EXECUTION COPY
ASSET PURCHASE AGREEMENT
BETWEEN
MEDITE CORPORATION
AND
SIERRA PINE, a California limited partnership
January 31, 1997
TABLE OF CONTENTS
1. Definitions. 1
2. Basic Transaction. 7
(a) Purchase and Sale of Assets. 7
(b) Assumption of Liabilities. 7
(c) Purchase Price. 7
(d) The Closing. 7
(e) Deliveries at the Closing. 8
(f) Adjustments to Purchase Price;
Final Net Working Capital Amount 8
(g) Allocation. 9
(h) Inventory Value 9
(i) Transfer 9
3. Representations and Warranties of the Seller. 9
(a) Organization of the Seller. 10
(b) Authorization of Transaction. 10
(c) Noncontravention. 10
(d) Brokers' Fees. 11
(e) Legal Compliance 11
(f) Real Property 11
(g) Contracts 12
(h) Litigation. 12
(i) Financial 12
(j) Permits and Licenses 13
(k) Scope of the Acquired Assets 13
(l) Environmental Matters 13
(m) Intellectual Property Rights 14
(n) Taxes 14
4. Representations and Warranties of the Buyer. 14
(a) Organization of the Buyer. 15
(b) Authorization of Transaction. 15
(c) Noncontravention. 15
(d) Brokers' Fees. 15
(e) Financing 16
5. Pre-Closing Covenants. 16
(a) General. 16
(b) Notices and Consents. 16
(c) Operation of Business. 16
(d) Access. 17
(e) Notice of Developments. 17
(f) Employee Matters 18
(g) Corporate Documentation and Authorization/Opinion 18
(h) Title/Survey 18
6. Post-Closing Covenants 20
(a) General 20
(b) Litigation Support 20
(c) Covenant not to Compete 20
(d) Confidential Information 21
(e) Employee Matters 21
(f) Access 21
(g) Air Permit 21
(h) Purchase Price Adjustments 22
(i) Refiner Conversion 22
7. Tax Matters 22
(a) Tax Cooperation 22
(b) Allocation of Taxes 22
(c) Transfer Taxes 23
8. Conditions to Obligation to Close. 23
(a) Conditions to Obligation of the Buyer. 23
(b) Conditions to Obligation of the Seller. 24
9. Survival of Representations and Warranties 25
10. Indemnification Provisions for Benefit of the Buyer 26
11. Indemnification Provisions for Benefit of the Seller 26
12. Matters Involving Third Parties 27
13. Miscellaneous Indemnity Provisions 28
(a) Determination of Adverse Consequences 28
(b) Other Indemnification Provisions 28
14. Termination. 28
(a) Termination of Agreement. 28
(b) Effect of Termination. 29
15. Remediation Obligations for Hazardous Materials 29
16. Employee Severance. 30
17. Miscellaneous. 31
(a) Press Releases and Public Announcements 31
(b) No Third Party Beneficiaries. 32
(c) Entire Agreement. 32
(d) Succession and Assignment. 32
(e) Counterparts. 32
(f) Headings. 32
(g) Notices. 32
(h) Governing Law. 33
(i) Amendments and Waivers. 34
(j) Severability. 34
(k) Dispute Resolution; Expenses 34
(l) Construction. 35
(m) Incorporation of Exhibits. 35
(n) Allocation of Purchase Price 35
(o) Bulk Transfer Laws. 35
EXHIBITS
EXHIBIT A-1 Form of Deed
EXHIBIT A-2 Form of Xxxx of Sale and Assignment
EXHIBIT B Form of Assumption
EXHIBIT C Allocation Schedule
EXHIBIT D Disclosure Schedule
EXHIBIT E License Agreement
EXHIBIT F Form of Valhi, Inc. Guaranty
EXHIBIT G Form of Assignment of License Agreement
EXHIBIT H Environmental Report
EXHIBIT I [Reserved]
EXHIBIT J Form of ODOE Estoppel Certificate
EXHIBIT K Form of Licensor Estoppel Certificate
SCHEDULES
SCHEDULE 1 Acquired Assets Listing
SCHEDULE 1.1 Real Property
SCHEDULE 1.2 Fixed Assets
SCHEDULE 1.4 Certain Agreements
SCHEDULE 1.5 Intellectual Property
SCHEDULE 1.6 Accounts Payable Listing
SCHEDULE 1.7 Accounts Receivable Listing
SCHEDULE 2 Assumed Liabilities Listing
SCHEDULE 3 Specified Persons for Determining Knowledge of Seller
SCHEDULE 4 Specified Persons for Determining Knowledge of Buyer
SCHEDULE 5 Maximum Employee Severance Obligations - MDF Facility
SCHEDULE 5.1 Maximum Employee Severance Obligations - Corporate
Headquarters
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is entered into as of
January 31, 1997, by and between SIERRA PINE, a California limited partnership
(the "Buyer"), and MEDITE CORPORATION, a Delaware corporation (the "Seller").
The Buyer and the Seller are referred to individually as a "Party" and
collectively as the "Parties."
This Agreement contemplates a transaction in which the Buyer will purchase
the Acquired Assets (as defined below) and assume the Assumed Liabilities (as
defined below) of the Seller in return for cash and the assumption of debt.
Excluded Liabilities shall remain the obligation of the Seller.
Now, therefore, in consideration of the premises and the mutual promises,
representations, warranties, and covenants set forth below, the Parties agree as
follows.
1. Definitions.
"Accounting Report" has the meaning set forth in Section2(f) below.
"Acquired Assets" means all of the right, title, and interest of Seller in
and to all of the assets described on Schedule 1 attached to this Agreement and
incorporated herein by this reference.
"Additional Endorsements" has the meaning set forth in Section5(h) below.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, reasonable
settlements, liabilities (absolute, accrued, contingent or otherwise),
obligations, taxes, liens, losses, expenses, and fees, including court costs and
reasonable attorneys' fees and expenses.
"Ancillary Agreements" has the meaning set forth in Section2(e) below.
"Annual Financial Statements" has the meaning set forth in Section3(i)
below.
"Applicable Rate" means the "Prime Rate" as identified in the Wall Street
Journal Money Rates section from time to time as the base rate of interest for
corporate loans.
`Applicable Severance Obligations'' has the meaning set forth in
Section16(c).
"Assumed Liabilities" means all liabilities and obligations of the Seller
as described on Schedule 2 attached to this Agreement and incorporated herein by
this reference.
"Business" means the Seller's business operations relating to the MDF
Facility.
"Buyer" has the meaning set forth in the preface above.
"Buyer Confidential Information" means any information known to Seller as
of the Closing Date concerning the Business that as of the Closing Date (i) is
not, and does not become as a result of any action by Seller, its officers,
directors, employees, agents or attorneys, generally available to the public,
and (ii) is not, and does not become, available to the Seller from any source
other than the Buyer or its affiliates or Seller and its affiliates.
"Cause" means theft or other acts of dishonesty, commission of a felony or
a crime involving moral turpitude, violation of substance abuse policy,
continuous unexplained absence from work or violation of express employer
policies by an employee.
"Closing" has the meaning set forth in Section2(d) below.
"Closing Balance Sheet" has the meaning set forth in Section2(f) below.
"Closing Date" has the meaning set forth in Section2(d) below.
"Confidential Information" means any information concerning the Business
and any other businesses and affairs of the Seller and its Subsidiaries that (i)
is not already, and does not become as a result of any action by Buyer, its
officers, directors, employees, agents or attorneys, generally available to the
public, and (ii) is not, and does not become, available to the Buyer from any
source other than the Seller or its Subsidiaries.
"Disclosure Schedule" means the disclosure schedule attached hereto as
Exhibit D and incorporated in this Agreement by this reference. For the
convenience of the parties, each exception noted in the Disclosure Schedule
shall be numbered to correspond to the applicable subsection to which it refers.
"Environmental Report" shall mean the reports setting forth the results of
the phase I and phase II investigation performed by Xxxxxxx & Xxxxx at the MDF
Facility more particularly described in Exhibit H.
"Estimated Net Working Capital Amount" means the estimated net book value
as of the Closing Date determined by the Seller as provided herein in accordance
with GAAP and consistent with the Seller's past practices, of all Working
Capital related to the Business.
"Excluded Liabilities" means any and all liabilities, obligations, losses,
damages, claims, demands, remedies, actions and causes of action of every kind
and nature whatsoever, known or unknown, asserted or unasserted, absolute or
contingent, liquidated or unknown, due or to become due, whether at law or in
equity, in contract or tort or arising under or by virtue of any statute,
regulation, or common law theory of liability, now recognized by law or that may
be created or recognized in the future in any manner, including without
limitation by statute, regulation, or judicial decision, including but not
limited to actual damages, exemplary and punitive damages, all penalties of any
kind, and prejudgment and postjudgment interest, of the Seller that are not
Assumed Liabilities, including: (i) workers' compensation claims or liabilities
or claims regarding injury to or death of persons or damage to or destruction of
property with respect to incidents occurring on or prior to the Closing Date
regardless of when said claims or liabilities are asserted and liabilities
arising out of or in connection with any of Seller's employee health, welfare
and pension (including defined benefit pension and profit sharing) plans; (ii)
except to the extent provided in Section16, severance obligations, if any,
arising out of termination of Seller's employees at the MDF Facility prior to
the Closing or other employee obligations arising, or based on events occurring,
or resulting from, the termination of such employees before the Closing,
including all liabilities relating to or arising out of any collective
bargaining agreement including the arbitration of any such claim, or arising out
of any collective bargaining obligation or relationship of Seller; (iii) Taxes
owed by or imposed upon Seller related to the Acquired Assets incurred in or
attributable to any Pre-Closing Tax Period; (iv) product liability, product
warranty liability and tort liabilities of Seller, in each case with respect to
products sold prior to the Closing Date; (v) contract claims or liabilities of
Seller existing as of or relating to performance prior to the Closing Date; (vi)
except to the extent provided in Section15, liabilities for (A) the disposal
prior to the Closing Date by Seller of Hazardous Materials other than on the
real properties that are part of the Acquired Assets, or (B) the migration prior
to the Closing Date of Hazardous Materials off the real properties that are part
of the Acquired Assets while Seller owned such real properties; (vii) all
employee severance payments and obligations with respect to employees of the
Business located outside of Oregon; (viii) any liability for legal, investment
banking and other expenses and fees incurred by Seller in connection with the
negotiation and preparation of this Agreement and the sale of the Acquired
Assets to Buyer; (ix) any liability or obligation of the Seller under this
Agreement (or under any side agreement between the Seller on the one hand and
the Buyer on the other hand entered into on or after the date of this
Agreement); (x) any liability or obligation of Seller (whether for the payment
of money or otherwise) under either (A) that certain agreement dated August 31,
1995 between Seller and Convey/Keystone concerning the purchase of an ammonia
treatment system or (B) that certain agreement dated August 23, 1995 between
Medite Corporation and Sunds Defibrator concerning the conversion of five L-42
refiners to five L-46 refiners; or (xi) any cost or expense related to the
environmental reports prepared pursuant to the Xxxxxxx/Xxxxx agreement
identified in Section 3(g) of the Disclosure Schedule.
