ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is made this 24th day of
September, 1997 by and among Diplomat Corporation, a Delaware Corporation with
its principal place of business at 00 Xxx Xxxxx Xxxxx, Xxxxx Xxxxx, Xxx Xxxx
("Diplomat"), Xxx Xxxxxx, Inc., a Delaware corporation with a place of business
at 000 Xxxxxx Xxxxxx, Xxxxxxx, Xxx Xxxxxx ("Magram"), or an assignee or designee
of either Diplomat or Magram (Diplomat, Xxx Xxxxxx or the assignee or designee
are referred to herein as "Purchaser"); Xxxx Xxxxxxx'x Brownstone Studio, Inc.,
a New York Corporation with its principal place of business at 0000 Xxxxxxxxx
Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 ("Brownstone") and Xxxxxx, Inc., a 0000
Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 ("Xxxxxx") (Brownstone and Xxxxxx
are collectively referred to as "Sellers" or "Company").
RECITALS
WHEREAS, Sellers have filed for Chapter 11 bankruptcy protection, and are
currently subject to the bankruptcy court's jurisdiction, in the Southern
District of New York, Case Nos. 97 B 41214 (JLG) and 97 B 41215 (JLG) ("Seller's
Bankruptcy"); and
WHEREAS, Purchaser will, upon the closing of the transactions contemplated
hereby and subject to Bankruptcy Court approval, acquire those assets of Sellers
set forth on Schedule 1(a)(i) hereto, which assets constitute substantially all
of the Assets of Sellers; and
WHEREAS, the Sellers desire to sell, transfer and assign to Purchaser and
the Purchaser desires to purchase from Sellers those assets of Sellers set forth
on Schedule 1(a)(i) hereto, which assets constitute substantially all of the
Assets (as such term is hereinafter defined) of the Sellers.
NOW THEREFORE, in consideration of the mutual promises herein contained and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. Acquisition of Assets
(a) Assets to be Acquired. At the Closing and upon the terms and
subject to the conditions of this Agreement and upon the representations,
warranties and covenants herein made, Sellers agrees to sell, assign,
transfer, convey and deliver to Purchaser, and Purchaser agrees to purchase
from Sellers, those assets of the Company set forth on Schedule 1(a)(i)
Hereto ("Assets")free and clear of all liens, pledges, security interests,
options, claims, charges and encumbrances of any kind whatsoever, together
with all rights now and hereafter attaching thereto, except with respect to
those liens set forth in Section 1(b) hereof. Specifically excluded from
such purchase and sale are, without limitation, those
assets particularly set forth on Schedule 1(a)(ii) attached hereto.
(b) Purchase Price. Upon the terms and subject to the conditions set
forth in this Agreement, subject to the representations, warranties and
covenants made herein, and in exchange for the Assets, Purchaser hereby
agrees to the following:
(i) to assume irrevocably all indebtedness and obligations owed by
Seller to Congress Financial Corporation ("Congress"), including
any amounts advanced pursuant to a certain junior participation
agreement dated September __, 1997 by and among Congress, Xxxxxx
X. Xxxxx and Xxx X. Xxxxxxxxx ("Bid"); and
(ii) to issue and transfer to Sellers, on the Closing Date, an option
to purchase an aggregate of 200,000 shares of Diplomat
Corporation's ("Diplomat") Common Stock, exercisable at any time
for a period of three years from the date of issuance of such
option at an exercise price equal to the closing price of
Diplomat's common stock as listed on the Nasdaq SmallCap Market
on the business day immediately preceding the Closing Date, such
options being exercisable on an all or none basis ("Option
Payment"), as more fully set forth in the form of option
agreement attached hereto at Exhibit 1(b)(ii).
The Bid and the Option Payment are collectively referred to herein as the
"Purchase Price").
(c) Assumption of Liabilities. Other than the liabilities being
assumed as part of the Purchase Price, and those set forth on Schedule
1(c) hereto, Purchaser will not assume any of Sellers' other
liabilities, provided however, Purchaser does agree to assume all
liabilities of Sellers which result from commitments made subsequent
to the implementation of a certain management agreement dated
September 17, 1997 by and between Purchaser and Sellers.
