CONFIDENTIAL TREATMENT REQUESTED
(*) Denotes information for which confidential treatment has been requested.
Confidential portions omitted have been filed separately with the Commission.
ASSET PURCHASE AGREEMENT
BY AND AMONG
XXXX POWER CORPORATION
AND
ORYX POWER PRODUCTS CORPORATION
AND
ORYX TECHNOLOGY CORP.
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT ("Agreement") dated March 2, 1998, by and
among XXXX POWER CORPORATION, a New York corporation ("Purchaser"), with
offices at 00 Xxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000, ORYX POWER PRODUCTS
CORPORATION, a Delaware corporation ("Seller"), with offices at 0000
Xxxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxx Xxxxxxxx, Xxxxxxxx 00000 and ORYX
TECHNOLOGY CORP., a Delaware Corporation ("OTC"), having offices located at
00000 Xxxxxxx, Xxxxxxx, Xxxxxxxxxx, 00000. Purchaser, Seller and OTC are
sometimes referred to collectively herein as the "Parties."
WITNESSETH:
WHEREAS, Seller is engaged in the business of the sale and
distribution of power supply units and parts for use in electronic goods (the
"Business"); and
WHEREAS, Seller owns all but one share of the capital stock of Oryx
De Mexico, S.A. de C.V., a Mexican corporation ("ODM"); and
WHEREAS, ODM is in the business of manufacturing and assembling said
power supply units and parts at a Maquiladora plant in Reynosa, Mexico for
shipment to Seller's facility for distribution and sale pursuant to a certain
Maquila Services Agreement between ODM and OTC; and
WHEREAS, Purchaser desires to purchase from Seller and Seller
desires to sell to Purchaser the entire Business of Seller by purchasing and
selling, as the case may be, substantially all of Seller's assets of the
Business, including but not limited to, all but one share of the capital
stock of ODM (the "ODM Stock"), and by assigning, and assuming as the case
may be, certain liabilities of Seller, all upon the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the promises and of the mutual
agreements, covenants, representations and warranties hereinafter contained,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES
1.1 Purchase and Sale of Assets. Subject to and upon the terms and
conditions set forth in this Agreement, Seller shall sell, assign, transfer,
convey and deliver to Purchaser and Purchaser shall purchase from Seller, at
the "Closing" (as hereinafter defined), all of the properties, assets, rights
and business of Seller of every type and description, real, personal and
mixed, tangible and intangible, related to, derived from or used in the
operation of the Business, wherever located and whether or not reflected on
the books and records of Seller (all of such assets, properties, rights and
business being hereinafter sometimes collectively referred to herein as the
"Acquired Assets") including, without limitation, the following:
(a) all inventory, including, without limitation, the finished
goods, work in progress, components, parts and supplies related thereto
identified on Schedule 1.1(a) hereto ("Seller's Inventory");
(b) all accounts receivable (the "Transferred Receivables");
(c) all furniture, fixtures, equipment, tools, machinery, vehicles,
supplies, signs, leasehold improvements and other tangible personal property
of Seller;
(d) all of Seller's right, title and interest in, to and under (i)
any agreements (other than any agreement or arrangement with any distributor
or manufacturers' representative and those certain Severance Agreements with
Xxxxxx Xxxxxxxx, Xxxx Xxxxxxx and Xxxxxxx Xxx and Separation Agreement with
Xxxxxx Xxxxxxx, leases and contracts, including, but not limited to, those
described in Schedule 1.1(d)(i) hereto; (collectively the "Transferred
Agreements"), and (ii) any and all prepayments, deposits and similar assets
(including but not limited to cash reserves) relating to or associated with
the Transferred Agreements;
(e) all intellectual property owned or licensed by Seller or used in
the operation of the Business (the "Intellectual Property"), including,
without limitation, (i) trade names, trademarks, service names, service
marks, copyrights, private labels, logos or designs, whether registered or
not, including, without limitation, the names and marks set forth in Schedule
1.1(e) hereto and a perpetual, royalty free license to use the name "Oryx" in
combination or in connection with the sale of power supplies; and (ii) all
trade secrets, confidential and/or proprietary information, know-how,
patents, processes, procedures, devices, techniques, programs, software,
creations, methods, formulas, designs, drawings, and technical information
related to, derived from or used in the operation of the Business;
(f) books, records and documents of Seller related to, derived from
or used in the operation of the Business, including, without limitation, all
customer lists, supplier lists, price lists, telephone numbers and listings,
advertising materials and marketing plans, internet web pages, business
files, regulatory files and approvals, business plans, financial data,
operations manuals, repair or service manuals, fire, safety or environmental
reports and all data related to inventory, sales and accounts receivable and
similar books and records used in or relating to the Business and all stock
and minute books of ODM;
(g) all permits, licenses, orders, consents and approvals of any
governmental or regulatory authority used in or related to the Business, or
the operation of the Business; (h) all existing and prospective business
relationships, reputation, and other intangibles which may be characterized
as "good will" or "going concern value" of Seller's Business including,
without limitation, the name "Oryx Power Products";
(i) all choses in action, causes of action, claims and rights of
recovery or setoff of every kind or character arising out of or attributable
to any of the Acquired Assets or the Business which is purchased hereunder
(hereinafter defined), irrespective of the date on which any such chose in
action, cause of action, claim or right may arise or accrue;
(j) all but one share of the capital stock of ODM; and
(k) any and all other properties, assets, rights and businesses of
every kind and nature owned or held by Seller on the Closing Date, known or
unknown, fixed or unfixed, xxxxxx or inchoate, accrued, absolute, contingent
or otherwise, whether or not specifically referred to in this Agreement.
1.2 Assumption of Liabilities. Purchaser shall assume only those
liabilities specifically described on Schedule 1.2 (the "Assumed
Liabilities"). Except for the Assumed Liabilities specifically described in
the immediately preceding sentence, Purchaser has not assumed or undertaken,
and is not assuming or undertaking, to discharge or perform, any obligation
or liability of Seller, all of which obligations and liabilities Seller and
OTC hereby undertake to fully discharge, pay and/or satisfy as and when the
same may become due. Without limiting the generality of the foregoing,
Purchaser shall not be deemed to have assumed, nor shall Purchaser assume,
any liability based upon or arising out of any tortious or wrongful actions
of Seller or any liability for the payment of (i) any liability or obligation
of Seller arising out of or in connection with the negotiation and
preparation of this Agreement and the consummation and the performance of the
transactions contemplated hereby including, without
limitation, any tax liability so arising; (ii) any liability or obligation of
Seller for any foreign, federal, state, county or local taxes, or any
interest or penalties thereon, accrued for, applicable to or arising from any
period ending on or prior to the date of Closing other than the Mexican Value
Added Tax (the "VAT") on the assets of Seller located at the facility in
Reynosa, Tamaulipas, Mexico, which will be shared in accordance with Section
8.2 hereof; (iii) any salary, wage, benefit, bonus, vacation pay, sick leave,
insurance, employment tax or similar liability of Seller to any employee,
officer, director or other person or entity allocable to services performed
on or prior to the date hereof; or (iv) any contributions to any pension,
employee benefit or profit sharing plan of Seller, ODM or OTC for the benefit
of any of Seller's employees, officers or directors.
1.3 Excluded Assets. Notwithstanding any other provision of this
Agreement the Acquired Assets shall not include and Seller shall retain: (a)
cash and cash equivalents of Seller (other than any cash received by KBK
Capital ("KBK") after February 28, 1998 with respect to accounts receivable);
(b) stock books, minute books and corporate seals of Seller (but the Acquired
Assets shall include such books and seals of ODM); and (c) Seller's right to
enforce this Agreement.
1.4 Notwithstanding anything in this Agreement to the contrary, title to
Seller's Inventory shall, without any further action by or on behalf of
Seller, pass to Purchaser upon delivery thereof to Purchaser from time to
time at Purchaser's facility located in McAllen, Texas. Purchaser shall have
the right to process and complete all unfinished inventory and shall pay all
costs of delivery to Purchaser's facility in McAllen, Texas.
ARTICLE 2
PURCHASE PRICE AND TERMS OF PAYMENT
2.1 Purchase Price. In consideration of the sale, assignment, transfer,
conveyance and delivery of the Acquired Assets to Purchaser, and in reliance
upon the representations, warranties, covenants and agreements made herein,
Purchaser shall pay Seller the following amounts (the "Purchase Price"):
(a) At the closing, the sum of Two Million Dollars ($2,000,000.00)
by wire transfer or certified or bank check, payable to the order of Seller.
(b) An additional amount not to exceed Four Million Dollars
($4,000,000.00) (the "Earn Out") calculated and adjusted pursuant to Section
2.3 hereof.
(c) At the Closing, Purchaser shall repay or cause to be repaid the
aggregate outstanding loan advances (the "KBK Advances") made by KBK and set
forth on Schedule 2.1(c).
2.2 Allocation of Purchase Price. The Parties agree that the Purchase
Price shall be allocated among Acquired Assets in conformance with the
provisions of Section 1060 of the Internal Revenue Code, as amended (the
"Code") and in accordance with an appraisal and allocation prepared by
American Appraisal. The Parties agree to accept the allocation prepared by
American Appraisal and to report the allocation of the Purchase Price in Code
Form 8594 and, where required, in their respective Federal and State income
tax returns in accordance therewith.
