INDEX TO EXHIBIT
Sequentially
Number
Exhibit No. Description Page
10.34 Asset Purchase Agreement 1-31
ASSET PURCHASE AGREEMENT
AGREEMENT, dated as of October 31, 1995, by and among
TEST SWITCH TECHNOLOGY, INC, a Texas corporation with offices at
00000 Xxxxxxx Xxxx, Xxxxxx, Xxxxx 00000-0000 ("Seller"), ELECTRIC
& GAS TECHNOLOGY, INC., a Texas corporation ("Parent"), and THE
DURHAM CO. (doing business as The Durham Company), a Missouri
corporation with offices at Xxxxxx Xxxx, Xxxxxxx, Xxxxxxxx 00000
("Purchaser").
Recitals:
A. Seller is engaged in the manufacture and sale of
electrical Test Switch equipment, including without limitation,
test switches and accessories, and related products at Seller's
plant facility (the "Facility") located in Canton, Ohio (the
Business").
B. Seller desires to sell, and Purchaser desires to
purchase, the Business and the Purchased Assets (as hereinafter
defined), subject to the terms and conditions set forth below.
NOW THEREFORE, in consideration of the premises and the
respective representations, warranties, covenants, agreements and
conditions contained herein, including the execution by Seller
and Parent of the NonCompetition Agreement (as defined below),
the parties hereto agree as follows:
ARTICLE I. PURCHASE AND SALE OF THE BUSINESS.
1.1 The Transaction. Upon the terms and subject to the
conditions hereinafter set forth, at the Closing (as hereinafter
defined), Seller shall sell, transfer, assign and deliver to
Purchaser, and Purchaser shall purchase, accept, assume and
receive, all of Seller's right, title and interest in, to or
arising from the Business as an operating business, including the
Purchased Assets (as hereinafter defined).
1.2 Purchased Assets. As used herein, the term "Purchased
Assets" shall mean and include all of the assets, properties,
rights and claims of any kind or nature (whether or not recorded
on the books of Seller) used in, relating to or arising from the
conduct of the Business, whether tangible or intangible, whether
real, personal or mixed, whether accrued, contingent or
otherwise, and wherever located (whether at the Facility or at
any other location), including without limitation: (i) those
assets listed and described on Schedule 1.2; (ii) all of Seller's
fixed assets relating to the Business, including without
limitation, leasehold
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improvements, fixtures, machinery and equipment, tools, dies,
furniture, furnishings, plant and office equipment (including
copying, telecommunication, telefax and
computer equipment) and automobiles and other motor vehicles;
(iii) all of Seller's inventories relating to the Business,
including supplies, raw materials, work-in-process, finished
goods and goods-in-transit from suppliers or manufacturers; (iv)
all of Seller's accounts receivable, prepaid expenses and
deposits related to the Business; (v) all of Seller's right,
title and interest in and under the Assumed Contracts (as defined
below); (vi) all operating data and records of Seller, including
without limitation, books, records (including any certifications
or approvals of Underwriters Laboratory or other similar
organizations), ledgers, sales and promotional data, advertising
materials, customer lists, credit information, cost and pricing
information supplier lists, purchase and sales orders,
quotations, business plans, reference catalogs, and all rights
relating to computer programs and software for the Purchased
Assets utilized by Seller in connection with the Business
(including all electronic data processing systems, program
specifications, service codes, input data, report layouts and
formats, record file layouts, diagrams, functional
specifications, narrative descriptions, flow charts and all
documentation relating thereto); (vii) all engineering and
production designs, drawings, formulae, technology, proprietary
information, inventions, trade secrets, know-how and other
similar data owned by Seller; (viii) all issued patents,
trademarks, trademark registrations, copyrights, trade names,
service marks, confidential information, slogans, logos and
similar rights, and any other intellectual properties owned by
Seller and used in connection with the Business, together with
all common law rights and good will associated with any of the
items set forth herein; (ix) all permits and licenses from all
governmental authorities held by Seller in connection with the
Business; (x) all claims, rights, causes of action, judgments,
claims, demands and rights of recovery or set-off of whatever
nature related to the Purchased Assets; and (xi) all other assets
and properties relating to the operation of the Business
(including all phone and fax numbers and any post office boxes),
together with all rights and claims derived therefrom, excluding,
however, the Excluded Assets (as defined in Section 1.5).