"Final Net Working Capital Amount" means the net book value as of the
Closing Date, determined by the Buyer and the Seller after the Closing in
accordance with GAAP and consistent with the Seller's past practices, of all
Working Capital related to the Business.
`GAAP'' means United States generally accepted accounting principles as in
effect from time to time.
"Xxxx-Xxxxx-Xxxxxx Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
"Hazardous Materials" means any hazardous substance defined or listed as a
hazardous substance within the meaning of the Comprehensive Environmental
Response, Compensation and Liability Act, as amended, or other hazardous
substances regulated under any federal, state or local environmental law,
statute, regulation, ordinance, permit or other legal requirement.
"Indemnified Party" has the meaning set forth in Section12(a) below.
"Indemnifying Party" has the meaning set forth in Section12(a) below.
"Intellectual Property Rights" means intellectual property rights,
including, without limitation, patents, patent applications, registered and
unregistered trademarks, trademark applications, trade names, service marks,
service xxxx applications, copyrights, copyright applications and registered
publications rights, computer programs, computer software, inventions, know-how,
trade secrets, technology, proprietary processes and formulae that are part of
the conduct of the Business.
"Inventory" means raw materials, work-in-process and finished goods related
to the Business but shall not include supplies or parts.
"Inventory Value" means the value of all Inventory as determined in
accordance with Section2(h) below.
"Knowledge" means, with respect to the Seller, the actual knowledge without
independent investigation of any one or more of the persons listed on attached
Schedule 3 and, with respect to the Buyer, the actual knowledge without
independent investigation of any one or more of the persons listed on attached
Schedule 4 .
"License Agreement" means the License Agreement attached hereto as Exhibit
E.
"MDF" means medium density fibreboard.
"MDF Facility" means the Seller's MDF facility in Medford, Oregon as more
particularly described in Schedule 1.
"Offer of Employment" means an offer by Buyer or Timber Products Company to
employ, in Medford, Oregon, an employee of Seller on substantially similar terms
and conditions to the terms and conditions of such employee's existing
employment with Seller (including without limitation, salary, position and
responsibilities) which employment will commence not later than one (1) week
after the Closing, subject to satisfactory completion of drug testing applicable
to all of Buyer's employees; provided however, that an offer by Buyer shall be
deemed an Offer of Employment notwithstanding that the terms and conditions
under which employees of Seller who are represented by a collective bargaining
representative shall be subject to, and may be modified pursuant to, collective
bargaining between Buyer and such collective bargaining representative.
"Ordinary Course of Business" with respect to a Person means the ordinary
course of business consistent with that Person's past custom and practice
(including, without limitation, with respect to quantity and frequency).
`ODEQ'' has the meaning set forth in Section6(g).
"ODOE Loan" means that certain loan between the Seller and the State of
Oregon Department of Energy and evidenced by the ODOE Loan Documents.
"ODOE Loan Documents" means the Loan Agreement dated as of October 8, 1992
and the Deed of Trust, Security Agreement, Promissory Note and Hazardous
Substance Agreement dated March 1, 1993 between the Seller and the State of
Oregon Department of Energy.
"Party" has the meaning set forth in the preface above.
"Permitted Exceptions" has the meaning set forth in Section5(h).
"Person" means an individual, a partnership, a corporation, an association,
a joint stock company, a limited liability company, a trust, a joint venture, an
unincorporated organization, or a governmental entity (or any department,
agency, or political subdivision thereof).
"Post-Closing Tax Period" means any tax period (or portion thereof)
beginning after the Closing Date.
"Pre-Closing Tax Period" means any tax period (or portion thereof) ending
on or before the Closing Date.
"Purchase Price" has the meaning set forth in Section2(c) below.
"Real Property" has the meaning set forth in Section5(h) below.
"Required Endorsements" has the meaning set forth in Section5(h) below.
"Security Interest" means any mortgage, pledge, lien, encumbrance, charge,
or other security interest, other than (a) mechanic's, materialmen's, and
similar liens, and (b) liens for taxes not yet due and payable or for taxes that
the taxpayer is contesting in good faith through appropriate proceedings.
"Seller" has the meaning set forth in the preface above.
"Subsidiary" means any Person with respect to which a specified Person (or
a Subsidiary thereof) owns a majority of the common stock or other equity
interests, or has the power to vote or direct the voting of sufficient
securities to elect a majority of the directors or other persons performing
similar functions with respect to such entity.
"Survey" has the meaning set forth in Section5(h) below.
"Taxes" means all taxes, however denominated, including any interest,
penalties, or other additions that may become payable in respect thereof,
imposed by any Federal, territorial, state, local, or foreign government or any
agency or political subdivision of any such government, which shall include,
without limitation, all income or real or personal property taxes, payroll and
employee withholding taxes, unemployment insurance, social security taxes, sales
and use taxes, ad valorem taxes, excise taxes, franchise taxes, gross receipts
taxes, business license taxes, occupation taxes, stamp taxes, environmental
taxes, transfer taxes and other governmental charges of a similar nature to any
of the foregoing.
"Third Party Claim" has the meaning set forth in Section12(a) below.
"Title Commitment" means the Preliminary Report, Order No. 54500mdf issued
by Xxxxxxx County Title Division of Continental Lawyers Title Company dated as
of 5:00 p.m. on December 9, 1996.
"Title Company" means Xxxxxxx County Title Division, Continental Lawyers
Title Company.
"WARN Act" means the Worker Adjustment and Retraining Notification Act.
"Working Capital" means xxxxx cash at the MDF Facility, accounts receivable
(excluding reserves for bad debts), accounts payable, accrued current
liabilities, prepaid items and Inventory Value.
2. Basic Transaction.
(a) Purchase and Sale of Assets. On the terms and subject to the
conditions of this Agreement, the Buyer agrees to purchase from the Seller, and
the Seller agrees to sell, transfer, convey, and deliver to the Buyer, all of
the Acquired Assets at the Closing for the consideration specified below in this
Section2.
(b) Assumption of Liabilities. On the terms and subject to the conditions
of this Agreement, the Buyer agrees to assume and become responsible for all of
the Assumed Liabilities at the Closing. The Buyer will not assume or have any
responsibility, however, with respect to any other obligations or liabilities of
the Seller that are not Assumed Liabilities. Without limiting the generality of
the foregoing, Excluded Liabilities remain the obligation of the Seller.
(c) Purchase Price. The Buyer agrees to pay to the Seller at the Closing
$37,541,000 for the MDF Facility plus or minus the Estimated Net Working Capital
Amount (as adjusted as provided in Section2(f) below, the "Purchase Price") by
(i) assumption by Buyer, in a manner and pursuant to assumption documents
reasonably satisfactory to Seller and the Buyer, of the ODOE Loan (which
assumption shall be deemed to have a value equal to (1) the outstanding
principal amount of the ODOE Loan as of the Closing Date, plus (2) the amount of
interest accrued and unpaid with respect to the ODOE Loan as of the Closing
Date), and (ii) payment of the remainder of the Purchase Price in cash by wire
transfer or delivery of other immediately available funds.
(d) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the main offices of U.S. National
Bank of Oregon in Portland, Oregon or any other mutually agreed upon location in
Portland, Oregon commencing at 9:00 a.m. local time on the fourteenth day after
the date of this Agreement (the "Closing Date") unless (i) such day is not a
business day, in which case the Closing shall occur at 9:00 a.m. local time on
the next succeeding business day, or (ii) as of such day all of the conditions
to the obligations of the Parties to consummate the transactions contemplated by
this Agreement (other than conditions with respect to actions the respective
Parties will take at the Closing itself) have not been satisfied or waived, in
which case the Closing shall occur on the second business day following the
satisfaction or waiver of all such conditions; provided, however, that by notice
by the Buyer to the Seller not later than twelve (12) days after the date of
this Agreement, the Buyer may extend the Closing Date to date not later than
twenty-one (21) days after the date of this Agreement. Either the Buyer or the
Seller may terminate this Agreement in accordance with Section14 if the Closing
Date shall not have occurred by the twenty-first day after the date of this
Agreement. The Closing shall be structured as a so-called "New York Style"
closing with the simultaneous issuance of the Title Policy by the Title Company
to Buyer and disbursement of the cash portion of the Purchase Price to Seller.
In connection therewith Buyer and Seller shall provide such gap indemnities and
undertakings as the Title Company may reasonable require. If the Title Company
is unable to facilitate a New York Style closing, the Closing shall be
consummated through a customary deed and money escrow arrangement with such
modifications thereto as are necessary to conform with the provisions of this
Agreement.