(d) Closing. The closing of the Acquisition of the Assets (the
"Closing") will take place at the Offices of Purchaser's Counsel
within ten (10) days of entry of an order of the Bankruptcy Court
approving this Agreement in form and substance, such order being
reasonably satisfactory to Purchaser and not the subject of a stay
pending appeal, but in no event later than November 30, 1997 unless
extended in the sole discretion of the Purchaser. The Closing will be
subject to the conditions herein discussed in Section 5 hereof.
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(e) Delivery of the Assets and Payments.
(i) At the Closing Sellers shall cancel indicia of ownership on
their behalf of the Assets by assigning in the name Purchaser, or its
designee(s), the Assets set forth in Exhibit 1(a)(i). Sellers shall
also provide Purchaser, in form reasonably satisfactory to the
Purchaser, such deeds, bills of sale, endorsements, assignments,
receipts and other instruments as shall be sufficient to vest in the
Purchaser good and marketable title to the Assets, free and clear of
all liens, claims and encumbrances.
(ii) Sellers will be responsible for, and will pay, any and all
applicable sales taxes, transfer taxes and similar charges arising in
connection with the transactions contemplated by this Agreement.
2. Representations and Warranties of the Company. The Company represents
and warrants to Purchaser, which representations and warranties shall survive
the Closing, that:
(a) Organization, Standing, etc. of the Company. Each Seller is a
corporation duly organized, validly existing and in good standing under the
laws of the State of New York and has full corporate power and authority to
conduct its business as presently conducted by it and to enter into and
perform this Agreement and to carry out the transactions contemplated by
this Agreement. Each Seller is duly qualified to do business as a foreign
corporation doing business in the States of New Jersey,
_______________________. There are no other jurisdictions in which the
conduct of its business or its ownership or leasing of property requires
that the Company qualify as a foreign corporation. Neither Seller has
subsidiaries and neither owns any shares of capital stock of any other
corporation.
(b) Authority for Agreement; Conflict with Authority. The execution,
delivery, and performance of this Agreement by each Seller has been duly
authorized by all necessary corporate action, and this Agreement
constitutes a valid and binding obligation of the Company enforceable
against it in accordance, with its terms. The execution and carrying out of
the transactions contemplated by this Agreement and compliance with its
provisions by each Seller will not violate any provision of law and will
not conflict with or result in any breach of any of the terms, conditions,
or provisions of, or constitute a default under, its Certificate of
Incorporation or its By-Laws or, in any material respect, any indenture,
lease, loan agreement or other instrument to which either Seller is a party
or by which it or any of its properties are bound, or any decree, judgment,
order, statute, rule or regulation applicable to the Company, and subject
only to the consent of Congress.
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(c) Governmental Consent, etc. Other than the need for an order from
the Bankruptcy Court approving this Agreement and the transaction
contemplated hereby, no consent, approval, order or authorization of, or
registration, qualification, designation, declaration, or filing with, any
governmental authority is required on the part of the Company in connection
with the execution and delivery of this Agreement, or the consummation of
the other transactions contemplated by this Agreement.
(d) Title to Properties; Liens. Except for liens granted to secure
indebtedness owed by Sellers to Congress, the Company has good title to, or
a valid and current leasehold interest in, the properties and assets
reflected in the Schedules hereto, and such properties and assets are free
and clear of all liens, security interests, charges and encumbrances,
except (i) as disclosed on the Financial Statement, (ii) liens for current
taxes not yet due and payable, and (iii) such imperfections of title or
zoning restrictions, easements or encumbrances, if any, as do not
materially interfere with the present use of such property or assets.
(e) Compliance with Other Instruments. Except with respect to
indebtedness owed by Sellers to Congress, neither Seller is in violation of
any term or provisions of its Certificate of Incorporation or By-Laws, or
of any material term of any instrument, loan agreement, agreement,
judgment, decree, order, statute, rule or regulation applicable to the
Company.
