ASSET PURCHASE AGREEMENT
by and among
LASER PHOTONICS, INC.,
a Delaware corporation
and
LASER ANALYTICS, INC.,
a Massachusetts corporation
and
LASER ANALYTICS, INC.,
a Texas corporation
Dated as of January 4, 1999
AGREEMENT
This ASSET PURCHASE AGREEMENT ("Agreement"), made and entered into as of
January 4, 1999, by and among Laser Photonics, Inc., a Delaware corporation
("LPI") and Laser Analytics, Inc., a Massachusetts corporation ("LAI"), on the
one hand, (collectively, "Sellers"), and Laser Analytics, Inc., a Texas
corporation ("Purchaser") on the other hand.
RECITALS
WHEREAS, Sellers are engaged in the business of manufacturing and marketing
certain lasers and delivery systems;
WHEREAS, LAI is a wholly-owned subsidiary of LPI; and
WHEREAS, each of Sellers desire to transfer to Purchaser and Purchaser
desires to acquire from Sellers certain assets which are used in operating
Sellers' business solely with respect to Sellers' business operations conducted
in Orlando, Florida (the "Orlando Site") and Wilmington, Massachusetts (the
"Wilmington Site") (the "Business"), which shall specifically exclude Sellers'
business operations (i) which are conducted in its Carlsbad, California,
facility or (ii) which relate to Sellers' excimer lasers and delivery systems,
in exchange for the consideration set forth herein below;
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual promises,
covenants and conditions herein contained, the parties hereto do hereby agree as
follows:
1. CERTAIN DEFINITIONS. The following terms as used in this Agreement
shall have the meanings set forth below:
"Patents" shall mean the patents, patents pending, industrial designs,
utility models and applications for patent that are identified herein and any
patents issued thereon and any continuations or reissues thereof, including any
continuation-in-part or divisional patent application thereof and all foreign
counterparts and extensions thereof.
"Proprietary Information" shall mean all of the information regarding any
products or services related to the Patents, which constitute reliable trade
secrets or proprietary business information, including, without limitation, such
information as encompassed in all drawings, designs, formulas, devices,
compilations, computer programs and software devices, plans, manuals, proposals,
financial information, costs, pricing information, marketing or sales plans,
customer lists or any other trade secrets or proprietary information whether now
existing or hereinafter developed whether it gives the disclosing party any
competitive advantage over those who do not know or use it, or whether it is
patentable or subject to copyright or trademark protection.
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"Technical Information" means all information, knowledge, engineering and
technical data, manufacturing data, raw data, developments, projections,
proprietary data, manufacturing drawings, product specifications, manufacturing
and assembly techniques, production descriptions, skills, methods, trade
secrets, processes, procedures and know-how and other information or
improvements thereto in existence on the date hereof or thereafter developed,
including, but not limited to all information contained in all pending patent
applications or patents within the definition of Patents (as defined above),
that is pertinent to the development, testing, registration, assembly,
manufacture, use or sale of any products or services related to the Patents.
"Trade Names" shall mean those tradenames, trademarks, service marks and
logos referenced herein.
2. TRANSFER OF ASSETS.
2.1 TRANSFERRED ASSETS. On the basis of the representations and
warranties and subject to the terms and conditions hereinafter set forth, on the
Closing Date, (as hereinafter defined), Sellers shall transfer or shall cause to
be transferred to Purchaser, and Purchaser shall acquire, the assets of Sellers
described in this Section 2.1 (the "Transferred Assets"), except to the extent
assets described in this Section 2.1 may be disposed of in the ordinary course
of business after the date hereof and before the Closing (defined below).
Subject to the foregoing, "Transferred Assets" means:
(a) All assets listed in Schedule 2.1 hereto, which shall include,
but not be limited to:
(1) All production, assembly, development, testing, or other
equipment used by LPI and LAI in the Business;
(2) All tools, tooling, dies, molds, jigs, or other items of
a similar nature related to and/or used in any
production, assembly, development and testing procedures
by LPI and LAI in the Business;
(3) All warehousing, packing and shipping equipment, racks,
conveyors and other storage, product movement, receiving
or shipping items used in the Business;
(4) All vehicles owned by LPI and LAI located at the Orlando
Site and the Wilmington Site;
(5) Customer deposits related to the future delivery of any
goods or services or related to any purchase orders,
contracts to purchase or similar agreements arising from
the Business;
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(6) Any notes receivable from customer installment sales
agreements, leases, or other similar contracts or
agreements related to equipment sold or otherwise
provided to customers of the Sellers arising from the
Business;
(7) The Sellers' rights to any discounts, rebates, premiums
or other payments due after the Closing Date from
suppliers or others arising from the Business;
(8) All finished goods, work-in process, production parts
and supplies of inventory held by the Sellers for
resale; for use in their development, design,
manufacture or assembly functions or for their own use
arising from the Business;
(9) All demonstrator units, equipment parts, or related
items arising from the Business;
(10) All inventories of office supplies and other
miscellaneous items used in the Business;
(11) All security deposits, utility deposits, or other
similar deposits or pre-paid expenses held by suppliers
or other entities as a condition of supplying any
utility, service, product, or other item used by the
Sellers in the conduct of the Business; and
(12) All prepaid interest paid on debts assumed by the
Purchaser;
(b) Certain inventories of finished goods, supplies, raw
materials, and work in process relating to the Business and
reflected on the Sellers' Financial Statements (as defined in
Section 6.6 hereof);
(c) Certain machinery, computer hardware and software, equipment,
furniture, fixtures, vehicles, copies of correspondence,
books, records, files, documents, original marketing
communication material (including communications, art work,
art boards, photography and negatives), sales literature,
customer lists, distributor and supplier records, formulas,
know-how, pricing policies, patent applications, letters
patent, trade secrets, models, processes, market information,
market analyses, marketing plans, operating and management
policies, promotional designs, concepts and literature,
customer lists, supplier lists, distributor records,
environmental control records, accounting and financial
records, maintenance documentation, operating and management
manuals, computer systems and software, customer
specifications, blueprints and drawings and other records, in
electronic or proper medium, owned by and in possession of
Sellers and relating solely and exclusively to the Business
and all other
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tangible personal property owned by Sellers and used in the
Business and set forth in Schedule 2.1(c) hereto;
(d) Certain of Sellers' rights and incidents of interest in and to
real and personal property, tangible or intangible, contracts,
agreements, licenses, warranties and leases, express or
implied, relating to the Business and reflected on the
Sellers' Financial Statements, to the extent such rights and
interests are assignable by Sellers;
(e) Copies of correspondence, books, records, files, documents,
original marketing communications material (including
communications, art work, art boards, photography and
negatives), sales literature, customer lists, distributor and
supplier records, formulae, customer specifications,
blueprints and drawings and other records, in electronic or
proper medium, owned by and in the possession of Sellers and
relating solely and exclusively to the Business;
(f) The Patents and Trade Names expressly listed in Schedules
6.20(a) and 6.20(b) hereto, and the related Proprietary
Technology and Technical Information; and
(g) All federal, state and local permits, licenses and similar
authorizations relating to the Business to the extent that the
same are assignable to Purchaser.
2.2 EXCLUDED ASSETS. All assets which are not Transferred Assets shall
be Excluded Assets and shall be retained by Sellers and shall not be sold and
transferred to Purchaser on the Closing Date (defined below). The Excluded
Assets shall expressly include all assets which relate to Sellers' business
operations which are (i) conducted in its Carlsbad, California facility or (ii)
which relate to Sellers' excimer laser and delivery systems.
