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EXHIBIT 2.01
ASSET PURCHASE AGREEMENT
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ASSET PURCHASE AGREEMENT dated as of May 22, 1997 ("Agreement"), by and
between HYSAN CORPORATION, an Illinois corporation ("Seller") and SPECIALTY
CHEMICAL RESOURCES, INC., a Delaware corporation ("Buyer").
W I T N E S S E T H:
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WHEREAS, on the terms and conditions herein contained, the Seller
wishes to sell and the Buyer wishes to buy all of the tangible and intangible
non-real estate assets used in the operation of the Seller's business, free and
clear of all liens, charges and encumbrances, it is hereby agreed as follows:
WHEREAS, WEDGE Energy Group, Inc., a Delaware corporation ("WEDGE"),
owns beneficially and of record, all of the outstanding capital stock of Seller;
and
ARTICLE 1
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SALE AND PURCHASE OF ASSETS
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1.1 SALE AND PURCHASE OF ASSETS. On the terms and conditions herein
contained and for the consideration hereinafter described, the Seller agrees to
sell to the Buyer and the Buyer agrees to buy from the Seller at the Closing (as
hereinafter defined), all of the Seller's right, title and interest in and to
all (except as set forth below) of the assets of the Seller used in or relate to
the Seller's business where ever conducted, including, without limitation, those
assets located at the Sellers' plant and facilities in Blue Island, Illinois,
and, including without limitation, all property, accounts receivable,
securities, deposits on contractual obligations or otherwise, claims and rights
under contracts and leases, licenses, customer lists, trade secrets, know-how,
all pending claims and other choses in action, rights to use the name "Hysan" or
any derivative thereof and all other names or slogans used by Seller in
connection with its business or its products, all product catalogs and other
advertising materials, all files, books and records (except as provided below)
of Seller relating to its business, and all computer programs, all as the same
exist on the Closing Date. Such assets (the "Acquired Assets") shall be conveyed
to the Buyer at Closing free and clear of all liens, charges and encumbrances.
Except as shall be specifically warranted herein to the contrary the Acquired
Assets will be conveyed to the Buyer in an "AS IS" condition and the Buyer
agrees to accept the Acquired Assets in such condition. The following assets and
rights shall be excluded from the Acquired Assets and retained by the Seller:
(a) BOOKS AND RECORDS. All books and records of the
Seller except such books and records as are required to permit the
Buyer to utilize and/or derive full benefit from the
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Acquired Assets, provided that the Seller will provide to the Buyer
copies of all books and records relating to the Acquired Assets;
(b) CERTAIN RECEIVABLES AND EXPECTANCIES. Sums due to the
Seller from Wedge Energy Group, Inc. ("Wedge") or from any other
Affiliate of the Seller, which sums are set forth on Schedule 1.l (b)
to this Agreement, any proceeds from the liquidation of any defined
benefit or other funded benefit plan previously established by the
Seller and any recovery from a pending claim against third parties with
respect to a transaction or occurrence prior to the Closing, which
claim is described on Schedule 1.1(b) to this Agreement;
(c) CASH. Cash on hand or on deposit to the account of
the Seller at Closing;
(d) Real Estate. All land and improvements belonging to the
Seller together with all associated leasehold improvements, easements
and rights of way and all real estate leasehold rights, if any.
As used in this Agreement "Affiliate" shall mean with respect to any
Person, another Person controlled by, under common control with or who controls,
that Person. As used herein "Person" shall mean any individual, corporation,
partnership, joint venture, association, joint stock company, trust or
unincorporated association.
1.2 LIABILITIES. Except as otherwise expressly provided herein the
Seller shall be responsible for the discharge of all liabilities, debts and
obligations associated with the Seller's business, known and unknown, contingent
or liquidated which arose or relate to acts, omissions, facts or circumstances
which occurred prior to the Closing, including any matters relating to employees
and employee benefits and product liability or warranties and the Buyer shall
have no responsibility for the payment, provision or discharge thereof. The
Buyer has designated on Schedule 1.2 certain of the Seller's accounts payable
and other obligations (such as equipment leases) which the Buyer, subject to
receipt at the Closing of any required consent to the transfer of any related
agreement, will assume and discharge ("Assumed Liabilities"). All Assumed
Liabilities shall be promptly paid by the Buyer in accordance with the terms
thereof, and (i) for purposes of the Closing Purchase Price Adjustment provided
for in Section 1.3 below accounts payable shall be deemed to have been paid to
take advantage of any available discounting terms provided by the vendor or
obligee thereof, and (ii) any prepayment penalty imposed on the Buyer for early
payment of any Assumed Liabilities which the Buyer chooses to make shall be
disregarded subject to any claims made in good faith.
1.3 PURCHASE PRICE; PAYMENT. The purchase price for the Acquired Assets
shall be estimated in the manner provided hereinafter in this Section 1.3 (the
"Closing Purchase Price") and, less $500,000 which shall be deposited in escrow
as provided below in this Section, paid to the Seller at the Closing by wire
transfer or otherwise in immediately available funds. The Buyer shall be
entitled to a credit for (i) the xxxxxxx money deposit described in Section
1.4(b) ("Xxxxxxx Money"), plus interest thereon at the rate of six percent (6%)
per annum from March 6, 1997 to the Closing Date, and (ii) an amount equal to
the sum of all accounts payable due on the Closing Date included
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as Assumed Liabilities (but not including any payments under equipment leases,
Section 1.4(a) ("Prorations"). Until final determination of the Adjusted Price
in accordance with Section 1.5 of this Agreement and to secure the Seller's
indemnification obligations hereunder, $500,000 of the Closing, Purchase Price
shall be deposited in escrow pursuant to the escrow agreement ("Escrow
Agreement") in the form of the attached Exhibit "1.3". The specific Acquired
Assets groups to be purchased and the estimate of the Closing Purchase Price of
each group shall be made as follows:
(a) ACCOUNTS RECEIVABLE. The accounts receivable shown on
Schedule 1.3(a) valued at book value at the close of business on the
last business day prior to the Closing determined in accordance with
generally accepted accounting principles ("GAAP"), less an amount equal
to the aggregate of all accounts receivable excluded from the Acquired
Assets pursuant to Section 1.1(b);
(b) INVENTORY. Inventory consisting of raw materials,
work-in-process, and intermediates which are useable in connection with
the sale or production of Finished Products, Finished Products and
Supplies, including Hysan label products, (collectively "Qualified
Inventory") which are described on Schedule 1.3(b) and are valued at
book value in accordance with generally accepted accounting principles
("GAAP") consistent with Seller's past practices as reflected on the
financial statements of the Seller at the close of business on the last
business day immediately prior to the Closing. Qualified Inventory
shall not include any Finished Products that were manufactured in
excess of one (1) year prior to Closing. "Finished Products" are deemed
as any product which has been sold to any customer within the fifteen
(15) month period immediately preceding Closing, or for which a future
order exists at Closing;
(c) FURNITURE, FIXTURES AND EQUIPMENT. Furniture, fixtures and
equipment, including generally but not by way of exclusion, all
manufacturing, office, sales and laboratory equipment of the Seller
used by or associated with the operation of the Seller's business and
which are described on Schedule 1.3(c) (the "Furniture, Fixtures and
Equipment"), shall be valued at book value (cost, net of reserves, if
any, and net of depreciation n) as reflected on the financial
statements of the Seller at the close of business on the last business
day of the month immediately prior to the Closing provided that the
carried values associated with leasehold improvements to the Seller's
real estate, the capitalized costs associated with closed facilities
and relocation of facilities from Houston, Texas, capitalized
leaseholds and other items designated on Schedule 1.3(c) to be excluded
from this computation shall be excluded from such value;
(d) EPA REGISTRATIONS AND PREPAID EXPENSES. Environmental
Protection Agency periodic renewal registrations (which are assignable
to the Buyer) (federal, state and local) and other prepaid expenses
described on Schedule 1.3(d), shall be valued at book value as
reflected on the financial statements of the Seller at the close of
business on the last business day of the month immediately prior to the
Closing;
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book value as reflected on the financial statements of the Seller at
the close of business on the last business day of the month immediately
prior to the Closing;
(e) INTANGIBLE ASSETS. All intangible assets, including but
not limited to formulas, technology, trade names and trade marks
(including the name "Hysan"), customer lists, contract rights,
assignable permits and registrations, capitalized leasehold rights (but
only to the extent that corresponding obligations are assumed by Buyer)
all as described on Schedule 1.3(e), and orders and backlog shall be
valued at $250,000, of which $100,000 is consideration for the covenant
set forth in Article 3.