(f) Labor Relations. The Company has certain pension, retirement or
similar plan or obligations, none of which are being assumed by the
Purchaser. The Company is a party to a collective bargaining agreement with
Local 23-25, UNITE, regarding terms and conditions of employment for
certain Company employees. Prior to sale, the Company shall make reasonable
efforts to secure from Local 23-25, UNITE, an agreement terminating the
collective bargaining agreement. The Company has no actual knowledge of any
current organization efforts by among or regarding any Company employees
not within the UNITE bargaining unit. The Company has no actual knowledge
of any material failure to comply with all applicable laws, including, but
not limited to, ERISA, and regulations relating to employment matters
including, but not limited to, those relating to wages, hours,
discrimination and payment of social security and similar laws.
(g) Tax Returns and Payment. All of the tax returns and reports of the
Company required by law to be filed have been duly and accurately filed and
all taxes shown due thereon have been paid and all payroll tax withholdings
have been timely deposited. There are in effect no waivers of the
applicable statute of limitations for federal, state or local taxes for any
period. The Company agrees to indemnify and save the Purchaser
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harmless and to promptly pay to the Purchaser or reimburse the Purchaser
for all losses, liabilities or obligations incurred by Purchaser resulting
from tax liabilities of the Company No deficiency assessment or proposed
adjustment of the Company's federal, state and local taxes is pending, and
the Company has no knowledge of any proposed liability for any tax to be
imposed upon its properties or assets, for which there is not an adequate
reserve reflected in the Financial Statement.
(h) Patents, Trademarks. Attached at Schedule 2(h) is a list of all of
the Company's patents, trademarks and copyrights. The Company has good
title to all of its material patents, trademarks, copyrights, trade names
and trade secrets, or adequate licenses and rights to use patents,
trademarks, copyrights, trade names and trade secrets of others necessary
to the conduct of its business. The business of the Company is being
carried on without known conflicts with patents, licenses, trademarks,
copyrights, trade names and trade secrets of others and to the best of the
Company's knowledge, no other persons are conducting their businesses in
conflict with patents, licenses, trademarks, copyrights, trade names and
trade secrets used by the Company.
(i) Environmental Matters. To the best knowledge of the Company (i)
the Company has obtained all permits and licenses which are required in
connection with its business under all applicable laws and regulations
relating to pollution or protection of the environment (the "Environmental
Laws") and is in compliance therewith; (ii) the Company has at all times
conducted its business in material compliance with all Environmental Laws
and the Company has not received any written or oral notice of any past,
present or future events, conditions or circumstances, which would
interfere with or prevent compliance or continued compliance with any
Environmental Laws or which would form the basis of any claim, demand or
investigation, based on or related to the Company's business or other
activities; (iii) to the Company's knowledge there is no civil, criminal or
administrative action or proceeding pending or threatened against the
Company, relating in any way to any Environmental Laws; (iv) there do not
exist, and at no time since the Company acquired any premises owned, leased
or used by it (the "Subject Premises"), have there existed any conditions
which would require remediation by the Company under any Environmental
Laws; (v) there are no underground storage tanks located on the Subject
Premises and (vi) the Company has at all times during its ownership or
occupation of the Subject Premises disposed of all wastes, hazardous or
otherwise, generated by the use of the Subject Premises in accordance with
Environmental Laws.
(j) Compliance with Laws and Regulations. The Company has complied in
all material respects with all laws and regulations applicable to the
conduct of its business.
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(k) Insurance. The Company has in full force and effect insurance
policies of the types and in amounts appropriate to be carried by business
entities operating businesses similar to that of the Company.
(l) Product Liability Claims. There are no pending or threatened
product liability claims by customers or any third parties of the Company
with respect to the business or operations of the Company, any products now
or previously manufactured and/or sold by the Company, nor does there exist
a basis therefor.