(e) Deliveries at the Closing. At the Closing, (i) the Seller will
deliver to the Buyer the various certificates, instruments, and documents
referred to in Section8(a) below; (ii) the Buyer will deliver to the Seller the
various certificates, instruments, and documents referred to in Section8(b)
below; (iii) each of the Seller and the Buyer will execute, acknowledge (if
appropriate), and deliver to the other (A) assignments, including a deed in the
form attached hereto as Exhibit A-1 and xxxx of sale and assignment in the form
attached hereto as Exhibit A-2, the assumption in the form attached hereto as
Exhibit B and an assignment and assumption of Seller's rights and obligations
under the License Agreement in the form attached hereto as Exhibit G (such real
property transfer documents, assumption and assignments, together with the
documents delivered under Subsections (ii) above and (iii)(B) below, are
referred to collectively as the "Ancillary Agreements"), and (B) such other
instruments of sale, transfer, conveyance, assignment and assumption as the
other reasonably may request; (iv) Seller will deliver to Buyer such detail
concerning the calculation of the Estimated Net Working Capital Amount as Buyer
may reasonably request; and (v) the Buyer will deliver to the Seller the
consideration specified in Section2(c) above.
(f) Adjustments to Purchase Price; Final Net Working Capital Amount.
(i) As promptly as practicable, but not before ninety (90) and not
later than one hundred twenty (120) days following the Closing Date, (i)
the Seller shall cause to be prepared, in accordance with GAAP and
consistent with its past practices, a balance sheet of the Business as of
the close of business on the Closing Date (the "Closing Balance Sheet");
and (ii) the Seller shall prepare a schedule setting forth the calculation
of the Final Net Working Capital Amount based on the Closing Balance Sheet
and (iii) the accounts receivable amount included in the Closing Balance
Sheet shall be determined as set forth in Section2(f)(ii). Promptly after
completion, the Seller shall deliver to the Buyer copies of the Closing
Balance Sheet and the schedule setting forth the calculation of the Final
Net Working Capital Amount (collectively, the "Accounting Report"). Within
ten (10) days after receipt of the Accounting Report, unless Buyer provides
notice to Seller of objection to the Accounting Report, (i) if the Final
Net Working Capital Amount exceeds the Estimated Net Working Capital
Amount, the Buyer shall make a cash payment to the Seller in an amount
equal to such excess; and (ii) if the Estimated Net Working Capital Amount
exceeds the Final Net Working Capital Amount, the Seller shall make a cash
payment to the Buyer in an amount equal to such excess. Any payments
pursuant to the foregoing provisions shall be adjustments to the Purchase
Price. In the event of any disputes with respect to the Purchase Price
adjustments pursuant to this Section2(f), the parties shall use their
respective best efforts to resolve such matters as provided in
Section17(k).
(ii) In preparing the Accounting Report, only those accounts
receivable actually collected as of ninety (90) days after the Closing Date
(determined with respect to the accounts receivable invoice referenced on
each respective payment), shall be considered in the calculation of the
Final Net Working Capital Amount and the Purchase Price shall be adjusted
accordingly. Accounts receivable which remain uncollected as of ninety
(90) days after the Closing Date shall not be counted in the Final Net
Working Capital Amount. Buyer promptly shall reassign all such uncollected
accounts receivable to the Seller.
(g) Allocation. The Parties agree to allocate the Purchase Price (and all
other capitalizable costs) among the Acquired Assets for all purposes (including
financial accounting and tax purposes) in accordance with the allocation
schedule attached hereto as Exhibit C. The Buyer and the Seller will cooperate
in the preparation and filing of Internal Revenue Service Form 8594 in a manner
consistent with this Section2(g); provided however, neither Party shall be
liable to the other in the event that such allocation is challenged by the
Internal Revenue Service.
(h) Inventory Value. Inventory shall be valued at average cost (excluding
LIFO reserves) in accordance with GAAP consistent with Seller's past practices,
including application of GAAP with respect to the lower of cost or market
valuation adjustments and valuation adjustments with respect to excess and slow
moving inventories.
(i) Transfer. Seller shall transfer possession of the Acquired Assets to
Buyer simultaneously with Closing.
3. Representations and Warranties of the Seller. The Seller represents
and warrants to the Buyer that the statements contained in this Section3 are
true, correct and complete, except to the extent qualified or supplemented by
the matters set forth in the Disclosure Schedule, as of the date of this
Agreement and will be true, correct and complete, except to the extent qualified
or supplemented by the matters set forth in the Disclosure Schedule, as of the
Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section3).
(a) Organization of the Seller. The Seller is a corporation validly
existing, and in good standing under the laws of the State of Delaware.
(b) Authorization of Transaction. The Seller has the corporate power and
authority to execute and deliver this Agreement and the Ancillary Agreements and
to perform its obligations under this Agreement and the Ancillary Agreements,
and the execution and delivery of this Agreement and the Ancillary Agreements
has been duly authorized and approved by all necessary corporate action of the
Seller. This Agreement constitutes, and the Ancillary Agreements when executed
by the Seller will constitute, valid and legally binding obligations of the
Seller, enforceable in accordance with their respective terms and conditions.
(c) Noncontravention. Neither the execution and the delivery of this
Agreement or the Ancillary Agreements, nor the consummation of the transactions
contemplated by this Agreement or the Ancillary Agreements, will (i) violate any
valid constitution, statute, regulation, rule, injunction, judgment, order,
decree, ruling, charge, or other restriction of any government, governmental
agency, or court to which any of the Seller and the Acquired Assets is subject
or any provision of the charter or bylaws of the Seller; or (ii) conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice or consent under any agreement, contract, lease, license,
instrument, or other arrangement to which the Seller is a party or by which it
is bound or to which any of its assets is subject (or result in the imposition
of any Security Interest upon any of its assets), except where the violation,
conflict, breach, default, acceleration, termination, modification,
cancellation, failure to give notice or obtain consent, or Security Interest
would not have a material adverse effect on the financial condition of the
Seller taken as a whole or on the ability of the Parties to consummate the
transactions contemplated by this Agreement or the Ancillary Agreements. To the
Knowledge of the Seller, and other than in connection with the provisions of the
Xxxx-Xxxxx-Xxxxxx Act, the Seller does not need to give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any government
or governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement or the Ancillary Agreements, except where the
failure to give notice, to file, or to obtain any authorization, consent, or
approval would not have a material adverse effect on the financial condition of
the Seller taken as a whole or on the ability of the Parties to consummate the
transactions contemplated by this Agreement or the Ancillary Agreements.
(d) Brokers' Fees. The Seller has no liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement or the Ancillary Agreements to which
the Acquired Assets could be subjected for which the Buyer could become liable
or obligated.
(e) Legal Compliance. The Seller has complied with all applicable and
valid laws (including rules, regulations, codes, plans, injunctions, judgments,
orders, decrees, rulings, and charges thereunder) of federal, state, local, and
foreign governments (and all agencies thereof), except where the failure to
comply would not have a material adverse effect upon the financial condition of
the Acquired Assets and Assumed Liabilities taken as a whole.
(f) Real Property.
(i) Section3(f)(i) of the Disclosure Schedule lists all Real
Property that is part of the Acquired Assets. With respect to each such
parcel of Real Property, and except as may be disclosed in any title
commitments issued with respect thereto:
(A) the Seller has good title to the Real Property, free and
clear of any Security Interest and other easements or covenants,
except as set forth in the Title Commitment and documents referenced
therein and except for building restrictions, zoning restrictions, and
similar matters arising from governmental action applicable generally
to properties of a similar character;
(B) there are no leases, subleases, licenses, concessions, or
other agreements granting to any party or parties the right of use or
occupancy of any portion of the parcel of real property; and
(C) there are no outstanding options or rights of first refusal
to purchase or lease the parcel of real property, or any portion
thereof or interest therein.
(ii) Section3(f)(ii) of the Disclosure Schedule lists all real
property leased or subleased that is part of the Acquired Assets. The
Seller has delivered to the Buyer correct and complete copies of the leases
and subleases listed in Section3(f)(ii) of the Disclosure Schedule (as
amended to date). To the Knowledge of the Seller, each lease and sublease
listed in Section3(f)(ii) of the Disclosure Schedule is legal, valid,
binding, enforceable in accordance with its terms, and in full force and
effect, except where the illegality, invalidity, nonbinding nature,
unenforceability, or ineffectiveness would not have a material adverse
effect on the Acquired Assets as a whole.
(g) Contracts. Section3(g) of the Disclosure Schedule lists all written
contracts and other written agreements relating to the Acquired Assets and
Assumed Liabilities the performance of which will involve consideration in
excess of $10,000, other than the Real Property leases and subleases listed in
Section3(f)(ii). The Seller has delivered to the Buyer a correct and complete
copy of each contract or other agreement listed in Section3(g) of the
Disclosure Schedule (as amended to date). To the Knowledge of Seller, all
contracts and other written agreements relating to the Acquired Assets and
Assumed Liabilities and listed on the Disclosure Schedule are in full force and
effect and are binding upon and enforceable in all material respects against the
parties thereto. To the Knowledge of Seller, Seller has not received any
written communications from any other party to the contracts required to be
disclosed under this Section3(g) which asserts a material breach to such
contract or which claims such contract is not valid or enforceable in any
material respect.