2.3 Calculation and Adjustment of Earn Out.
(a) Subject to adjustment pursuant to Section 2.3(b) hereof, Seller
shall be entitled to receive additional consideration based on attaining
certain levels of "Oryx Sales" (as hereinafter defined) during the fourteen
month period immediately following the Closing (the "Earn Out Period"). Oryx
Sales shall mean sales by Purchaser or any affiliate of Purchaser (i) of the
specific products and derivatives of such products listed on Schedule
2.3(a)(1) to the specific customers designated to that product on said
Schedule; (ii) of any products (other than standard and modified standard
products of Xxxx Products Corp.) to
the customers identified on Schedule 2.3(a)(2); and (iii) of identified
products listed on Schedule 2.3(a)(3), reduced by the amount of all taxes,
shipping and insurance charges, commissions payable to certain manufacturers
representatives identified as item 13 on Schedule 1.2, and all amounts
attributable to returns and adjustments accepted in accordance with customary
industry practice. Payments ("Earn Out Payments") shall be paid only with
respect to Oryx Sales for which payment is actually received and will be
computed in accordance with the table set forth below. Earn Out Payments will
be paid on the last day of the month immediately following the month during
which Purchaser actually receives payment with respect to accounts receivable
attributable to Oryx Sales.
-------------------------------------------------------------------------------------------
Earn Out Payment Calculation at and within
Level Aggregate Payments Received each Level including all prior Levels
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
I. $7,000,000 [ * ]
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
II. More than $7,000,000 to and including [ * ]
$10,000,000
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
III. More than $10,000,000 and less than [ * ]
$11,000,000
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
IV. $11,000,000 to and including [ * ]
$14,000,000
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
V. More than $14,000,000 and less than [ * ]
$15,000,000
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
VI. $15,000,000 to and including [ * ]
$18,000,000
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
VII. More than $18,000,000 and less than [ * ]
$19,000,000
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
VIII. $19,000,000 and less than [ * ] (not to exceed a maximum
$22,000,000 aggregate amount of $4,000,000)
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
For purposes of computing aggregate payments received, amounts received for
shipping, insurance, non-recurring engineering charges and other ancillary
costs will be excluded and credits for returns and adjustments will be netted
against Oryx Sales. For any shipment of products with respect to Oryx Sales
initially made within the Earn Out Period which is returned to Purchaser and
re-shipped within 90 days after the end of the Earn Out Period, such
re-shipment shall be treated as made during the Earn Out Period. Purchaser,
in its sole discretion, shall have the right to accept or reject any Oryx
Sale to any customer whatsoever, and no such rejected or potential Oryx Sale
shall be included in the calculation of any Earn Out Payment.
(b) Earn Out Payments shall be reduced dollar for dollar by the sum
of the following:
(i) the amount of any accounts receivable, (net of any reserve
for bad debt, returns, allowances and warranty claims) reflected on the
audited consolidated balance sheet (the "Closing Balance Sheet") of ODM and
Seller dated February 28, 1998 ("Balance Sheet Date"), not collected in the
ordinary course of business during the 180-day period immediately following
the Closing;
(ii) to the extent not previously paid to Purchaser pursuant to
Section 4.3(b), the amount, if any, by which the Seller's Net Asset Value (as
hereafter defined) is less than $1,400,000.00. For purposes of this
Agreement, Net Asset Value shall mean (a) the amount of Seller's assets,
excluding cash, cash equivalents, and amounts attributable to goodwill, all
as reflected on the Closing Balance Sheet, minus (b) the amount of Seller's
liabilities, as reflected on the Closing Balance Sheet excluding
inter-company debt, obligations with respect to certain redeemable
convertible common stock, and accounts payable in excess of $1,800,000, all
as reflected on the Closing Balance Sheet, plus the KBK Advances at February
28, 1998;
(iii)the amount of any inventory in excess of any reserve for
obsolete inventory reflected on the Closing Balance Sheet that remains unsold
at the end of the Earn Out Period. If, at the end of the Earn Out Period, any
IBM Inventory exists, Purchaser may in its sole discretion, elect to purchase
such remaining IBM inventory by applying any Earn Out adjustments pursuant to
this Section 2.3(b) at cost or, if it does not purchase said IBM Inventory,
Purchaser shall return said Inventory to Seller and Purchaser shall have no
further obligation with respect to the IBM Inventory. IBM Inventory means
those items and the quantities thereof listed on Schedule 2.3(b)(iii);
(iv) the amount by which the KBK Advances exceed $1,500,00.00;
(v) to the extent not previously paid to Purchaser pursuant to
Section 4.3(b), the amount by which the aggregate accounts payable ("Accounts
Payable") of Seller as set forth in the Audited Financial Statement, as
hereinafter defined exceeds $1,800,000.00;
(vi) the amount of any Earn Out Payments (calculated at the
applicable Earn Out level) previously paid with respect to Oryx Sales for
which products are returned for any reason and for which no re-shipment is
made during the 90 day period following the Earn Out Period;
(vii) the amount of any raw materials subject to outstanding
purchase orders for purchased goods on the Closing Date which remain in
inventory as raw materials at the end of the Earn Out Period and any and all
amounts paid by Purchaser in connection with canceling, adjusting or changing
the terms of any such purchase order in the ordinary course of business; and
(viii) the aggregate amount of any increase in the wages and
salaries effective at any time before February 28, 1999 to be paid to
employees working at the ODM facility located in Reynosa, Tamaulipas, Mexico
in excess of five (5%) percent (on an annualized basis) above the wages and
salaries in effect on March 1, 1998 with respect to the number of employees
covered by the union contract in effect at such facility on February 28, 1998.
(c) If Purchaser receives payment of an amount for accounts
receivables or inventory pursuant to Sections 2.3(b)(i) or (iii) hereof in
excess of the amount required under such subsection (each a "Surplus") then
the amount of such Surplus may be applied against any shortfall in the other
subsection. This provision shall only apply to surpluses and shortfalls under
Sections 2.3(b)(i) and (iii) and shall not affect, in any way, any Surplus or
shortfall under any other provision of Section 2.3 or other Section of this
Agreement.
(d) To the extent any adjustment pursuant to Section 2.3(b) exceeds
any Earn Out Payment to which it has been applied, such shortfall shall be
carried forward on a dollar for dollar basis and applied against any future
Earn Out Payments.
2.4 Guaranty of Xxxx Products. Purchaser's payment and other obligations
hereunder shall be guaranteed by Xxxx Products Corporation in the form of
guaranty (the "Xxxx Guaranty") attached hereto as Exhibit A.
2.5 Audit Rights. Each month of the Earn Out Period, Purchaser shall
provide Seller and OTC with a written statement setting forth shipments of
products with respect to Oryx Sales subject to the Earn Out in the prior
month. If no shipments with respect to Oryx Sales subject to the Earn Out
were made in such month, that fact shall be stated. For each such month,
Purchaser shall provide Seller and OTC with a statement of cumulative
shipments of products made through such month and the amount of Earn Out
Payments owed for such period. Such report shall be made within fifteen (15)
days of the end of such month. If no payments are owed, such fact shall be so
stated. Purchaser shall keep full, complete, and accurate records relating to
all payments and shipments. Seller and OTC shall together have the right, at
their own expense, through an independent Certified Public Accountant (the
"Auditor") to audit records in Purchaser's actual or constructive possession
relating to information bearing upon the amount of payments owed Seller and
shipments of products with respect to Oryx Sales subject to the Earn Out.
Such an audit shall occur upon not less than ten (10) days' prior written
notice, shall not take place more than two times, and shall occur during
Purchaser's ordinary business hours. The Auditor shall disclose to all
parties whether a discrepancy exists and, if so, the basis and amount
thereof. Prompt adjustment shall be made by Purchaser to compensate for any
shortfall disclosed by the audit. If any audit discloses a shortfall in
payments owed for more than five percent (5%) for any period being audited,
Purchaser shall bear the reasonable costs of such audit. No audit shall occur
later than twelve (12) months after the end of the Earn Out Period.
ARTICLE 3
CLOSING
3.1 The closing of the transactions hereunder (the "Closing") shall take
place at the offices of Purchaser's counsel located at 000 Xxx Xxxxxxx Xxxx,
Xxxxxxx, Xxx Xxxx. Such date is herein sometimes referred to as the "Closing
Date."
ARTICLE 4
CLOSING CONDITIONS
4.1 Obligations of Seller. Concurrently with the execution of this
Agreement, Seller or OTC shall deliver to Purchaser the following:
(a) a Xxxx of Sale, duly executed by Seller, together with such
other
documents of conveyance, assignment and transfer, all in form and substance
satisfactory to Purchaser and its counsel, as shall be required to vest in
Purchaser good and marketable title to the Acquired Assets and shall provide
for delivery of specific Acquired Assets to be delivered at such locations
within the United States of America as the parties agree;
(b) Seller's customer list;
(c) assignments to Purchaser of the Transferred Agreements, in form
and substance satisfactory to Purchaser and its counsel and all required
consents to such assignments;
(d) all of the original Transferred Agreements, files, computer
records (including programs and software) and other data and documents
pertaining to the Business including, without limitation, accounting books
and records of Seller and ODM, all of which may be delivered to the Purchaser
at Seller's Texas or Mexican facilities, or such other facilities of Seller
as the parties agree.
(e) a non-competition agreement, in form and substance satisfactory
to Purchaser and its counsel, duly executed by each of the following:
(i) Xxxxxx Xxxxxxxx;
(ii) Xxxxxxx Xxxxxxxxx;
(iii) Oryx Technology Corp.; and
(iv) Oryx Power Products Corporation.
(f) a true and complete copy of Seller's Certificate of
Incorporation (and any amendments thereto), certified as of a recent date by
the Secretary of State of Delaware;
(g) a true and complete copy of ODM's Articles of Organization and
any amendments thereto (or the Mexican equivalent thereof).