1.3 Assumed Liabilities. Purchaser shall assume, as of
the Closing Date, and pay, perform and discharge all obligations
of Seller for future performance solely from and after the
Closing Date under only those contracts, agreements and
commitments (including purchase and sale orders) entered into by
Seller in connection with the Business which Purchaser
specifically agrees to assume in writing on the Closing Date,
including standard purchase orders for materials to be delivered
after the Closing in the ordinary course of business (the
"Assumed Contracts"). The parties hereby acknowledge and agree
that Purchaser shall not assume any
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obligations under any other contract, agreement or commitment
relating to the Business, including any and all contracts
or obligations related to employees of Seller and Seller's
union contract covering employees at the Facility, and any
such contract, agreement or commitment shall not be included
as part of the Assumed Contracts.
1.4 No Other Liabilities. Notwithstanding anything to the
contrary contained in this Agreement, except as expressly
provided in Section 1.3 hereof, Purchaser shall not assume, and
expressly disclaims responsibility for, any debts, liabilities,
obligations or commitments of Seller, Parent or any other party
of any kind or nature whatsoever with respect to the Business or
Purchased Assets, including, without limitation, the following:
(a) all liabilities and obligations relating to
the Business;
(b) all liabilities and obligations to employees of
the Business of any kind or nature, including those for
salaries and employment benefits, accident, disability,
health and workers' compensation insurance or benefits, and
all other liabilities and obligations to employees, whether
arising from events or occurrences for any period either
prior to or following the Closing Date;
(c) all liabilities and obligations under any pension,
profit-sharing, employee stock ownership or other employee
benefit or welfare plans maintained or contributed to by
Seller; and
(d) all liabilities and obligations for taxes of
any kind for the period up to and including the Closing
Date, including without limitation, Federal, state and
local taxes, income, sales and use, ad valorem duties
and assessments, FICA, contributions and profit sharing
deductions relating to the operation of the Business or
otherwise, and all taxes related to or arising from the
transfers contemplated by this Agreement.
1.5 Excluded Assets. Purchaser and Seller agree that the
Purchased Assets shall not include Seller's account receivable
owed by Hydro-Pro in the amount of $44,080 and those assets set
forth on the attached Schedule 1.5 (the "Excluded Assets"), and
Purchaser shall not be acquiring any interest in the Excluded
Assets.
1.6 Closing Date. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place
at the offices of ELECTRIC & GAS TECHNOLOGY, INC., 00000 Xxxxxxx
Xxxx, Xxxxxx, Xxxxx 00000, at 10:00 A.M., local time, on October
31, 1995
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(the "Closing Date"), or such other date and time as shall be
mutually agreed to among the parties.
ARTICLE II. PURCHASE PRICE.
2.1 Purchase Price and Payment.
(a) The purchase price to be paid by Purchaser to Seller
for the Purchased Assets hereunder, in addition to the Assumed
Contracts to be as assumed by Purchaser pursuant to Section 1.3
hereof, shall be Two Million One Hundred Thirty Thousand Nine
Hundred Twenty Dollars (U.S. $2,130,920.00) in the aggregate,
subject to adjustment pursuant to Section 2.1.(d) (the "Purchase
Price"). The Purchase Price shall be payable by delivery by
Purchaser to Seller at the Closing of $2,130,920.00, subject to
adjustment pursuant to Section 2.1.(d), less the amount of the
Escrowed Funds (as defined in that certain Escrow Agreement dated
September 30, 1995, as amended, among Seller, Xxxx X. Xxxxx, Esq.
(the "Escrow Agent") and Purchaser (the "Escrow Agreement")), by
wire transfer or immediately available funds to an account (or
accounts) designated by Seller. The Escrowed Funds shall remain
in escrow for six (6) months and used to satisfy any
indemnification claims by Purchaser pursuant to the terms of the
Second Amendment to Escrow Agreement attached as Exhibit A (the
"Second Amendment to Escrow Agreement"). The Purchase Price
shall be allocated among the Purchased Assets pursuant to an
allocation agreement between the Purchaser and Seller executed at
Closing, using the Internal Revenue Service ("IRS") allocation
rules, and each party shall agree to timely file an IRS Form 8594
consistent with such allocation.