(h) Litigation. Section3(h) of the Disclosure Schedule sets forth each
instance in which the Seller (but only to the extent relating to the Acquired
Assets or Assumed Liabilities) or the Acquired Assets or Assumed Liabilities (i)
is subject to any outstanding injunction, judgment, order, decree, ruling, or
charge or (ii) is the subject of any pending, or to the Knowledge of Seller,
threatened in writing, action, suit, proceeding, hearing, or investigation of,
in, or before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction, except where the injunction,
judgment, order, decree, ruling, action, suit, proceeding, hearing, or
investigation would not reasonably be expected to involve consideration in
excess of $5,000. Section3(h) of the Disclosure Schedule lists all payments
during the five (5) years preceding the Closing Date for product-related claims
with respect to which each claim individually exceeds $25,000 in connection with
the products manufactured at the MDF Facility. The Seller is not a party to any
decree, order or arbitration award (or agreement entered into in any
administrative, judicial or arbitration proceeding with any governmental
authority) with respect to or having a material adverse effect upon the
financial condition of the Acquired Assets or Assumed Liabilities taken as a
whole.
(i) Financial.
(i) The Seller's balance sheets dated as of December 31, 1993,
December 31, 1994 and December 31, 1995, as well as income statements for
the years then ended, delivered to the Buyer (cumulatively the "Annual
Financial Statements") present fairly the financial position of the Seller
as of the date of each respective Annual Financial Statement and the
results of operations of the Seller for the respective periods covered by
the Annual Financial Statements in accordance with GAAP.
(ii) The unaudited balance sheet and income statements of the Seller
as of September 30, 1996 for the nine-month period then ended delivered to
the Buyer present fairly the financial position of the Seller as of the
date thereof and the results of operation of the Seller for the period
covered thereby in accordance with GAAP, subject to normal recurring
year-end adjustments in accordance with the Seller's historical accounting
practices.
(iii) The unaudited income statements of the Seller as of November
30, 1996, for the period then ended delivered to the Buyer present fairly
the financial position of the Seller as of the date thereof and the results
of operation of the Seller for the period covered thereby in accordance
with GAAP, subject to normal recurring year-end adjustments in accordance
with the Seller's historical accounting practices.
(iv) Other than the liabilities disclosed in the financial statements
described in this Section2(i) or otherwise in this Agreement, there are no
liabilities or obligations of the Business (whether absolute, contingent or
otherwise) which, if it had occurred or arisen prior to the date of such
financial statements, would have been required by GAAP to be reflected in
such financial statements.
(v) The Disclosure Schedule contains a list of the accounts payable
of MDF Facility as of a date not more than seven (7) days prior to the date
hereof, identifying the payee and the amount payable.
(vi) The Disclosure Schedule contains a list of the accounts
receivable of MDF Facility as of a date not more than seven (7) days prior
to the date hereof, identifying the payor and the amount payable.
(j) Permits and Licenses. Section3(j) to the Disclosure Schedule
contains a list of and true and correct copies of every material license, permit
or governmental approval applied for, issued or given to the Seller and every
material agreement with governmental authorities (federal, state, local or
foreign) entered into by the Seller as to the Business, which is in effect or
has been applied for or is pending.
(k) Scope of the Acquired Assets. The Acquired Assets constitute, and on
the Closing Date will constitute, all of the assets or property used or held for
use in the Business as presently conducted by Seller except the remaining assets
that are being retained by Seller. The Seller has good title to, or a valid
leasehold interest in, the material tangible assets that constitute the Acquired
Assets (other than Real Property).
(l) Environmental Matters. Seller has provided to Buyer, or given access
to Buyer with respect to, all of Seller's records relating to the
transportation, treatment or disposal of Hazardous Materials arising from or
related to the Acquired Assets. To its Knowledge, and except as disclosed in
the Environmental Report, the Seller is in compliance with all valid laws
(including federal, state, local and foreign statutes, laws, ordinances,
regulations, rules, permits, judgements, orders and decrees) applicable to the
Acquired Assets and the Business relating to environmental protection, including
standards relating to air, water, and land and the generation, storage,
transportation, treatment or disposal of solid wastes and Hazardous Materials,
except where the failure to comply would not have a material adverse effect upon
the financial condition of the Acquired Assets and Assumed Liabilities taken as
a whole. To its Knowledge, and except as disclosed in the Environmental Report,
there is no location on the Real Property where Hazardous Substances or other
harmful substances have entered into the soil or groundwater, except where the
existence of such substances would not have a material adverse effect upon the
financial condition of the Acquired Assets and Assumed Liabilities taken as a
whole.
(m) Intellectual Property Rights.
(i) Section3(m) of the Disclosure Schedule sets forth all license
agreements (the "Ancillary License Agreements") other than the License
Agreement relating to Seller's Intellectual Property Rights. Seller has
delivered to Buyer a true and correct copy of the License Agreement and
each of the Ancillary License Agreements, and such agreements have not been
modified in any material respect. To the Knowledge of Seller, the License
Agreement and the Ancillary License Agreements are in full force and
effect, no default exists thereunder and the licensors thereunder have not
alleged the existence of a default thereunder.
(ii) To the Knowledge of Seller, the Intellectual Property Rights
licensed to Seller under the License Agreement and the Ancillary License
Agreements are all of the Intellectual Property Rights of Seller used in
connection with the Business.
(iii) For purposes of this Section3(m), "use", with respect to
Intellectual Property Rights, includes make, reproduce, display or perform
(publicly or otherwise), prepare derivative works based on, sell,
distribute, disclose and otherwise exploit such Intellectual Property
Rights to the full extent permitted by law.
(n) Taxes. The Seller has timely paid all Taxes, and all interest and
penalties due thereon and payable by it for the Pre-Closing Tax Period which
will have been required to be paid on or prior to the Closing Date, the non-
payment of which would result in a Security Interest on any Acquired Asset,
would otherwise materially and adversely affect the Acquired Assets or Assumed
Liabilities taken as a whole or would result in the Buyer becoming liable or
responsible therefor.
4. Representations and Warranties of the Buyer. The Buyer represents and
warrants to the Seller that the statements contained in this Section4 are true,
correct and complete as of the date of this Agreement and will be true, correct
and complete as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement throughout this
Section4).
(a) Organization of the Buyer. The Buyer is a limited partnership duly
organized, validly existing, and in good standing under the laws of California.
(b) Authorization of Transaction. The Buyer has the power and authority
to execute and deliver this Agreement and the Ancillary Agreements and to
perform its obligations under this Agreement and the Ancillary Agreements, and
the execution and delivery of this Agreement and the Ancillary Agreements has
been duly authorized and approved by all necessary action of the Buyer. This
Agreement constitutes, and the Ancillary Agreements when executed by the Buyer
will constitute, valid and legally binding obligations of the Buyer, enforceable
in accordance with their respective terms and conditions.
(c) Noncontravention. Neither the execution and the delivery of this
Agreement or the Ancillary Agreements, nor the consummation of the transactions
contemplated by this Agreement or the Ancillary Agreements, will (i) violate any
valid constitution, statute, regulation, rule, injunction, judgment, order,
decree, ruling, charge, or other restriction of any government, governmental
agency, or court to which the Buyer is subject or any provision of the
organizational documents of the Buyer; or (ii) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice or consent under any agreement, contract, lease, license, instrument, or
other arrangement to which the Buyer is a party or by which it is bound or to
which any of its assets is subject (or result in the imposition of any Security
Interest upon any of its assets), except where the violation, conflict, breach,
default, acceleration, termination, modification, cancellation, failure to give
notice or obtain consent, or Security Interest would not have a material adverse
effect on the financial condition of the Buyer taken as a whole or on the
ability of the Parties to consummate the transactions contemplated by this
Agreement or the Ancillary Agreements. To the Knowledge of the Buyer, and other
than in connection with the provisions of the Xxxx-Xxxxx-Xxxxxx Act, the Buyer
does not need to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated by this
Agreement or the Ancillary Agreements, except where the failure to give notice,
to file, or to obtain any authorization, consent, or approval would not have a
material adverse effect on the financial condition of the Buyer taken as a whole
or on the ability of the Parties to consummate the transactions contemplated by
this Agreement or the Ancillary Agreements.
(d) Brokers' Fees. The Buyer has no liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement or the Ancillary Agreements for
which the Seller could become liable or obligated.
(e) Financing. Buyer will have, on the Closing Date, all funds necessary
to pay the Purchase Price and related fees and expenses, and has, or will have
on the Closing Date, the financial capacity to perform all of its other
obligations under this Agreement.
5. Pre-Closing Covenants. The Parties agree as follows with respect to
the period between the execution of this Agreement and the Closing.
(a) General. Each of the Parties will use its reasonable efforts to take
all action and to do all things necessary in order to consummate and make
effective the transactions contemplated by this Agreement (including
satisfaction, but not waiver, of the closing conditions set forth in Section8
below).
(b) Notices and Consents. Each Party will give any notices to third
parties, and each Party will use its reasonable efforts to obtain any third
party consents, that the other Party reasonably may request in connection with
the matters referred to in Section3(c) and Section4(c) above. Each of the
Parties will give any notices to, make any filings with, and use its reasonable
efforts to obtain any authorizations, consents, and approvals of governments and
governmental agencies in connection with the matters referred to in Section3(c)
and Section4(c) above. Without limiting the generality of the foregoing, each
of the Parties, in consultation with the other party, will file any notification
and report forms and related material that it may be required to file with the
Federal Trade Commission and the Antitrust Division of the United States
Department of Justice under the Xxxx-Xxxxx-Xxxxxx Act or otherwise, will use its
reasonable efforts to obtain early termination of the applicable waiting period,
and will make any further filings pursuant thereto that may be necessary.
(c) Operation of Business. The Seller will conduct the Business in the
Ordinary Course of Business and will not engage in any practice, take any
action, or enter into any transaction in each case relating to the Business
outside the Ordinary Course of Business. Without limiting the generality of the
foregoing, from and after the date of this Agreement through the Closing Date,
without the prior consent of the Buyer, which shall not be unreasonably
withheld, the Seller shall not:
(i) terminate, modify or amend any lease of real property related to
the Acquired Assets in any material respect;
(ii) hire any new employee who shall have an annual salary in excess
of $25,000.00, except to replace an existing employee of the Seller who is
receiving a comparable annual salary;
(iii) increase the compensation payable to any employee;
(iv) sell, transfer or otherwise dispose of any material asset or
property related to the Acquired Assets, except for sales of Inventory in
the Ordinary Course of Business and except the remaining assets that are
being retained by Seller;
(v) order any Inventory, except in the Ordinary Course of Business;
or
(vi) borrow money or incur indebtedness, other than in the Ordinary
Course of Business for the payment of liabilities arising in the Ordinary
Course of Business.