(h) a Certificate of Amendment to Seller's Certificate of
Incorporation pursuant to which the name of Seller is changed to a name that
is dissimilar to its present name and which does not contain the words "Power
Products", or any derivative thereof;
(i) a certificate of good standing of Seller issued by the Secretary
of State of Delaware dated within thirty (30) days of the Closing Date;
(j) a certificate of good standing (or the Mexican equivalent
thereof) of ODM issued by the appropriate governmental official in Mexico or
any political subdivision thereof, and dated within thirty (30) days of the
Closing Date;
(k) a certificate, dated the Closing Date, from each of the
Secretary of Seller and the Secretary of OTC, as the case may be, certifying
the resolutions adopted by (i) the stockholders of Seller and Board of
Directors of Seller and (ii) the Board of Directors of OTC, authorizing the
execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement;
(l) a current franchise tax letter issued by the Delaware Department
of Taxation stating that Seller is current in its franchise tax filings and
payments;
(m) a written opinion of counsel for each of Seller and ODM, dated
the Closing Date, in form and substance satisfactory to Purchaser and its
counsel;
(n) the stock book (to the extent it exists), all unissued,
cancelled and redeemed stock certificates and all stock certificates
representing 49,999 shares of ODM shares issued to Seller and the minute book
(to the extent it exists) of ODM;
(o) binding and effective lease to the premises occupied by ODM in
Reynosa, Tamaulipas, Mexico with an expiration date of 2003 or later or an
estoppel letter from the landlord confirming among other things that the
current lease is effective until at least December 31, 1998; and
(p) forms UCC-3 Termination Statements (or the Mexican equivalent)
with respect to all liens of record against any of the Acquired Assets and
any of the assets of ODM;
(q) all consents, orders and approvals of third-parties required for
Seller or ODM to enter into this Agreement or to perform their respective
obligations hereunder or to give Purchaser the benefit of the bargain
contemplated herein;
(r) any and all such other documents, agreements, certificates and
instruments required to be executed and/or delivered by Seller, OTC or ODM or
any shareholder of Seller, OTC or ODM to Purchaser, and all payments (if any)
required to be made, pursuant to the terms and provisions of this Agreement;
(s) Texas tax form signed by Seller; and
(t) a letter agreement from Seller regarding the withholding of
$15,000 from the purchase price for payment of stock transfer gains tax.
4.2 Obligations of Purchaser. Concurrently with the execution of this
Agreement, Purchaser shall deliver to Seller the following:
(a) Two Million ($2,000,000.00) Dollars by wire transfer or certified
or bank check payable to the order of Seller;
(b) an amount equal to the outstanding KBK Advances by wire transfer
directly to KBK;
(c) the executed Xxxx Guaranty;
(d) a certificate dated the date hereof of the Secretary of
Purchaser and Xxxx Products certifying the resolutions adopted by the Board
of Directors of Purchaser approving the execution and delivery of this
Agreement and the consummation of the transactions contemplated by this
Agreement and with respect to Xxxx Products further that the Guaranty has
been duly approved by Xxxx Products;
(e) any and all such other documents, agreements, certificates and
instruments required to be executed and/or delivered by Purchaser, and all
payments required to be made, pursuant to the terms and provisions of this
Agreement;
(f) certified good standing certificate of Xxxx Products and of
Purchaser;
(g) written opinion letter of counsel to Xxxx Products and
Purchaser, dated the Closing Date, in form and substance satisfactory to
Seller and OTC and their counsel; and
(h) Illinois tax form signed by Purchaser.
(i) a letter agreement from Purchaser regarding payment of certain
operating costs of Seller and ODM since February 28, 1998
4.3 Covenants and Further Assurances.
(a) Seller and OTC hereby covenant and agree to have Price
Waterhouse LLP, their independent auditors, prepare audited financial
statements (the
"Audited Financial Statements"), including the Closing Balance Sheet for
Seller and ODM on a consolidated basis for the two year period ending
February 28, 1998. Seller shall cause the Audited Financial Statements to be
completed in accordance with Generally Accepted Accounting Principles and
delivered to Purchaser on or before May 15, 1998. Purchaser agrees to share
the additional costs and expenses incurred by Seller to obtain the Audited
Financial Statements over and above the costs and expenses incurred to
prepare the audited financial statements of OTC, Seller, ODM and their
affiliates on a consolidated basis. Purchaser shall provide to Seller's
independent auditors reasonable cooperation and all necessary information and
assistance to permit Seller to prepare such Closing Balance Sheet.
(b) Within ninety (90) days after the Closing Date, Seller shall pay
to Purchaser an amount equal to the sum of (i) the amount, if any by which
the Net Asset Value is less than $1,400,000.00 and (ii) the amount, if any,
by which the Accounts Payable exceeds $1,800,000.00;
(c) Seller and OTC hereby covenant to remit to the appropriate
Mexican governmental authorities or pay or reimburse the Purchaser the amount
of all payroll and withholding taxes and deductions required to be withheld
for or on behalf of the employees of ODM for the period through and including
February 28, 1998 in excess of the amount, if any, reflected therefor on the
Closing Balance Sheet.
(d) Seller will pay all earned, accrued and unpaid vacation
obligations (the "Oryx Vacation Pay") to its employees as of February 28,
1998. Purchaser agrees to reimburse to Seller an amount equal to the Oryx
Vacation Pay not to exceed $102,506 and associated employer paid payroll
taxes and an amount equal to Seller's payroll for the period February 28,
1998 through March 4, 1998 not to exceed $19,168 and related employer paid
payroll taxes, and medical and life insurance benefit premiums not to exceed
$10,000, in the aggregate, at the end of the Earn Out Period, subject to
offset for any available adjustments to Earn Out Payments then and thereafter
due based on Oryx Sales.
(e) Seller and OTC agree to pay to Purchaser at the end of the Earn
Out Period any amount pursuant to Section 2.3(b)(vi) which has not then been
offset by any available Earn Out Payment.
(f) If any payment obligation provided for under this Section 4.3 is
not paid when due or within ten (10) days after demand therefor (where no
specific due date is indicated), the amount of such payment obligation shall
bear interest at a rate equal to the prime rate of interest in effect at The
Chase Manhattan Bank plus three (3%) percent.
(g) At any time and from time to time after the Closing, at any
Party's request and without further consideration, the other Party or
Parties, as the case may be, will execute and deliver such other instruments
of sale, transfer, conveyance, assignment and delivery and take such action
as the requesting Party may reasonably deem necessary or desirable in order
to more effectively transfer, convey, assign and deliver to such requesting
Party what it seeks in order to effectuate the transactions contemplated
hereunder.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SELLER AND OTC
Seller and OTC, jointly and severally, represent and warrant to Purchaser
as follows:
5.1 Organization and Good Standing of Seller and ODM.
(a) Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Seller has all
requisite corporate power and authority, licenses, permits and franchises to
own, lease and operate its properties and assets in Delaware, Texas and
Illinois and to carry on the Business as currently conducted in Texas,
Illinois and California.
Seller is qualified to do business as a foreign corporation in Texas,
Illinois and California in such other jurisdictions in which the nature of
its business or assets makes such qualification necessary. Seller has not
been notified by any such state or country that it is required to qualify to
do business in such state or country. Seller maintains office facilities in
McAllen, Texas and Mt. Prospect Illinois. Seller has no other offices, does
not lease or own real property other than in McAllen, Texas and Mt. Prospect,
Illinois. Seller has heretofore delivered to Purchaser Schedule 5.1 which is
a true and complete list of all states in which Seller is qualified to do
business.
(b) ODM is a corporation duly organized, validly existing and in
good standing under the laws of Mexico. ODM has all requisite corporate power
and authority, licenses, permits and franchises to own, lease and operate its
properties and assets in Reynosa, Mexico and to carry on the Business as
currently conducted in Reynosa, Mexico.
5.2 Authorization of Agreement and Enforceability. Seller has full
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. This Agreement has been duly and validly
authorized, executed and delivered by Seller, OTC and (assuming the valid
execution and delivery of the Agreement by Purchaser) constitutes a legal,
valid and binding obligation of Seller and OTC, enforceable against Seller
and OTC in accordance with its terms.
5.3 Effect of Agreement. Neither the execution, delivery and performance
of this Agreement by Seller and OTC, nor the consummation by Seller and OTC
of the transactions contemplated hereby will: (a) conflict with or result in
a breach of any provision of the Certificate of Incorporation or By-laws of
Seller, OTC or ODM; (b) constitute or result in the breach of, conflict with
or give rise to a right of forfeiture, termination, cancellation or
acceleration with respect to, any term, condition or provision of, any note,
bond, mortgage, indenture, license or other contract or obligation to which
Seller, OTC or ODM is a party or by which any of them or any of their
respective Assets may be bound, except for such conflicts, breaches or
defaults as to which written waivers or consents have been obtained, or (c)
violate in any material respect any law, statute, regulation, judgment,
order, writ, injunction, or decree applicable to Seller, OTC, ODM, the
Business, the Acquired Assets or any of the Assets of ODM.
5.4 Capitalization and Ownership of Capital Stock. The issued shares of
capital stock of ODM are duly authorized, validly issued, fully paid and
non-assessable. The presently authorized, issued and outstanding shares of
capital stock of ODM and the names and addresses of the record and beneficial
owners thereof are as set forth on Schedule 5.4 hereto. Each of such persons
is the lawful record and beneficial owner of the number of shares set forth
opposite his name, free and clear of any liens, claims, encumbrances or
restrictions of any kind. There are no outstanding subscriptions, options,
warrants, calls, contracts, demands, commitments, convertible securities or
other agreements or arrangements of any character or nature whatsoever under
which ODM or any other person is or may become obligated to issue, assign or
transfer any shares of its capital stock.
5.5 Government and Other Consents. No consent, order, authorization,
qualification, or approval of, or exemption by, or filing with, or notice to
any governmental, public, or regulatory body or authority is required in
connection with the execution, delivery and performance by Seller or OTC of
this Agreement.