1.4 PRORATIONS; XXXXXXX MONEY.
(a) PRORATIONS. Personal property taxes for the Acquired
Assets and equipment lease payments (for equipment leases included
within Assumed Liabilities) shall be prorated between the parties at
Closing.
(b) XXXXXXX MONEY. Prior to the date hereof the Buyer has
paid the Seller $100,000 as a good xxxxx xxxxxxx money deposit which
shall be applied as provided in Section 1.3.
1.5 ADJUSTMENTS TO PURCHASE PRICE. The portion of Closing
Purchase Price determined with reference to the financial statements of the
Seller for the month immediately prior to the Closing shall be adjusted
following Closing in the following manner:
(a) PHYSICAL INVENTORY. Buyer shall conduct a physical
inventory at the Seller's premises on or immediately after the Closing
to identify and count the Qualified Inventory as of the date of Closing
(the "Closing Date"). The Seller shall be entitled to designate one or
more of its representatives to observe the taking of the physical
inventory.
(b) POST CLOSING AUDIT. As soon following the Closing as is
practicable, but in no event later than 30 days following the Closing,
the Buyer will prepare an accounting (a "Post-Closing Audit"), as of
the Closing Date, of the items in Section 1.3(b) (using for the
inventory valuation information determined from the physical inventory)
comprising the Acquired Assets and upon acceptance thereof by the
Seller the Closing Purchase Price will be deemed adjusted to reflect
the difference between (i) an amount (the "Base Price") equal to the
aggregate of the amounts determined under Section 1.3(b), and (ii) an
amount (the "Adjusted Price") equal to the aggregate of the amounts
determined for such items in the Post-Closing Audit. The results of
this audit shall be provided to tax Seller and within twenty (20) days
following the receipt thereof and, in the absence of any timely
objection to the determination of the Adjusted Price as provided for in
Section 1.5(d), the Buyer shall pay to the Seller the amount by which
the Adjusted Price exceeds the Base Price or the Seller shall pay to
the Buyer the amount by which the Base Price exceeds the Adjusted
Price, which payment by Seller shall first be made from amounts held in
escrow under the Escrow
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Agreement and thereafter, if any additional amounts are owed, directly
by Seller. Provided the Seller shall have maintained its books and
records to the Closing Date in accordance with GAAP applied on a
consistent basis, subject only to normal year end adjustments, the
Buyer shall use the Seller's records in completing this accounting, and
shall determine the Adjusted Price in accordance with GAAP, applied
consistently with the Seller's past practice, except as provided on
Exhibit 1.5(b) to this Agreement.
(c) ACCOUNTS RECEIVABLE. During the 90 day period following
the Closing, the Buyer shall use reasonable efforts, consistent with
its ordinary course of business practice, to collect all amounts due on
the Accounts Receivable comprising the Acquired Assets ("Purchased
Accounts"). The Buyer shall provide the Seller with a weekly report of
the progress made in the collection of the Purchased Accounts. In this
process the Buyer shall apply all amounts received from account debtors
to the oldest outstanding invoices of such account debtors in the order
of such invoices from the oldest to the most current, except on those
payments that are designated by the account debtor to a specific
invoice. Should the Buyer learn of any objection to payment of a
Purchased Account by an account debtor arising out of a transaction or
occurrence prior to the Closing the Buyer shall immediately notify the
Seller and, after the Seller has repurchased the Purchased Account from
the Buyer, the Seller shall be permitted to discuss the matter with the
account debtor and compromise or otherwise dispose of the dispute,
provided that the Seller shall in good faith, but without impairing the
Seller's ability to ultimately obtain payment on any accounts
receivable, attempt to compromise or otherwise dispose of any dispute
in any manner that would not impose any obligation on the Buyer. The
Buyer will not compromise or settle any Purchased Account in dispute
which imposes any obligation on the Seller without the consent of the
Seller which consent will not be unreasonably withheld. Provided the
Buyer shall have complied with the provisions of this paragraph the
Seller will repurchase from the Buyer upon notice from the Buyer all
Purchased Accounts which remain unpaid 90 days following Closing. The
purchase price therefor shall be the unpaid amount remaining due on
such Purchased Account. Notwithstanding the foregoing, the Seller shall
be under no obligation to repurchase such Purchased Account if the
account debtor's refusal or failure to pay the balance of a Purchased
Account arises in whole or material part from a dispute with the Buyer
related to product sold to, or orders requested by, such account debtor
after the Closing Date. The Seller shall remit to the Buyer immediately
on receipt all accounts receivable relating to the Seller's business
and received by the Seller on or after the Closing Date.
(d) PURCHASE PRICE DISPUTE RESOLUTION. In the event either the
Buyer or the Seller shall take objection to any valuation or setting of
Adjusted Price the party objecting shall promptly (in the case of the
post closing audit described in Section 1.5(b) within twenty (20) days
of receipt thereof) advise the other party in writing of the basis of
the objection or objections and the parties and their representatives
shall thereafter promptly convene, in person or by phone to resolve
their differences. If the parties are unable to resolve their
differences within thirty (30) days of the sending of an objection
notice either party may call for the dispute to be submitted to binding
arbitration before a three person panel in Chicago,
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Illinois in accordance with the Commercial Rules of the American
Arbitration Association ("AAA") with each party selecting one
arbitrator (each of whom shall be a certified public accountant who
(and whose firm) does not perform services for, or have any investments
in, and is independent from the Buyer or the Seller) and the two
arbitrators so selected, selecting the third arbitrator (who shall be
skilled in valuation matters and shall be similarly independent). If
the two (2) arbitrators fail to agree on the selection of the third
arbitrator, such third arbitrator shall be selected in accordance with
the rules of the AAA, but must be skilled in inventory valuation
matters. To avoid multiple dispute resolution meetings, the party
making an objection may, at its option, postpone submission of any
unresolved dispute until the conclusion of the valuation/purchase price
adjustment process. Amounts to be paid to one party or the other which
are in dispute may be withheld until the dispute is resolved but
amounts which are not in dispute shall be promptly paid in accordance
with the terms of this Agreement. Amounts withheld, which are
determined by the arbitration process to be due shall be paid promptly
with interest at the rate of 6% per annum from the date of withholding
to the date of payment. The parties shall be responsible for their own
costs and share equally the cost the AAA and the arbitrators, provided
that the losing party in a proceeding which produces a benefit greater
than $50,000.00 to the prevailing party (as measured against the last
settlement offer preceding the award), shall pay the AAA and
arbitrators costs and the reasonable cost and expenses of the
prevailing party.
