"), and PENDA CORPORATION, a Florida corporation (the "Parent").


PRELIMINARY STATEMENT:


This Agreement contemplates a transaction in which the Purchaser will acquire substantially all of the assets (and assume certain of the liabilities) of the Seller in exchange for cash. The Seller is engaged in the business of manufacturing and selling fiberglass toppers, lids, and related accessories for motor vehicles (the "Business of the Seller"), with its principal place of business at 600 Highway 4, Dunnell, Minnesota 56127. An Affiliate of the Purchaser is engaged in the business of manufacturing and selling fiberglass tonneau covers, caps, van tops, running boards, sleeper shells and related accessories for motor vehicles (the "Business of the Purchaser"). The Purchaser, the Parent, the Seller, and the Shareholder are each referred to in this Agreement as a "Party" and collectively as the "Parties".


AGREEMENT:


In consideration of the premises and of the respective mutual agreements, covenants, representations and warranties contained herein, the parties hereto agree as follows:


1. Defined Terms and Other Definitional Provisions.


(a) Definitions. In addition to terms defined elsewhere in this Agreement, the following terms when utilized in this Agreement, unless the context otherwise requires, shall have the meanings indicated, which meanings shall be equally applicable to both the singular and plural forms of such terms:


"Accounting Firm" has the meaning set forth in ss.2(c)(iii) below.


"Accounts Receivable" means all accounts, instruments, drafts, acceptances and other forms of receivables relating to the Seller's business, and all rights earned under the Seller's contracts to sell goods or render services.


"Accrued Liabilities" has the meaning set forth in ss.2(e) below.


"Accrued Liability Escrow" has the meaning set forth in ss.2(b) and ss.2(e) below.


"Acquired Assets" means all right, title and interest in and to the Seller's (a) Accounts Receivable, (b) Contracts, (c) Equipment, (d) Intellectual Property, (e) Inventory, (f) Prepaid Items, (g) Real Property and Leased Real Property, (h) Cash, and (i) Related and Incidental Assets;


1


PROVIDED, HOWEVER, that, the Real Property located in Dunnell Minnesota shall not be an Acquired Asset but shall be governed by the terms and conditions of the Real Estate Lease And Purchase Agreement set forth in Exhibit B, and FURTHER PROVIDED, that, notwithstanding any provision of this Agreement which may be to the contrary, the following assets shall in no event be deemed to constitute Acquired Assets:


(i) any Tax Returns of the Seller;


(ii) refunds in respect of Taxes paid by Seller;


(iii) non-assignable third-party indemnities, policies of
insurance, fidelity, surety or similar bonds and the coverages afforded
thereby;


(iv) the Seller's Employee Benefit Plans and all trusts,
insurance policies, contracts and other assets of the Seller
attributable thereto;


(v) minute books and stock ledgers;


(vi) any rights that the Seller may have under this Agreement
and all rights, causes of action and claims arising out of any of the
assets described in clauses (i) through (v) above.


(vi) AS/400 Related Software


"Actual Net Working Capital" has the meaning set forth in ss.2(c)(iii)(3) below


"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act.


"Affiliated Group" means any affiliated group within the meaning of ss.1504 of the Code.


"Agreement" means this Asset Purchase Agreement together with all exhibits and schedules contemplated hereby.


"AS/400 Related Software" means AS/400 software and databases, licensed, developed or owned by Shareholder which is used or operated by Shareholder and which the AS/400 Seller Software requires in order to function properly and includes specifications, design documentation, and source code.


"AS/400 Seller Software" means AS/400 software and databases (including archived data) developed or owned by Shareholder which is used or operated by Shareholder exclusively for the Business of the Seller and includes specifications, design documentation, and source code.