5.6 Books and Records. All financial, business and accounting books,
ledgers, accounts and official and other records relating to the Business
have been made available to Purchaser and its representatives. Such books and
records have been properly and accurately kept and are complete in all
material respects, and there are no material inaccuracies or discrepancies of
any kind contained or reflected therein.
5.7 No Subsidiaries or Investments. Seller does not own capital shares or
other equity or ownership or proprietary interest in any corporation,
partnership, association, trust, joint venture or other entity, other than
the capital stock of ODM.
5.8 Financial Statements.
(a) Seller has previously delivered to Purchaser copies of: (i) the
Balance Sheet dated November 30, 1997 (the "November Balance Sheet") and the
related Profit and Loss Statement and Cash Flow Statement for the period
ended November 30, 1997 (collectively, the "November Financial Statements").
Within fifteen (15) days of Closing, Seller shall deliver to Purchaser the
unaudited balance sheet and profit and loss statement and statement of cash
flows for the fiscal year ended February 28, 1998 (collectively with the
November Financial Statements, the Closing Balance Sheet and the Audited
Financial Statements are referred to herein as, the "Financial Statements").
The November Financial Statements correctly and completely reflect Seller's
books and records as of the Balance Sheet Date, and upon delivery, the
Financial Statements will correctly and completely reflect the Seller's books
and records as of the dates thereof. The November Financial Statements fairly
present (and upon delivery, the Financial Statements) will fairly present the
financial position and results of operations of Seller and ODM as of the
dates and for the periods indicated and have been (and the Financial
Statements will be) prepared in accordance with generally accepted accounting
principles consistent with prior periods.
(b) Other than the KBK Advances and the obligation to repay Texas
State Bank $362,666.53 principal plus accrued interest represented by a
promissory note (the "TSB Note") and, except for such claims, debts and
liabilities as are reflected or reserved against on the Closing Balance
Sheet, Seller and ODM do not have any outstanding indebtedness for money
borrowed and are not subject to any claims or liabilities, contingent or
otherwise, other than obligations incurred in the ordinary course of business
since the Balance Sheet Date, in amounts usual and customary, individually
and in the aggregate.
(c) All of the Transferred Receivables resulted from the sale of
inventory, parts and services in the ordinary course of business and the
Transferred Receivables are collectible in full in the ordinary course of
business net of reserves in accordance with Seller's past practices in
accordance with GAAP, all of the Transferred Receivables are owned by Seller
free and clear of all liens, claims, charges, encumbrances and other interests
of third parties other than the lien thereon in favor of KBK, except that the
account receivable from Micro Energy India was not obtained in the ordinary
course of business.
(d) Since the Balance Sheet Date, there has not been any material
adverse change in the condition, financial or otherwise, of the business,
assets, properties, liabilities, prospects or results of operations of the
Seller or ODM, and to the best of their knowledge no fact or condition exists or
is contemplated or threatened which might cause any such change at any time in
the future. Since the Balance Sheet Date, Seller and ODM have conducted the
Business only in the ordinary course of business.
5.9 Title to Properties; Encumbrances. Except as set forth in Schedule
5.9 hereto, neither Seller nor ODM owns any real property or has any lease or
other interest in real property. Neither Seller nor ODM uses any real estate
or has any interest in real estate, including, without limitation, any
building, office, plant, factory, warehouse, improvement or structure in
connection with its business other than pursuant to the leases identified on
Schedule 5.9. Except as disclosed on Schedule 5.9, Seller and/or ODM have
good title to all of their properties and assets, including, without
limitation, all of the properties and assets reflected in the Balance Sheet
(except for properties and assets sold since the Balance Sheet Date in the
ordinary course of business and consistent with the past practice), and all
of the properties or assets purchased by it since the Balance Sheet Date.
Except as set forth on Schedule 5.9, none of such properties or assets is
subject to any mortgage, pledge, lien, security interest, encumbrance or
charge of any kind except (a) liens shown on the Balance Sheet as securing
specified liabilities or obligations with respect
to which no default exists; (b) liens arising in the ordinary course of
business and consistent with past practice since the Balance Sheet Date and
liens arising by operation of law or minor imperfections of title, if any,
none of which is substantial in amount, materially detracts from the value or
materially impairs the use of the property subject thereof, or materially
impairs Seller's operations, and (c) liens for current taxes not yet due, or,
if due, that are being contested in good faith in the ordinary course of
business. Except as disclosed on Schedule 5.9, neither Seller nor ODM uses in
their respective Businesses any assets owned by any shareholder or affiliate
of Seller or ODM (not including assets owned by either Seller or ODM), as the
case may be. For purposes of this Agreement, "affiliate" shall have the
meaning ascribed to that term in Rule 12b-2 promulgated under the Securities
Exchange Act of 1934, as amended.
5.10 Leases. Schedule 5.10 hereto contains an accurate and complete list
and description of the terms of all leases to which either Seller or ODM is a
party (as lessee or lessor) and to which OTC is a party, for or on behalf of
either Seller or ODM, copies of which have been previously delivered to
Purchaser. Except as disclosed on Schedule 5.10, each lease set forth in
Schedule 5.10 (or required to be set forth in Schedule 5.10) is in full force
and effect; all rents and additional rents due through the date hereof on
each such lease have been paid; no waiver, indulgence or postponement of the
lessee's obligations thereunder has been granted by the lessor; and there
exists no event of default or event, occurrence, condition or act (including
the purchase of the Acquired Assets hereunder) which, with the giving of
notice, the lapse of time or the happening of any further event or condition,
would become a material breach under such lease. Except as disclosed on
Schedule 5.10, Seller, ODM and OTC have not violated any of the terms or
conditions under any such lease in any material respect, and all of the
covenants to be performed by any other party under any such lease have been
fully performed. The properties owned and leased by Seller, ODM and OTC are
in a state of good repair and are adequate and suitable for the purposes for
which they are presently being used.
5.11 Business Practices. None of Seller or ODM or OTC have made, offered
or agreed to offer anything of value to any government official, political
party or candidate for government office or taken any action which would be
in violation of the Foreign Corrupt Practices Act of 1977 or any anti-boycott
or export laws.
5.12 Officers, Directors and Key Employees. Schedule 5.12 hereto is a
complete and correct list of (i) the officers and directors of each of Seller
and ODM immediately prior to the transaction contemplated by this Agreement;
the name, position and total compensation, including bonuses, of each officer
and director of ODM, (ii) the name of each employee, consultant, independent
contractor, agent or other representative of Seller and/or ODM who received
$20,000 or more in any form of compensation from Seller since January 1,
1997, and (iii) all wage or salary increases or bonuses received by any such
person since the Balance Sheet Date, and any accruals for or commitment or
agreement by either Seller or ODM, as the case may be, to pay such increases
or bonuses. Except as set forth in Schedule 5.12, none of such persons has,
in writing or (to the knowledge of the Seller or OTC) orally, threatened,
informed or otherwise indicated to Seller or ODM or any officer or director
of Seller or ODM that he or she plans to cancel or otherwise terminate his or
her relationship with Seller or ODM, as the case may be, for any reason,
including, without limitation, the consummation of the transactions
contemplated hereby.
5.13 Employment Arrangements. Neither Seller nor ODM has any material
obligation, contingent or otherwise, under any employment agreement,
collective bargaining or other labor agreement, any agreement containing
severance or termination pay arrangements, deferred compensation agreement,
retainer or consulting arrangement, pension or retirement plan, bonus or
profit-sharing plan, stock option or purchase plan or other employee contract
or non-terminable (whether with or without penalty) arrangement, group, life,
health, medical or hospitalization insurance plan or program or other
employee or fringe benefit plan, including vacation plans or programs and
sick leave plans or programs, other than those listed or described on
Schedule 5.13 hereto true and complete
copies of which have heretofore been delivered to Purchaser. Seller and ODM
have each performed all of their respective obligations required to be
performed by it under all such agreements, plans and arrangements, and no
party thereto is in breach of or in default or arrears in any material
respect under any of the provisions thereof.
5.14 Employee Relations. Each of Seller and ODM is in compliance with all
Federal, state or other applicable laws, domestic or foreign (including the
laws of Mexico and/or any political subdivision thereof), as the case may be,
respecting employment and employment practices, terms and conditions of
employment and wages and hours, and has not and is not engaged in any unfair
labor practice (or similar offense under Mexican law). No unfair labor
practice (or similar offense under Mexican law) complaint against Seller or
ODM is pending before the National Labor Relations Board or any equivalent
governmental agency in Mexico. No labor strike, picket, dispute, slowdown,
stoppage or other labor trouble has ever occurred or is pending or, to the
knowledge of Seller or OTC, is threatened against or involves Seller or ODM.
No union representation question exists respecting the employees of Seller or
ODM, except as disclosed on Schedule 5.14. No grievance or any arbitration
proceeding is pending and, to the knowledge of Seller or OTC, no such claim
has been asserted or is threatened. No collective bargaining agreement is
currently being negotiated by Seller or ODM, except as disclosed on Schedule
5.14. Except as disclosed on Schedule 5.14, no claim of discrimination or
harassment is pending or, to the knowledge of Seller or OTC, threatened
before the Equal Employment Opportunity Commission (or equivalent Mexican
agency), or any judicial or administrative body or agency in the United
States, Mexico or any other jurisdiction. There has not been and, to the
knowledge of Seller or OTC, there will not be any material adverse change in
relations with employees of Seller or ODM as a result of any announcement of
the transactions contemplated by this Agreement. Seller has paid all accrued
vacation pay for its employees. ODM has paid or reserved for all vacations
pay for its employees.