(d) Access. The Seller will permit representatives of the Buyer to have
access at all reasonable times, and in a manner so as not unreasonably to
interfere with the normal business operations of the Seller, to all premises,
properties, personnel, books, records (including tax records), contracts, and
documents of or pertaining to the Business as Buyer may reasonably request from
time to time. Subject to the provisions of Section5(h), the Buyer acknowledges
and agrees that it has completed to its satisfaction all of its other due
diligence in connection with the transactions contemplated by this Agreement,
including without limitation the environmental testing described in the
Environmental Report. Until the consummation of the transactions contemplated
by this Agreement, the Buyer will treat and hold as such any Confidential
Information it receives from the Seller, will not use any of the Confidential
Information except in connection with this Agreement and its conduct of the
Business, and, if this Agreement is terminated for any reason whatsoever, will
return to the Seller, or certify to the Seller that it has destroyed, all
tangible embodiments (and all copies) of the Confidential Information which are
in its possession.
(e) Notice of Developments.
(i) The Seller may elect at any time to notify the Buyer of any
development causing a breach of any of its representations and warranties
in Section3(e)-(n) above. Unless the Buyer has the right to terminate
this Agreement pursuant to Section14(a)(ii) below by reason of the
development and exercises that right within the period of ten (10) business
days referred to in Section14(a)(ii) below, the written notice pursuant to
this Section5(e)(i) will be deemed to have amended the Disclosure
Schedule, to have qualified the representations and warranties contained in
Section3 above, and to have cured any misrepresentation or breach of
warranty that otherwise might have existed hereunder by reason of the
development.
(ii) Each Party will give prompt written notice to the other Party of
any material adverse development causing a breach of any of its own
representations and warranties in Section3(a)-(d) and, Section4 above.
No disclosure by any Party pursuant to this Section5(e)(ii), however,
shall be deemed to amend or supplement the Disclosure Schedule or to
prevent or cure any misrepresentation or breach of warranty.
(f) Employee Matters. As Seller will no longer be owning or operating the
Business to be sold to the Buyer, Seller will terminate all of its employees
listed on Schedule 5 of the Disclosure Schedule immediately prior to the Closing
on the Closing Date. Prior to Closing, Buyer shall inform Seller in writing as
to which of the employees listed on Schedules 5 and 5.1 it intends to make an
Offer of Employment.
(g) Corporate Documentation and Authorization/Opinion. Seller shall
deliver to Buyer (with respect to Seller and Valhi, Inc.), and Buyer shall
deliver to Seller (with respect to Buyer), the following corporate or
partnership documentation and authorizations: (i) copies of organizational
documents consisting of articles or certificates of incorporation, bylaws,
partnership agreements and such other documents, including shareholder consents,
as the receiving party may reasonably request; (ii) copies of resolutions of the
respective board(s) of directors or similar persons with respect to the
transactions contemplated by this Agreement together with an original
certificate issued by an appropriate officer with respect thereto; and (iii) an
incumbency certificate issued by an appropriate officer with respect to all
officers executing documents in connection with the transactions contemplated by
this Agreement. In lieu of the delivery of the foregoing documents, Buyers
shall deliver to Seller at Closing an opinion, in form and substance
satisfactory to Seller, with respect to the authorization, execution and
delivery of the documents and the actions taken by Buyer with respect to the
transactions contemplated by this Agreement. Buyer agrees to deliver a draft of
such opinion to Seller within two (2) business days after the execution of this
Agreement.
(h) Title/Survey. Buyer acknowledges that Seller has delivered to the
Buyer a the Title Commitment issued by the Title Company for the issuance of an
ALTA Form B Owner's Title Insurance Policy (1992) (the "Title Policy") insuring
fee simple title to the real property owned by the Seller and part of the
Acquired Assets, all as more particularly described in Schedule 1 hereto (the
"Real Property"). The Title Commitment was accompanied by copies of all
instruments and documents of record referenced therein. Buyer acknowledges that
Seller, at Seller's sole cost and expense, has delivered to Buyer an Urban
ALTA/ASCM Land Title Survey (the Survey") certified to the Buyer and the Title
Company meeting accuracy standards jointly adopted by the American Land Title
Association and the American Congress on Surveying and Mapping and incorporating
the following Table A-Optional Survey Responsibilities and Specifications":
Items 1,2,3,4 (as to gross land area), 6, 7, 8, 9, 10, 11 and 13.
All exceptions listed in the Title Commitment or revealed on the Survey are
approved by Buyer and shall therefore be considered "Permitted Exceptions" for
purposes of this Agreement. It shall be a condition to Buyer's obligation to
proceed with the Closing that, when issued to Buyer at Closing or in accordance
with escrow arrangements, the Title Policy shall include full extended coverage
over all general exceptions and the Required Endorsements; provided however,
Buyer represents and warrants to Seller that the Buyer has confirmed that (i)
all Required Endorsements are available in the State of Oregon and, (ii) the
Buyer is ready, willing and able to satisfy all requirements of the Title
Company in order to obtain such Required Endorsements.
Buyer shall have the option to request, at Buyer's sole cost and expense,
that the Title Company agree to provide coverage against matters relating to
federal bankruptcy, state insolvency or similar creditors' rights laws, and the
following endorsements: an ALTA 3.1 zoning endorsement (with parking) and
contiguity endorsement (the "Required Endorsements") and such other endorsements
as Buyer may request (the "Additional Endorsements"). Buyer shall have the
option to request, at Buyer's sole cost and expense, that the Title Company
reinsure portions of the risk covered by the Title Policy with reinsurance
companies reasonably satisfactory to Buyer under standard reinsurance agreements
providing, at a minimum, for direct access and enforcement of rights by the
insured party to and against the reinsurer. Except for the issuance of the
Required Endorsements at the Closing or pursuant to escrow arrangements, none of
the matters described in this paragraph shall be conditions to Buyer's
obligations to close the transactions contemplated by this Agreement.
The Buyer shall have five (5) business days following receipt of any
updates or amendments to the Title Commitment or the Survey and copies of any
additional instruments and documents of record referenced therein to object by
written notice to the Seller to any title exception identified therein or
thereon. All title exceptions revealed by any updates or amendments to the
Title Commitment or the Survey to which Buyer does not object within the five-
day period provided above shall be considered Permitted Exceptions. In the
event the Buyer timely objects to a title exception as provided in the first
sentence of this paragraph, the Seller may, within two (2) business days
following receipt of the Buyer's written objections, and in any event no later
than the Closing Date, cause the Title Company to commit in writing to Buyer to
eliminate or modify or arrange for the removal or modification of such
disapproved exception to the Buyer's satisfaction. If the Seller is unable or
does not elect to eliminate or modify, or arrange for the elimination or
modification of any disapproved exception to the Buyer's satisfaction, within
such two (2) business day period, the Buyer shall have three (3) business days
after the expiration of such two (2) business day period within which to notify
the Seller whether the Buyer shall elect to terminate this Agreement or to waive
its objection to the disapproved exception (in which case the exception shall be
a Permitted Exception); provided, however, in the event that Buyer waives its
objection to a disapproved exception, the Buyer shall nonetheless receive a
credit, not to exceed $50,000 in the aggregate for all such exceptions, against
the Purchase Price with respect to any such exception to the extent the same
constitutes a lien or encumbrance of a definite or ascertainable amount. In the
event the Buyer elects termination, all obligations of the parties under this
Agreement (except such obligations that survive termination as set forth in
Section10(b)) shall thereafter cease and be of no further force or effect.
6. Post-Closing Covenants. The Parties agree as follows with respect to
the period following the Closing:
(a) General. In case at any time after the Closing any further action is
necessary to carry out the purposes of this Agreement, including without
limitation for the purpose of assigning, transferring, granting, conveying, and
confirming the transfer to the Buyer of the Acquired Assets and the assumption
by the Buyer of the Assumed Liabilities in accordance with the terms of this
Agreement, each of the Parties will take such further action (including without
limitation the execution and delivery of such further deeds, assignments,
conveyances, assumptions and other assurances, documents, and instruments) as
the other Party reasonably may request, all at the sole cost and expense of the
requesting Party (unless the requesting Party is entitled to indemnification
therefor under Section Section10, 11 or 12 below). Buyer will provide Seller
or its designees access at reasonable times and upon reasonable notice to any
documents, books, records, agreements and financial data concerning the
Business.
(b) Litigation Support. In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving any of Seller and its Subsidiaries, the other
Party shall cooperate with it and its counsel in the defense or contest, make
available its personnel, and provide such testimony and access to its books and
records as shall be necessary in connection with the defense or contest, all at
the sole cost and expense of the contesting or defending Party (unless the
contesting or defending Party is entitled to indemnification therefor under
Section Section10, 11 or 12 below).
(c) Covenant not to Compete. In consideration of the purchase by the
Buyer of the Acquired Assets, the Seller agrees that, for a period of three
years commencing on the Closing Date, it will not directly or indirectly,
including through any Subsidiary or affiliate, compete with the Buyer or any
successor or assign of the Buyer in any state of the United States west of the
Mississippi River (the "Western United States") by engaging in the production,
sale or distribution of medium density fiberboard for or to customers in the
Western United States, provided, that the provisions of this paragraph shall not
prevent the Seller from owning up to 4.9% of the outstanding shares or other
equity interests of any publicly traded corporation or other entity, including
any corporation or other entity engaged in such business.