1.6 PURCHASE PRICE ALLOCATIONS. Within one hundred fifty (150) days
after the Closing, the Buyer will prepare and deliver to the Seller a Form 8594
allocating the purchase price for the Acquired Assets for income tax purposes in
a manner that reflects the values ascribed to the asset groups by the pricing
process set forth above in this Article 1. Unless the Seller believes that such
Form 8594 does not reasonably allocate the purchase price for the Acquired
Assets, the Buyer and the Seller shall file all income tax returns and take all
other actions consistent with such Form. If the Seller notifies the Buyer within
thirty (30) days after receiving the Form 8594 that it believes such Form is
unreasonable, the matter shall be arbitrated in accordance with Section 1.5(d).
1.7 TRANSFER TAXES. All transfer, documentary, sales, use, stamp,
registration and other taxes and fees incurred in connection with this Agreement
will be paid by the Seller.
ARTICLE 2
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CLOSINGS
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2.1 CLOSINGS. The transaction shall be closed ("Closing") on May 22,
1997, at the offices of Redneck and Xxxxx, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000 or at such other time or place as the parties shall agree
immediately upon execution of this Agreement on the date first above written.
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the actions as set forth below shall be taken and each party shall deliver to
the other party the agreements, certificates, opinions, and other documents
required to be delivered as set forth below:
2.1.1 CERTIFICATE. The Seller shall deliver to the Buyer a
certificate dated as of the Closing Date certifying that: (a) the
articles of incorporation, certificates of incorporation and bylaws
attached thereto are true, correct and complete copies of such
organizational documents of the Seller, as applicable, (b) the
resolutions of the Board of Directors and sole shareholder of the
Seller attached thereto authorizing the execution, delivery and
performance of this Agreement are true, correct and complete; and (c)
all consents required of seller referred to in Section 2.1.3 have been
received.
2.1.2 OPINION. The Buyer shall receive from Xxxxxxx & Xxxxx,
Chicago, Illinois, counsel to the Seller, an opinion of Such counsel,
dated the Closing Date, with respect to certain matters reasonably
within the knowledge of such counsel i-i a form reasonably satisfactory
to counsel for the Buyer.
2.1.3 CONSENTS AND APPROVALS. All authorizations, consents,
waivers, approvals or other action required in connection with the
execution, delivery and performance of this Agreement by the Buyer and
the Seller and the consummation by such parties of the transactions
contemplated hereby shall have been obtained, including, without
limitation, any authorizations, consents, waivers, approvals or other
action required in connection with the execution, delivery and
performance of this Agreement to prevent a breach or default under any
material contract to which the Seller is a party and for the
continuation of any agreement to which the Seller is a party and which
is being transferred to the Buyer pursuant to this Agreement. All of
such required consents are listed on the attached Schedule 4.3.
2.1.4 ARTICLES OF INCORPORATION. Seller and Buyer shall have
delivered one to the other their respective Articles of Incorporation,
as amended, certified by the Secretaries of State of their respective
states of incorporation together with good standing certificates (or
the equivalent thereof) from the Secretaries of State, each as of a
date not more than seven (7) days prior to the Closing Date.
2.1.5 CERTIFICATE. The Buyer shall deliver to the Seller a
certificate of one of its duly authorized officers, dated as of the
Closing Date, certifying that (a) the certificate of incorporation and
by-laws attached thereto are true, correct and complete copies of such
organizational documents of the Buyer, and (b) the resolutions of the
Board of Directors of the Buyer attached thereto authorizing the
execution, delivery and performance of this Agreement are true and
correct.
2.1.6 OPINION. Seller shall have received from Benesch,
Friedlander, Xxxxxx & Xxxxxxx LLP, counsel to the Buyer, an opinion of
such counsel, dated the Closing Date, with respect to certain matters
reasonably within the knowledge of such counsel in a form reasonably
satisfactory to counsel for the Seller.
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of the Buyer attached thereto authorizing the execution, delivery and
performance of this Agreement are true and correct.
2.1.6 OPINION. Seller shall have received from Benesch,
Friedlander, Xxxxxx & Xxxxxxx LLP, counsel to the Buyer, an opinion of
such counsel, dated the Closing Date, with respect to certain matters
reasonably within the knowledge of such counsel in a form reasonably
satisfactory to counsel for the Seller.
2.1.7 REMOVAL OF ACQUIRED ASSETS. Buyer shall have submitted
to the Seller and the Seller shall have approved and accepted a
detailed plan ("the Plan") for the removal of the Acquired Assets from
the premises of the Seller. Buyer shall submit the Plan to Seller as
soon as reasonably practical, but at least prior to Buyer removing any
of the Acquired Assets. The Plan shall provide, among other matters,
(i) the identity of any outside contractors proposed to be employed by
the Buyer to assist in the removal and transport of the Acquired Assets
together with evidence of the bonding or financial responsibility of
such persons in adequate amounts which shall name Seller as an
additional insured or beneficiary, (ii) copies of any and all permits
required to effect such removal and transport, (iii) the date or dates
when such removal shall commence and be completed, which shall not be
later than ninety (90) days after Closing, and (iv) an undertaking by
the Buyer (which is deemed to be made hereby) to indemnify the Seller
and hold the Seller harmless for or on account of (A) any injury to the
property of the Seller or any adjoining land owners, (B) any
environmental condition requiring remediation caused by such asset
removal or (C) any claim of bodily injury to any person or any claims
by any third party.
2.1.8 ESCROW AGREEMENT. The Seller shall enter into the Escrow
Agreement and the Buyer shall have deposited $500,000 of the Closing
Purchase Price into escrow pursuant thereto.
2.2 FURTHER ASSURANCES/PROVISION OF RECORDS. If at any time after the
Closing Date the Buyer shall consider or be advised that any further deeds,
assignments or assurances in law or any other acts are necessary, desirable or
proper to (i) vest, perfect or confirm, of record or otherwise, in the Buyer,
title to the Acquired Assets, or (ii) otherwise carry out the purposes of this
Agreement, the Seller agrees that it shall execute and deliver all such deeds,
assignments and assurances in law and do all acts necessary, desirable or proper
to vest, perfect and confirm title to such Acquired Assets in the Buyer, and
otherwise do all acts reasonably necessary to carry out the purposes of this
Agreement. If at any time after the Closing Date either party hereto shall
require access to any of the books, records or files of the other party hereto
or any of the other party's employees in order to evaluate or resolve any
dispute or uncertainty concerning any of the Purchase Price, Acquired Assets or
the Assumed Liabilities, as applicable, such other party shall cooperate fully
with any reasonable requests therefor made by the requesting party.
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ARTICLE 3
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COVENANT NOT TO COMPETE
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3.1 COVENANT NOT TO COMPETE. The Seller and Wedge agree that from and
after the Closing and until the fifth anniversary of the Closing neither they
nor any Affiliate of either of them in the United States of America, United
States territories and possessions, Mexico or Canada, shall, directly or
indirectly, engage in the business of the Seller as conducted and pursued
immediately prior to the Closing ("Protected Business"). The "Protected
Business" is the manufacture and/or sale of specialty chemical products for
personal care and for commercial, automotive or household use in cleaning,
polishing, sanitizing, degreasing, exterminating and similar functions. It shall
not be a violation of this covenant if, in respect o the Seller, Wedge or any
Affiliate:
(a) any of them own 5% or less of the outstanding common
stock or equity shares of any publicly traded enterprise which is
engaged in the Protected Business; or
(b) all or any part of any of them is acquired, whether
through a stock or asset acquisition by, any person and the acquiror or
joint venturer, as the case may be, or any of the acquiror's or joint
venturer's Affiliates were engaged in the Protected Business prior to
the acquisition; provided that neither WEDGE nor the Seller nor their
respective Affiliates, other than the acquiror or joint venturer,
engages in the Protected Business for the five (5) year period provided
herein The Seller and Wedge agree that the restrictions contained in
this Covenant are reasonable and necessary to protect the legitimate
interests of the Buyer and that any violations of this covenant shall
result in irreparable injury to the Buyer. In the event of a violation
of this covenant, the Buyer shall be entitled to seek injunctive relief
in a court of competent jurisdiction, in addition to monetary damages.