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"Assumed Obligations" means (a) all liabilities and obligations of the Seller in respect of trade accounts payable accrued in the Ordinary Course of Business set forth on the Most Recent Balance Sheet, (b) all liabilities and obligations of the Seller in respect of trade accounts payable accrued in the Ordinary Course of Business which have arisen in the Ordinary Course of Business since the date of the Most Recent Balance Sheet, except to the extent such obligations are or have been discharged prior to the Closing Date, (c) all liabilities and obligations of the Seller for the processing and delivery to vendees of outstanding customer orders as of the Closing Date, (d) all liabilities and obligations arising on or after the Closing Date under all of the Contracts included in the Acquired Assets, excluding any liability or obligation resulting from any breach, violation, failure to comply, omission or basis therefor, existing as of the Closing Date, and (e) all liabilities and obligations that otherwise arise or are asserted by reason of events, acts or transactions occurring or relating to the Acquired Assets or the operation of the business of the Seller by the Purchaser on or after the Closing Date, including Environmental Claims as well as liabilities for Third Party Claims related to products manufactured or sold after the Closing Date; PROVIDED, HOWEVER, that the Assumed Obligations shall not include the Retained Liabilities.


"Authority" means any federal, state, local or foreign governmental regulatory agency, commission, bureau, authority, court or arbitration tribunal.


"Bill of Sale, Assignment and Assumption Agreement" means the Bill of Sale, Assignment and Assumption Agreement, in the form of Exhibit A hereto.


"Business of the Seller" has the meaning set forth in the Preliminary Statement above.


"Cash" means cash, amounts in bank accounts, certificates of deposit and other cash equivalents and short term investments as reflected in Seller's Financial Records.


"Closing" has the meaning set forth in ss.3(a) below.


"Closing Date" has the meaning set forth in ss.2(a) below.


"COBRA" means Part 6 of Subtitle B of Title I of ERISA and Section 4980B of the Code.


"Code" means the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.


"Confidential Information" means data and information relating to the Business of the Seller (which does not rise to the level of a Trade Secret) and which has value to the Seller and is not generally known to the public.


"Contracts" means any and all sales orders, sales contracts, purchase orders, purchase contracts, distributor agreements, broker agreements, executory contracts, employment agreements, franchises, understandings, arrangements, leases, or other instruments or undertakings to which the Seller is a party or to which or by which any of the Seller's property is subject or bound, including


3


without limitation those listed under ss.5B(m) of the Disclosure Schedule, but excluding (a) any Seller Permits, and (b) any of the foregoing to the extent that they evidence or secure Funded Indebtedness.


"Deed" means the General Warranty Deed pursuant to which the Seller shall sell, transfer, convey, assign and deliver the Real Property located in Eloy Arizona to the Purchaser.


"Defense Counsel" has the meaning set forth in ss.9(b)(iii) below.


"Defense Notice" has the meaning set forth in ss.9(b)(iii) below.


"Disclosure Schedule" means the Disclosure Schedule accompanying this Agreement.


"Documents" means the Bill of Sale, Assignment and Assumption Agreement, Bill of Sale and Assignment Agreement, Real Estate Lease And Purchase Agreement, Software License Agreement, Trademark License Agreement, Patent Assignment, Patent And Trademark Assignment, Trademark Assignment, and the Warranty Deeds


"Employee Benefit Plan" has the meaning set forth in ss.5B(r) below.


"Employee Pension Benefit Plan" has the meaning set forth in ERISA ss.3(2).


"Employee Welfare Benefit Plan" has the meaning set forth in ERISA ss.3(1).


"Environmental Claim" means any written notice or claim by any person or any Authority alleging potential liability (including, without limitation, potential liability for investigatory costs, cleanup costs, governmental response costs, natural resources damages, property damages, personal injuries or penalties) arising out of, based on or resulting from (i) the presence, release or threatened release into the environment, of any Materials of Environmental Concern at any location, whether or not owned, leased or operated by the Seller, or (ii) any violation, or alleged violation, of any Environmental, Health and Safety Requirement.


"Environmental, Health and Safety Requirements" means all federal, state, local and regional statutes, regulations and ordinances concerning workplace health and safety and pollution or protection of the environment, including all those relating to the presence, use, production, generation, handling, transportation, treatment, storage, disposal, distribution, labeling, testing, processing, discharge, release, threatened release, control or cleanup of any hazardous materials, substances or wastes, as such requirements are enacted and in effect on the Closing Date.


"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.


"Equipment" means all supplies, equipment, production machinery, manufactured and purchased parts, tools, jigs, dies, molds, furniture, fixtures, vehicles, leasehold improvements, office equipment, signs and all other tangible personal property (other than Inventory) of the Seller.


4


"Final Determination Date" has the meaning set forth in ss.2(c)(iii) below.