3. ASSUMPTION OF LIABILITIES.
3.1 ASSUMED LIABILITIES. On the Closing Date (as hereinafter defined),
Purchaser shall assume and agree to pay, perform and discharge those certain
debts, obligations and liabilities of Sellers relating to or arising out of the
conduct of the Business prior to or on the Closing Date, accrued or otherwise
(the "Assumed Liabilities"), as expressly described in Schedules 3.1 and 6.9,
including, but not limited to, those obligations to perform under all express or
implied contracts, mortgages, leases, loans, notes, agreements, licenses,
warranties or other arrangements included in, related to, or arising out of the
use and operation of the Business or the Transferred Assets, including, without
limitation, any executory agreements which arose from the Business, but not
completed prior to the Closing. As of the Closing Date, the Assumed Liabilities
shall not exceed the purchase price of $1,200,000. Sellers will be solely
responsible for any and all debts, obligations and liabilities of Sellers
exceeding the aggregate of $1,200,000.
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3.2 RETAINED LIABILITIES. Notwithstanding Section 3.1 above, the
liabilities of the Business existing on the Closing Date and not expressly set
forth in Schedule 3.1 (the "Retained Liabilities") shall be retained by Sellers
and shall not be assumed by Purchaser on the Closing Date.
3.3 ASSUMED LIENS. Assuming the Purchaser pays the entire Purchase
Price, all assets acquired, both tangible and intangible will be free of any and
all liens, claims, liabilities, charges, restrictions, royalties and fees,
obligations of the Sellers, or other encumbrances except as specified in
Schedule 3.1 or disclosed to the Purchaser no later than five (5) days prior to
the Closing Date.
(a) The Sellers will, within the five (5) business days prior to
the Closing Date, secure and provide to the Purchaser the
results of a complete UCC (Uniform Commercial Code) filing
search including copies of any Form UCC-1 or other filings
related to liens or other security interests in the assets to
be purchased by the Purchaser from the Sellers.
3.4 PAYMENT OF PURCHASE PRICE. The Purchase Price to be paid by the
Purchaser to the Sellers for the purchase of the Business shall be One Million
Two Hundred Thousand Dollars ($1,200,000) (the "Purchase Price"). The Purchase
Price shall be payable in the form of either or a combination of an assumption
of liabilities (with a complete written release of Sellers from such
liabilities) and/or payment of the Assumed Liabilities. It is expressly
understood that Purchaser shall either pay the creditors whose liabilities are
being assumed in full or settle with such creditors for less than the full
amount of the Assumed Liabilities. In the event that Purchaser pays the Assumed
Liabilities in full or settles the Assumed Liabilities with the creditor for
less than the full amount of the Assumed Liabilities, Purchaser shall arrange
for the delivery to Sellers of complete written releases of Sellers from the
Assumed Liabilities, which written release agreements shall be delivered to
Sellers at the Closing. If, at the Closing, Purchaser has been unsuccessful in
obtaining the complete release of Sellers from all of the Assumed Liabilities,
Purchaser shall deposit into escrow (the "Escrow"), pursuant to the terms of the
escrow agreement ("Escrow Agreement"), attached hereto as Schedule 3.4(a), funds
equal to the unreleased portion of the Assumed Liabilities listed on Schedule
3.1. The funds deposited into Escrow shall be held in Escrow until all of the
Assumed Liabilities shall have either been paid in full or until a written
release of all of the Assumed Liabilities shall have been obtained by Purchaser
and delivered to Sellers. Funds held in Escrow shall only be used by the
Escrowholder to pay the obligations set forth on Schedule 3.1 hereto. The funds
held in Escrow shall act as collateral (the "Collateral") for the payment of the
Assumed Liabilities and shall be held as security for the payment by Purchaser
of the Assumed Liabilities. The Collateral shall be governed by a Pledge and
Security Agreement (the "Pledge Agreement"), attached hereto as Schedule 3.4(b).
4.1 DEPOSIT. On December 15, 1998, the Purchaser deposited $30,000 in
escrow (the "Deposit") with the Sellers' counsel, as escrow holder. This amount
is to be applied to the Purchase Price as directed by the Purchaser in writing.
If this transaction is canceled by Purchaser prior to Closing, the Deposit shall
be deemed liquidated damages, to compensate Sellers' for any loss they may
suffer for keeping the Business or any part thereof off of the market during the
pendency of the due diligence investigation by the Purchaser. Special
liquidated damages language PROVIDED, HOWEVER, such liquidated damages provision
shall not be
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in force or effect if cancellation of this transaction is based upon proven
fraud or intentional misconduct affecting the Transaction which are the subject
of this Agreement. PROVIDED, FURTHER, that Purchaser may terminate this
transaction without cause for a period of ten (10) days from December 1, 1998.
4.2 ASSUMPTION BY PURCHASER OF THE ASSUMED LIABILITIES. On the Closing
Date, Purchaser shall assume only the obligations underlying the Assumed
Liabilities, as set forth in Section 3.1 of this Agreement.
5. CLOSING. The closing of this transaction (the "Closing") shall take
place as of the close of business as of March 16, 1999 (the "Closing Date") at
the offices of Matthias & Xxxx LLP located at 0000 Xxxxx Xxxxx Xxxxx, Xxxxx 000,
Xxx Xxxxxxx, Xxxxxxxxxx 00000 or at such other place and date as the parties
hereto agree to in writing.
6. REPRESENTATIONS AND WARRANTIES OF SELLERS.
6.1 ORGANIZATION AND GOOD STANDING; DUE AUTHORIZATION. Each of Sellers
is a corporation duly organized, validly existing, and in good standing under
the laws of the states of Delaware and Massachusetts, respectively, and has the
corporate power and is duly authorized, qualified, franchised and licensed under
all applicable laws, regulations, ordinances and orders of public authorities to
own all of its properties and assets and to carry on its business in all
material respects as it is now being conducted, including qualification to do
business as a foreign corporation in the states in which the character and
location of the assets owned by them or the nature of the business transacted by
it requires qualification. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated by this Agreement in
accordance with the terms hereof will not, violate any provision of each of
Sellers' articles of incorporation or certificate of incorporation, as the case
may be, or bylaws. Each of Sellers has taken all action required by law, its
articles of incorporation, its bylaws or otherwise to authorize the execution
and delivery of this Agreement. Each of Sellers has full power, authority and
legal right and has taken all action required by law, its articles of
incorporation, bylaws and otherwise to consummate the transactions herein
contemplated.
6.2 TITLE TO TRANSFERRED ASSETS. At the Closing, each of Sellers shall
have and Purchaser shall receive good and marketable title to the Transferred
Assets, free and clear of any lien, mortgage, charge, security interest, pledge
or other encumbrance or other adverse claim or interest of any nature, except as
set forth in Schedule 6.2 hereto or in the Sellers' Financial Statements. Each
of Sellers is the sole and exclusive owner of the Transferred Assets as of the
Closing Date. Each of Sellers has the right and power to assign all of its
rights, title and interest in and to the Transferred Assets. Each of Sellers
further represents and warrants that the Transferred Assets constitute all of
Sellers' rights and interests in, and each of Sellers has not made any prior
transfer, sale, assignment, pledge, hypothecation or encumbrance to any other
person or entity any right or interest in, the Transferred Assets, except as set
forth in Schedule 6.2 hereto or in the Sellers' Financial Statements.
6.3 BINDING OBLIGATION; NO DEFAULT. Each of Sellers has duly taken all
action necessary to authorize the execution, delivery and performance of this
Agreement and the other
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instruments and agreements contemplated hereby. Such execution, delivery and
performance does not and will not, to the best of each of Sellers' knowledge,
constitute a default under or a violation of any agreement, order, award,
judgment, decree, statute, law, rule, regulation or any other instrument to
which each of Sellers is a party or by which each of Sellers or the property of
each of Sellers may be bound or may be subject. This Agreement constitutes the
legal, valid and binding obligation of each of Sellers, enforceable against each
of Sellers in accordance with its terms.
6.4 COMPLIANCE WITH OTHER INSTRUMENTS, ETC. Neither the execution and
delivery of this Agreement by Sellers nor compliance by Sellers with the terms
and conditions of this Agreement will: (a) require Sellers to obtain the consent
of any governmental agency; (b) constitute a material default under any
indenture, mortgage or deed of trust to which each of Sellers is a party or by
which each of Sellers or its properties may be subject; (c) cause the creation
or imposition of any lien, charge or encumbrance on any of its assets; or (d)
breach any statute or regulation of any governmental authority, domestic or
foreign, or will on the Closing Date conflict with or result in a breach or any
of the terms or conditions of any judgment, order, injunction, decree or ruling
of any court or governmental authority, domestic or foreign, to which each of
Sellers is subject.