ARTICLE 4
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REPRESENTATIONS AND WARRANTIES OF SELLER
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Statements in this Agreement made to the "Knowledge of the Seller"
shall mean that the Seller's officers, after having made a good faith effort to
ascertain the facts in question would be reasonably likely to have information
relating to the fact in question. The Seller represents and warrants to the
Buyer as follows:
4.1 ORGANIZATION, POWER AND QUALIFICATION. The Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Illinois, and has all requisite corporate power and authority to own or
hold under lease its properties and assets and to carry on its business as now
conducted. True and complete copies of the Articles of Incorporation, as amended
to date, the by-laws, as amended to date, of the Seller have been furnished to
the Buyer.
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The Seller's minute books and stock records do not contain any information which
would materially affect the Buyer's ability to enjoy the benefits of this
Agreement.
4.2 CAPITALIZATION. All of the currently issued and outstanding shares
of the capital stock of the Seller is owned of record by Wedge and is duly
authorized, validly issued and outstanding, fully paid and nonassessable and has
not been issued in violation of the certificate of incorporation or by-laws (or
other organic documents) of the Seller or the terms of any agreement to which
the Seller is a party or by which the Seller is bound.
4.3 NO VIOLATION. Except as disclosed on Schedule 4.3 (i) neither the
execution and delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will constitute a violation of, be in conflict
with, result in a cancellation of, constitute a default under, or create (or
cause the acceleration of the maturity of) any debt, obligation or liability
which would have a material adverse effect on or result in the creation or
imposition of any security interest, lien, or other encumbrance against any of
the Acquired Assets under: (a) any term or provision of the articles of
incorporation or by-laws (or other organic document) of the Seller; (b) any
judgment, decree, order, regulation or rule of any court or governmental
authority; (c) to the Knowledge of the Seller any statute or law; or (d) any
contract, agreement, indenture, lease or other commitment to which the Seller is
a party or by which the Seller is bound; (ii) no consent of, or notice to, any
federal, state or local authority, or any private person or entity, is required
to be obtained or given by the Seller in connection with the execution, delivery
or performance of this Agreement or any other agreement or document to be
executed, delivered or performed hereunder by the Seller, or to enable the
Seller to assign to Buyer the Seller's rights to any agreements included in the
Acquired Assets, which has not been obtained or given; and (iii) to the
Knowledge of the Seller no limitations, qualifications or conditions imposed by
any federal, state or local authority, or any private person or entity, exist
which affect the full utilization of the Acquired Assets.
4.4 TITLE TO ACQUIRED ASSETS. The Seller is the owner of and has good
and valid title to all of the Acquired Assets, including those assets and
properties reflected on the schedules attached to this Agreement, free and clear
of all mortgages, liens, pledges, charges, security interests, encumbrances or
other third party interests of any nature whatsoever, except for: (a) the lien
of current taxes not yet due and payable, (b) other title exceptions disclosed
and described in Schedule 4.4 hereto, and (c) the interest of the Buyer arising
under this Agreement. There are, and after the date of this Agreement will be,
no tax deficiencies (including penalties and interest) of any kind assessed
against the Seller with respect to any taxable periods ending on or before, or
including the Closing Date of a character or nature that would result in liens
or claims on any of the Acquired Assets or on the Buyer's title to or use of the
Acquired Assets, or that would result in any claim against the Buyer.
4.5 CONTRACTS. To the Knowledge of Seller, all of the Contracts, to
which the Seller is a party and which are being assigned to the Buyer as part of
the Acquired Assets or which benefit or relate to the Acquired Assets are set
forth on Schedule 4.5. To the Knowledge of Seller, such contracts constitute
valid and binding obligations of the respective parties thereto, are in full
force
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and effect, and no party or parties thereto, have violated any material
provision of, or committed or failed to perform any act which with notice, lapse
of time or both would constitute a default under a material provision of any
Contract, the termination of which would have a materially adverse effect upon
the properties, assets, liabilities, financial condition, results of operations
or business prospects of Seller. To the Knowledge of the Seller, there is no
pending or threatened termination, cancellation or non-renewal of any Contract.
To the Knowledge of the Seller there is no set-off right or similar right on the
part of any party, arising during any period on or prior to the Closing Date,
which has not been fully satisfied or otherwise discharged. To the Knowledge of
the Seller there is no restriction or other limitation on the Buyer's ability to
enjoy all of the Seller's rights under the Contracts. Correct and complete
copies of all written Contracts disclosed on Schedule 4.5 have been made
available to the Buyer.
4.6 NO SUIT. No suit, action or other proceeding or investigation is to
the Knowledge of the Seller threatened or pending before or by any governmental
agency or by any third party (i) questioning the legality of this Agreement or
the consummation of the transactions contemplated hereby in whole or in part, or
(ii) which would have an adverse effect on the Acquired Assets. For purposes of
paragraphs 4.6 and 4.8 of this Agreement, service of a lawsuit or proceeding on
Seller constitutes Knowledge.
4.7 PERMITS. Schedule 4.7 sets forth permits and registrations,
including, without limitation, those with respect to environmental matters
relating to the Acquired Assets or the Seller's business as presently conducted
and all such permits and registrations are fully paid for and valid.
4.8 PRODUCT LIABILITY; WARRANTY LIABILITY. Except as disclosed in
Schedule 4.8, to Seller's Knowledge, there are no actions, suits, inquiries,
proceedings or investigations by or before any court or governmental or other
regulatory or administrative agency or commission pending or threatened against
or involving the Seller, relating to any product alleged to have been
manufactured or sold by the Seller or any class of products assigned and sold to
the Buyer hereunder as Qualified Inventory alleging such product, products or
class of products to have been defective or improperly designed or manufactured,
which, if adversely decided, could have, either individually or in the
aggregate, an adverse effect upon the Acquired Assets or the Buyer's use of any
product or class of products included in the Acquired Assets. Schedule 4.8
contains a written statement accurately describing the Seller's warranties and
customer service policies.
4.9 PRINCIPAL CUSTOMERS AND SUPPLIERS. Schedule 4.9 sets forth a list
of all material customers and suppliers of the Seller during the fifteen (15)
month period ended March 31, 1997, showing in each case the approximate total
sales and purchases by or from each such customer or supplier during such
period. The Seller is not required, in the ordinary course of business, to
provide any bonding or any other financial security arrangements in connection
with any transactions with any customers or suppliers. The Seller has not
receiver any notice of any disruption (including, without limitation, delayed
deliveries or allocations by suppliers) in the availability of any materials or
products used in the Seller's business and to the Knowledge of Seller no such
disruption is threatened to occur.
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4.10 AUTHORITY. The Seller has all necessary power and authority,
corporate and otherwise, to make, execute, deliver and perform this Agreement
and all other agreements and documents to be executed, delivered and performed
by them pursuant hereto, and the Seller has taken all necessary actions required
to be taken to authorize, execute and deliver this Agreement and such other
agreements, and to perform all of the respective obligations, undertakings and
agreements to be observed and performed by them hereunder and thereunder. This
Agreement has been duly executed and delivered by the Seller, and constitutes
die valid and binding agreement of the Seller enforceable in accordance with its
terms subject, as to the enforcement of remedies, to general equitable
principles and to bankruptcy, insolvency and similar laws affecting creditors'
rights generally.