"Financial Records" means the financial records kept in the Ordinary Course of Business as adjusted to be consistent with GAAP including but not limited to balance sheets and income statements


"Financial Statements" has the meaning set forth in ss.5B(e)(i) below.


"Funded Indebtedness" means the aggregate amount (including the current portions thereof) of all (i) indebtedness for money borrowed from others and purchase money indebtedness and capital lease obligations of the Seller, (ii) indebtedness of the type described in clause (i) above guaranteed, directly or indirectly, in any manner by the Seller, or in effect guaranteed, directly or indirectly, in any manner by the Seller, through an agreement, contingent or otherwise, to supply funds to, or in any other manner invest in, the debtor, or to purchase indebtedness, or to purchase and pay for property if not delivered or to pay for services if not performed, primarily for the purpose of enabling the debtor to make payment of the indebtedness or to assure the owners of the indebtedness against loss, but excluding endorsements of checks and other instruments in the ordinary course, (iii) indebtedness of the type described in clause (i) above secured by any Lien upon property owned by the Seller, even though the Seller has not in any manner become liable for the payment of such indebtedness and (iv) interest expense accrued but unpaid, and all prepayment premiums, on or relating to any of such indebtedness. Notwithstanding anything to the contrary contained herein, all of the leases of Seller identified in section 5B(m) of the Disclosure Schedule shall be deemed operating leases, and not capital leases, for purposes of this Agreement.


"GAAP" means United States generally accepted accounting principles as in effect from time to time.


"High Net Working Capital" has the meaning set forth in ss.2(c)(iii)(2) below.


"Indemnified Party" has the meaning set forth in ss.9(b)(iii) below.


"Indemnifying Party" has the meaning set forth in ss.9(b)(iii) below.


"Initial Payment" has the meaning set forth in ss.2(b) below.


"IRS" means the Internal Revenue Service.


"Intellectual Property" means all know-how, inventions, patents, trademarks, common law trademarks, service marks, product names, trade dress, logos, domain names, trade names and corporate names, together with all goodwill associated therewith (including all translations, adaptations, derivations and combinations of the foregoing); copyrights and copyrightable works; registrations, applications and renewals for any of the foregoing and all related legal files and documentation (including legal files related to patent and trademark searches, infringement investigations, and infringement litigation filed by or against Seller); trade secrets and Confidential


5


Information (including, without limitation, ideas, compositions, know-how, manufacturing and production processes and techniques, research and development information, drawings, specifications, designs, plans, proposals, technical data, business and marketing plans, and customer and supplier lists and related information); and computer software (including, without limitation, AS/400 Seller Software, data, data bases and documentation) related to the Business of the Seller whether owned by Seller or Shareholder.


"Inventory" means all of the Seller's inventories, including without limitation, raw materials, work in progress, finished goods, packaging goods and other like items.


"Knowledge" means, with respect to the Seller, the best of the knowledge of the Seller or the Shareholder.


"Lease" means the Lease, in the form of Exhibit C hereto.


"Leased Real Property" has the meaning set forth in ss.5B(k) below.


"Lien" means any mortgage, pledge, lien, encumbrance, charge or other security interest, whether or not related to the extension of credit or the borrowing of money.


"Loss" or "Losses" means any loss, liability, damage or expense (including reasonable attorneys' fees and expenses) that the subject Person may suffer or sustain.


"Low Net Working Capital" has the meaning set forth in ss.2(c)(iii)(1) below.


"Material Adverse Change" or "Material Adverse Effect" means any change or effect that is materially adverse to the business, financial condition, results of operations or prospects of the Seller.


"Material Contract" means any Contract, written or oral (including any and all amendments thereto) to which the Seller is a party, or by which the Seller or any of its assets is bound, and which (a) relates to Funded Indebtedness for borrowed money or is a letter of credit, pledge, bond or similar arrangement running to the account of or for the benefit of the Seller, (b) relates to the purchase, maintenance or acquisition of, or sale or furnishing of, materials, supplies, merchandise, machinery, equipment, parts or any other property or services other than in the Ordinary Course of Business, (c) is a collective bargaining agreement, (d) obligates the Seller not to compete with any business, or which otherwise restrains or prevents the Seller from carrying on any lawful business or which restricts the right of the Seller to use or disclose any information in its possession (excluding in each case customary restrictive covenants or confidentiality
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