(m) Full Disclosure. The representations and warranties of the Company
contained in this Agreement do not contain any untrue statement of a
material fact or omit a material fact necessary to make the statements
contained therein or herein not misleading.
(n) Powers of Attorney. Except as specified in Schedule 2(n), there
are no powers of attorney, limited powers of attorney, proxies or
discretionary accounts in place which entitle any employee, independent
contractor or the third party to deal with any account of the Company or
which would bind the Company in any other way.
(o) Documents Furnished. Before the Closing, Sellers will have
delivered to Purchaser or given Purchaser access to all documents which are
set forth on Schedule 2(o), including but not limited to:
(a) access to insurance policies in force under which the Company
is insured;
(b) access to all permits and licenses held by the Company or by
any of the officers and directors of the Company with respect to the
business of the Company;
(c) delivery of all audits, reviews and correspondence referring
to management's accounting policies and practices between the Company
and its independent accountants;
(d) access to all compensation and employment agreements and any
other material agreement between the Company and any employee,
independent contractor, head hunter or any other third party, as well
as any agreement entered into by the Sellers pertaining in any respect
to the Company;
Company shall make available subsequent to the Closing hereof for review by
Purchaser or Purchaser's representatives, all other books, records and
documents of the Company which Purchaser reasonably requests.
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(p) Bank Accounts. Schedule 2(p) sets forth the names and locations of
all banks, depositories and other financial institutions in which the
Company has an account or safe deposit box and the names of all persons
authorized to draw thereon or to have access thereto.
3. Representations and Warranties of Purchaser. The Purchaser represents
and warrants to the Company, which representations and warranties shall survive
the Closing, that:
(a) Organization, Standing, etc, of the Purchaser. The Purchaser is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has full corporate power and authority to
conduct its business as presently conducted by it and to enter into and
perform this Agreement and to carry out the transactions contemplated by
this Agreement.
(b) Authority for Agreement. The execution, delivery, and performance
of this Agreement by the Purchaser has been duly authorized by all
necessary corporate action, and this Agreement constitutes a valid and
binding obligation of the Purchaser enforceable against it in accordance
with its terms. The execution and carrying out of the transactions
contemplated by this Agreement and compliance its with provisions by the
Purchaser will not violate any provision of law and will not conflict with
or result in any breach of any of the terms, conditions, or provisions of,
or constitute a default under, its Certificate of Incorporation or its
By-Laws or, in any material respect, any indenture, lease, loan agreement,
agreement, or other instrument to which the Purchaser is a party or by
which it or any of its properties are bound, or any decree, judgment,
order, statute, rule or regulation applicable to the Purchaser.
(c) Commission Reports. Diplomat has made all required filings of
reports and forms with the Commission under the Securities Exchange Act of
1934, as amended (the "Exchange Act") since _________. All such reports and
forms (as amended, in the case of any thereof which were amended after
filing) were prepared in all material respects in accordance with the
requirements of the Exchange Act and the rules and regulations thereunder.
As of their respective dates (or as of the date last amended, in the case
of any thereof which were amended after filing), none or such reports or
forms contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading, except to the extent corrected by a subsequently
filed amendment or other report, form or document. The audited consolidated
financial statements and unaudited interim financial statements and
schedules of Diplomat (as amended, if applicable) contained in such public
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reports (or incorporated therein by reference) were prepared in accordance
with generally accepted accounting principles applied on a consistent
basis, except as noted therein, and fairly presented in all material
respects the consolidated financial condition and results of operations of
Diplomat and its consolidated subsidiaries as at the respective dates
thereof and for the periods indicated therein, subject in the case of
interim unaudited financial statements to normal year-end audit
adjustments.
4. Covenants
(a) Access to Records and Properties of the Company.
(1) Between the date of this Agreement and the Closing, Sellers
shall give to Purchaser and its agents and representatives, including
but not limited to its accountants, attorneys and consultants, such
access to the premises, books and records of the Company, and to cause
the officers and employees of the Company to furnish such financial
and operating data and other information with respect to the Company,
as Purchaser shall from time to time reasonably request in a manner so
as not to interfere with the ordinary course of business of the
Company.