6.5 CONSENTS. No consent, approval or authorization of, or declaration,
filing or registration with, any governmental or regulatory authority or any
third party is required to be made or obtained by Sellers in connection with the
execution, delivery and performance of this Agreement and the transactions
contemplated hereby.
6.6 FINANCIAL STATEMENTS. As soon as practicable following the
execution of this Agreement, but in no event later than December 24, 1998, each
of Sellers shall furnish to Purchaser true and complete copies of Sellers'
unaudited financial statements, including the Sellers' unaudited balance sheet
as of September 30, 1998 and the related statements of operations for the nine
(9) months then ended (the "Sellers' Financial Statements") which shall
expressly exclude the assets and liabilities and results of operations of LPI's
76%-owned subsidiary, AccuLase, Inc., a California corporation. The Sellers'
Financial Statements fairly present the financial position of Sellers at the
date of, and the results of the operations for Sellers for the period then
ended. Such Sellers' Financial Statements have been prepared in accordance with
Statements on Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants, and have been prepared on
the accounting basis used by Sellers for income tax purposes and are subject to
adjustment upon audit. Thereafter, Seller will provide Purchaser with
unaudited, monthly financial statements within thirty (30) days after the end of
each month, together with copies of customary monthly management reports.
6.7 NO UNDISCLOSED LIABILITIES. Except as set forth on Schedule 6.7
hereto, with respect to the Transferred Assets and Assumed Liabilities, each of
Sellers does not have any material liabilities or obligations of any nature
(absolute, accrued, contingent or otherwise) which were not adequately reflected
or reserved against on the Sellers' Financial Statements, except for liabilities
and obligations incurred since the date thereof in the ordinary course of
Sellers' business and consistent with past practice and which, in any event, in
the aggregate, would not have a Material Adverse Effect.
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6.8 ABSENCE OF CERTAIN CHANGES. Except as and to the extent set forth
on Schedule 6.8 hereto or except as otherwise expressly contemplated hereby,
with respect to the Transferred Assets and Assumed Liabilities, since the date
of the Sellers' Financial Statements, each of Sellers has not:
(a) Suffered any material adverse change in its financial
condition, assets, liabilities (absolute, accrued, contingent
or otherwise), or reserves, and no event has occurred and no
action has been taken by Sellers or, to the best knowledge of
Sellers, any other person, nor is any such event or action
contemplated or, to the best knowledge of Sellers, threatened,
which might reasonably be expected to have a material adverse
effect on the Transferred Assets or the operations or
condition (financial or otherwise) of the Business ("Material
Adverse Effect"), except that no representation or warranty is
made as to general economic conditions or matters affecting
Sellers' industry generally;
(b) Suffered any material adverse change in their business,
operations or prospects;
(c) Experienced any shortage of raw materials or supplies;
(d) Permitted or allowed any of its property or assets (real,
personal or mixed, tangible or intangible) to be subjected to
any mortgage, pledge, lien, security interest, encumbrance,
restriction or charge of any kind; and
(e) Granted any general increase in the compensation of officers
or employees (including any such increase pursuant to any
bonus, pension, profit sharing or other plan or commitment)
other than in the ordinary course of business and consistent
with past practice, or any increase in the compensation
(including, without limitation, salary and bonus) payable or
to become payable to any officer or key employee.
6.9 LEASES. Schedule 6.9 hereto is an accurate and complete list of all
leases pursuant to which each of Sellers leases real or any material item of
personal property to be transferred to or assumed by Purchaser, and which shall
be deemed to be part of the Assumed Liabilities for purposes of this Agreement.
A true and correct copy of each such lease has been delivered to the Purchaser,
and no changes have been made thereto since the date of delivery. Except as set
forth in Schedule 6.9 hereto, each such lease is valid and in full force and
effect, there are no existing material defaults by Sellers thereunder, and, to
the best knowledge of Sellers, no event has occurred which (with notice, lapse
of time or both) would constitute a default thereunder by any party. Except as
set forth on Schedule 6.9 hereto, each of Sellers is presently in compliance in
all material respects with all laws, rules, regulations and ordinances relating
to zoning and land use restrictions which are applicable to any portion of the
land subject to the real property leases set forth in Schedule 6.9 hereto.
Except as set forth on Schedule 6.9 hereto, no consent is required from the
lessor under any lease of real or personal property listed on Schedule 6.9 prior
to the consummation of the transactions contemplated hereby.
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6.10 CONTRACTS AND COMMITMENTS. Except as set forth on Schedule 6.10,
with respect to the Transferred Assets and Assumed Liabilities:
(a) Each of Sellers has not entered into any outstanding
agreements, contracts or commitments or restrictions which,
individually or in the aggregate, are material to its
business, operations or prospects, or which require the making
of any charitable contribution;
(b) No purchase contracts or commitments of Sellers continue for a
period of more than 30 days or are in excess of the normal,
ordinary and usual requirements of its business or, to the
best knowledge of Sellers, at any excessive price;
(c) Each of Sellers has not entered into any contracts or
commitments pursuant to which each of Sellers is, as of the
date hereof, required to obtain or maintain, on behalf of
itself or any of its directors, officers or employees, any
facility or personnel security clearances from the U.S.
Department of Defense or any other agency of the U.S.
Government;
(d) There are no outstanding sales contracts, purchase orders,
commitments or proposals of Sellers which continue for a
period of more than 30 days or will likely result in any loss
to Sellers upon completion or performance thereof;
(e) Each of Sellers has not entered into any outstanding contracts
with officers, employees, agents, consultants, advisors,
salesmen, sales representatives or suppliers that are not
cancelable by it on notice of not longer than 30 days and
without liability, penalty or premium, or any agreement or
arrangements providing for the payment of any bonus or
commission based on sales or earnings;
(f) Each of Sellers has not entered into any outstanding
employment agreement, or any other outstanding agreement that
contains any severance or termination pay liabilities or
obligations;
(g) Each of Sellers is not a party to any collective bargaining
agreement or other contract or agreement with any labor
organization;
(h) Each of Sellers is not restricted by agreement from carrying
on its business anywhere in the world;
(i) Each of Sellers has not incurred any outstanding debt
obligation for borrowed money, including guarantees of or
agreements to acquire any such debt obligation of others other
than as reflected on the Sellers' Financial Statements; and
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(j) Each of Sellers is not a party to any contract, sub-contract
or agreement with the U.S. Government or any agency or
instrumentality thereof, or with any territorial or state
government or any agency or instrumentality thereof.
6.11 COMPLIANCE WITH CONTRACTS; DELIVERY OF CERTAIN CONTRACTS. Except as
disclosed on Schedule 6.11, each of Sellers is not in default under any material
contract, commitment, obligation or agreement with respect to the Transferred
Assets and Assumed Liabilities, including, without limitation, those listed in
Schedules 6.9 and 6.10 hereto, except for those which would not have a Material
Adverse Effect, and no act or omission by Sellers has occurred which, with
notice or lapse of time or both, would constitute such a default under any term
or provision of any such contract or agreement. Except as disclosed on Schedule
6.11, each of the agreements referred to in Schedules 6.9 and 6.10 hereto is
valid and in full force and effect. Except as disclosed on Schedule 6.11, to
the best knowledge of Sellers, no party is in default under any agreement
referred to in Schedules 6.9 and 6.10 hereto with respect to the Transferred
Assets and Assumed Liabilities, and to the best knowledge of Sellers, no act or
omission has occurred by any party which, with notice or lapse of time or both,
would constitute such a default under any term or provision thereof. Each of
Sellers has previously delivered to Purchaser a true and correct copy of each
agreement, contract, commitment or restriction listed on Schedules 6.9 and 6.10
hereto, including all amendments and modifications thereof.