4.11 FINANCIAL INFORMATION. The Seller has provided the Buyer with
copies of its audited financial statements for 1994, 1995 and 1996 ("Financial
Information"). The Financial Information (i) fairly and accurately presents the
book value of the Seller's assets at the dates indicated, (ii) has been prepared
in accordance with GAAP, consistently applied, and (iii) fairly and accurately
presents the financial condition and results of operations of the Seller's
business as of the respective dates and for the respective periods thereof.
4.12 ABSENCE OF CERTAIN CHANGES. Since December 31, 1996, the Seller
has actively conducted the Seller's business in the ordinary and regular course,
consistent with past practice.
4.13 ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth on
Schedule 4.13, Seller has no obligation or liability (accrued, absolute, fixed
or contingent) which if unpaid would or could materially adversely affect
Buyer's use of the Acquired Assets.
4.14 BROKERAGE AND FINDER'S FEE. No shareholder, officer, director or
agent of the Seller has incurred any liability to any broker, finder or agent,
not an employee of Seller, for any brokerage fees, finder's fees, or commissions
with respect to the transactions contemplated by this Agreement.
4.15 TRADEMARKS, COPYRIGHTS AND SIMILAR MATTERS. To the Knowledge of
Seller, the Seller is the sole and exclusive owner of, or has the sole and
exclusive right to use all patents, as well as all technology, trade secrets and
know-how related thereto, trademarks, service marks, trade names and copyrights
listed on Schedule 4.15 attached to this Agreement (the "Specified Items"). To
the extent that any of the Specified Items are registered with any governmental
authority or for which Seller's application for registration is pending, such
Specified Items are listed on Schedule 4.15. The Seller does not use any of the
Specified Items by consent of any other party. No claims or demands have been
made to Seller by any other person, firm or corporation pertaining to any of the
Specified Items, and to the Knowledge of Seller no proceedings have been
instituted, are pending or are threatened which challenge the rights of the
Seller in respect of any of the Specified Items. To the Knowledge of Seller none
of the Specified Items infringes on, or is being infringed on by, others, and
none of the Specified Items is subject to any outstanding order, decree,
judgment, stipulation or agreement restricting Seller from using the Specified
Items in Seller's business in the same manner
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as used by Seller at any time during the two years prior to the date hereof. The
Seller has taken all reasonable steps to maintain and perfect the Specified
Items.
4.16 COMPLIANCE WITH LAWS. To the Knowledge of Seller, the Seller's
business is operated substantially in compliance with all laws, regulations,
rules and orders of any commission, board, agency or instrumentality, federal,
state or local, and any other requirements of law and is not in material default
under or in violation of any provision of any applicable federal, state or local
law, regulation, rule or order.
4.17 EMPLOYEE BENEFIT PLANS.
(a) For purposes of this Section 4.17, the following
Definitions apply: (i) "Benefit Plan" means any "employee benefit plan" as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or any other plan, policy, arrangement or scheme for the
provision or funding of employee benefits with respect to which a Controlled
Group Member in the past or present, directly or indirectly, maintained or
maintains, sponsored or sponsors, or had or has any obligation or liability; and
(ii) "Controlled Group Member" means the Seller and each other person or entity
required to be aggregated with the Seller under Section 414(b), (c), (in) or
(o)'of the Internal Revenue Code of 1986, as amended ("Code").
(b) No Controlled Group Member has directly or indirectly
acted in any manner or incurred any obligation or liability, and will not
directly or indirectly act in any manner in the future or incur any obligation
or liability in the future with respect to any Benefit Plan which has or could
give rise to any liens on any of the Acquired Assets or which could result in
any liability or obligation to Buyer, including, without limitation, any
liability or obligation which arises out of the establishment, operation,
administration or termination of such Benefit Plan or the transactions
contemplated by this Agreement.
4.18 MATERIAL MISSTATEMENTS OR OMISSIONS. No representations or
warranties made by the Seller in Article 4 of this Agreement contain any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements of fact contained therein not misleading. BUYER ACKNOWLEDGES AND
AGREES THAT THIS SECTION 4.18 IS NOT INTENDED TO AND DOES NOT CHANGE THE "AS-IS"
NATURE OF THE SALE OF ACQUIRED ASSETS.
ARTICLE 5
---------
REPRESENTATIONS AND WARRANTIES OF THE BUYER
-------------------------------------------
Statements in this Agreement made to the "Knowledge of" the Buyer shall
mean the Buyer's officers, after having made a good faith effort to ascertain
the facts in question would be reasonably likely to have information relating to
the facts in question.
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The Buyer represents and warrants to the Seller as follows:
5.1 DUE ORGANIZATION; GOOD STANDING AND POWER. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Buyer has all requisite corporate and other power and
authority to enter into this Agreement and any other agreement contemplated
hereby and to perform its obligations hereunder and thereunder. True and
complete copies of the Articles of Incorporation, as amended to date, and the
By-laws, as amended to date, of Buyer have been furnished to Seller. The Buyer's
minute books and stock records do not contain any information which would
materially affect Seller's ability to enjoy the benefits of this Agreement.
5.2 AUTHORIZATION AND VALIDITY. Buyer has all necessary power and
authority, corporate and otherwise, to make, execute, deliver and perform this
Agreement and all other agreements and documents to be executed, delivered and
performed by it pursuant hereto, and Buyer has taken all necessary actions
required to be taken to authorize, execute and deliver this Agreement and such
other agreements, and to perform all of its obligations, undertakings and
agreements to be observed and performed by it hereunder and thereunder. This
Agreement has been duly executed and delivered by Buyer and constitutes the
valid and binding agreement of Buyer enforceable in accordance with its terms
subject, as to the enforcement of remedies, to general equitable principles and
to bankruptcy, insolvency and similar laws affecting creditors' rights
generally.
5.3 GOVERNMENTAL APPROVALS; NO CONFLICTS. The execution, delivery and
performance of this Agreement and any other agreements contemplated hereby by
Buyer and the consummation by it of the transactions contemplated hereby and
thereby (i) will not violate (with or without the giving of notice or the lapse
of time or both), or require any consent, approval, filing or notice under any
provision of any law, rule or regulation, court or administrative order, writ,
judgment or decree applicable to Buyer or its assets or properties, including
the requirements of the Xxxx/Xxxxx/Xxxxxx Antitrust Improvements Act and except
for such violations the occurrence of which, and such consents, approvals,
filings or notices the failure of which to obtain or make, could not, either
individually or in the aggregate, have an adverse effect on Buyer's ability to
perform its obligations hereunder, and (ii) will not (with or without the giving
of notice or the lapse of time or both) violate or conflict with, or result in
the breach, suspension or termination of any provision of, or constitute a
default under, or result in the acceleration of the performance of the
obligations of Buyer, under, or in the creation of any Liens pursuant to the
charter or by-laws of Buyer or any indenture, mortgage, deed of trust, lease,,
agreement, contract or instrument to which Buyer is a party or by which Buyer or
any of its assets or properties is bound, except for such violations, conflicts,
breaches, suspensions, terminations, defaults, accelerations or Liens which
could not have an adverse effect on Buyer's ability to perform its obligations
hereunder.
5.4 BROKERS' FEES. Buyer has not employed anyone other than The Xxxxxxx
Group, Inc. ("Agent") as a broker or finder who is entitled to a brokerage fee,
commissions or finders' fees in connection with the transactions contemplated
hereby. Buyer shall be solely responsible for the payment of such fee.
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5.5 NO SUIT. No suit, action or other proceeding or investigation is to
the Knowledge of Buyer threatened or pending before or by any governmental
agency or by any third party questioning the legality of this Agreement or the
consummation of the transactions contemplated hereby in whole or in part.