5.15 Contracts and Liabilities.
(a) Schedule 5.15 sets forth all of the contracts and commitments
and obligations described below (collectively, the "Agreements") of, or which
relate to the Business, written or otherwise, to which Seller or ODM is a
party pursuant to which either of them or their respective assets or
properties are bound or subject and which are material to the Business, the
Acquired Assets or ODM's assets:
(1) contracts, commitments and other agreements with any
current or former officer, director, employee, independent contractor,
consultant, agent or other representative of Seller or ODM;
(2) contracts and other agreements with any labor union or
association representing any employee;
(3) contracts, commitments and other agreements for the sale of
any of its assets or properties other than in the ordinary course of business
or for the grant to any person of any preferential rights to purchase any of
its assets or properties;
(4) joint venture or other agreements involving sharing of
profits or joint ownership of assets or sharing of obligations or liabilities;
(5) contracts or other agreements under which either agrees to
indemnify any party or to share tax liability of or with any party;
(6) loan, factoring, credit line, security, collateral
assignment or pledge agreement, guaranty, subordination or similar type
agreement;
(7) contracts, commitments and other agreements with customers
or suppliers for the sharing of fees, the rebating of charges or other
similar arrangements;
(8) contracts, commitments and other agreements containing
obligations or liabilities of any kind to or with any of Seller, ODM or OTC
or any affiliate of any of them, as the case may be;
(9) contracts and other agreements containing covenants of
either Seller or ODM not to compete in any line of business or with any
person in any geographical area (or not to solicit or accept any business) or
covenants of any other person not to compete with Seller in any line of
business or in any geographical area (or not to solicit or accept any
business);
(10) contracts and other agreements relating to the acquisition
by either Seller or ODM of any operating business or the capital shares of
any other person;
(11) options for the purchase of any asset, tangible or
intangible;
(12) contracts and other agreements requiring the payment to
any person of an incentive payment override or similar commission or fee;
(13) contracts and other agreements for the payment of fees or
other consideration to any officer or director of either Seller, ODM or OTC,
or to any other entity in which any of the foregoing has a direct or indirect
interest;
(14) contracts and other agreements relating to the borrowing
of money;
(15) purchase orders, contracts and commitments for the
purchase or sale of any goods or services to or by either Seller or ODM,
except for those orders, contracts and commitments which are less than
$10,000 in amount or which cannot be cancelled at will by Seller or ODM, as
the case may be, without penalty or premium;
(16) other contracts or business arrangements which are not
made in the ordinary course of business;
(17) any agreement or arrangements related to the business,
assets or operations of ODM or the Maquiladora Arrangement; and
(18) any quotations for the production or design of any product
or the rendering of any services.
(b) Except as set forth in Schedule 5.15, all such contracts are
valid, binding and enforceable and in full force and effect. Except as set
forth in Schedule 5.15, neither Seller nor ODM is in default under any such
contract and there have been no claims of defaults and there exist no factors
or conditions which with the passage of time or giving of notice or both
would constitute such a default or in any case in which such default would
give rise to a right of termination by the other party thereto or which would
result in any material cost, expense or penalty to Seller or ODM.
(c) There have been delivered to Purchaser complete and correct
copies of all of the Agreements and summaries of any Agreements that are not
reduced to writing.
5.16 Operation of Seller and ODM. Except as provided on Schedule 5.16
hereto, since November 30, 1997, each of Seller and ODM have conducted its
business and operations only in the ordinary and usual course of business,
consistent with past practice, has preserved intact its business, has
maintained its relationships with all customers and suppliers and has used
its reasonable best efforts to keep available the services of its officers
and employees. Except as set forth on Schedule 5.16, since November 30, 1997,
neither Seller or ODM has:
(a) amended its Certificate of Incorporation (other than as provided
in Section 4.1(h) hereof) or By-Laws or merged with or into or consolidated
with any other person, subdivided or in any way reclassified any of its
shares of capital stock or changed or agreed to change in any manner the
rights of any shares of its capital stock or the character of its Business;
(b) issued or sold or purchased, or issued options or rights to
subscribe to, or entered into any contracts or commitments to issue or sell
or purchase, any shares of its capital stock or any other securities;
(c) entered into or amended any employment agreement, entered into
or amended any agreement with any labor union or association representing any
employee, adopted, entered into, or amended any employee benefit plan, or
made any change in the actuarial methods or assumptions used in funding any
defined benefit pension plan, or made any change in the assumptions or
factors used in determining benefit equivalencies thereunder;
(d) incurred any indebtedness for borrowed money or increased the
outstanding indebtedness under any existing facility;
(e) declared or paid any dividends or declared or made any other
distributions of any kind to its shareholders (other than normal
compensation) or made any direct or indirect redemption, retirement, or any
purchase or other acquisition of any shares of its capital stock or any other
securities convertible into shares of its capital stock;
(f) reduced its cash or short-term investments or their equivalents,
other than to meet cash needs arising in the ordinary course of business,
consistent with past practices;
(g) made any change in its accounting methods or practices or made
any change in depreciation or amortization policies or rates adopted by it;
(h) changed any of its business policies in any material respect,
including, without limitation, advertising, marketing, pricing, purchasing,
credit, personnel, sales, returns, budget or product acquisition policies;
(i) except in the ordinary course of business, consistent with past
practices, made any wage or salary increase or bonus, or increased any other
direct or indirect compensation, for or to any of its officers, directors,
employees, consultants, agents or other representatives, or made any accrual
for or commitment or agreement to make or pay the same;
(j) made any loan or advance to any of its shareholders, officers,
directors, employees, consultants, agents or other representatives (other
than travel advances made in the ordinary course of business), or made any
other loan or advance otherwise than in the ordinary course of business;
(k) made any payment or commitment to pay any severance or
termination pay to any of its officers, directors, employees, consultants,
agents or other representatives, other than payments or commitments to pay
persons other than officers, directors or shareholders in the ordinary course
of business;
(l) except in the ordinary course of business, entered into any
lease (as lessor or lessee); sold, abandoned or made any other disposition of
any of its assets or properties; granted or suffered any material lien or
other encumbrance on any of its assets or properties; entered into or amended
any material contract or other agreement to which it is a party, or by or to
which it or its assets or properties are bound or subject, or pursuant to
which it agrees to indemnify any party or to refrain from competing with any
party (other than pursuant to Section 4.1(e) hereof);
(m) except in the ordinary course of business, incurred or assumed
any material liability;
(n) except in the ordinary course of business, made any acquisition
of all or any part of the assets, properties, capital shares or business of
any other person;
(o) paid, directly or indirectly, any liabilities or obligations
before the same became due in accordance with its terms or otherwise than in
the ordinary course of business or consistent with prior practice or deferred
the payment of any liability or obligation;
(p) suffered or incurred any damage, destruction or loss (whether or
not covered by insurance) which materially adversely affected Seller's or
ODM's Assets;
(q) collected or billed any accounts receivable in advance of the
dates on which payments were due other than in the ordinary course of
business consistent with prior practice;
(r) gave or agreed to give any of its customers any discounts or
special payment terms or arrangements which were not consistent with prior
practice or which were outside the ordinary course of business;
(s) made any material change in the type, nature or composition of
its services, or made any material change relating to its fees, commissions
or other charges or terms for its services; or
(t) terminated or failed to renew, or received any information,
written or otherwise, threatening to terminate or fail to renew, any contract
or other agreement that materially affects the assets, properties, business,
operations or condition (financial or otherwise) of Seller or ODM, as the
case may be.
5.17 Insurance Policies. Schedule 5.17 hereto contains a complete and
correct list and description of all insurance polices with respect to each of
Seller's and ODM's business, properties, assets and employees. Such policies
are in full force and effect and insure adequately against risks to which
each of Seller and ODM and their respective assets, properties and employees
are normally exposed in the operation of their respective businesses. No
notice of cancellation, expiration or non-renewal of any such policy has been
received by Seller, or ODM or OTC and no cause for such termination exists.
5.18 Related-Party Transactions. Except as otherwise disclosed and
clearly identified as a related party transaction on Schedule 5.18 hereto,
neither Seller, nor ODM, nor any person controlling, controlled by or under
common control with any of the foregoing or any relative or spouse of any of
the foregoing has any interest, financial or otherwise, in any business,
corporate or otherwise (the value of which equals or exceeds $2,000), which
is a party to, or has an interest in any property which is the subject of,
business relationships or arrangements or any kind with Seller or ODM,
including, without limitation, any customer, supplier, competitor, or
potential competitor or lessor, but excluding OTC's holdings of stock in
Seller and Seller's holdings of stock in ODM.
5.19 Compliance with ERISA and Equivalent Mexican Statutes.
(a) Schedule 5.19 hereto sets forth a complete and correct list of
all "employee pension benefit plans" and "employee benefit plans" as defined
respectively in Sections 3(2) and 3(3) of ERISA, including "multiemployer
plans" as defined in Section 3(37) of ERISA, and any other pension, profit
sharing, retirement, deferred compensation, vacation, severance, disability,
hospitalization, medical insurance or other employee benefit plan or program,
if any, which Seller, ODM, OTC or any other entity which constitutes part of
a "controlled group" (within the meaning of Section 4001(b) of ERISA and/or
Sections 414(b)-(o) of the Code and the Treasury Regulations proposed
thereunder) which Seller, ODM or OTC maintains or to which Seller, ODM or OTC
has any present or future obligation to contribute (collectively, the "Seller
Plans"). Seller, ODM and OTC have delivered to Purchaser true and complete
copies of all Seller Plans (including other instruments relating thereto), if
any, as they may have been amended to the date hereof, embodying, relating to
or summarizing the Seller Plans. Seller and OTC have made available to
Purchaser the most recent annual report (Form 5500) filed and the most recent
summary plan description with respect to each Seller Plan.