6.12 INSURANCE. Schedule 6.12 contains an accurate and true description
of all existing policies of fire, liability, worker's compensation and all other
forms of insurance owned or held by, or covering the business, properties or
assets of, Sellers with respect to the Transferred Assets and Assumed
Liabilities. All such policies are in full force and effect, all premiums with
respect thereto covering all periods up to and including the date hereof have
been paid, and no notice of cancellation or termination has been received by
Sellers with respect to any such policy. Such policies will remain in full force
and effect through the respective dates set forth on Schedule 6.12 without
additional premiums being paid or properly accrued as an additional liability;
and will not in any way be affected by, or terminate or lapse by reason of, the
transactions contemplated by this Agreement. Schedule 6.12 also (i) describes
all products liability claims made since each of Sellers' inception, and all
other claims (except medical and dental) pending or made since each of Sellers'
inception under such insurance policies and (ii) identifies all types of
insurable risks which each of Sellers and its Board of Directors has designated
as being self insured. Except as set forth in Schedule 6.12, each of Sellers
has not been turned down at any time since each of Sellers' inception for any
insurance with respect to its assets or operations with respect to the
Transferred Assets and Assumed Liabilities, nor has its coverage been limited by
any insurance carrier to which it has applied for any such insurance or with
which it has carried insurance during the last three years.
6.13 LABOR DIFFICULTIES. Except to the extent set forth in Schedule 6.13
with respect to the Transferred Assets and Assumed Liabilities:
(a) To the best knowledge of Sellers, no employee of Sellers is in
violation of, or has threatened any violation of, any material
term of any employment contract or any other contract or
agreement relating to the relationship of such employee with
Sellers or any other party, including any employee
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handbook and/or personnel policy manual of each of Sellers
except for violations which would not, individually or in the
aggregate, have a Material Adverse Effect;
(b) Each of Sellers has complied in all material respects with
each and every term, provision, section and part of any
written employment contract or agreement, including any
employee handbook and/or personnel policy manual, that each of
Sellers has or has had with any individual who has performed
work for Sellers;
(c) There is no unfair labor practice charge or similar charge,
complaint, allegation or other process or claim pending or, to
the best knowledge of Sellers, threatened against Sellers
before the National Labor Relations Board (the "NLRB") or any
other federal, territorial, state or local governmental agency
or other entity;
(d) There is no labor dispute, strike, slowdown, work stoppage or
other job action pending or, to the best knowledge of Sellers,
threatened against or otherwise affecting Sellers;
(e) No petition for election or similar charge, complaint,
allegation or other process or claim is pending or, to the
best knowledge of Sellers, threatened against Sellers before
the NLRB, any region of the NLRB, or any other federal,
territorial, state or local governmental agency or other
entity, and no organizing campaign or other effort is underway
or, to the best knowledge of Sellers, threatened by any labor
organization to organize any employees of Sellers;
(f) Each of Sellers has not experienced any labor dispute, strike,
slowdown, work stoppage, or other job action since its
inception; and
(g) There is not pending or, to the best knowledge of Sellers,
threatened against Sellers any complaint, charge, allegation
or other process or claim whatsoever, other than those which
would not, individually or in the aggregate, have a Material
Adverse Effect, (i) alleging any violation of the Occupational
Safety and Health Act or any other federal, territorial, state
or local law governing health and/or safety in the workplace;
(ii) seeking compensation, benefits and/or penalties pursuant
to any Workers' Compensation Act or similar law; (iii) seeking
any compensation or benefits pursuant to any Unemployment
Insurance Act or similar law; (iv) alleging any violation of
the Immigration Reform and Control Act of 1986 or any similar
law; (v) alleging any violation of the Fair Labor Standards
Act or any other federal, territorial, state or local law
governing wage and/or hour issues; (vi) alleging any violation
of any federal, territorial, state or local child labor law;
and/or (vii) alleging any other federal, territorial, state or
local law relating to or governing employment or labor
matters.
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6.14 LITIGATION. Except as set forth in Schedule 6.14 hereto, with
respect to the Transferred Assets and Assumed Liabilities:
(a) There is no pending or, to the best knowledge of Sellers,
threatened complaint, charge, claim, action, suit or
arbitration proceeding before any federal, territorial, state,
municipal, foreign or other court or governmental or
administrative body or agency, or any private arbitration
tribunal or any investigation or inquiry before any federal,
territorial, state, municipal, foreign or other court or
governmental or administrative body or agency against,
relating to or affecting (i) the assets, properties or
business of Sellers, or (ii) the transactions contemplated by
this Agreement, nor, to the best knowledge of Sellers, is
there any basis for any such complaint, charge, claim, action,
suit, arbitration proceeding, investigation or inquiry which
could have an adverse effect on the assets, property, business
or prospects of Sellers;
(b) There is not in effect any order, judgment or decree of any
court or governmental or administrative body or agency
enjoining, barring, suspending, prohibiting or otherwise
limiting Sellers or, to the best knowledge of Sellers, any
officer, director, employee or agent thereof from conducting
or engaging in any aspect of the business of Sellers, or
requiring Sellers or, to the best knowledge of Sellers, any
officer, director, employee or agent thereof to take certain
action with respect to any aspect of the business of Sellers
which could reasonably be anticipated to have a Material
Adverse Effect; and
(c) Each of Sellers is not in violation of or default under any
applicable order, judgment, writ, injunction or decree of any
federal, territorial, state, municipal, foreign or other court
or regulatory authority.
6.15 NO CONDEMNATION OR EXPROPRIATION. Neither the whole nor any portion
of the leaseholds or any other assets of Sellers with respect to the Transferred
Assets and Assumed Liabilities is subject to any governmental decree or order to
be sold or is being condemned, expropriated or otherwise taken by any public
authority with or without payment of compensation therefor, nor, to the best
knowledge of Sellers, has any such condemnation, expropriation or taking been
proposed.
6.16 COMPLIANCE WITH LAW. To the best knowledge of Sellers, with respect
to the Transferred Assets and Assumed Liabilities, the operations of Sellers
have been conducted in accordance with all applicable laws, regulations and
other requirements of all national governmental authorities, and of all
territories, states, municipalities and other political subdivisions
13
and agencies thereof having jurisdiction over Sellers, including, without
limitation, all such laws, regulations, ordinances and requirements relating to
environmental, antitrust, consumer protection, labor and employment, zoning and
land use, currency exchange, immigration, health, occupational safety, pension,
securities, defense procurement and trading with the enemy matters, except as
disclosed in Schedule 6.16 hereto and except for violations which would not,
individually or in the aggregate, have a Material Adverse Effect. Except as set
forth in Schedule 6.16, each of Sellers has not received any notification since
its inception of any asserted present or past failure by Sellers to comply with
such laws, regulations, ordinances or requirements. Each of Sellers has all
permits, authorizations and consents necessary for the operation of its business
except for those which the failure to have would not, individually or in the
aggregate, have a Material Adverse Effect.
6.17 ABSENCE OF QUESTIONABLE PAYMENTS. Neither Sellers nor, to the best
knowledge of Sellers, any of its directors, officers, agents, employees or other
persons acting on its behalf or for its benefit, with respect to the Transferred
Assets and Assumed Liabilities, has used any corporate or other funds for
unlawful contributions, payments, gifts, or entertainment, or made any unlawful
expenditures relating to political activity to government officials or others or
established or maintained any unlawful or unrecorded funds for such purpose.
Neither each of Sellers nor, to the best knowledge of each of Sellers, any of
its directors, officers, agents, employees or other persons acting on its behalf
or for its benefit has accepted or received any unlawful contributions,
payments, gifts, or expenditures.
6.18 PERSONNEL. Schedule 6.18 hereto reflects, as of February 28, 1999,
a true and complete list of the wage rates for all non-salaried and salaried
employees of Sellers by classification with respect to the Business.