ARTICLE 6
---------
NATURE AND SURVIVAL OF REPRESENTATIONS
--------------------------------------
6.1 NATURE AND SURVIVAL OF REPRESENTATIONS. The representations and
warranties made by the Seller in Section 4 and by the Buyer in Section 5 of this
Agreement shall survive the Closing Date for a period of one (1) year after the
Closing except that the representations and warranties contained in Section 4.4
and 4.17 relating to taxes and ERISA shall survive for the period of limitation
during which an action may be brought against Buyer pertaining to the subject
matter covered in such representations and warranties, and the representations
and warranties contained in Sections 4.10 and 5.2 shall survive without
limitation. Representations and warranties shall not terminate as to any Claim
made prior to the expiration of the respective representation or warranty.
ARTICLE 7
---------
MUTUAL COVENANTS
----------------
7.1 NECESSARY ACTIONS. Buyer and Seller agree that to the extent not
provided at Closing they shall prepare, submit and file, or cause to be
prepared, submitted and filed, all applications for approvals and actions as may
be required by applicable law with respect to the transactions contemplated by
this Agreement, and shall use their respective Reasonable efforts to obtain such
approvals and accomplish such results as expeditiously as possible.
7.2 BULK SALES. Without implying application to the transactions
contemplated by this Agreement, neither Seller nor Buyer intend to nor have they
complied with the provisions of the Uniform Commercial Code relating to bulk
sales or transfers or to similar laws; provided, HOWEVER, that Seller shall not
be relieved of its obligations to indemnify Buyer in respect to any liabilities
of Seller pursuant to the terms hereof as a result of Seller's and/or Buyer's
failure to comply with such provisions and/or laws as may be applicable.
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ARTICLE 8
---------
INDEMNIFICATION
---------------
From and after the Closing, subject to the period of limitations set
forth in Article 6 hereof with respect to survival of representations and
warranties, Buyer and Seller shall be indemnified as set forth below.
8.1 INDEMNIFICATION BY THE SELLER. The Seller covenants and agrees
promptly to indemnify, defend and pay to Buyer or any of its Affiliates, and
hold them harmless from the amount of any Damages (as defined in Section 8.4
below) suffered or incurred by any of them as a result of, arising out of, in
connection with or relating to (i) any suit, claim or demand of any third party
arising from acts, omissions, facts, or circumstances relating to Seller's
operation of its business or the Acquired Assets occurring prior to the Closing
Date the responsibility for which is not specifically assumed by Buyer
hereunder, (ii) non-compliance with any provision of law relating to bulk
transfers relating to the transactions described in this Agreement, (iii) any
claims against Buyer arising under or relating to any violation of, or failure
by Seller to comply with, any Requirements of Law (defined below), on or before
the Closing Date, (iv) any claim that any product sold by the Seller on or prior
to the Closing Date or included in the Acquired Assets as finished goods
inventory is defective or has been improperly designed or manufactured, (v) any
obligation to withhold a portion of the Closing Purchase Price or Adjusted Price
to satisfy the requirements of any applicable law, (vi) any liabilities arising
under any Requirements of Law (as hereinafter defined) in connection with the
Equipment containing Contaminants (as hereinafter defined), which contamination
Buyer occurred prior to the Closing, and (vii) any breach of any of the
representations or warranties made by Seller in this Agreement.
For the purposes hereof, "Requirements of Law" shall mean any federal ,
state or local law, rule, regulation, permit, agreement, order or other binding
determination (if any governmental authority relating to the environment, public
health or safety, or that govern the use, manufacture, storage, handling,
disposal or remediation of Contaminants. For the purposes hereof "Contaminants"
shall mean any substance or waste containing any hazardous substances,
pollutants or contaminants, as those terms are defined in the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601
et seq., and any other substance similarly defined or identified in any other
federal, state or local laws, rules or regulations governing the manufacture,
import, use, handling, storage, processing, release or disposal of substances or
wastes deemed hazardous, toxic, dangerous or injurious to public health or to
the environment. This definition includes asbestos-containing material and
petroleum or petroleum-based products.
The provisions of this Section 8.1 shall be in addition to and not in
limitation of any other rights or remedies which the Buyer may have hereunder or
otherwise. Notwithstanding the foregoing, Buyer shall not be entitled to
indemnification hereunder for breaches of any representation or any warranty
contained in Section 4 from the Seller (i) unless a claim for indemnification is
made within the time limits provided in Section 6.1 or (i) if such claim arises
from information not known
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to Seller and which is known to Buyer or any of Buyer's shareholders, agents or
representatives on or prior to the Closing Date.
8.2 INDEMNIFICATION BY BUYER. The Buyer hereby covenants and agrees
promptly to indemnify, defend and pay to the Seller or any Affiliates of the
Seller, and hold them harmless from the amount of any Damages suffered or
incurred by any of them as a result of, arising out of, in connection with, or
relating to any suit, claim or demand of any third party that arises from acts,
omissions, facts or circumstances relating to (i) the Buyer's operation of the
business of the Buyer at any time, (ii) subject to Section 8. 1 (iv), the
Acquired Assets to the extent any such Damages arise from such events occurring
after the Closing Date, or (iii) any claims against Seller arising under or
relating to any violation of, or failure by Buyer to comply with, any
Requirements of Law, after the Closing Date or the date Buyer takes possession
of any of the Acquired Assets. The provisions of this Section 8.2 shall be in
addition to and not in limitation of any other rights or remedies which the
Seller or any Affiliates of the Seller may have hereunder or otherwise.
Notwithstanding the foregoing, such persons and entities shall not be entitled
to indemnification hereunder from the Buyer for breaches of any representation
or any warranty contained in Section 5 unless a claim for indemnification is
made within the time limits provided in Section 6.1.
8.3 INDEMNIFICATION BASKET; INTEREST.
(a) Notwithstanding anything contained in this Section Buyer
shall not be entitled to make any claim against Seller for
indemnification on account of a breach of a representation or warranty
contained in this Agreement until Buyers shall have aggregated claims
in excess of $75,000 and whereupon Buyer shall be entitled to recover
fully the amount of all Damages suffered or incurred.
(b) In the event Buyer or Seller, as applicable, is adjudged
or entitled by agreement to indemnification pursuant to Section 8. 1 or
8.2, the. indemnifying party shall pay to the indemnified party
interest on all such amounts owing determined from the date such
indemnification was claimed and at the rate quoted by Bank of America
Illinois as its prime rate in effect on the date indemnification was
adjudged or agreed to as proper.
8.4 INSURANCE; DAMAGES. The amount of the liability of the Seller for
indemnification hereunder shall be net of any insurance proceeds received. As
used in this Agreement, "Damages" shall mean claims, demands, obligations,
taxes, liabilities, assessments, losses, costs, expenses or damages (including,
without limitation, reasonable attorneys' and accountants' fees and reasonable
costs of litigation), but shall not include consequential damages.
8.5 THIRD PARTY CLAIMS. If a party ("Defendant") shall receive actual
notice of any demand, claim asserted or any action or administrative or other
proceeding commenced in respect of which demand, claim, action or proceeding
Defendant is or may be entitled to indemnification hereunder, Defendant shall
give prompt written notice thereof to the other party from whom the indemnity
may be sought ("Respondent") (within ten (10) days in the case of receipt of a
notice,
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summons or complaint or such shorter period as shall permit Respondent
reasonable time to timely respond or answer such demand, claim, summons,
complaint or notice). Within thirty (30) days after the earlier of (i) receipt
of such notice or (ii) receipt of actual notice by Respondent from sources other
than Defendant, Respondent may give Defendant written notice of its election to
conduct the defense of such demand, claim, action or proceeding at its own
expense. If Respondent has given Defendant such notice of election to conduct
the defense, Respondent may conduct the defense at its expense, but Defendant
will nevertheless have the right to participate in the defense, but such
participation will be solely at the expense of Defendant, without a right of
further reimbursement. If Respondent has not so notified Defendant in writing
(within the time above provided) of its election to conduct the defense of such
claim, action or proceeding, Defendant may but need not conduct the defense of
such demand, claim, action, or proceeding. If Respondent elects to settle,
compromise or satisfy any demand, claim, action or proceeding defended by it,
the cost of any such settlement, compromise or satisfaction will be borne
entirely by Respondent and may be made only with the consent of Defendant, which
consent will not be unreasonably withheld. Defendant and Respondent will use all
reasonable efforts to cooperate fully with respect to the defense of any claim,
action or proceeding covered by this Section 8.5.