(d) Confidential Information. From and after the Closing, Seller agrees
that (i) Seller will treat as confidential any Buyer Confidential Information;
and (ii) Seller will not use any Buyer Confidential Information for purposes of
the manufacture and sale of medium density fibreboard except in connection with
the operation of its Irish manufacturing facilities, if any, and sales and other
activities in relation thereto.
(e) Employee Matters. Seller acknowledges its obligation to bargain with
the collective bargaining representative of employees covered by a collective
bargaining agreement with respect to the transactions contemplated herein and
the impact thereof on bargaining unit employees. If Buyer hires any of Seller's
former employees, all such employees shall receive credit for all prior service
with Seller for purposes of participation in Buyer's employee benefit plans.
Buyer will make an Offer of Employment to employees whom the Buyer desires, in
its sole and absolute discretion, to hire. Buyer agrees not to take any action
or omit to take any action in connection with the hiring process that would
subject Seller to any responsibility or liability under the WARN Act with
respect to the MDF Facility.
(f) Access. Seller shall retain, at least through ninety (90) days after
the Closing Date, the lease for the AS400 computer currently under lease to
Seller from Winthrop Resources. Until ninety (90) days after the Closing Date,
Seller shall allow Buyer access to the AS400 computer for the purpose of running
all software programs currently utilized in the management and operation of, and
accounting for, the Business (copies of which software shall be provided at
Closing). Seller shall have access to all historical records of the Business in
both hard copy and electronic form, to facilitate preparation of the Accounting
Report. Seller shall provide to Buyer at no cost access via remote computer
connection to Seller's computer system on which the software and data to be used
by the Buyer shall be made available. Buyer shall be responsible for any
telecommunications or other third-party charges related to such remote access.
(g) Air Permit. Buyer and Seller acknowledge that the MDF Facility may
not in the past have been, and may not presently be, in compliance with the
existing air quality discharge permit with the State of Oregon Department of
Environmental Quality (`ODEQ''). Buyer agrees Seller shall not have any
obligation or responsibility with respect to the modification of the air quality
discharge permit or issuance of a new permit in order to cure such non-
compliance, if any. In the event that any fines, penalties or other
assessments, together with interest thereon, are imposed by the ODEQ or any
other governmental agency in respect of any noncompliance events occurring on or
before the Closing Date relating to the air quality discharge permit, Seller
agrees to pay, and indemnify and hold Buyer harmless in respect of, such fines,
penalties or other assessments, together with interest thereon.
(h) Purchase Price Adjustments. Buyer and Seller agree to comply with the
provisions of Section Section2(f)-(h).
(i) Refiner Conversion. Seller agrees, at its sole cost and expense, to
cause the 42" refining system (L-42 Defibrator) described on attached Schedule
1.2 as "Used L-42 Refiner" to be removed from the MDF Facility, to be converted
to a 46" refining system (L-46 Defibrator) pursuant to the terms of the
Agreement dated August 23, 1995 between Medite Corporation and Sunds
Defibrator (as modified to provide for a conversion to a 46" refiner rather
than a 44" refiner) and to be delivered to the MDF Facility.
7. Tax Matters.
(a) Tax Cooperation. Each of the Buyer and the Seller will furnish, or
cause to be furnished to each other, upon request, as promptly as practicable,
such information and assistance relating to the Acquired Assets and the Business
as is reasonably necessary for the filing of all tax returns, and making of any
election related to taxes, the preparation for any audit by any taxing
authority, and the prosecution or defense of any claim, suit or proceeding
relating to any tax return. Each of the Buyer and the Seller shall cooperate
with the other in the conduct of any audit or other proceeding related to taxes
involving the Business. The obligations of the Parties pursuant to this
Section7(a) shall include, without limitation, information, assistance and
cooperation relating to matters arising after the Closing under employee benefit
arrangements.
(b) Allocation of Taxes. All real property taxes, personal property taxes
and similar ad valorem obligations (collectively, the "Apportioned Obligations")
levied with respect to the Acquired Assets for a taxable period which includes
(but does not end on) the Closing Date shall be apportioned between the Seller
and the Buyer as of the Closing Date based on the number of days of such taxable
period included in the Pre-Closing Tax Period or Post-Closing Tax Period,
respectively. The Seller shall be liable for the proportionate amount of such
taxes that is attributable to the Pre-Closing Tax Period. Within ninety (90)
days after the Closing, each of the Seller and the Buyer shall present a
statement to the other setting forth the amount of reimbursement to which each
is entitled under this Section7(b), together with such supporting evidence as
is reasonably necessary to calculate the proration amount. The proration amount
shall be paid by the party owing it the other within ten (10) days after
delivery of such statement. Thereafter, the Seller shall notify the Buyer upon
receipt of any xxxx for real or personal property taxes relating to the Acquired
Assets, part or all of which are attributable to the Post-Closing Tax Period,
and shall promptly deliver such xxxx to the Buyer who shall pay the same to the
appropriate taxing authority, provided that if such xxxx covers the Pre-Closing
Tax Period, the Seller shall also remit to the Buyer prior to the due date of
assessment payment for the proportionate amount of such xxxx that is
attributable to the Pre-Closing Tax Period. In the event that either the Seller
or the Buyer shall thereafter make a payment for which it is entitled to
reimbursement under this Section7(b), the other party shall make such
reimbursement promptly but in no event later than thirty (30) days after the
presentation of a statement setting forth the amount of reimbursement to which
the presenting party is entitled along with such supporting evidence as is
reasonably necessary to calculate the amount of reimbursement. Any payment
required under this Section and not made within ten (10) days of delivery of the
statement shall bear interest at the rate per annum determined, from time to
time, under the provisions of Section 6621(a)(2) of the Code for each day until
paid.
(c) Transfer Taxes. Any transfer, documentary, sales, use or other Taxes
assessed upon or with respect to the transfer of the Acquired Assets to the
Buyer and any recording or filing fees with respect thereto shall be paid by the
Buyer.
8. Conditions to Obligation to Close.
(a) Conditions to Obligation of the Buyer. The obligation of the Buyer to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(i) the representations and warranties of Seller set forth in
Section3 above and of Valhi, Inc. in the Guaranty described below shall be
true and correct in all material respects at and as of the Closing Date;
(ii) the Seller shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) there shall not be any suit, proceeding, injunction, judgment,
order, decree, ruling, or charge in effect preventing or seeking to prevent
the consummation of any of the transactions contemplated by this Agreement,
the Ancillary Agreements or the Guaranty;
(iv) the Seller shall have delivered to the Buyer a certificate to
the effect that each of the conditions specified above in Section8(a)(i)-
(iii) is satisfied in all respects;
(v) all applicable waiting periods (and any extensions thereof) under
the Xxxx-Xxxxx-Xxxxxx Act shall have expired or otherwise been terminated
and the Seller, its Subsidiaries, and the Buyer shall have received all
other authorizations, consents, and approvals of governments and
governmental agencies referred to in Section3(c) and Section4(c) above;
(vi) the Seller shall have executed and delivered to the Buyer the
Assignment of License Agreement in the form of Exhibit G attached hereto;
(vii) Valhi, Inc. shall have executed and delivered to the Buyer the
Guaranty in the form of Exhibit F attached hereto;
(viii) the Buyer shall have received a consent to assignment and
estoppel certificate from the lender of the ODOE Loan in the form of
Exhibit J;
(ix) the Buyer shall have received a consent to assignment and
estoppel certificate from the licensor under the License Agreement in the
form of Exhibit K;
(x) no material adverse change shall have occurred with respect to
the Business taken as a whole since December 31, 1996, or, except as
publicly disclosed by Valhi, Inc., in the financial condition of Valhi Inc.
since September 30, 1996; and
(xi) all actions to be taken by the Seller in connection with
consummation of the transactions contemplated hereby and all certificates,
instruments, and other documents required to effect the transactions
contemplated hereby shall have been executed, delivered, recorded, taken or
completed all as reasonably satisfactory in form and substance to the Buyer
and the Title Policy shall have been issued to Buyer contemporaneously with
the Closing or otherwise as is in accordance with the Title Company's
escrow procedure.
The Buyer may waive any condition specified in this Section8(a) if it executes
a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of the Seller. The obligation of the Seller
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section4 above
shall be true and correct in all material respects at and as of the Closing
Date;
(ii) the Buyer shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) there shall not be any injunction, judgment, order, decree,
ruling, or charge in effect preventing consummation of any of the
transactions contemplated by this Agreement;
(iv) the Buyer shall have delivered to the Seller a certificate to
the effect that each of the conditions specified above in Section8(b)(i)-
(iii) is satisfied in all respects;
(v) all applicable waiting periods (and any extensions thereof) under
the Xxxx-Xxxxx-Xxxxxx Act shall have expired or otherwise been terminated
and the Seller, its Subsidiaries, and the Buyer shall have received all
other authorizations, consents, and approvals of governments and
governmental agencies referred to in Section3(c) and Section4(c) above;
(vi) the Buyer shall have executed and delivered to Seller the
Assignment of License Agreement in the form of Exhibit G attached hereto;
(vii) Buyer shall have delivered to Seller the opinion or other
documents described in Section5(g) in form and substance satisfactory to
Seller;
(viii) All matters relating to air permit compliance on or before the
Closing Date shall have been resolved to the satisfaction of Seller in its
sole discretion; and
(ix) all actions to be taken by the Buyer in connection with
consummation of the transactions contemplated hereby and all certificates,
instruments, and other documents required to effect the transactions
contemplated hereby shall have been executed, delivered, recorded, taken or
completed all as reasonably satisfactory in form and substance to the
Seller.
The Seller may waive any condition specified in this Section8(b) if it executes
a writing so stating at or prior to the Closing.