6.19 ACCURACY OF INFORMATION FURNISHED. No representation or warranty by
Sellers contained in this Agreement or in respect of the exhibits, schedules or
documents delivered to Purchaser by Sellers and expressly referred to herein,
and no statement contained in any certificate furnished or to be furnished by or
on behalf of Sellers pursuant hereto, or in connection with the transactions
contemplated hereby, contains, or will contain as of the date such
representation or warranty is made or such certificate is or will be furnished,
any untrue statement of a material fact, or omits, or will omit to state as of
the date such representation or warranty is made or such certificate is or will
be furnished, any material fact which is necessary to make the statements
contained herein or therein, in light of the circumstances under which they were
made, not misleading. True and correct copies of each agreement and other
document referred to in the schedules hereto have been furnished by Sellers to
Purchaser.
6.20 TITLE TO PATENTS AND TRADE NAMES. At the Closing, Purchaser shall
receive, as part of the Transferred Assets, good and marketable title to the
Patents set forth in Schedule 6.20(a) and Trade Names set forth in Schedule
6.20(b), free and clear of any lien, mortgage, charge, security interest, pledge
or other encumbrance or other adverse claim or interest of any nature. The
Patents and Trade Names set forth in Schedule 6.20 (c) hereto and the
Proprietary Information and Technical Information related thereto, shall be part
of the Excluded Assets. Except as described in Schedule 6.20(d), each of Sellers
is the sole and exclusive owner of the Patents and Trade Names described in
Schedules 6.20 (a) and (b), respectively, the issued or granted Patents
described in Schedule 6.20 (a) hereto are valid, and in full force and effect as
of the Closing Date. Each of
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Sellers is the party named in the Patents described in Schedule 6.20 (a) hereto,
and is the party who made, or caused to be made, the application for the letters
of patents. Except as described in Schedule 6.20(d), each of Sellers has the
right and power to assign the Patents and Trade Names described in Schedules
6.20 (a) and (b), respectively, and made no prior transfer, sale or assignment
of all or any part of such Patents and Trade Names and the exploitation of such
Patents and Trade Names do not and will not infringe the rights granted to any
other person by any United States or other patent or proprietary interest of any
kind or nature. Each of Sellers further represents and warrants that the
Patents and Trade Names described in Schedules 6.20 (a) and (b), respectively,
constitute all of each of Sellers' rights and interests therein, and except as
described in Schedule 6.20(d), each of Sellers has not transferred or conveyed
to any other person or entity any right or interest in, any patents, patents
pending, industrial designs, utility models and applications for patent and
method of use or manufacture and any patents issued thereon and any
continuations or reissues thereof, including any continuation-in-part or
divisional patent application thereof, and all foreign counterparts and
extensions thereof with respect to such Patents and Trade Names, and all of the
Technical Information and Proprietary Information or improvements thereto in
existence on the date hereof or thereafter developed, including, but not limited
to all information contained in all pending patent applications or patents, that
are pertinent in any manner whatsoever to the development, testing,
registration, assembly, manufacture, use or sale of all products and services
related to the Patents described in Schedule 6.20 (a) hereto.
6.21 REAL PROPERTIES. Schedule 6.21 hereto is an accurate and complete
list of all real property owned by Sellers with respect to the Transferred
Assets and Assumed Liabilities, together with a description of every mortgage,
deed of trust, pledge, lien, agreement, encumbrance, claim or equity interest of
any nature whatsoever in such real property.
7 REPRESENTATIONS AND WARRANTIES OF PURCHASER.
7.1 ORGANIZATION AND GOOD STANDING; DUE AUTHORIZATION. Purchaser is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Texas, and has the corporate power and is duly authorized,
qualified, franchised and licensed under all applicable laws, regulations,
ordinances and orders of public authorities to own all of its property and
assets and to carry on its business in all material respects as it is now being
conducted, including qualification to do business as a foreign corporation in
the states in which the character and location of the assets owned by it or the
nature of the business transacted by it requires qualification. The execution
and delivery of this Agreement does not, and the consummation of the
transactions contemplated by this Agreement in accordance with the terms hereof
will not, violate any provision of Purchaser's articles of incorporation or
bylaws. Purchaser has taken all action required by law, its articles of
incorporation, its bylaws or otherwise to authorize the execution and delivery
of this Agreement. Purchaser has full power, authority and legal right and has
taken all action required by law, its articles of incorporation, bylaws and
otherwise to consummate the transactions herein contemplated.
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7.2 BINDING OBLIGATION; NO DEFAULT. Purchaser has duly taken all
corporate action necessary to authorize the execution, delivery and performance
of this Agreement and the other instruments and agreements contemplated hereby.
Such execution, delivery and performance does not and will not, violate each of
their respective articles of incorporation or bylaws, or to the best of
Purchaser's knowledge, constitute a default under or a violation of any
agreement, order, award, judgment, decree, statute, law, rule, regulation or any
other instrument to which Purchaser or the property of Purchaser may be bound or
may be subject. This Agreement constitutes the legal, valid and binding
obligation of Purchaser enforceable against Purchaser in accordance with its
terms.
7.3 COMPLIANCE WITH OTHER INSTRUMENTS, ETC. Neither the execution and
delivery of this Agreement by Purchaser nor compliance by Purchaser with the
terms and conditions of this Agreement will: (a) require Purchaser to obtain the
consent of any governmental agency; (b) result in any violation or breach of any
term or provision of the articles of incorporation or bylaws of Purchaser; (c)
constitute a material default under any indenture, mortgage or deed of trust to
which each of Purchaser is a party or by which Purchaser or its property may be
subject; (d) cause the creation or imposition of any lien, charge or encumbrance
on any of its assets; or (e) breach any statute or regulation of any
governmental authority, domestic or foreign, or will on the Closing Date
conflict with or result in a breach of any of the terms or conditions of any
judgment, order, injunction, decree or ruling of any court or governmental
authority, domestic or foreign, to which each of Purchaser is subject.
7.4 CONSENTS. No consent, approval or authorization of, or declaration,
filing or registration with, any governmental or regulatory authority or any
third party is required to be made or obtained by Purchaser in connection with
the execution, delivery and performance of this Agreement and the transactions
contemplated hereby.
7.5 LITIGATION. To the best of Purchaser's knowledge, there is no
claim, action, suit, proceeding or investigation pending or, threatened, against
or involving Purchaser which questions the validity of this Agreement or seeks
to prohibit, enjoin or otherwise challenge the transactions contemplated hereby,
and to the best of Purchaser's knowledge, there is no basis for any such claim,
action, suit, proceeding or governmental investigation pending or, threatened
against or involving Purchaser before any court, agency or other governmental
body which might materially and adversely affect the transactions contemplated
by this Agreement.
8. CONDITIONS TO SELLERS' OBLIGATIONS. The obligations of each of
Sellers to consummate the transactions contemplated by this Agreement, both at
the Closing and subsequently, are subject to the fulfillment at the Closing of
each of the conditions set forth in this Section 8. Each of Sellers may waive
any or all of these conditions in whole or in part without prior notice;
PROVIDED, HOWEVER, that no such waiver shall constitute a waiver of any of its
other rights or remedies, at law or in equity, arising from any breach by
Purchaser of any representation, warranty, covenant or other agreement contained
herein:
8.1 REPRESENTATIONS AND WARRANTIES OF PURCHASER. On the Closing Date,
all of the representations and warranties made herein by Purchaser shall be true
and correct as of that date, and all of the agreements of Purchaser contained in
this Agreement which are to be performed on or before the Closing Date shall
have been performed.
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8.2 AUTHORIZATION OF ACTIONS. All action on the part of Purchaser
necessary and sufficient to authorize the execution, delivery and performance of
this Agreement and the consummation the transactions provided for herein shall
have been duly and validly taken by Purchaser, and Sellers shall have been
furnished with a certificate of the Secretary or Assistant Secretary of
Purchaser setting forth a copy of the resolution or other instrument authorizing
(a) the acquisition of the Transferred Assets and the assumption of the Assumed
Liabilities, and (b) the performance of all other transactions provided for in
this Agreement.