(2) In the event the sale and purchase hereunder shall not be
consummated, Sellers and Purchaser shall treat as confidential all
documents, materials and other information which they shall have
obtained regarding the Sellers or Purchaser during the course of the
negotiations leading to the transaction contemplated hereby, the
investigation of the Sellers or Purchaser, and the preparation of this
Agreements, and shall return all copies of non-public documents and
materials which have been furnished in connection therewith. However,
nothing contained herein shall prohibit Sellers or Purchaser from:
(i) using such documents, materials and other information in
connection with any action or proceeding brought or any claim
asserted by Sellers or Purchaser in respect of any breach of any
representation, warranty or covenant made pursuant to this
Agreement; or
(ii) supplying or filing such documents, material or other
information (1) to federal, state or local government, agency or
authority to the extent required in connection with the obtaining
of any other consent, waiver, amendment, modification, approval,
authorization, permit or license which may be necessary to
effectuate this Agreement and to consummate the transactions
contemplated hereby or (2) to the extent required under legal
process by subpoena or other court order.
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(b) Operation of the Company Prior to Closing. From the date hereof
and until the earlier of (i) the Closing, and (ii) the implementation of a
management agreement by and among Purchaser, Brownstone and Xxxxxx, except
as otherwise expressly contemplated by this agreement or to the extent that
Purchaser shall otherwise expressly consent in writing, the Company shall
operate its business as presently operated and solely in the ordinary
course, and, consistent with such operation, the Sellers:
1. shall not effect any amendment to the Company's Certificate or
Articles of Incorporation or Bylaws;
2. shall not change the Company's corporate name or permit the
use thereof by any other person;
3. except for matters expressly permitted under this Agreement,
shall not pay or agree to pay to any employee, officer, or director of
the Company, compensation that is in excess of the current
compensation level of such employee, officer, or director, except for
annual increases in the ordinary course of business consistent with
prior practices and consistent with bonus and commission policies in
effect on the date of this Agreement;
4. shall not merge or consolidate the Sellers with any other
corporation, association, partnership, joint venture or other entity
or allow it to acquire or agree to acquire any corporation,
association, partnership, joint venture, or other entity;
5. shall not sell, transfer, pledge or otherwise dispose of any
assets of the Company, except in the ordinary course of business
consistent with prior practices;
6. shall not create, incur, assume, or guarantee any indebtedness
for money borrowed by the Company, any other corporation or any
individual except in the ordinary course of business, or create or
suffer to exist any mortgage, lien, or other encumbrance on any of its
properties or assets, real or personal, except those in existence on
the date hereof;
7. shall not make any capital expenditure, or series of related
capital expenditures, in excess of $20,000 not previously approved by
Purchaser;
8. except as set forth herein, shall not declare or pay any
dividends on or make any distributions of any kind with respect to any
of the Company's capital stock;
9. shall maintain the facilities, Assets, and properties of the
Company in good operating repair, order, and condition, reasonable
wear and tear excepted, and to notify
9
Purchaser immediately upon any loss of, damage to, or destruction of
any of the assets of the Company;
10. shall maintain in full force and effect with respect to the
assets, employees and business of the Company, all present insurance
coverage of the types and in the amounts as are in effect as of the
date of this Agreement and to apply the proceeds received under any
such insurance policy or as a result of any loss or destruction of or
damage to any assets of the Company, to the repair or replacement of
such assets;
11. shall use its reasonable best efforts to preserve the present
employees, reputation and business organization of the Company, and
the relationship of the Company with its customers and others having
business dealings with it;
12. shall not permit the issuance of any additional shares of the
capital stock of the Company or take any action affecting the
capitalization of the Company;
13. shall refrain from taking any action, and not suffer to exist
any event or occurrence, which would render any representation and
warranty contained herein inaccurate in all material respects at any
time between the date hereof and the Closing, including as of the
Closing, and to promptly advise Purchaser of any breach of any
representation and warranty, covenant, condition or obligation of
Sellers hereunder;
14. shall comply with and not be in default or violation under
any law, regulation, decree or order applicable to the business,
operations or assets of the Company; and
15. shall not enter into any contract or arrangement which
obligates the Company to expend more than $10,000.