9. Survival of Representations and Warranties. All of the
representations and warranties of the Buyer and the Seller shall survive the
Closing (unless the damaged Party had Knowledge (as a result of matters set
forth on the Disclosure Schedule or otherwise) of any misrepresentation or
breach of warranty contained in Section3 or Section4 above at the time of
Closing) and continue in full force (i) with respect to the representations of
the Seller in Section3(d) - (n) above, for a period of eighteen (18) months
after the Closing at which time such representations and warranties shall be
null and void and cease to be of any effect whatsoever, except that, to the
extent that any specific claim has been asserted by the Buyer prior to the
expiration of such period, the representations and warranties relating to such
claim shall continue in respect of such claim only until such claim is resolved,
and (ii) with respect to all other representations and warranties of Buyer and
Seller, in effect forever thereafter (subject to any applicable statutes of
limitations).
10. Indemnification Provisions for Benefit of the Buyer.
(a) Subject to the limitations contained in Section10(d), in the event
the Seller breaches any of its representations in Section3 or any of its
covenants contained in Section5(f) , Section6 and Section7, the Seller agrees
to indemnify the Buyer and Buyer's members, officers, employees and agents
(collectively, "Buyer's Indemnified Persons") from and against any Adverse
Consequences the Buyer's Indemnified Persons shall suffer through and after the
date of the claim for indemnification caused proximately by the breach, provided
however, that the indemnity in this Section10(a) shall not apply at all to
matters for which Buyer is indemnifying Seller as provided in this Agreement.
Solely for purposes of Seller's indemnification obligations under this
Section10(a), any representation or warranty of Seller in Section3 which
includes the term "material adverse effect" (or derivatives or variations of
such term) and/or "taken as a whole" shall be construed as if such term instead
were "effect" without any additional qualification.
(b) The Seller agrees to indemnify the Buyer's Indemnified Persons from
and against any Adverse Consequences the Buyer's Indemnified Persons shall
suffer caused proximately by any liability which is an Excluded Liability and,
to the extent provided in Section15, with respect to liabilities related to the
disposal or migration of Hazardous Materials prior to the Closing Date.
(c) The Seller agrees to indemnify the Buyer's Indemnified Persons from
and against any Adverse Consequences the Buyer's Indemnified Persons shall
suffer caused proximately by the failure of Seller to discharge when due
liabilities related to employees to the extent provided in Section16 hereof.
(d) Except with respect to any breach of Seller's representations in
Section3(a) - (c) and any breach of the covenants contained in Section5,
Section6 and Section7, Seller's indemnification obligations to the Buyer
pursuant to Section10(a) shall not exceed $2,000,000 in the aggregate. Buyer
agrees that it will not seek indemnification for any claim under Section10(a)
relating to the breach of a representation or warranty unless the aggregate of
all claims under Section10(a) will result in loss to Buyer's Indemnified
Persons in excess of $250,000 in the aggregate, provided however, that once such
threshold is exceeded, Seller shall indemnify Buyer's Indemnified Persons for
all such claims from the first dollar of claims up to the $2,000,000 limitation
specified above. Notwithstanding anything to the contrary contained in this
Section10(d), (x) the $2,000,000 limitation and (y) the $250,000 threshold
specified herein shall not be applicable with respect to any claim for
indemnification for the breach of the representations of the Seller in
Section3(d) - (n) to the extent Seller has Knowledge (and Buyer did not have
Knowledge) of the inaccuracy of such representation or warranty as of Closing.
11. Indemnification Provisions for Benefit of the Seller.
(a) In the event the Buyer breaches any of its representations in
Section4 above or any of its covenants contained in Section5(f), Section6 and
Section7 of this Agreement, the Buyer agrees to indemnify the Seller and
Seller's officers, directors, shareholders, employees and agents (collectively,
"Seller's Indemnified Persons") from and against any Adverse Consequences the
Seller's Indemnified Persons shall suffer through and after the date of the
claim for indemnification caused proximately by the breach, provided however,
that the indemnity in this Section11(a) shall not apply at all to matters for
which Seller is indemnifying Buyer as provided in this Agreement. Solely for
purposes of Buyer's indemnification obligations under this Section11(a), any
representation or warranty of Buyer in Section4 which includes the term
"material adverse effect" (or derivatives or variations of such term) and/or
"taken as a whole" shall be construed as if such term instead were "effect"
without any additional qualification.
(b) The Buyer agrees to indemnify the Seller's Indemnified Persons from
and against any Adverse Consequences the Seller's Indemnified Persons shall
suffer caused proximately by any liability which is an Assumed Liability.
(c) The Buyer agrees to indemnify the Seller's Indemnified Persons from
and against the failure of Buyer to discharge when due liabilities related to
the disposal or migration of Hazardous Materials to the extent provided in
Section15 hereof.
(d) The Buyer agrees to indemnify the Seller's Indemnified Persons from
and against the failure of Buyer to discharge when due liabilities related to
employees to the extent provided in Section16 hereof.
12. Matters Involving Third Parties.
(a) If any third party shall notify any Party (the "Indemnified Party")
with respect to any matter (a "Third Party Claim") which may give rise to a
claim for indemnification against the other Party (the "Indemnifying Party")
under Section10 or Section11, then the Indemnified Party shall promptly (and
in any event within ten (10) business days after receiving notice of the Third
Party Claim) notify the Indemnifying Party thereof in writing.
(b) The Indemnifying Party will have the right within thirty (30) days of
receipt of the notice specified in the preceding paragraph to assume and
thereafter conduct the defense of the Third Party Claim with counsel of its
choice; provided, however, that the Indemnifying Party will not consent to the
entry of any judgment or enter into any settlement with respect to the Third
Party Claim without the prior written consent of the Indemnified Party (not to
be withheld unreasonably) unless the judgment or proposed settlement involves
only the payment of money damages and does not impose an injunction or other
equitable relief upon the Indemnified Party.
(c) Unless and until the Indemnifying Party assumes the defense of the
Third Party Claim as provided in Section12(b) above, however, the Indemnified
Party may defend against the Third Party Claim in any manner it reasonably may
deem appropriate, and the Indemnifying Party will cooperate and make available
to the Indemnified Party all books and records and such officers, agents and
employees as are reasonably necessary and useful in connection with the defense.
(d) In no event will the Indemnified Party consent to the entry of any
judgment or enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnifying Party, which consent shall
not be unreasonably withheld and which consent shall be deemed given if the
Indemnifying Party has not replied in writing to the Indemnified Party within
fifteen (15) days of notice of any request for any such consent.
13. Miscellaneous Indemnity Provisions.
(a) Determination of Adverse Consequences. The Parties shall make
appropriate adjustments for tax benefits and insurance coverage and proceeds and
take into account the time cost of money (using the Applicable Rate as the
discount rate) in determining Adverse Consequences for purposes of Section10 or
Section11. All indemnification payments under Section10 or Section11 shall be
deemed adjustments to the Purchase Price.
(b) Other Indemnification Provisions. The indemnification provisions in
Section10 and Section11 are the sole remedy any Party may have for breach of
representation, warranty, or covenant, provided however, that it is expressly
agreed between the parties that monetary damages would be inadequate to
compensate the Buyer for any breach by the Seller of its covenants and
agreements in Section6(c). Accordingly, the Seller agrees and acknowledges
that any such violation or threatened violation of such covenants will cause
irreparable injury to the Buyer and that, in addition to the remedies available
to it under this Section10, the Buyer shall be entitled to obtain injunctive
relief against any threatened or continuing breach of any covenant in
Section6(c), without the necessity of proving actual damages.
14. Termination.
(a) Termination of Agreement. The Parties may terminate this
Agreement as provided below:
(i) the Buyer and the Seller may terminate this Agreement by
mutual written consent at any time prior to the Closing;
(ii) the Buyer may terminate this Agreement by giving written
notice to the Seller at any time prior to the Closing in the event (A)
the Seller has within the then previous ten (10) business days given
the Buyer any notice pursuant to Section5(e)(i) above and (B) the
development that is the subject of the notice has had a material
adverse effect upon the financial condition of the Acquired Assets and
Assumed Liabilities taken as a whole;
(iii) the Buyer may terminate this Agreement by giving written
notice to the Seller at any time prior to the Closing (A) in the event
the Seller has breached any material representation, warranty, or
covenant contained in this Agreement in any material respect, the
Buyer has notified the Seller of the breach, and the breach has
continued without cure for a period of ten (10) days after the notice
of breach or (B) if the Closing shall not have occurred on or before
the twenty-first day after the date of this Agreement by reason of the
failure of any condition precedent under Section8(a) hereof (unless
the failure results primarily from the Buyer itself breaching any
representation, warranty, or covenant contained in this Agreement);
(iv) the Seller may terminate this Agreement by giving written
notice to the Buyer at any time prior to the Closing in the event the
Buyer has breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, the Seller has
notified the Buyer of the breach, and the breach has continued without
cure for a period of ten (10) days after the notice of breach or (B)
if the Closing shall not have occurred on or before the twenty-first
day after the date of this Agreement by reason of the failure of any
condition precedent under Section8(b) hereof (unless the failure
results primarily from the Seller itself breaching any representation,
warranty, or covenant contained in this Agreement); and
(vi) the Buyer may terminate this Agreement by giving written
notice to the Seller pursuant to Section5(h).
(b) Effect of Termination. If any Party terminates this Agreement
pursuant to Section14(a) above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other Party
(except for any liability of any Party then in breach); provided, however, that
the confidentiality provisions contained in Section5(d) above shall survive any
such termination.
15. Remediation Obligations for Hazardous Materials.
(a) The Seller and the Buyer shall each notify the other as soon as
reasonably practicable after receiving notice of any liabilities or potential
liabilities to the Business or having Adverse Consequences on the Acquired
Assets as a result of the disposal or migration of Hazardous Materials off the
Real Property at any time prior to the Closing Date (collectively, "Off-Site
Hazardous Materials"). As soon as practicable after receiving notice of any
such liability or potential liability, the Seller and Buyer shall determine
jointly an appropriate response. Seller shall have the responsibility to direct
the actions required to carry out the response and shall provide to the Buyer
such information with respect to such actions as the Buyer may reasonably
request. The costs, if any, associated with such response (such costs and
Adverse Consequences, the "Off-Site Remediation Costs"), shall be borne by the
Parties as provided below.