8.3 BINDING OBLIGATION; NO DEFAULT. The execution, delivery and
performance of this Agreement does not and will not violate Purchaser's Articles
of Incorporation or bylaws or constitute a default under or a violation of any
agreement, order, award, judgment, decree, statute, law, rule, regulation or any
other instrument to which Purchaser is a party or by which it or its property is
bound or to which it or its property is bound or to which it or its property is
subject. This Agreement constitutes the legal, valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms.
8.4 CONSENTS. All material consents, approvals or authorizations of, or
declarations, filings or registrations with, any governmental or regulatory
authority which are required to be made or obtained by Purchaser in connection
with the execution, delivery and performance of this Agreement and the
transactions contemplated hereby shall have been obtained by Purchaser and
delivered to Sellers.
8.5 FORM OF DOCUMENTS. The form and substance of all certificates,
instruments and other documents delivered to Sellers under this Agreement shall
be satisfactory in all reasonable respects to each of Sellers and its counsel.
8.6 DELIVERY OF CLOSING DOCUMENTS. Purchaser shall have delivered to
Sellers on the Closing Date the closing documents required to be delivered
pursuant to Section 14 in form and substance satisfactory to each of Sellers and
its counsel.
8.7 ABSENCE OF PROCEEDINGS. No suit, action, investigation or other
proceeding shall be pending or threatened before any court or governmental or
regulatory agency or authority, and no suit, action, investigation or other
proceeding before any governmental or regulatory agency or authority shall have
been threatened, which seeks (or, in the case of an investigation, may lead to a
suit, action or proceeding which seeks) to restrain, prohibit or obtain damages
or other relief in connection with the Agreement or the consummation of the
transactions contemplated hereby or which questions the validity or legality of
such transactions.
9. CONDITIONS TO PURCHASER'S OBLIGATIONS. The obligations of Purchaser
to consummate the transactions contemplated this Agreement, both at the Closing
and subsequently, are subject to the fulfillment at the Closing of each of the
conditions set forth in this Section 9. Purchaser may waive any or all of these
conditions in whole or in part without prior notice; PROVIDED, HOWEVER, that no
such waiver shall constitute a waiver of any of its other rights or remedies, at
law or in equity, arising from any breach by Sellers of any representation,
warranty, covenant or other agreement contained herein:
17
9.1 REPRESENTATIONS AND WARRANTIES OF SELLERS. On the Closing Date, all
of the representations and warranties made herein by each of Sellers shall be
true and correct as of that date, and all of the agreements of each of Sellers
contained in this Agreement which are to be performed on or before the Closing
Date shall have been performed.
9.2 AUTHORIZATION OF ACTIONS. All action on the part of Sellers
necessary and sufficient to authorize the execution, delivery and performance of
this Agreement and the consummation the transactions provided for herein shall
have been duly and validly taken by Sellers, and Purchaser shall have been
furnished with a certificate of the Secretary or Assistant Secretary of Sellers
setting forth a copy of the resolution or other instrument authorizing (a) the
acquisition of the Transferred Assets and the assumption of the Assumed
Liabilities, and (b) the performance of all other transactions provided for in
this Agreement.
9.3 BINDING OBLIGATION; NO DEFAULT. The execution, delivery and
performance of this Agreement does not and will not violate each of Sellers'
Articles of Incorporation or bylaws or constitute a default under or a violation
of any agreement, order, award, judgment, decree, statute, law, rule, regulation
or any other instrument to which each of Sellers is a party or by which it or
its property is bound or to which it or its property is bound or to which it or
its property is subject. This Agreement constitutes the legal, valid and
binding obligation of Sellers, enforceable against Sellers in accordance with
its terms.
9.4 CONSENTS. All material consents, approvals or authorizations of, or
declarations, filings or registrations with, any governmental or regulatory
authority which are required to be made or obtained by Sellers in connection
with the execution, delivery and performance of this Agreement and the
transactions contemplated hereby shall have been obtained by Sellers and
delivered to Purchaser.
9.5 FORM OF DOCUMENTS. The form and substance of all certificates,
instruments and other documents delivered to Purchaser under this Agreement
shall be satisfactory in all reasonable respects to Purchaser and their counsel.
9.6 DELIVERY OF CLOSING DOCUMENTS. Each of Sellers shall have delivered
to Purchaser on the Closing Date the closing documents required to be delivered
pursuant to Section 14 in form and substance reasonably satisfactory to
Purchaser and their counsel.
9.7 ABSENCE OF PROCEEDINGS. No suit, action, investigation or other
proceeding shall be pending before any court or governmental or regulatory
agency or authority, and no suit, action, investigation or other proceeding
before any governmental or regulatory authority shall have been threatened,
which seeks (or, in the case of investigation, may lead to a suit, action or
proceeding which seeks) to restrain, prohibit or obtain damages or other relief
in connection with this Agreement or the consummation of the transactions
contemplated hereby or which questions the validity or legality of such
transactions.
10. OTHER AGREEMENTS.
18
10.1 AGREEMENT TO OBTAIN CONSENTS AND APPROVALS. Purchaser and Sellers
shall cooperate with one another to use their best efforts to obtain any and all
governmental or third party consents and approvals necessary to complete the
transactions contemplated by this Agreement. Following the Closing, Purchaser,
for a period of five years, shall maintain all business records of Sellers
acquired by Purchaser in connection with the purchase and sale of assets which
is the subject of this Agreement, in safekeeping. Sellers shall have access to
such business records, upon reasonable notice, during normal business hours, at
the situs of the Purchaser's offices for purposes of auditing the books and
records of Sellers, or for any other reason.
10.2 AGREEMENT CONCERNING CONDITIONS TO CLOSING. Sellers and Purchaser
shall agree to use their best efforts to cause the conditions set forth in
Sections 8 and 9 to be met prior to the Closing Date.
10.3 TRANSFER AND OTHER TAXES. Purchaser shall pay at the Closing any
and all taxes, whether federal, state, local or foreign in the nature of sales,
transfer or similar taxes, arising out of the transactions contemplated by this
Agreement; PROVIDED, HOWEVER, that if the amount of any such tax is not known on
the Closing Date, Purchaser shall pay at the Closing the amount of such tax
estimated by Sellers and shall pay any additional amount due with respect to
such tax within five days after notice of such amount by Sellers, or, if any
such estimated amount paid by Purchaser shall be in excess of the actual amount
of such tax, with respect to such tax Sellers will reimburse Purchaser for such
amount within five days of the date Sellers have notice of the actual amount
due; and PROVIDED, FURTHER, that Purchaser shall reimburse Sellers for the
amount of any tax required to be paid by Purchaser under this Section 10.3 but
actually paid by Seller pursuant to legal requirements or otherwise.
10.4 LICENSES TO OPERATE THE BUSINESS. Prior to the Closing Date,
Purchaser shall submit applications to the appropriate authorities seeking all
necessary licenses to operate the Business with respect to the Transferred
Assets and Assumed Liabilities in Purchaser's name. Purchaser understands that,
following the Closing Date, Sellers shall notify the appropriate licensing
authorities that each of Sellers is no longer operating the Business and shall
terminate its licenses.
10.5 EMPLOYMENT OF SELLER'S EMPLOYEES. No less than fifteen (15) days
prior to the Closing Date, the Purchaser will, advise the Sellers as to which of
the employees of Sellers' will be hired as employees of the Purchaser.
(a) Employees who are not to be hired by the Purchaser will be
terminated by the Sellers effective on the Closing Date.
Sellers shall indemnify and hold harmless Purchaser from any
and all employment related litigation that relates or pertains
to any termination of employment by Seller of any of Sellers'
employees on or prior to the Closing Date, including but not
limited to any legal actions that relate or pertain to age
discrimination, wrongful termination, slander, defamation,
libel, disparagement or any other employment related
litigation. This indemnification includes all litigation fees
and costs incurred by Purchaser, including but not limited to
attorneys fees, litigation expenses, court costs and other
fees and expenses.
19
10.6. OTHER CLOSING CONDITIONS. The Closing of the proposed transaction
will be contingent on:
(a) Approvals as might be required by customers, suppliers, or
creditors of either Sellers or the Purchaser by governmental
agencies or by other parties related to or the Purchaser by
contract or other agreements.