(b) Pursuant to the terms of the Loan Agreement, dated as
of November 24, 1993 (the "CIT Loan Agreement"), among THE CIT
GROUP/CREDIT FINANCE, INC., as Lender ("CIT"), and Seller, Parent
and its affiliates ("Borrowers"), CIT has made certain revolving
loans to Borrowers. As security for such loan obligations, Seller
has granted to CIT a security interest in, and lien on, its
inventory, equipment and other collateral, including without
limitation, the Purchased Assets. On or prior to the Closing
Date, Seller shall cause CIT to deliver to Purchaser Form UCC-3
financing statements duly executed and in form ready for
recordation and filing and such other documentation as may
reasonably be requested by Purchaser and its counsel evidencing
the termination of such security interest and liens on the
Purchased Assets (the "CIT Termination Documents").
(c) In addition to the CIT Termination Documents, on or
prior to the Closing Date, Seller shall deliver or cause to be
delivered to Purchaser Form UCC-3 financing statements duly
executed and in form ready for recordation and filing and such
other documentation
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as may reasonably be requested by Purchaser and its counsel
evidencing termination of all other security interests and
liens on the Purchased Assets (the "Additional Termination
Documents").
(d) In the event on the Closing Date (i) the amount of
Seller's accounts receivable is different than the July 31, 1995
amount set forth in Section 3.7 (excluding in both instances the
$44,080 Hydro-Pro receivable), and/or (ii) there is a difference
between (x) the cost of materials purchased by Seller since
October 19, 1995 and (y) the material cost of shipments invoiced
since October 19, 1995 (such amount being deemed to be 35% of
such invoiced amounts), then in either or both such events the
Purchase Price shall be automatically adjusted upward or downward
in each event on a dollar-for-dollar basis in an amount equal to
such difference.
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller and Parent hereby jointly and severally make the
following representations and warranties to Purchaser, each of
which shall be deemed material (and Purchaser, in executing,
delivering and consummating this Agreement, has relied and will
rely upon the correctness and completeness eight each of such
representations and warranties):
3.1 Valid Corporate Existence; Good Standing. Seller and
Parent are corporations duly organized, validly existing and in
good standing under the laws of the State of Texas, and Seller
has the corporate power to carry on its business as now being
conducted and to own its assets. The copies of the Articles of
Incorporation and By-Laws, as amended to date, of Seller, which
will be delivered to Purchaser at least ten (10) days prior to
the Closing, are true and complete copies of those documents in
effect at the time of delivery, and such documents shall not be
amended or modified prior to the Closing. Seller is duly
qualified and in good standing as a foreign corporation in the
State of Ohio, and in all other jurisdictions where it conducts
business and such qualification is required by law.
3.3 Consents. Seller represents that there are no consents
nor approvals of governmental and other regulatory agencies,
foreign or domestic, and of other third parties which are
required to be obtained by or on behalf of Seller in order to
enable Seller to enter into and carry out this Agreement in all
material respects, except for the CIT Termination Document and
the Additional Termination Documents. All such requisite
consents have been, or prior to the Closing will have been,
obtained.
3.4 Corporate Authority; Binding Nature of Agreement.
Seller and Parent each have the full power and authority to enter
into
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this Agreement and to carry out its respective obligations
hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been
duly authorized by Parent, as the sole stockholder of Seller, and
by the Board of Directors of Seller and Parent, and no other
corporate proceedings on the part of Seller or Parent is
necessary in order to authorize the execution and delivery of
this Agreement and the consummation of the transactions
contemplated hereby. This Agreement constitutes the valid and
binding obligation of Seller and Parent and is enforceable in
accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium or similar laws relating to the
enforcement of creditors' rights generally and the application of
general principles of equity. In connection with the foregoing,
Seller represents and warrants that the Purchase Price, together
with the assumption of the Assumed Liabilities hereunder,
constitutes fair consideration for, and a reasonably equivalent
value of, the Purchased Assets.