(b) Other than those employee pension benefit plans set forth on
Schedule 5.19, none of Seller, ODM or OTC maintain any "employee pension
benefit plan" as defined in ERISA Section 3(2) for the benefit of Seller's
and/or ODM's employees and has maintained no such plan during any part of the
past five (5) years.
(c) Neither Seller or ODM have any obligation to contribute to any
"multiemployer" plan with respect to the employees of Seller or ODM, as
defined in Section 3(37) of ERISA.
(d) Seller, ODM and OTC are each in compliance with the requirements
prescribed by any and all statutes, orders, governmental rules or regulations
applicable to the Seller Plans, and all reports and disclosures relating to
the Seller Plans required to be filed with or furnished to governmental
agencies, participants or beneficiaries prior to the date of this Agreement
have been filed in accordance with applicable law.
(e) None of Seller, ODM or OTC, as of the date of this Agreement,
has completely or partially withdrawn from any "multiemployer plan" within
the meaning of the Multiemployer Pension Plan Amendments Act of 1990. Neither
Seller, ODM nor OTC have suffered a seventy (70%) percent decline in
"contribution base units" (within the meaning of ERISA Section 4205(b)(1)(A))
in any plan year beginning after 1979.
(f) There are no actions, audits, suits or claims pending (other
than routine claims for benefits) or threatened, against any of the Seller
Plans or any fiduciary of any of the Seller Plans or against the assets of
any of the Seller Plans.
(g) The consummation of the transactions contemplated hereby will
not accelerate any liability under any of the benefit plans because of an
acceleration of any rights or benefits to which employees may be entitled
thereunder.
(h) With respect to any Seller Plan that is an "employee welfare
benefit plan" within the meaning of Section 3(1) of ERISA ("Seller Welfare
Plan") (i) each such Seller Welfare Plan, the contributions to which are
claimed as a deduction under any provision of the Code, is in compliance with
all applicable requirements pertaining to such deduction, (ii) with respect
to any "welfare benefit fund" within the meaning of Section 419 of the Code
that comprises part of a Seller Welfare Plan, there is no disqualified
benefit within the meaning of Section 4976(a) of the Code, (iii) any such
Seller Welfare Plan that is a "group health plan" within the meaning of
Section 162(i)(3) of the Code meets all of the requirements of Section 162(k)
of the Code.
(i) Except as disclosed on Schedule 5.19 hereto, neither Seller or
ODM have any obligation to any retired or former employee of Seller or ODM
under any disability (long or short term), hospitalization, medical, dental
or life insurance plans (whether insured or self-insured) or other employee
welfare plan as defined in ERISA Section 3(1) maintained by the Seller, ODM
and/or OTC.
(j) ODM is in full compliance with all Mexican laws, rules and
regulations with respect to retirement, pension and other employee benefit
matters (collectively "Mexican Retirement Matters"), applicable to persons
employed or otherwise engaged by ODM or at the facility in Reynosa,
Tamaulipas, Mexico. Seller and ODM have made all payments required to be made
in connection with such Mexican Retirement Matters, including, but not
limited to, all
payments to social security and the Mexican Retirement Fund, and there is no
unfunded liability under or in connection with any such Mexican Retirement
Matters.
5.20 Tax Matters. Seller, ODM and OTC have heretofore delivered to
Purchaser true, complete and correct copies of the Federal, state and local
tax returns filed by Seller for the year ended February 28, 1997, and in the
case of ODM, all returns or statements required by the Mexican Federal, state
and local governmental authorities, for the two (2) taxable years of ODM
ended December 31, 1995 and 1996, any statement of audit adjustments
applicable thereto and all Federal, state and local returns (and the Mexican
equivalent thereof) of estimated taxes filed during 1996 and 1997. Seller and
ODM have duly and timely filed all federal, state, local and other tax and
information returns (and the Mexican equivalent thereof) required to be filed
with regard to any income, sales, use, gross receipts, property, employment
and other taxes, charges, levies or other assessments related to the
Business, the Acquired Assets and/or ODM's assets, and have duly paid in full
or made adequate provision for all taxes and other charges shown as due on
such returns or which otherwise have been accrued or have become due prior to
the date hereof whether or not shown on any such return. Neither Seller nor
ODM have received any written notice of any claim or claims for additional
taxes which are claimed to be due from it by any Federal, state or local
taxing authority in the United States or Mexico, or foreign taxing
authorities in connection with such reports or returns or with respect to the
organization or operation of Seller's or ODM's business. Seller has not filed
any "S" Corporation or other consents or elections under the Code, other than
such consents and elections, if any, reflected in the tax reports and returns
furnished to Purchaser. There are no liens for Federal, state or local taxes
in the United States or Mexico, or foreign taxes, assessments or government
charges or levies upon any of either Seller's or ODM's properties or assets.
There are no outstanding agreements or waivers extending the statutory period
of limitation applicable to any income tax or other return of Seller or ODM
for any period and there are not, nor have there been, any audits of Seller
or ODM by any Federal, state or local governmental tax authority in the
United States or Mexico and no notice of any audit has been received by
either Seller or ODM.
5.21 Intellectual Property. Schedule 5.21 hereto contains a list of all
Patents, Patent Applications, Trademark Registrations and Trademark
Applications comprising a part of the Intellectual Property of the Seller and
ODM. Seller and ODM, as the case may be, have full ownership right, title and
interest in and to the Intellectual Property. The Intellectual Property
constitutes valid and enforceable rights of Seller or ODM as the case may be.
Neither Seller, ODM nor OTC have received any notice or have any reason to
believe that the validity of any Intellectual Property or Seller's or ODM's
interest therein, can be or is being challenged by any third party. Neither
Seller nor ODM have heretofore granted any licenses or conveyed any other
rights or interests to any of the Intellectual Property. The operation of the
Business and the business of ODM as currently conducted does not infringe
upon any patents or other intellectual property rights of any third party.
The trade names and trademarks used by Seller and ODM to identify their
respective products and services are protected by registration in the name of
Seller or ODM, as the case may be, on the principal register in the United
States Patent and Trademark Office (or the corresponding authority in Mexico)
or are subject to pending applications before such agency (or the
corresponding authority in Mexico), state registrations and/or by rights in
the United States or Mexico, as the case may be, accorded to Seller or ODM by
virtue of the common law. Seller and ODM have taken or caused to be taken all
steps reasonably necessary or desirable and proper to protect the
Intellectual Property in Mexico.
5.22 Environmental Matters.
(a) Neither Seller nor ODM has received any notice from any
governmental agency or private or public entity (in the United States, Mexico
or otherwise) advising that such party is or may be responsible for response
costs or other costs with respect to a release or threatened release of any
Hazardous
Substance (as defined herein) and neither Seller, ODM nor OTC, or
any of their respective predecessors in interest with respect to the Business
or the business of ODM have conducted activities which could reasonably be
expected to result in such a notice. No administrative, civil or criminal
actions, including without limitation third-party actions for personal injury
or property damage, are pending or threatened with respect to Environmental
Laws or related to the Business or the Business of ODM. No judgments, consent
orders, consent decrees, stipulations, or other restrictions have been
entered or applied with respect to Environmental Laws or related to the
Business. None of Seller, ODM or OTC have received notice or knowledge of any
governmental orders, notifications, notices of violation, or requests for
information relating to environmental or health and safety conditions at or
related to the Business, or is aware of any past or current violations of any
Environmental Law related to the Business or of environmental conditions
related to the Business. Neither the operation of the Business or the
business of ODM, either as currently conducted or as conducted in the past at
any office space or other facility or real property owned, leased, used or
occupied by Seller or ODM, whether currently or at any time in the past,
violates nor has violated any Environmental Laws.
(b) For purposes of this Agreement, (i) "Environmental Laws" shall
mean any statute, law, ordinance, rule or regulation of any federal, state,
county, local governmental authority of the United States or Mexico, or any
other foreign governmental authority relating to the environment, including
air, water or noise pollution, emissions or discharges, the environment,
public health, employee health, safety or welfare, land use or the
production, processing, distribution, use, storage, labeling, handling,
transportation, treatment or disposition of any Hazardous Substance; and (ii)
"Hazardous Substance" shall mean asbestos, paints, solvents,
ureaformaldehyde, polychlorinated biphenyls, nuclear fuel or material,
chemical waste, hazardous waste, radioactive material, explosives, known
carcinogens, petroleum products and by-products and other dangerous, toxic,
infectious or hazardous pollutants, contaminants, chemicals, materials,
wastes or substances listed or identified in, or regulated by, any
Environmental Laws.
5.23 Product Warranty. Each product manufactured, sold, or delivered by
Seller or ODM conforms with all material contractual specifications and all
express and implied warranties, and neither Seller nor ODM has any liability
(and to the knowledge of the Seller and OTC there is no basis for any present
or future action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand against Seller or ODM giving rise to any liability
of either Seller or ODM) for replacement or repair thereof or other damages
in connection therewith. No product manufactured, sold or delivered by either
Seller or ODM is subject to any guaranty, warranty, or other indemnity except
as described on Schedule 5.23 hereto. Schedule 5.23 contains a complete list
of the entire backlog for returned power supplies. Neither Seller or ODM
leases any products to others.
5.24 Permits, Licenses, Compliance with Laws. Each of Seller and ODM has
all permits, licenses, orders, consents and approvals of federal, state and
local governmental or regulatory bodies (both in the United States and
Mexico, as the case may be) and any other domestic or foreign governmental or
regulatory bodies that are required in order to permit Seller and ODM to
carry on their respective Businesses as currently conducted, without having
an adverse material effect on the Business. Schedule 5.24 hereto sets forth a
correct and complete list of all such permits, licenses, orders and
approvals, all of which are in full force and effect, and no suspension or
cancellation of any of them is threatened, and to the best of OTC's and
Seller's knowledge, no cause exists for such suspension or cancellation. The
Business and the business of ODM is and has historically been conducted in
compliance with all applicable federal, state and local (both in the United
States and Mexico, as the case may be) and other applicable domestic and
foreign laws, codes, ordinances, rules and regulations, except for minor
violations which do not have a material adverse effect on the Business, the
business or assets of ODM or the Acquired Assets.