(1) By December 24, 1998, each of the Parties hereto will
notify the other in writing of all such third parties known to
them who must approve the transaction proposed herein or who
can exercise any prior approval rights in regard to this
transaction.
(2) Each of the Parties will cooperate with the other in
securing any such approvals.
(c) Financing arrangements to support this proposed transaction
which area, satisfactory to the Purchaser and to their current
bank including the approval by such bank for the assumption or
retirement of the liabilities of the Sellers by the Purchaser.
(d) Completion of normal due diligence investigations by the
Purchaser and/or consultants to the Purchaser to the complete
satisfaction of the Purchaser in its sole discretion.
(e) It is understood that at the request of the Purchaser, the
Sellers will provide, in a timely manner, all information
reasonably needed by the Purchaser to complete normal due
diligence investigations of the Business including, but not
limited to, copies of all contracts, agreements, or
understandings which relate to the Business. Evidence of
"good standing" of the Purchaser and the Sellers as
corporations in their respective states of domicile.
10.7 SELLER'S COVENANTS. Sellers covenant and agree to indemnify,
defend, and hold harmless Purchaser and Sellers from and against any and all
claims, suits, losses, judgments, damages, and liabilities amount paid in
settlement of any claim, action, suit, or proceeding (collectively, "Losses"),
other than those Losses and liabilities already disclosed in this Agreement or
any Exhibit delivered pursuant to this Agreement, to which Purchaser or Sellers
may be subject. This right to indemnification is in addition to any other right
available to Purchaser and Sellers.
10.8 MEDIATION OF DISPUTES. If a party hereunder ("Claimant Party")
gives written notice to the other party of a claim of breach by such other party
of any representations or warranties made under this Agreement, such Claimant
Party must defer any legal action for a period of fifteen days from the date of
such notice, and all parties agree to submit the disputed matter to mediation
during such period. The costs and fees of mediation, if any, shall be divided
equally among the parties involved. Before the mediation begins, the parties
agree to sign a document limiting the admissibility in any arbitration or any
civil action of anything said, any
20
admission made, and any documents prepared, in the course of the mediation. If
any party commences an arbitration or court action based on a dispute or claim
to which this paragraph applies without first attempting to resolve the matter
through mediation, then such party shall not be entitled to recover attorney's
fees even if such fees would otherwise have been available to that party in any
such arbitration or court action. However, the filing of a judicial action to
enable the recording of a notice of pending action, for order of attachment,
receivership, injunction, or other provisional remedies, shall not in itself
constitute a loss of the right to recover attorney's fees under this provision.
11. ACCESS TO INFORMATION. On or before the Closing Date, Purchaser
shall give, or cause to be given, to each of Sellers and its representatives,
during normal business hours at Purchaser's premises and at Sellers' expense,
such reasonable access to the personnel, properties, titles, contracts, books,
records, files, documents and affairs of Purchaser and copies of titles,
contracts, books, records, files and documents as reasonably requested by
Sellers in connection with this Agreement.
12. INTERIM OPERATIONS OF THE BUSINESS. The parties hereto acknowledge
that the present intent of both parties is to continue to operate and to improve
the value of the Business. For as long as each of Sellers continues to operate
the Business prior to the Closing Date any services provided by Sellers to the
Business or by the Business to Sellers shall be on terms mutually agreeable to
Sellers and Purchaser.
13. CLOSING DOCUMENTS TO BE DELIVERED BY SELLERS. On the Closing Date,
Sellers shall deliver to Purchaser:
13.1 XXXX OF SALE AND ASSIGNMENT. A xxxx of sale and instruments of
assignment covering the Transferred Assets.
13.2 CERTIFICATE. A certificate dated the Closing Date, signed by a duly
authorized officer of Sellers, stating that all of Sellers' representations and
warranties set forth in this Agreement are true and correct on and as of the
Closing Date as if made on the Closing Date.
13.3 FURTHER INSTRUMENTS. Such further instruments with respect to the
transactions contemplated by this Agreement as each of Sellers is required to
deliver or as Purchaser may reasonably request.
14. CLOSING DOCUMENTS TO BE DELIVERED BY PURCHASER. On the Closing
Date, Purchaser will deliver to Sellers:
14.1 PURCHASE PRICE. Evidence of assumption of the Assumed Liabilities
by Purchaser, with full release of liability of Sellers'. Instruments of
assumption of all Assumed Liabilities agreed to be assumed hereunder as more
fully set forth in Schedule 3.1
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14.2 COLLATERAL. The agreed upon Collateral as set forth on Schedule 3.4
and all documents required for the perfection of a security interest pursuant to
the Uniform Commercial Code as enacted in the State of California or other
jurisdiction in which such Collateral shall be located at any time.
14.3 CERTIFICATE. A certificate dated the Closing Date, signed by a duly
authorized officer of Purchaser, stating that all of Purchaser's representations
and warranties set forth in this Agreement are true and correct on and as of the
Closing Date as if made on the Closing Date.
15. INDEMNIFICATION; NOTICE OF BREACH.
15.1 PURCHASER'S INDEMNIFICATION. After the Closing, Purchaser shall
protect, defend, indemnify and hold harmless each of Sellers, its subsidiaries,
and its officers, directors, employees, successors and assigns from and against
any losses, damages (but not including consequential damages and penalties) and
expenses (including, without limitation, reasonable counsel fees, costs and
expenses incurred in investigating and defending against the assertion of such
liabilities) which may be sustained, suffered or incurred by each of Sellers or
its subsidiaries and which (a) are based upon the existence of any Assumed
Liability, (b) are related to any breach by Purchaser of its representations and
warranties in this Agreement, or (c) arise out of the use by Purchaser of the
Transferred Assets or the conduct of the Business after the Closing Date.
15.2 SELLERS' INDEMNIFICATION. After the Closing, each of Sellers shall
protect, defend, indemnify and hold harmless Purchaser, its officers, directors,
employees, successors and assigns from and against any losses, damages (but not
including consequential damages and penalties) and expenses (including, without
limitation, reasonable counsel fees, costs and expenses incurred in
investigating and defending against the assertion of such liabilities) which may
be sustained, suffered or incurred by them and which are based solely upon BONA
FIDE claims asserted by third parties against Purchaser with respect to the
Retained Liabilities.
15.3 NOTICE. If any action, suit or proceeding shall be commenced, or
any claim or demand shall be asserted, in respect or which one party (the
"Indemnitee") proposes to demand indemnification under Section 15.1 or 15.2, the
party from which indemnification is sought (the "Indemnitor") shall be notified
to that effect with reasonable promptness and shall have the right to assume the
entire control of (including the selection of counsel), subject to the right of
the Indemnitee to participate (with counsel of its choice) in, the defense,
compromise or settlement thereof, but the fees and expenses of such counsel
shall be at the expense of the Indemnitee unless (a) the employment of such
counsel by the Indemnitee has been specifically authorized by the Indemnitor, or
(b) the named parties to any such action (including any impleaded parties)
include both the Indemnitee and the Indemnitor and the Indemnitee shall have
been advised by its counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
Indemnitor. The Indemnitee shall cooperate fully in all respects with the
Indemnitor in any such defense, compromise or settlement, including, without
limitation, by making available all pertinent information under its control to
the Indemnitor. The Indemnitor shall not compromise or settle any such action,
suit, proceeding, claim or demand without the prior
22
written consent of the Indemnitee; PROVIDED, HOWEVER, that in the event the
approval described above is withheld, then the liabilities of the Indemnitor
shall be limited to the total sum representing the amount of the proposed
compromise or settlement and the amount of counsel fees accumulated at the time
such approval is withheld.