3.5 Financial Statements. Attached hereto as Schedule 3.5
is the following financial statements (the "Financial
Statements"): unaudited balance sheet and statements of income,
and changes in stockholders' equity as of and for the twelve (12)
month period ended July 31, 1995 (the balance sheet including all
business activities of Seller, one income statement being for the
Business only and one income statement being for the other
business activities of Seller), showing true, complete and
accurate sales, revenues, labor costs and material costs
connected with the Business, with a reasonable adjustment for
allocated expenses and overhead during the time period in which
Seller conducted the Business in conjunction with other business
activities. The Financial Statements were prepared in accordance
with generally accepted accounting principles applied on a
consistent basis throughout the periods covered thereby, are
correct and complete, and are consistent with the books and
records of Seller (which books and records are correct and com-
plete). The Financial Statements are not subject to any year-end
adjustment and accurately represent the financial condition and
operations of the Business. Seller acknowledges that Purchaser
has relied upon the accuracy and completeness of the Financial
Statements in order to determine the Purchase Price. There has
been no material change in Seller's financial status from the
date of the Financial Statements to the date hereof.
3.6 Inventory. Except as disclosed in Schedule 3.6, the
inventory constituting part of the Purchased Assets consists of
raw materials and supplies, manufactured and purchased parts,
goods in process, and finished goods, all of which is
merchantable and fit for the purpose for which it was procured or
manufactured, and none of which is slow-moving, obsolete,
damaged, or defective, subject only to the reserve for inventory
write-down set forth on the face of the Financial Statement
(rather than in any notes thereto) as
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adjusted for the passage of time through the Closing Date in
accordance with the past custom and practice of Seller. As of
July 31, 1995, the inventory of Seller was valued (using a
valuation of the lower of cost or
market for each item) at $629,012.90, with a $65,000.00 reserve
for obsolescence. Except as set forth on Schedule 3.6, the
inventory constituting part of the Purchased Assets is not, and
on the Closing Date will not be, stored with, or held by, any
sales representative, bailee, warehouseman or other similar party
at any location other than the Facility, all such items of
inventory stored or held at remote warehouse locations other than
the Facility are owned outright by Seller free and clear of all
liens and encumbrances of any kind or nature whatsoever, and are
being held for sale by such sales representative or other party
on behalf of Seller in the ordinary course consistent with past
practices of the Business. Purchaser and Seller acknowledge that
the Purchase Price reflects a $25,000 adjustment as a result of
the October 19, 1995 inventory conducted by Purchaser.
3.7 Accounts Receivable. Except for the Hydro-Pro account
which is remaining with Seller (and which account has been
reflected in the Purchase Price), all accounts receivable of
Seller are reflected properly on its books and records, are valid
receivables subject to no setoffs or counterclaims, are presently
current and collectible, and will be collected in accordance with
their terms at their recorded amounts, subject only to the
reserve for bad debts set forth on the face of the Financial
Statement (rather than in any notes thereto) as adjusted for the
passage of time through the Closing Date in accordance with the
past custom and practice of Seller. As of July 31, 1995, the
accounts receivable of Seller totaled $305,696.28, with a $10,000
reserve for bad debts.
3.8 Insurance. Schedule 3.8 sets forth the following
information with respect to each insurance policy (including but
not limited to policies providing property, casualty, liability,
and workers' compensation coverage and bond and surety
arrangements) to which Seller has been a party, a named insured,
or otherwise the beneficiary of coverage at any time within the
past three (3) years:
(i) the name, address and telephone number of the
agent;
(ii) the name of the insurer, the name of the
policyholder, and the name of each covered insured;
(iii) the policy number and the period of coverage;
(iv) the scope (including an indication of whether the
coverage was on a claims made, occurrence, or other basis) and
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amount (including a description of how deductibles and
ceilings are calculated and operate) of coverage; and
(v) a description of any retroactive premium
adjustments or other loss-sharing arrangements.
With respect to each such insurance policy: (a) the policy is
legal, valid, binding, and in full force and effect; (b) the
policy will continue to be legal, valid, binding, and enforceable
and in full force and effect on identical terms following the
Closing Date, except for those property and casualty policies
covering Purchased Assets; (c) Seller is not in breach or default
(including with respect to the payment of premiums or the giving
of notices) and no event has occurred which, with notice or the
lapse of time, would constitute such a breach or default or
permit termination, modification, or acceleration, under the
policy; and (d) no party to the policy has repudiated any
provision thereof. Seller has been covered during the past five
(5) years by insurance in scope and amount customary and reason-
able for the businesses in which it has engaged during the
aforementioned period.
3.9 Adverse Developments. As of the date herein, there
have been no material adverse changes in the assets, properties,
operations or financial condition or prospects of the Business.
Seller, after reasonable inquiry, does not know of any
development or threatened development of a nature that is, or
which could be reasonably expected to have, a material adverse
effect upon the Business or any part of the Purchased Assets.