(c) Consents and Notices. Promptly after the date hereof, Sellers and
Purchaser shall use their best commercially reasonable efforts to obtain
all necessary or desirable consents and notices to effectuate this
Agreement and to consummate the transactions contemplated hereby in
accordance with the terms hereof, or to continue in effect and to assure
that the Sellers and Purchaser shall continue to be entitled to all of the
benefits of the all contracts to which Sellers are a party and access to
the bank accounts of the Sellers, and shall give all notices to third
parties required to be given by the Sellers in contemplation and as a
result of the transactions contemplated by this Agreement. Sellers shall
promptly advise the Purchaser of any difficulties encountered by the
Sellers in obtaining any such consents, waivers, approvals and
authorization.
(d) Commercially Reasonable Covenant to Satisfy
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Conditions. Sellers shall use commercially reasonable efforts to cause the
obligations contained in Section 5 to be satisfied to the extent that the
satisfaction of such conditions is in the control of the Company; however,
the foregoing shall not constitute a limitation upon the covenants and
obligations of Sellers and Purchaser otherwise expressly set forth in this
Agreement.
(e) Restriction on Transfer. From the date hereof until Closing,
Sellers shall not without the written consent of Purchaser sell, assign,
pledge, donate, transfer or otherwise dispose of any shares of the capital
stock of the Company or permit any shares of the capital stock of the
Company to be sold, assigned, pledged, donated, transferred or otherwise
disposed of or enter into any agreement in which the Sellers agrees to take
such action.
5. Conditions to Closing.
(a) Conditions Precedent to Purchaser's Obligations on the Closing
Date. The obligations of the Purchaser on the Closing Date as provided in
Section 1(a) shall be subject to the satisfaction on or prior to the
Closing Date of the following conditions precedent, any one or more of
which may be waived by the Purchaser:
(1) Representations and Warranties. The representations and
warranties by the Company in Section 2 hereof shall be true and
accurate on and as of the Closing.
(2) Performance. The Company shall have performed and complied
with all agreements and conditions contained herein or in other
ancillary documents incident to the transactions contemplated by this
Agreement required to be performed or complied with by it prior to or
at the Closing.
(3) Consents, Etc, The Company shall have obtained the approval
of the Bankruptcy Court, as evidenced by an order satisfactory in form
and substance to Purchaser, which is not subject to a stay pending
appeal or writ of certiorari, which approves the terms of this
Agreement, as well as all other permits, consents and authorizations
that shall be necessary, desirable or required lawfully to consummate
this Agreement.
(4) Compliance Certificate. The Company shall have delivered to
the Purchaser or its representative at the Closing an Officer's
Certificate to the effect that the representations and warranties of
the Company continue to be true and accurate on the Closing, and that
all conditions specified herein have been fulfilled.
(5) Proceedings and Documents. All corporate and other
proceedings in connection with the transactions con-
11
templated by this Agreement and all documents and instruments incident
to such transactions shall be satisfactory in substance and form to
the Purchaser and its counsel, and the Purchaser and its counsel shall
have received all such counterpart originals (or certified or other
copies) of such documents as they may reasonably request.
(6) Material Changes; Due Diligence. Since the date of this
Agreement, except as to changes, occurrences, conditions or
developments, the magnitude and aspects of which have been
specifically disclosed to the Purchaser prior to the date hereof,
there shall not have been any material adverse change in the business,
assets, operations or prospects of the Company (as determined by the
Purchaser in its sole discretion).
(b) Conditions Precedent to Company's Obligations. The obligations of
the Company on the Closing Date as provided in Section 1(a) shall be
subject to the satisfaction, on or prior to the Closing Date, of the
following conditions precedent, any one or more of which may be waived by
the Company.