(b) All Off-Site Remediation Costs shall be paid by the Parties as
follows: The Seller shall pay, or indemnify the Buyer against, all Off-Site
Remediation Costs up to $500,000; the Buyer shall pay for, or indemnify the
Seller against, the next $1,000,000 of Off-Site Remediation Costs; and the
Seller shall thereafter pay for, or indemnify the Buyer against, all additional
Off-Site Remediation Costs, regardless of by whom or when incurred. Without
limiting the generality of the foregoing, the Seller shall indemnify and hold
harmless the Buyer and the Buyer's Indemnified Persons for all Adverse
Consequences arising from or caused by Off-Site Hazardous Materials, except to
the extent of the Buyer's obligation as provided in the first sentence of this
Paragraph (b). Without limiting the generality of the foregoing, the Buyer
shall indemnify and hold harmless the Seller and the Seller's Indemnified
Persons for all Adverse Consequences arising from or caused by Off-Site
Hazardous Materials, except to the extent of the Seller's obligation as provided
in the first sentence of this Paragraph (b). For purposes of this Paragraph
(b), the Off-Site Remediation Costs shall be measured as incurred, and
documented by appropriate invoice. Each Party shall pay to the other from time
to time (but no more frequently than once per calendar month) all Off-Site
Remediation Costs to be paid by such Party hereunder promptly upon receipt of
supporting documentation therefor, and shall provide to the other Party
supporting documentation with respect to the Off-Site Remediation Costs paid by
it.
16. Employee Severance.
(a) Attached hereto as Schedule 5 is a list of all current employees
of the MDF Facility and Seller's estimate of Seller's maximum potential
obligation to each of the Seller's employees at the MDF Facility (other than
employees covered by a collective bargaining agreement) that would result upon
the failure by the Buyer to make an Offer of Employment to each employee listed
on Schedule 5. Attached hereto as Schedule 5.1 is a list of all current
employees of the Medford Corporate Office and Seller's estimate of Seller's
maximum potential obligation to each of the Seller's employees at the Medford
Corporate Office that would result upon the failure by the Buyer to make an
Offer of Employment to each employee listed on Schedule 5.1. Buyer agrees to
provide a listing to Seller prior to Closing of employees on Schedules 5 and 5.1
to whom the Buyer does not intend to make an Offer of Employment.
(b) Buyer shall reimburse Seller for the payment of employee
severance payments made and obligations incurred, solely with respect to
Applicable Severance Obligations, provided liability for such reimbursement
obligations shall be limited individually (e.g., for each salaried employee,
limited to the individual severance amount set forth opposite each employee's
name) and in the aggregate to the amounts set forth on attached Schedules 5 and
5.1 plus the sum of the amounts, if any, of individual severance payments made
to employees pursuant to terms negotiated by Seller with the collective
bargaining representative of employees covered by a collective bargaining
agreement as provided in Schedule 5. Buyer shall indemnify and hold Seller
harmless in respect of all Applicable Severance Obligations. Buyer shall be
entitled to a credit against amounts otherwise owed to Seller pursuant to the
first sentence of this paragraph in an amount equal to the sum of the individual
severance amounts set forth on Schedule 5.1 for each employee listed on Schedule
5.1 to whom Buyer makes an Offer of Employment; provided however, such credit in
the aggregate shall not exceed the aggregate Applicable Severance Obligations
actually paid to employees listed on Schedule 5. In the event that any employee
on Schedule 5.1 who is hired by Buyer is subsequently terminated by Buyer, for
any reason other than Cause, and such termination occurs on or before one (1)
year after the Closing, Buyer shall refund to Seller, within ten (10) days after
any such termination, an amount equal to the reimbursement obligation with
respect to such employee as set forth on Schedule 5.1; provided however, Buyer's
aggregate refund obligation shall not exceed the aggregate amount actually
credited to Buyer pursuant to the preceding sentence.
(c) For purposes of this Section16, `Applicable Severance
Obligations' shall mean (i) severance payments and obligations that arise as a
result of Buyer's failure to make an Offer of Employment to any of the employees
at the MDF Facility described on attached Schedule 5, or (ii) severance payments
and obligations that arise as a result of the involuntary termination on or
before one (1) year after the Closing, for any reason other than Cause, of any
employee listed on Schedule 5 and any employees on Schedule 5.1 hired by the
Buyer.
17. Miscellaneous.
(a) Press Releases and Public Announcements. No Party shall issue or
make, or allow any affiliate to issue or make, any press release or public
announcement relating to the subject matter of this Agreement prior to the
Closing without the prior written approval of the other Party; provided,
however, that any Party or any affiliate of such Party may make any public
disclosure it believes in good faith is required by applicable law or any
listing or trading agreement concerning its publicly-traded securities (in which
case the Party which intends, or which has an affiliate that intends, to issue
such press release or make such public announcement will advise the other Party
prior to making the disclosure and provide the other Party opportunity to
comment upon the release or announcement).
(b) No Third Party Beneficiaries. This Agreement and the Ancillary
Agreements shall not confer any rights or remedies upon any Person other than
the Parties and their respective successors and permitted assigns.
(c) Entire Agreement. This Agreement (including the Ancillary Agreements
and other documents referred to herein) constitutes the entire agreement between
the Parties and supersedes any prior understandings, agreements, or
representations by or between the Parties, written or oral, to the extent they
related in any way to the subject matter hereof.
(d) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Party.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and then
three business days after) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
set forth below:
If to the Seller: Medite Corporation
Three Lincoln Centre, Suite 1700
0000 XXX Xxxxxxx
Xxxxxx, XX 00000-0000
Attention: President
Tel: 000-000-0000
Fax: 000-000-0000
Copy to:
Xxxxx X. Xxxxxxxxx
Bartlit Xxxx Xxxxxx Xxxxxxxxx & Xxxxx
000 00xx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
If to the Buyer: Sierra Pine, a California limited partnership
000 Xxxxx 0xx Xxxxxx
Xxxxxxxxxxx, Xxxxxx 00000
Attention: Xxxxxx Xxxxxx XX
Tel: 541/000-0000
Fax: 541/000-0000
Copy to: Xxxxx X. Dun
Dun & Xxxxxxxx
000 0xx Xxxxxx Xxxxx X
X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxx 00000-0000
Tel: 000- 000-0000
Fax: 000-000-0000
Xxxx Xxxxxxx
Xxxx Xxxxxx & Xxxxxxxxx
Xxx Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Tel: 000-000-0000
Fax: 000-000-0000
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received on a business day by the intended
recipient; provided however, that if such notice, request, demand, claim, or
other communication is received on a business day after 3:00 p.m. local time, it
shall be deemed received on the next business day. Any Party may change the
address to which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other Party notice in the manner
herein set forth.
(h) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Delaware without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Delaware or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Delaware.
(i) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Seller. No waiver by any Party of any default, misrepresentation,
or breach of warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any such prior or subsequent occurrence.
(j) Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) Dispute Resolution; Expenses. If there shall be any dispute,
controversy or claim ("Dispute") between the Parties hereto arising out of,
relating to, or connected with this Agreement or the breach or invalidity of the
provisions of this Agreement, including without limitation the calculation of
the Final Net Working Capital Amount, the Parties shall use their best efforts
to resolve the matter on an amicable basis and in a manner fair and equitable to
the Parties. If one Party notifies the other Party that a Dispute has arisen
and the Parties are unable to resolve such Dispute within a period of fifteen
(15) days from such notice, then the matter shall be referred to the most senior
officers of such Parties for attempted resolution, who shall have a further
thirty (30) days from such notice to resolve the Dispute (the "Resolution
Deadline"). No recourse to litigation under this Agreement shall take place
unless and until such procedure has been followed.
Each of the Buyer and the Seller will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby. Notwithstanding the foregoing
sentence, (i) the Seller shall bear the costs of the Title Policy, excluding all
Required Endorsements and Additional Endorsements, the Survey, and one-half of
the costs assessed by the ODOE in connection with the ODOE loan assumption; (ii)
the Buyer shall bear the costs of all Required Endorsements and Additional
Endorsements requested by the Buyer and any and all transfer taxes, including
without limitation any use or sales taxes, associated with the sale of the
Acquired Assets or the assumption of the Assumed Liabilities, and and one-half
of the costs assessed by the ODOE in connection with the ODOE loan assumption.
Escrow and other customary closing costs will be divided equally between the
Seller and the Buyer. Real estate taxes and any other customary prorations
shall be made as of the Closing Date.
(l) Construction. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the provisions of
this Agreement. Any reference to any federal, state, local, or foreign statute
or law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context otherwise requires. The word "including" shall
mean including without limitation.
(m) Incorporation of Exhibits. The Exhibits and any annexes and schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
(n) Allocation of Purchase Price. The Buyer and the Seller will cooperate
in the preparation and filing of Internal Revenue Service Form 8594.
(o) Bulk Transfer Laws. The Buyer acknowledges that the Seller will not
comply with the provisions of any bulk transfer laws of any jurisdiction in
connection with the transactions contemplated by this Agreement. Both parties
acknowledge that Oregon does not have presently have any bulk transfer laws.
*****
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first above written.
SIERRA PINE, a California limited partnership
By: Rockland Timber Co, a general partner
By:
-----------------------
Title:
---------------------
By: Xxxxxxx Investments, Inc.,
a general partner
By:
---------------------------------
Title:
---------------------
MEDITE CORPORATION, a Delaware corporation
By:
----------------------
Title:
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