3.10 Taxes. All Federal, state, local and foreign income,
gross receipts, profits, franchise, sales, goods and services,
use, occupancy, excise, and custom duties and other taxes and
assessments, including interest and penalties (collectively, the
"Taxes"), payable by, or due from, Seller in connection with the
Business have been fully paid or adequately disclosed and fully
provided for. Seller shall be solely liable for all of the Taxes
payable at any time in connection with the operations of the
Business and the Purchased Assets during the period to and
including the Closing Date, and to the extent that all of such
Taxes are not fully satisfied, remain liable therefor following
the Closing Date. In addition, Seller shall be solely responsible
for the timely filing of all tax returns and reports with respect
to the operations of the Business and the Purchased Assets with
respect to such period.
3.11 Ownership of Assets. Except as set forth in Schedule
3.11, Seller owns outright, and has good, valid and marketable
title to, all of the assets, properties and businesses
constituting the Purchased Assets, free and clear of all liens,
mortgages, pledges, security interests, conditional sales
agreements,
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restrictions on transfer or other encumbrances, claims or
charges of any kind or nature whatsoever.
3.12 Intellectual Property. Schedule 3.12 sets forth a true
and complete list and brief description of all patents,
copyrights, trademarks, service marks, trade names, proprietary
know-how and other similar intangible assets which constitute a
portion of the Purchased Assets. Except as set forth in Schedule
3.12, no other person, firm or corporation has any proprietary or
other interest in any such intangible assets, and Seller is not a
party to or bound by any license or other agreement requiring the
payment to any person, firm or corporation of any royalty with
respect thereto, except for Seller's license to use the tradename
"Superior" pursuant to that certain Trademark License Agreement
dated April 28, 1995 between Seller and American Circuit Breaker
Corporation, which license shall be assigned to Purchaser at the
Closing. Seller, after reasonable inquiry, does not know of any
violation by others of any such copyrights, trademarks, service
marks, trade names or patent rights. Seller is not infringing
upon any patent, copyright, trade name, trademark or service xxxx
or are otherwise misappropriating or violating the rights of any
third party with respect thereto, and no proceedings have been
instituted or, to the knowledge of Seller, after reasonable
inquiry, are threatened, and no claim has been received by Seller
alleging any such violation.
3.13 Leases. Schedule 3.13 lists and described briefly all
real property leased or subleased to Seller related to the
Business. Seller has delivered to the Purchaser or will deliver
to the Purchaser, at least twenty (20) days prior to the Closing,
correct and complete copies of the leases and subleases listed in
Schedule 3.13. With respect to each lease and sublease listed in
Schedule 3.13, and subject to Section 6.7:
(i) the lease or sublease is legal, valid, binding,
enforceable, or in full force and effect;
(ii) the lease or sublease will continue to be legal,
valid, binding, enforceable, and in full force and effect on
identical terms following the Closing, subject to Section
6.7;
(iii) no party to the lease or sublease is in breach
or default, and no event has occurred which with notice or
lapse of time, would constitute a breach or default or
permit termination, modification, or acceleration there-
under;
(iv) no party to the lease or sublease has repudiated
any provision thereof;
(v) there are no disputes, oral agreements, or
forbearance programs in effect as to the lease or sublease;
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(vi) with respect to such sublease, the
representations and warranties set forth in subsections (i)
through (v) above are true and correct with respect to the
underlying lease;
(vii) Seller has not assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in
the leasehold or subleasehold;
(viii) all facilities leased or subleased thereunder
have received all approvals of governmental authorities
(including licenses and permits) required in connection with
the operation thereof and have been operated and maintained
in accordance with applicable laws, rules, and regulations;
(ix) all facilities leased or subleased thereunder
are supplied with utilities and other services necessary for
the operation of said facilities; and
(x) the owner of the facility leased or subleased
has good and marketable title to the parcel of real
property, free and clear of any security interest, easement,
covenant, or other restriction, except for (a) installments
of special easements not yet delinquent and (b) recorded
easements, covenants, and other restrictions which do not
impair the current use, occupancy, or value, or the
marketability of title, of the property subject thereto.