(1) Representations and Warranties. The representations and
warranties by the Purchaser in Section 3 hereof shall be true and
accurate on and as of the Closing Date.
(2) Performance. The Purchaser shall have performed and complied
with all agreements and conditions contained herein or in other
ancillary documents incident to the transactions contemplated by this
Agreement required to be performed or complied with by it prior to or
at the Purchaser.
(3) Compliance Certificate. The Purchaser shall have delivered to
the Company at the Closing an Officer's Certificate to the effect that
the representations and warranties of the Purchaser continue to be
true and accurate on the Closing Date, and that all conditions
specified in Sections 5(b)(1) and (2), inclusive, have been fulfilled.
6. Indemnification.
(a) Indemnification by the Sellers. The Sellers ("Indemnitors")
jointly and severally hereby agree to indemnify and hold harmless Purchaser
against all losses, liabilities, costs, damages and expenses, including
reasonable attorneys fees, incurred by Purchaser resulting from, arising
out of, or connected with:
(1) any damage or deficiency resulting from the material breach
of any representation or warranty under Section 2 in this Agreement or
any instrument furnished to Purchaser hereunder, any material
misrepresentation or omission, material breach of warranty, material
nonfulfillment of any agreement on the
12
part of the Indemnitors under this Agreement or from any
misrepresentation in or omission from any certificate, document or
other instrument furnished or to be furnished to Purchaser hereunder;
(2) all undisclosed liabilities of the Company of any nature,
whether accrued, absolute, contingent or otherwise, existing at the
Closing;
(3) the material nonfulfillment of any covenant made by the
Indemnitors or the Company in this Agreement or in any instrument
furnished by the Indemnitors or the Company to Purchaser or in
connection with the Closing; and
(4) all actions, suits, proceedings, demands, assessments,
judgments, costs, including attorneys fees, and expenses incident to
any of the foregoing.
(b) Claims. If it shall be determined in accordance with Section 6(a)
that any of the Indemnitors are required to indemnify the Purchaser for any
claim, judgment and expenses, including attorneys fees, relating to any
litigation by a court of competent jurisdiction or as a result of a
settlement approved by the Purchaser, the amount of such indemnification
shall be paid by the Indemnitors, jointly and severally, from time to time,
on demand, for any amounts as to which the indemnity relates. In the event
of a determination of the amount of any indemnification pursuant to this
Section, the Purchaser shall give the Indemnitors written notice of the
existence of any claim and shall give the Indemnitors written notice of the
amount of loss or damage relating to any such claim within a reasonable
period of time so as not to prejudice the Indemnitors' rights. The
Purchaser shall give the Indemnitors notice before settling any claim in
whole or in part, and the Indemnitors shall have the right to participate
in the defense of any such claim at their own expense.
7. Miscellaneous.
(a) Expenses. Each party shall bear its own costs, including attorneys
fees, involved in the negotiating of this Agreement and consummation of the
transactions contemplated hereby.
(b) Survival of Agreements. All agreements, covenants, representations
and warranties contained herein or made in writing in connection with the
transactions contemplated hereby shall survive the execution and delivery
of this Agreement.
(c) Notices. All notices, requests, consents and other communications
herein shall be in writing and shall be mailed by first class certified
mail, postage prepaid, return receipt requested or personally delivered, in
each case addressed:
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if to Magram:
Xxx Xxxxxx Ltd.
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
With a copy to:
Xxxxxxx, Savage, Kaplowitz, Xxxxxxxxxx & Xxxxxx, LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxxxx, Xx., Esq.
If to Brownstone/Xxxxxx:
Xxxx Xxxxxxx'x Brownstone Studio, Inc
0000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: President
With a copy to:
Xxxx & Priest, LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxxx, Esq.
and
Xxxx Marks& Xxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxx, Esq.
or, in any such case, at such other address or addresses as shall have been
furnished in writing to the other parties hereto in accordance with the
provisions of this Section 7(c). For purposes of computing the time periods
set forth in this Agreement, the date of mailing shall be deemed to be the
delivery date.