5.25 Litigation. There is no claim, action, suit, proceeding,
arbitration,
investigation or inquiry pending or threatened against Seller or ODM before
any federal, state, local, or other court or governmental, administrative, or
self-regulatory body or agency, or any private arbitration tribunal in the
United States or Mexico, relating to the Business, the business of ODM or any
of the assets of ODM or the Acquired Assets or the transactions contemplated
by this Agreement; nor to the best of their knowledge is there any basis for
any such claim, action, suit, proceeding, arbitration, investigation or
inquiry. Neither Seller nor ODM is in default under any order, license,
regulation or demand of any federal, state or local, or other court or
governmental, administrative or self-regulatory body or agency, in the United
States, Mexico or any other jurisdiction.
5.26 Inventories. The inventories of each of Seller and ODM as shown on
the Balance Sheet and the inventories acquired subsequent to the Balance
Sheet Date consist of items of a quality and quantity usable and saleable in
the ordinary course of its business.
5.27 Product Liability. Neither Seller nor ODM has any liability (and
there is no basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim or demand against Seller or
ODM giving rise to any liability) arising out of any injury to individuals or
property as a result of the ownership, possession, or use of any product
manufactured, sold, leased, or delivered by Seller or ODM (a "Product
Liability Claim"). Neither Seller nor ODM has received notice or knowledge of
any pending or threatened Product Liability Claim.
5.28 Fixed Assets. Schedule 5.28 hereto sets forth a complete and correct
list of each of Seller's and ODM's fixed assets and their locations
including, but not limited to, all of their real property, equipment,
fixtures and furniture.
5.29 Broker. Other than Price Waterhouse LLP which acted as investment
banker for Seller, no broker, finder, agent or other intermediary has acted
on behalf of either Seller or ODM or otherwise assisted in bringing about the
transactions contemplated by this Agreement. No broker, finder, agent or
other intermediary is entitled to any commission or finder's fee in respect
thereof based in any way on agreements, understandings or arrangements with
Seller or ODM except that Seller or OTC shall be solely responsible to pay
Price Waterhouse the amount of any broker's or finder's fee or any other type
of fee or expense incurred in connection with the transaction.
5.30 Material Information; Full Disclosure. This Agreement and any other
certificate, document, agreement or information furnished (including, without
limitation, any schedule hereto) or to be furnished pursuant to this
Agreement by Seller or OTC to Purchaser do not and will not contain any
untrue statement of a material fact and do not and will not omit to state a
material fact required to be stated herein or therein necessary to make the
statements herein and therein not misleading. There is no fact, development
or threatened development (excluding general economic factors affecting
businesses in general) which has not been disclosed to Purchaser in writing
which adversely affects or, so far as Seller or OTC can now reasonably
foresee, may adversely affect, the business, operations, assets, properties,
prospects or condition (financial or otherwise) of Seller or ODM.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
6.1 Organization and Good Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State
of New York and is duly qualified to do business in each jurisdiction where
the failure to so qualify would not have a material adverse effect on its
business. Purchaser has all requisite corporate power and authority to own,
lease and operate its properties and assets and to carry on its business as
currently
conducted.
6.2 Authorization of Agreement and Enforceability. Purchaser has full
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. This Agreement has been duly and validly
authorized, executed and delivered by Purchaser and (assuming the valid
execution and delivery of the Agreement by Seller and OTC) constitutes a
legal, valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms.
6.3 Effect of Agreement. Neither the execution, delivery and performance
of this Agreement by Purchaser, nor the consummation by Purchaser of the
transactions contemplated hereby will (a) conflict with or result in a breach
of any provision of Purchaser's Certificate of Incorporation or By-Laws, (b)
constitute or result in the breach of, conflict with or give rise to a right
of termination, cancellation or acceleration with respect to, any term,
condition or provision of, any note, bond, mortgage, indenture, license or
other contract or obligation to which Purchaser is a party or by which it or
any of its properties or assets may be bound, except for such conflicts,
breaches or defaults as to which written waivers or consents have been
obtained, or (c) violate any law, statute, regulation, judgment, order, writ,
injunction, or decree applicable to Purchaser or any of its properties or
assets.
6.4 Government and Other Consents. No consent, order, authorization,
qualification, or approval of, or exemption by, or filing with any
governmental, public, or regulatory body or authority is required in
connection with the execution, delivery and performance by Purchaser of this
Agreement.
6.5 Broker. No broker, finder, agent or other intermediary has acted on
behalf of Purchaser or otherwise assisted in bringing about the transactions
contemplated by this Agreement and no broker, finder, agent or other
intermediary is entitled to any commission or finder's fee in respect hereof
based in any way on agreements, understandings or arrangements with or the
conduct of Purchaser.
ARTICLE 7
INDEMNIFICATION
7.1 Indemnification by Seller and OTC.
(a) Notwithstanding the Closing and regardless of any investigation
at any time made by or on behalf of Purchaser or receipt of any information
by Purchaser in respect thereof, Seller and OTC, jointly and severally, shall
indemnify, defend and hold Purchaser (and any successors in interest)
harmless from and against any damage, liability, loss or deficiency
(including, without limitation, reasonable attorneys' fees and other costs
and expenses incident to any suit, action or proceeding) arising out of or
resulting from, and shall pay Purchaser on demand the full amount of any sum
or sums which Purchaser pays or becomes obligated to pay on account of: (i)
any inaccuracy in any representation or the breach of any warranty made by
Seller or OTC herein or in any material agreement, instrument or document
delivered pursuant to this Agreement; (ii) any failure of Seller or OTC to
duly perform or observe any material term, provision, covenant, or agreement
herein or in any material agreement, instrument or document delivered
pursuant to or in connection with this Agreement on the part of Seller or OTC
to be performed or observed; (iii) any liability or obligation with respect
to the Acquired Assets or the conduct of the Business arising with respect to
any events or circumstances existing or occurring prior to the Closing (other
than the Assumed Liabilities); (iv) other than one-half (1/2) of the VAT, any
liability or obligation with respect to the business or assets of ODM
(including but not limited to all tax liabilities of ODM for the fiscal year
ending December 31, 1997 and thereafter whether the same relates to income
taxes, payroll taxes, social security taxes and value added taxes or any
other tax in the United States or Mexico relating to the organization or
operation of ODM prior to the Closing) arising with respect to any events or
circumstances existing or occurring prior to the Closing other
than those liabilities reflected on the ODM Balance Sheet; (v) any warranty
obligations attributable to sales of Seller's products prior to the Closing;
(vi) any warranty obligations attributable to design defects in products
comprising Oryx Sales; (vii) the amount on November 30, 1999 by which actual
aggregate Earn Out Payments paid to Seller exceeds the amount of aggregate
Earn Out Payments to which Seller is entitled after applying all adjustments
under Section 2.3(b); and (viii) until such time as Purchaser shall appoint a
new Board of Directors any and all actions taken by the members of the Board
of Directors or persons holding powers of attorney for ODM on or as of the
Closing Date, unless such action shall be authorized in writing by Purchaser
prior to the taking of such action. In no event will Seller or OTC be
required to pay damages or other indemnifiable costs or expenses pursuant to
this Section 7 in excess of $5,500,000.00.
(b) All statements of fact contained in any Schedule and the
November Balance Sheet delivered by or on behalf of Seller, ODM or OTC
pursuant hereto or in connection with the transactions contemplated hereby,
shall be deemed representations and warranties by Seller and OTC hereunder.
7.2 Indemnification by Purchaser.
(a) Notwithstanding the Closing and regardless of any investigation
at any time made by or on behalf of Seller or OTC or receipt of any
information by Seller or OTC in respect thereof, Purchaser shall indemnify,
defend and hold Seller and/or OTC, as the case may be, (and any successors in
interest) harmless from and against any damage, liability, loss or deficiency
(including, without limitation, reasonable attorneys' fees and other costs
and expenses incident to any suit, action or proceeding) arising out of or
resulting from, and shall pay Seller and/or OTC, as the case may be, on
demand the full amount of any sum or sums which Seller and/or OTC pays or
becomes obligated to pay on account of: (i) any inaccuracy in any
representation or the breach of any warranty made by Purchaser herein or in
any material agreement, instrument or document delivered pursuant to this
Agreement, (ii) any failure of Purchaser to duly perform or observe any
material term, provision, covenant, or agreement herein or in any material
agreement, instrument or document delivered pursuant to or in connection with
this Agreement on the part of Purchaser to be performed or observed, and
(iii) the failure of Purchaser to pay or discharge any of the Assumed
Liabilities as provided in Section 1.2 hereof.
7.3 No Waiver. No failure or delay on the part of a Party in exercising
any right, power or remedy under this Agreement, or available to a Party at
law or in equity shall operate as a waiver of such right, power or remedy,
nor shall any single or partial exercise of any such right, power or remedy
preclude any further exercise thereof or the exercise of any other right,
power or remedy available to such Party, unless the waiver so provides by its
terms. The remedies provided in this Agreement are cumulative and not
exclusive of any remedies available to any Party at law or equity.