3.14 Contracts. Schedule 3.14 lists the following
contracts, agreements, and other written arrangements to which
Seller is a party related to the Business:
(i) any written arrangement (or group of related
written arrangements) for the lease of personal property
from or to third parties;
(ii) any written arrangement (or group of related
written arrangements) for the purchase or sale of raw
materials, commodities, supplies, products, or other
personal property or for the furnishing or receipt of
services;
(iii) any written arrangement concerning a partnership
or joint venture;
(iv) any written arrangement (or group of written
arrangements) under which it has created, incurred, assumed,
or guaranteed (or may create, incur, assume, or guarantee)
indebtedness (including capitalized lease obligations) or
under which it has imposed (or may impose) a security
interest on any of its assets, tangible or intangible;
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(v) any written arrangement concerning
confidentiality or noncompetition;
(vi) any written arrangement involving Seller and
Seller's shareholders and affiliates related to the
Business;
(vii) any written arrangement with any of Seller's
directors, officers, and employees in the nature of a
collective bargaining agreement, employment agreement, or
severance agreement;
(viii) any written arrangement under which the
consequences of a default or termination could have an
adverse effect on the assets, Liabilities, business,
financial condition, operations, results of operations, or
future prospects of the Company; or
(ix) any other written arrangement (or group or
related written arrangements) not entered into in the
ordinary course of business.
Seller has delivered to the Purchaser or will deliver to the
Purchaser, at least twenty (20) days prior to the Closing, a
correct and complete copy of each written arrangement listed in
Schedule 3.14. With respect to each written arrangement so
listed: (a) the written arrangement is legal, valid, biding,
enforceable, and in full force and effect; (b) the written
arrangement will continue to be legal, valid, biding, and
enforceable and in full force and effect on identical terms
following the Closing; (c) no party is in breach or default, and
no event has occurred which with notice or lapse of time would
constitute a breach or default or permit termination,
modification, or acceleration, under the written arrangement; and
(d) no party has repudiated any provision of the written
arrangement. Seller is not a party to any verbal contract,
agreement, or other arrangement which, if reduced to written
form, would be required to be listed in Schedule 3.14 under the
terms of Schedule 3.14. No unfilled customer order or commitment
obligating Seller is in excess of normal requirements, nor are
prices provided therein less than current market prices for the
products or services to be provided thereunder. No supplier of
Seller has indicated within the past year that it will stop, or
decrease the rate of, supplying materials, products, or services
to Seller and no customer of Seller has indicated within the past
year that it will stop, or decrease the rate of, buying
materials, products, or services from Seller.
3.15 Litigation. Except as set forth in Schedule 3.15, there
are no actions, suits, proceedings or governmental investigations
relating to or involving Seller in respect of the Business or any
part of the Purchased Assets by or before any court or
governmental or other regulatory agency or commission either
pending or, to the
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knowledge of Seller, after reasonable inquiry, threatened,
or any outstanding order, injunction, judgment, writ, award
or decree against the Business or any part of the Purchased
Assets; and Seller, after reasonable inquiry, does not know of
any basis for any of the same.
3.16 Compliance with Laws. The operation of the Business
and the Purchased Assets has been conducted in compliance with
all applicable laws, ordinances, rules, regulations and other
requirements of all Federal, state, municipal and other political
subdivisions and commissions, bureaus, agencies and instru-
mentalities thereof having jurisdiction over the Business and the
Purchased Assets, including, without limitation, with respect to
wages, hours, hiring, promotion, retirement, nondiscrimination,
air and water pollution, zoning, health, safety and other working
conditions, pension and other employee benefits, securities,
antitrust, trade regulation, warranties and consumer protection.
3.17 Environmental Protection. The Seller, in connection
with the Business and specifically in connection with any
underground tanks located at the Facility, is in compliance with
all Federal, state, local and foreign laws and guidelines
relating to pollution or protection of the environment, including
laws relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes into the environment
(including without limitation, ambient air, surface water, ground
water or land), or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals,
petroleum or petroleum products, or industrial, toxic or
hazardous substances or wastes (collectively, the "Environmental
Laws"), and has obtained all permits, licenses and authorizations
required thereunder. Except as set forth in Schedule 3.17, there
is no civil, criminal or administrative action, suit, demand,
claim, hearing, notice or demand letter, notice of violation,
investigation, proceeding pending, or to the knowledge of Seller,
after reasonable inquiry, threatened, against Seller, the
Business or the Purchased Assets relating in any manner to any
Environmental Law or any regulation, code, plan, order, decree,
judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder, and Seller, after reasonable
inquiry, is not aware of any reasonable basis therefor.