(d) Modifications; Waiver. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally or in
writing, except that any provision of this Agreement may be amended and the
observance of any such provision may be waived (either generally or in a
particular instance and either retroactively or prospectively) with (but
only with) the written consent of the parties to be charged.
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(e) Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the transactions contemplated hereby,
and supersedes all negotiations, agreements, representations, warranties
and commitments, whether in writing or oral, prior to the date hereof.
(f) Successors and Assigns. All of the terms of this Agreement shall
be binding upon and inure to the benefit of and be enforceable by the
respective successor and assigns of the parties hereto.
(g) Remedies at Law or in Equity. If any party shall default in any of
its respective obligations under this Agreement following ten (10) business
days' notice thereof and such default shall be continuing or if any
representation or warranty of the respective parties made in this agreement
or in any certificate, report or other instrument delivered under or
pursuant to any term hereof shall be untrue or misleading when taken as a
whole in any material respect as of the date of this Agreement or as of the
Closing Date or as of the date it was made, furnished or delivered, the
other party may proceed to protect and enforce its rights by suit in equity
or action at law, whether for the specific performance of any term
contained in this Agreement or for an injunction against the breach of any
such term or in furtherance of the exercise of any power granted in this
Agreement, or to enforce any other legal or equitable right of such party
or to take any one or more of such actions, but only as to matters which
have not been waived or consented to by the other parties in accordance
with Section 8(d). In the event the non-breaching party brings such an
action against the breaching party, the prevailing party in such dispute
shall be entitled to recover from the other party all fees, costs and
expenses of enforcing any right of such prevailing party under or with
respect to this Agreement, including without limitation such reasonable
fees and expenses of attorneys and accountants, which shall include,
without limitation, all fees, costs and expenses of appeals.
(h) Remedies Cumulative: Waiver. No remedy referred to herein is
intended to be exclusive, but each shall be cumulative and in addition to
any other remedy referred to above or otherwise available at law or in
equity. No express or implied waiver of any default shall be a waiver of
any future or subsequent default. The failure or delay in exercising any
rights granted a party hereunder shall not constitute a waiver of any such
right and any single or partial exercise of any particular right shall not
exhaust the same or constitute a waiver of any other right provided herein.
(i) Exhibits and Documentation. All Exhibits and Schedules annexed
hereto and all documentation specifically referred to herein, are
incorporated in and made a part of this Agreement as if set forth herein.
Any matter disclosed on any such documentation
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or Exhibit or Schedule hereto shall be deemed also to have been disclosed
on any other applicable documentation referred to herein, as the case may
be.
(j) Execution and Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall
be deemed an original, and such counterparts together shall constitute one
instrument.
(k) Events of Termination. Anything herein or elsewhere to contrary
notwithstanding, this Agreement may be terminated by written notice of
termination at any time before the purchase of the Assets (i) by mutual
written consent of the parties; or (ii) by written notice by Purchaser to
Sellers if on the Closing Date the representations and warranties of
Sellers are determined to be incorrect, inaccurate or misleading in any
material respect as determined by Purchaser.
(l) Governing Law and Severability. This Agreement shall be governed
by the laws of the State of New York, without regard to its conflict of
laws principles. If any provision of this Agreement or any application
thereof is held to be unenforceable, the remainder of the Agreement and any
application of such provision shall not be affected thereby and to the
extent permitted by law, there shall be substituted for the provisions held
unenforceable, provisions which shall, as nearly as possible have the same
economic effect as the provisions held unenforceable.
(m) Headings. The descriptive headings of the Sections hereof and the
Schedules and Exhibits hereto are inserted for convenience only and do not
constitute a part of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
XXX XXXXXX, INC.
By:__/s/_______________________
XXXX XXXXXXX'X BROWNSTONE, INC.
By:__/s/______________________
XXXXXX, INC.
By:__/s/______________________
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