ARTICLE 9
---------
OTHER AGREEMENTS
----------------
9.1 MATERIALS ON ORDER BY SELLER. Seller agrees to provide to Buyer on
the date of Closing a summary of purchase orders for all materials on order
showing the material, quantity, purchase price and delivery date placed with
each vendor to produce future forecasted requirements of Finished Products from
Current Customers. Buyer accepts responsibility for all such purchase orders for
materials on order so long as they are for production of Finished Products, and
agrees that it will be their responsibility to direct vendors as to disposition
of said orders, and will assume responsibility to pay vendors for these
materials.
9.2 PASSAGE OF TITLE; INSURABLE INTEREST. Upon passing of title to the
Acquired Assets at Closing the Seller shall no longer have any insurable
interest in the Acquired Assets and no responsibility to the Buyer for any
damage or injury to the Acquired Assets while they remain on the premises of the
Seller. While the Acquired Assets remain on the Seller's premises the Buyer
shall indemnify the Seller against any damage or injury to the Seller, Seller's
employees or invitees or to the Seller's premises or premises of adjoining land
owners arising from the presence of the Acquired Assets on the Seller's premises
or as a result of any actions of Buyer or its agents, employees or
representatives.
9.3 STORAGE OF ACQUIRED ASSETS. Buyer shall be permitted to store the
acquired assets on Seller's premises for up to ninety (90) days after Closing
Date. While the acquired assets remain on Seller's premises, Buyer will
reimburse Seller for or pay directly all Seller's employee costs for services
requested by Buyer in writing and a fair proportion to be determined of Seller's
property
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(real and personal), taxes, utility costs and security expenses. If Buyer shall
not have removed the Acquired Assets from the Seller's premises within ninety
(90) day following the Closing Date in accordance with the Plan the Buyer shall
pay the Seller storage charges in the amount of $1,000 per day for each day that
any part of the Acquired Assets remain on the Seller's premises after such
period. The continued presence of the Acquired Assets on the Seller's premises
after the Closing and the accruing and payment of storage fees shall not create
a relationship of landlord/tenant or xxxxxx/bailee between the Buyer and Seller
nor any duty on the part of the Seller to care for or protect the Acquired
Assets. The Seller may at any time after expiration of ninety (90) days from
Closing utilize reasonable self help remedies to remove the Acquired Assets from
the Seller's premises notwithstanding the payment or the tender of payment of
the storage fees provided for herein. The Buyer agrees that notwithstanding the
absence of any relationship which would give the Seller a statutory lien on the
Acquired Assets the Seller shall none the less have a lien upon the Acquired
Assets for any storage charges accumulated or compensation due Seller in the
nature of damages or indemnification hereunder and which remains unpaid and
Seller shall be entitled to record and perfect such lien. To give effect to the
provisions of this section the Buyer hereby grants the Seller a limited power of
attorney to execute in the Buyer's name any filings, including any Uniform
Commercial Code forms as may be necessary to perfect such lien and thereafter
exercise the rights of a lien holder under the Uniform Commercial Code.
9.4 WARN ACT RESPONSIBILITY; EMPLOYEE NOTICES. Seller shall comply with
applicable federal, state and/or local laws relating to termination of any of
its employees including but not limited to the Worker Readjustment and Training
Notification Act of 1989 and the Consolidated Omnibus Budget Reconciliation Act
of 1985.
9.5 CHANGE OF NAME; ADVICE TO SUPPLIERS AND CUSTOMERS. Concurrently
with the Closing the Seller shall take such action as shall be required to
change its corporate name to a name dissimilar to Hysan Corporation. Upon the
request of either the Buyer or the Seller the parties shall cooperate in the
preparation and distribution of a notice advising the suppliers and customers of
the Seller that the Buyer has succeeded to the business of the Seller.
ARTICLE 10
----------
GENERAL PROVISIONS
------------------
The parties further covenant and agree as follows:
10.1 WAIVER OF TERMS. Any of the terms or conditions of this Agreement
may be waived at any time by the party or parties entitled to the benefit
thereof but only by a written notice signed by the party or parties waiving such
terms or conditions.
10.2 AMENDMENT OF AGREEMENT. This Agreement may be amended,
supplemented or interpreted at any time only by written instrument duly executed
by each of the parties hereto.
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10.3 PAYMENT OF EXPENSES. Except as set forth in this Agreement, the
parties shall each pay its own expenses, including, without limitation, the
expenses of its own counsel, investment bankers, brokers and accountants,
incurred in connection with the preparation, execution and delivery of this
Agreement and the other agreements and documents referred to herein or therein
and the consummation of the transactions contemplated hereby and thereby.
10.4 CONTENTS OF AGREEMENT, PARTIES IN INTEREST, ASSIGNMENT. This
Agreement and the other agreements and documents referred to herein set forth
the entire understanding of the parties with respect to the subject matter
hereof. Any previous agreements or understandings between the parties regarding
the subject matter hereof are merged into and superseded by this Agreement. The
parties have participated equally in the negotiation and preparation of this
Agreement and any rule of construction requiring this Agreement be interpreted
against the drafting party shall be inapplicable. All representations,
warranties, Covenants, terms and conditions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by and against the
respective heirs, legal representatives, successors and assigns of the parties
hereto; PROVIDED FURTHER, HOWEVER, that none of the rights or obligations of any
of the parties hereto may be assigned without the prior written consent of, in
the case of assignment by Seller, Buyer, or, in the case of assignment by Buyer,
Seller, which consent shall not unreasonably be withheld.
10.5 NOTICES. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be by hand-delivery, certified
or registered mail, return receipt requested, telex or telecopier (during normal
business hours), or air courier to the parties set forth below. Such notices
shall be deemed given at the time personally delivered, if delivered by hand or
by courier; at the time received, if sent certified or registered mad; when
answered back, if telexed; and when receipt acknowledged by telecopy equipment,
if telecopied.
If to Buyer: Specialty Chemical Resources, Inc.
Attn: President
0000 Xxxxxx Xxxx Xxxx
Xxxxxxxxx, Xxxx 00000
Phone: 216/000-0000
Fax: 216/000-0000
Copy to: Benesch, Friedlander, Xxxxxx & Xxxxxxx, LLP
Attn: Xxx X. Xxxxxx
0000 XX Xxxxxxx Xxxxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Phone: 216/000-0000
Fax: 216/000-0000
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If to Seller: Care of WEDGE Energy Group, Inc.
Attn: President
0000 Xxxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Phone: 713/000-0000
Fax: 713/000-0000
Copy to: Care of WEDGE Energy Group, Inc.
Attn: General Counsel
X.X. Xxx 000000
Xxxxxxx, Xxxxx 00000
Phone: 713/000-0000
Fax: 713/000-0000
and Xxxxxxx & Xxxxx
Attn: Xxxxxxx X. Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
10.6 SEVERABILITY. If any one or more of the provisions contained in
this Agreement shall be invalid, illegal or unenforceable in any respect for any
reason, the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions of this Agreement shall not be in
any way impaired.