3.18 Products Liability. Except as set forth in Schedule
3.18: (a) there is no claim, action, suit, inquiry, proceeding or
investigation by or before any court or governmental or other
regulatory or administrative agency or commission pending, or to
the knowledge of Seller, after reasonable inquiry, threatened,
against or involving Seller in connection with any product relat-
ing to the Business or the Purchased Assets alleged to have been
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manufactured, shipped or sold by Seller and alleged to have
a defect in manufacture or design, including without limitation,
any failure to warn of the defect, nor to the knowledge of
Seller, after reasonable inquiry, is there any reasonable basis
therefor; (b) to the knowledge of Seller, after reasonable
inquiry, there has not been any occurrence (as defined below);
(c) to the knowledge of Seller, after reasonable inquiry, there
has not been any product recall, rework or retrofit relating to
any product which has been manufactured, shipped or sold by the
Business; and (d) there are no design defects resulting in
hazardous conditions, including without limitation, any failure
to warn of any design defects, involving any product
manufactured, shipped or sold in connection with the Business.
For purposes hereof, "occurrence" shall mean any accident,
happening or event caused or allegedly caused by any hazard or
defect or alleged hazard or alleged defect in the manufacture,
design, materials or workmanship, including without limitation,
any failure or alleged failure to warn of the hazard, defect or
alleged hazard or alleged defect, of any product (including any
parts or components thereof) relating to the Business which
results or is alleged to have resulted in injury or death to any
person or damage to or destruction of the product itself (or any
parts or components thereof) or other consequential damages.
3.19 Product Warranty. Each product manufactured, sold,
leased, or delivered by Seller has been in conformity with all
applicable contractual commitments and all express and implied
warranties, and Seller has no liability (and there is no basis
for any present or future charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand against any
of them giving rise to any Liability) for replacement or repair
thereof or other damages in connection therewith, subject only to
the reserve for product warranty claims set forth on the face of
the Financial Statement (rather than in any notes thereto) as
adjusted for passage of time through the Closing Date in
accordance with the past custom and practice of Seller. No
product manufactured, sold, leased, or delivered by Seller is
subject to any guaranty, warranty, or other indemnity beyond the
applicable standard terms and conditions of sale or lease.
Schedule 3.19 includes copies of the standard terms and
conditions of sale or lease for Seller (containing applicable
guaranty, warranty and indemnity provisions).
3.20 Condition of Assets. Each item of machinery,
equipment, vehicles and other personal property constituting part
of the Purchased Assets is in good operating condition and
working order and suitable for purposes for which it is presently
used, and has been maintained in accordance with normal industry
practice. Purchaser hereby acknowledges that, on a date which
shall be no more than ten (10) days prior to the Closing Date
(the "Equipment Inspection Date), it will inspect such machinery,
equipment and
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other personal property. All such machinery and
equipment shall be purchased by Purchaser hereunder on an "as is,
where is" basis, except for any changes to such personal property
occurring during the period from the Equipment Inspection Date to
the Closing Date.
3.21 Employees. Except as set forth on Schedule 3.21, to
the knowledge of Seller, and the directors, officers (and
employees with responsibility for employment matters) of Seller,
no key employee or group of employees has any plans to terminate
employment with Seller. Except as set forth on Schedule 3.21,
Seller is not a party to or bound by any collective bargaining
agreement, nor has Seller experienced any strikes, grievances,
claims of unfair labor practices or other collective bargaining
disputes. Seller has not committed any unfair labor practice.
Neither Seller nor its directors and officers (and employees with
responsibility for employment matters) have any knowledge of any
organizational effort presently being made or threatened by or on
behalf of any labor union with respect to employees of Seller.
Except as set forth on Schedule 3.21, Seller is not a party to,
nor has adopted, any employee benefit plan, whether qualified or
nonqualified or any employee fringe benefit plan or program, or
other similar plan or arrangement. Seller acknowledges and
agrees that Purchaser shall not be hiring any union employees of
Seller and Seller shall remain the employer of such union
employees after Closing and Seller shall be solely responsible
for all expenses, obligations, liabilities and claims related to
such employees.
3.22 Availability of Assets. The Purchased Assets include,
except for any interests in real property, all of the assets and
properties necessary to the conduct of the Business by Purchaser
in the same manner that the Business is presently conducted by
Seller.