7.4 Third Party Claims.
For any written claim initiated or asserted by any person, firm,
governmental authority or corporation other than a Party (a "Third Party
Claim") or the commencement of any litigation asserting a Third Party Claim
which may give rise to any indemnification obligation of a Party (an
"Indemnitor") to another Party under the provisions of this Section, the
Party receiving the Third Party Claim and seeking indemnity (the
"Indemnitee") shall give notice thereof as provided hereunder to the
Indemnitor as promptly as practicable after receipt of such written assertion
or the commencement of such litigation, unless the failure to give such
notice would not materially prejudice Indemnitor. Indemnitor may at its sole
cost and expense, upon written notice given to Indemnitee within fifteen (15)
days after its receipt of Indemnitee's notice under this Section 7.4, assume
the defense, with counsel reasonably satisfactory to Indemnitee, of any such
Third Party Claim or litigation, provided that Indemnitor admits in writing
to Indemnitee its obligation to indemnify Indemnitee against liability for
such claims. If Indemnitor assumes the defense
of any such claim or litigation, the obligations of Indemnitor hereunder as
to such claim or litigation shall be limited to taking all steps reasonably
necessary in the defense or settlement thereof and to holding Indemnitee
harmless from and against any and all losses, liabilities, expenses and
damages caused by or arising out of any settlement approved by Indemnitor or
any judgment in connection with such claim or litigation, and Indemnitee
shall cooperate with and make available to Indemnitor such books and records
in Indemnitee's possession as Indemnitor may reasonably require in connection
with such defense. Except with the express prior written consent of
Indemnitee, Indemnitor shall not consent to the settlement or entry of any
judgment arising from any such claim or litigation which in each case does
not include as an unconditional term thereof the giving by the claimant or
plaintiff, as the case may be, to Indemnitee of an unconditional release from
all liability in respect thereof unless Indemnitor shall have actually paid
the full amount of any such settlement or judgment. Indemnitee shall be
entitled to be consulted about (but not control) the defense of, and receive
copies of all pleadings and other material papers in connection with, any
such claim or litigation. If Indemnitor does not assume the defense of any
such claim or litigation, Indemnitee may defend the same in such reasonable
manner as it may deem appropriate, including but not limited to settling such
claim or litigation after giving reasonable notice of the same to Indemnitor
on such terms as Indemnitee may deem appropriate, and Indemnitor will
promptly reimburse Indemnitee in accordance with the provisions of this
Section 7.4, provided that Indemnitee shall provide Indemnitor with copies of
all pleadings and other material documents in connection with any such claim
or litigation and that Indemnitor is consulted about (albeit not in control
of) such litigation. Anything contained in this Section 7.4 to the contrary
notwithstanding, (i) Indemnitor shall not be entitled to assume the defense
of any such claim or litigation if the Third Party Claim seeks an order,
injunction or other equitable relief against Indemnitee which, if successful,
might materially interfere with, or adversely affect, the operation of the
Business or the Acquired Assets or the business of ODM; and (ii) Indemnitee
may defend any Third Party Claim to which Indemnitee may have a defense or
counterclaim which Indemnitor is not entitled to assert to the extent
necessary to assert and maintain such defense or counterclaim provided that
Purchaser shall provide Indemnitor with copies of all pleadings and other
material documents in connection with any such claim or litigation and that
Indemnitor is consulted about (albeit not in control of) such litigation.
ARTICLE 8
GENERAL
8.1 Expenses. Except as otherwise provided in Section 7 and 8.2 hereof,
Purchaser, Seller and OTC shall pay their own respective counsel, accountants
and other advisors' fees and expenses arising in connection with the
negotiation and preparation of this Agreement and the consummation of the
transactions contemplated hereby.
8.2 Sales, Transfer and Documentary Taxes, etc. Seller and OTC shall pay
one-half (1/2) and Purchaser shall pay one-half (1/2) of the VAT and all
sales, transfer and documentary taxes, if any, due as a result of the sale of
Acquired Assets to Purchaser and all other fees directly relating to the
transfer of Acquired Assets (including but not limited to the ODM stock) to
Purchaser. Nothing contained herein shall be deemed to affect the tax
liability of any person with respect to taxes attributable to any income or
gain realized as a result of the transaction contemplated by this Agreement,
whether such income or gain relates to the sale of the assets of Seller, the
sale of the stock of ODM, the assumption of the Assumed Liabilities or
otherwise. Purchaser shall take delivery of all Acquired Assets other than
the equipment located on the Closing Date at the facility located in Xxxxxxx,
Tamaulipas, Mexico at the facility located in McAllen, Texas or such other
place within the United States of America as the Purchaser may designate.
8.3 Survival of Representations and Warranties. Each of the Parties
covenants and agrees that all of the representations warranties, covenants, and
agreements set forth in this Agreement shall survive the Closing for a period
of three (3) years and shall not be merged into any instruments of transfer
or other documents delivered by any of the Parties at Closing or at any other
time. This period of limitations shall not apply to the representations and
warranties set forth in Section 5.4 or 5.20 hereof with respect to which
there shall be no contractual period of limitation.
8.4 No Third Party Beneficiaries. Nothing in this Agreement, expressed or
implied, is intended to confer on any person other than the Parties or their
respective heirs, successors and assigns any rights, remedies, obligations,
or other liabilities under or by reason of this Agreement.
8.5 Notices. All notices permitted or required under this Agreement shall
be in writing and shall be either (a) delivered by personal service, (b)
delivered by courier service, (c) telecopied and confirmed immediately in
writing by a copy mailed by registered or certified mail, postage prepaid,
return receipt requested, or (d) sent by certified or registered mail,
postage prepaid, return receipt requested, to the parties hereto at their
addresses set forth below or at such other addresses and addressees which may
be designated in writing by the parties:
If to Seller to: Oryx Power Products Corporation
0000 Xxxxxx
Xxxxxxx, XX 00000
with a copy to: X. X. Xxxxxxxxxxx, Esq.
Wise & Xxxxxxx, LLP
0000 Xxxxxx Xxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
If to OTC to: Oryx Technology Corp.
0000 Xxxxxx
Xxxxxxx, XX 00000
with a copy to: X. X. Xxxxxxxxxxx, Esq.
Wise & Xxxxxxx, LLP
0000 Xxxxxx Xxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
If to Purchaser to: Xxxx Power Corporation
00 Xxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
with a copy to: Ruskin, Moscou, Xxxxx & Faltischek, P.C.
000 Xxx Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telecopier No.: (000) 000-0000
If to TPC to: Xxxx Products Corporation
00 Xxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
with a Copy to: Ruskin, Moscou, Xxxxx & Faltischek, P.C.
000 Xxx Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telecopier No.: (000) 000-0000
Such notices shall be effective upon receipt in the case of personal or
courier service or telecopier delivery (with confirming transmittal receipt)
and on the fifth (5th) day after posting in the U.S. mail.
8.6 Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto) supersedes all prior agreements and understandings, oral
and written, among the parties with respect to the subject matter hereof, and
this Agreement constitutes the entire agreement of the parties.
8.7 Headings. The article, section and other headings contained in this
Agreement are for reference purposes only and shall not be deemed to be a
part of this Agreement or to affect the meaning or interpretation of this
Agreement.
8.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when executed, shall be deemed to be an
original, and all of which together shall be deemed to be one and the same
instrument.
8.9 Governing Law, Consent to Jurisdiction, Venue and Service of Process.
All questions, claims, controversies or other matters concerning this
Agreement, including, but not limited to, its execution, interpretation and
performance, shall be governed by the law of the State of New York without
regard to any principles of conflicts of laws. The parties hereto, for the
purpose of resolving any questions, claims, controversies or other matters
arising hereunder, hereby consent to the jurisdiction of any Federal Court
located in Nassau or Suffolk County in the State of New York and any Federal
Court located in Alameda County in the State of California. If Seller or OTC
seek to enforce any rights hereunder, any action with respect to such
enforcement shall only be brought in New York, and if Purchaser seeks to
enforce any rights hereunder, any action with respect to such enforcement
shall only be brought in California. The parties each waive the claim of
forum non conveniens in connection with any action arising hereunder brought
therein, and agree that service of process may be made upon them by certified
mail, return receipt requested, to the address set forth herein for delivery
of notices.
8.10 Severability. If any term, covenant, condition, or provision of this
Agreement or the application thereof to any circumstance shall be invalid or
unenforceable to any extent, the remaining terms, covenants, conditions, and
provisions of this Agreement shall not be affected and each remaining term,
covenant, condition, and provision of this Agreement shall be valid and shall
be enforceable to the fullest extent permitted by law. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only as broad as is enforceable.
8.11 Amendments. This Agreement may not be modified or changed orally but
only by an instrument or instruments in writing signed by all Parties.
8.12 Assignment. None of the Parties shall assign its rights or
obligations under this Agreement without the prior written consent of the
other Parties, except that Purchaser may assign this Agreement to any
Affiliate of Purchaser without the consent of Seller or OTC.
8.13 Successors and Assigns. The covenants, agreements, and conditions
contained or granted herein shall be binding upon and shall inure to the
benefit of Purchaser, Seller and OTC and their respective heirs, successors
and permitted assigns.
8.14 No Joint Venture. The Parties, by entering into this Agreement and
consummating the transactions contemplated in this Agreement, shall not be
and shall not be considered a partner or joint venturer of one another.
8.15 Construction of Agreement. This Agreement was negotiated at arm's
length by the Parties and their respective counsel. This Agreement shall not
be construed as having been "drafted" by any one Party and shall not be
construed against any Party as a drafting party.
IN WITNESS WHEREOF, the undersigned have executed this Asset Purchase
Agreement as of the date first written above.
XXXX POWER CORPORATION
By: /s/ XXXXX XXXX
--------------------------------
Xxxxx Xxxx
ORYX POWER PRODUCTS CORPORATION
By: /s/ XXXXXXX XXXXXXXXX
--------------------------------
Xxxxxxx Xxxxxxxxx, President
ORYX TECHNOLOGY CORP.
By: /s/ XXXXXX XXXXXXXX
--------------------------------
Xxxxxx Xxxxxxxx, President