16. MISCELLANEOUS.
16.1 BROKERAGE AND FINDER'S FEES. Sellers and Purchaser represent to and
agree with each other that no broker or finder has been or shall be involved in
any manner in the negotiation or consummation of the transactions contemplated
hereby. Each of Sellers agrees to indemnify and save Purchaser harmless from
and against any and all claims, liabilities or obligations with respect to
brokerage or finder's fees or commissions in connection with the transactions
contemplated by this Agreement asserted by any person on the basis of any
statement or representation made or alleged to have been made by Sellers. Each
of Purchaser agrees to indemnify and save Sellers and one or more of its
subsidiaries harmless from and against any and all claims, liabilities or
obligations with respect to brokerage or finder's fees or commissions in
connection with the transactions contemplated by this Agreement asserted by any
person or persons on the basis of any statement or representation made or
alleged to have been made by Purchaser.
16.2 EXPENSES. Each of the parties to this Agreement shall bear all of
its own expenses incurred by it in connection with this Agreement.
16.3 RISK OF LOSS. The risk of any loss, damage, impairment,
confiscation or condemnation of the Transferred Assets or any part thereof shall
be upon Sellers at all times prior to the Closing Date. Prior to the Closing, in
the event of any such loss, damage, impairment, confiscation or condemnation,
the proceeds of, or any claim for any loss payable under, each of Sellers'
insurance policy, judgment or award with respect thereto shall be payable to
Sellers, and Sellers shall have no obligation to Purchaser to repair, replace or
restore any such property or to pay all or any part of such proceeds to
Purchaser. In the event such loss so impairs the Transferred Assets so that
Purchaser, in its sole and absolute discretion no longer believes that the
Business can operate as it does on the date of this Agreement, Purchaser may
terminate this Agreement without liability to Purchaser.
16.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Sellers in this Agreement or in any instrument or document
delivered prior to or on the Closing Date shall survive indefinitely following
the Closing. The representations, warranties and covenants of Purchaser in this
Agreement or in any certificate or document delivered prior to, on or after the
Closing Date shall survive indefinitely following the Closing.
16.5 LAW, FORUM AND JURISDICTION. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware.
16.6 NOTICES. All necessary notices or correspondence required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been properly given when hand delivered or when mailed by first class certified
mail, return receipt requested, postage prepaid, or when telescoped with a
confirmation copy hand delivered or sent by first class mail:
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If to Sellers: Laser Photonics, Inc.
0000 Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxxx
Chief Financial Officer
(000) 000-0000 (Telecopier No.)
With a copy to: Matthias & Xxxx LLP
0000 Xxxxx Xxxxx Xxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxx
(000) 000-0000 (Telecopier No.)
If to Purchaser: Laser Analytics, Inc.
00000 Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxx, Xx.
(000) 000-0000 (Telecopier No.)
With a copy to: Xxxxx Xxxx, Esq.
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
(000) 000-0000 (Telecopier No.)
16.7 ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding and agreement between the parties hereto. This Agreement
supersedes any and all previous agreements, commitments and understandings among
the parties hereto, whether such agreements, commitments or understandings were
oral or written, and neither party hereto has relied or will rely on any
representation of the other except to the extent set forth herein.
16.8 HEADINGS; CONTEXT. The headings of the sections and paragraphs
contained in this Agreement are for convenience of reference only and do not
form a part hereof and in no way modify, interpret or construe the meaning of
this Agreement.
16.9 COUNTERPARTS. This Agreement may be executed in counterparts, all
of which shall be considered one and the same agreement, and shall become
effective when one or more counterparts have been signed by each of the parties
hereto and delivered to the other.
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16.10 BENEFIT. This Agreement shall be binding upon and shall inure only
to the benefit of the parties hereto, and their permitted assigns hereunder.
This Agreement shall not be assigned by any party without the prior written
consent of the other party. In the event of any permitted assignment by
Purchaser, the assignee shall succeed to all of the rights and obligations of
the Purchaser under this Agreement; and in the event of any permitted assignment
by Sellers, the assignee shall succeed to all of the rights and obligations of
Sellers under this Agreement.
16.11 AMENDMENT AND WAIVER. This Agreement may be amended, or any
provision of this Agreement may be waived, provided that any such amendment or
waiver shall be binding on Purchaser only if such amendment or waiver is set
forth in a writing executed by Purchaser, and provided that any such amendment
or waiver shall be binding on Sellers only if such amendment or waiver is set
forth in a writing executed by Sellers. The waiver of any party hereto of a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any other breach.
16.12 PUBLIC ANNOUNCEMENTS. Except as may be required by law, neither
party shall make any public announcement or filing with respect to the
transactions provided for herein without the prior consent of the other party
hereto.
16.13 FURTHER ASSURANCES. After the Closing, Sellers and Purchaser shall
perform such further acts as may be necessary to transfer and convey title to an
possession of the Transferred Assets to Purchaser, and otherwise comply with the
terms of this Agreement. After the Closing Date, Sellers and Purchaser shall
give to each other, upon reasonable notice, reasonable access to all relevant
books, contracts and records concerning the Business as may be required by
Purchaser in its conduct thereof.
16.14 ATTORNEYS' FEES. In any action at law or in equity to enforce or
construe any provisions or rights under this Agreement, the unsuccessful party
or parties to such litigation, as determined by a court pursuant to a final
order, judgment or decree, shall pay to the successful party or parties all
costs, expenses and reasonable attorneys' fees incurred by such successful party
or parties (including, without limitation, such costs, expenses and fees on any
appeal), which costs, expenses and attorneys' fees shall be included as part of
any order, judgment or decree.
16.15 SEVERABILITY. In the event that any particular provision or
provisions of this Agreement or the other agreements contained herein shall for
any reason hereafter be determined to be unenforceable, or in violation of any
law, governmental order or regulation, such unenforceability or violation shall
not affect the remaining provisions of such agreements, which shall continue in
full force and effect and be binding upon the respective parties hereto.
16.16 FAILURE OF CONDITIONS; TERMINATION. In the event any of the
conditions specified in this Agreement shall not be fulfilled on or before the
Closing Date, either Purchaser or Sellers have the right either to proceed or,
upon prompt written notice to the other, to terminate and rescind this Agreement
without liability to any other party. The election to proceed shall not affect
the right of such electing party reasonably to require the other party to
continue to use its efforts to fulfill the unmet conditions.
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16.17 NO STRICT CONSTRUCTION. The language of this Agreement shall be
construed as a whole, according to its fair meaning and intendment, and not
strictly for or against either party hereto, regardless of who drafted or was
principally responsible for drafting the Agreement or any specific term or
conditions hereof.
16.18 EXECUTION KNOWING AND VOLUNTARY. In executing this Agreement,
Purchaser and Sellers severally acknowledge and represent that each: (a) has
fully and carefully read and considered this Agreement; (b) has been or has had
the opportunity to be fully apprised of his, her or its attorneys of the legal
effect and meaning of this document and all terms and conditions hereof; (c) has
been afforded the opportunity to negotiate as to any and all terms hereof; and
(d) is executing this Agreement voluntarily, free from any influence, coercion
or duress of any kind.
16.19 LITIGATION BY THIRD PARTIES. In the event that suit is brought by a
third party to enjoin or otherwise interfere with the consummation of the
transactions contemplated herein, the parties agree that the bringing of such
litigation shall not entitle any party hereto to terminate the within Agreement,
but that the parties shall bring an action for declaratory relief before a court
of competent jurisdiction and shall terminate this Agreement if such court
adjudges termination to be required by the rights of such third party.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed and delivered in its name and on its behalf, all as of the day and
year first above written at Carlsbad, California.
("LPI")
LASER PHOTONICS, INC.
a Delaware corporation
By:/s/ Xxxxx Xxxxxxxx
------------------
Xxxxx Xxxxxxxx, Chief Financial Officer
("LAI")
LASER ANALYTICS, INC.
a Massachusetts corporation
By: /s/ Xxxxx Xxxxxxxx
------------------
Xxxxx Xxxxxxxx, Chief Financial Officer
("Purchaser")
LASER ANALYTICS, INC.
a Texas corporation
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By: /s/ Xxxxx X. Xxxx Xx.
---------------------
Xxxxx X. Xxxx, Xx., President
27