10.7 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.8 HEADINGS; SCHEDULES. The headings of the Sections and the
subsections of this Agreement are inserted for convenience of reference only and
shall not constitute a part hereof. Each of the parties hereto acknowledge that
disclosure with respect to a specific Schedule constitutes disclosure for all
purposes of this Agreement.
10.9 GOVERNING LAW; JURISDICTION. This Agreement shall be governed,
construed and enforced in accordance with the internal laws of the State of
Illinois, excluding any choice of law rules which may direct the application of
the laws of another jurisdiction. Any dispute arising under or relating to the
matters made the subject of this Agreement shall be submitted to binding
arbitration by a panel of three arbitrators in Chicago, Illinois pursuant to the
Commercial Rules and regulations of the AAA. Each party shall select one
arbitrator and the two arbitrators thus selected shall select a third
arbitrator. Any arbitration award shall be enforceable in the courts of general
jurisdiction of
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Xxxx County, Illinois. The party commencing arbitration shall be responsible for
the costs of arbitration and of the arbitrators unless they are the prevailing
party as set forth below. Notwithstanding the foregoing (i) the arbitration
procedure described in Section 1.5(d) herein shall be followed for resolution of
any dispute relating to determination of the Closing Purchase Price or the
Adjusted Purchase Price and any party, if so entitled, shall be free to pursue
equitable remedies in a court of law. The prevailing party in any proceeding
under this Section 9.9 shall be entitled to recover its reasonable attorneys
fees, costs and any arbitration costs it may have incurred. A prevailing party
shall be the party obtaining relief in respect to its claims whether by way of a
final and nonappealable judgment or order providing for an aggregate payment at
such time of a monetary amount which is $50,000 greater than the most immediate
prior settlement offer of the losing party or an award or order which (i)
provides injunctive relief or (ii) an agreement to take or refrain from taking
specific action.
10.10 INSTRUMENTS OF FURTHER ASSURANCE. Each of the parties hereto
agrees, upon the request of the other party hereto, from time to time to execute
and deliver to such other party all such instruments and documents of further
assurance or otherwise as shall be reasonable under the circumstances, and to do
any and all such acts and things as may reasonably be required to carry out the
obligations of such requested party hereunder.
10.11 PUBLICITY. No notices to third parties or other publicity,
including press releases, concerning any of the transactions provided for herein
shall be made by any party hereto unless planned and coordinated jointly among
the parties hereto, except to the extent otherwise required by law.
10.12 NO THIRD PARTY BENEFICIARIEs. Nothing in this Agreement is
intended nor shall it be construed to give any person, firm, corporation or
other entity, other than the parties hereto and their respective successors and
permitted assigns, any right, remedy or claim under or in respect of this
Agreement or any provisions hereof.
22
23
Whereupon the undersigned have set their hands and seals on the date first above
written.
SELLER: BUYER:
HYSAN CORPORATION SPECIALTY CHEMICAL RESOURCES, INC.
By: /s/ Xxxxx X. Xxxxxxxxxxx By: /s/ Xxxxx Xxxx, C.E.O.
--------------------------- -------------------------------------
Attest: /s/ Xxxxxx X. Xxxxx Attest: /s/ Xxx Xxxxxx
------------------------ ----------------------------------
The undersigned agrees to be bound by the terms and conditions contained in
Article 3 of this Agreement.
WEDGE ENERGY GROUP, INC.
By: /s/ Xxxx X. Xxxxx
---------------------------
Attest: /s/ Xxxxxx X. Xxxxxxxx
------------------------
23
24
ASSET PURCHASE AGREEMENT
------------------------
Hysan Corporation and Specialty Chemical Resources, Inc.
25
ASSET PURCHASE AGREEMENT
------------------------
ARTICLE PAGE
------- ----
ARTICLE 1
SALE AND PURCHASE OF ASSETS................................................1
1.1 Sale and Purchase of Assets.......................................1
1.2 Liabilities.......................................................2
1.3 Purchase Price; Payment...........................................2
1.4 Prorations; Xxxxxxx Money.........................................4
1.5 Adjustments to Purchase Price.....................................4
1.6 Purchase Price Allocations........................................6
1.7 Transfer Taxes....................................................6
ARTICLE 2
CLOSINGS...................................................................7
2.1 Closings..........................................................7
2.1.1 Certificate..............................................7
2.1.2 Opinion..................................................7
2.1.3 Consents and Approvals...................................7
2.1.4 Articles of Incorporation................................7
2.1.5 Certificate..............................................7
2.1.6 Opinion..................................................8
2.1.6 Opinion..................................................8
2.1.7 Removal of Acquired Assets...............................8
2.1.8 Escrow Agreement.........................................8
2.2 Further Assurances/Provision of Records...........................8
ARTICLE 3
COVENANT NOT TO COMPETE....................................................9
3.1 Covenant Not to Compete...........................................9
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER..................................10
4.1 Organization, Power and Qualification............................10
4.2 Capitalization...................................................10
4.3 No Violation.....................................................10
4.4 Title to Acquired Assets.........................................10
4.5 Contracts........................................................11
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ARTICLE PAGE
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4.6 No Suit.............................................................11
4.7 Permits.............................................................11
4.8 Product Liability; Warranty Liability...............................11
4.9 Principal Customers and Suppliers...................................12
4.10 Authority...........................................................12
4.11 Financial Information...............................................12
4.12 Absence of Certain Changes..........................................12
4.13 Absence of Undisclosed Liabilities..................................12
4.14 Brokerage and Finder's Fee..........................................12
4.15 Trademarks, Copyrights and Similar Matters..........................13
4.16 Compliance with Laws................................................13
4.17 Employee Benefit Plans..............................................13
4.18 Material Misstatements or Omissions.................................13
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE BUYER..................................14
5.1 Due Organization; Good Standing and Power...........................14
5.2 Authorization and Validity..........................................14
5.3 Governmental Approvals; No Conflicts................................14
5.4 Brokers' Fees.......................................................15
5.5 No Suit.............................................................15
ARTICLE 6
NATURE AND SURVIVAL OF REPRESENTATIONS.......................................15
6.1 Nature and Survival of Representations..............................15
ARTICLE 7
MUTUAL COVENANTS.............................................................15
7.1 Necessary Actions...................................................15
7.2 Bulk Sales..........................................................16
ARTICLE 8
INDEMNIFICATION..............................................................16
8.1 Indemnification by the Seller.......................................16
8.2 Indemnification by Buyer............................................17
8.3 Indemnification Basket; Interest....................................17
8.4 Insurance; Damages..................................................18
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ARTICLE PAGE
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8.5 Third Party Claims..................................................18
ARTICLE 9
OTHER AGREEMENTS.............................................................18
9.1 Materials On Order By Seller........................................18
9.2 Passage of Title; Insurable Interest................................18
9.3 Storage of Acquired Assets..........................................19
9.4 WARN Act Responsibility; Employee Notices...........................19
9.5 Change of Name; Advice to Suppliers and Customers...................19
ARTICLE 10
GENERAL PROVISIONS...........................................................20
10.1 Waiver of Terms.....................................................20
10.2 Amendment of Agreement..............................................20
10.3 Payment of Expenses.................................................20
10.4 Contents of Agreement, Parties in Interest, Assignment..............20
10.5 Notices.............................................................20
10.6 Severability........................................................21
10.7 Counterparts........................................................22
10.8 Headings; Schedules.................................................22
10.9 Governing Law; Jurisdiction.........................................22
10.10 Instruments of Further Assurance....................................22
10.11 Publicity...........................................................22
10.12 No Third Party Beneficiaries........................................22
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