3.23 Permits and Licenses. Schedule 3.23 sets forth all
permits, licenses, orders, franchises and approvals
(collectively, the "Permits") from all Federal, state, local and
foreign governmental regulatory bodies held by Seller relating to
the Purchased Assets and the conduct of the Business. The
Permits are all permits, orders, licenses, etc., from any and all
Federal, state, local and foreign governmental or regulatory
bodies, respectively, required of Seller to legally carry on the
Business as presently conducted. All the Permits are in full
force and effect, and to the knowledge of Seller, after
reasonable inquiry, no suspension or cancellation of any Permit
is threatened. To Seller's knowledge, after reasonable inquiry,
Seller is in compliance with all requirements, standards and
procedures of the Federal, state, local and foreign governmental
authorities which have issued a Permit.
3.24 No Breach. Neither the execution and delivery of
this Agreement nor compliance by Seller or Parent with any of the
provisions hereof nor consummation of the transactions
contemplated hereby, will:
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(a) violate or conflict with any provision of the
Articles of Incorporation or By-Laws of Seller or
Parent;
(b) violate or, alone or with notice or the
passage of time, result in the material breach or
termination of, or otherwise give. any contracting
party the right to terminate, or declare a default
under, the terms of any agreement or other document or
undertaking, oral or written, relating to the Purchased
Assets or the Business to which Seller or Parent is a
party or by which it may be bound (except for such
violations, conflicts, breaches or defaults as to which
required waivers or consents by other parties have
been, or will, prior to the Closing, be obtained);
(c) result in the creation of any lien, security
interest, charge or encumbrance upon any of the
Purchased Assets;
(d) violate any judgment, order, injunction,
decree or award against, or binding upon Seller,
Parent, the Purchased Assets or the Business; or
(e) violate any law or regulation of any
jurisdiction relating to Seller, Parent, the Purchased
Assets or the Business.
3.25 No Brokers. All negotiations relative to this
Agreement and the transactions contemplated hereby have been
carried on directly with Purchaser by Seller without the
intervention of any broker, finder, investment banker or other
third party. Neither Seller nor Parent have engaged, consented
to, or authorized any broker, finder, investment banker or other
third party to act on its behalf, directly or indirectly, as a
broker or finder in connection with the transactions contemplated
by this Agreement. Seller and Parent hereby agree to jointly and
severally indemnify Purchaser, and to hold Purchaser harmless,
from and against any claim for brokerage or similar commission or
other compensation which may be made against Purchaser by any
third party in connection with any of the transactions
contemplated hereby, which claim shall be based upon any action
by or on behalf of Seller or Parent.
3.26 Untrue or Omitted Facts. No representation, warranty
or statement by Seller or Parent in this Agreement contains any
untrue statement of a material fact, or omits or will omit to
state a fact necessary in order to make such representations,
warranties or statements not materially misleading.
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ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser hereby makes the following representations
and warranties to Seller, each of which shall be deemed material
(and Seller, in executing, delivering and consummating this
Agreement, have relied and will rely upon the correctness and
completeness of each of such representations and warranties):
4.1 Valid Corporate Existence; Good Standing. Purchaser is
a corporation duly organized, validly existing and in good
standing
under the laws of the State of Missouri and has the corporate
power
to carry on its business as now being conducted and to own its
assets.
4.2 Corporate Authority; Binding Nature of Agreement.
Purchaser has the power to enter into this Agreement and to carry
out its obligations hereunder. The execution and delivery of this
Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by the Board of Directors of
Purchaser. This Agreement constitutes the valid and binding
obligation of Purchaser and is enforceable in accordance with its
terms, subject to applicable bankruptcy, reorganization,
moratorium or similar laws relating to the enforcement of
creditors' rights generally and the application of general
principles of equity.
4.3 Consents. Schedule 4.3 sets forth a complete list of
all
consents and approvals of governmental and other regulatory
agencies, foreign or domestic, and of other third parties which
are required to be obtained by or on behalf of Purchaser in order
to enable such party to enter into and carry out this Agreement
in all material respects. All such requisite consents have been,
or prior to the Closing will have been, obtained.
4.4 No Breach. Neither the execution and delivery of this
Agreement nor compliance by Purchaser with any of the provisions
hereof nor consummation of the transactions contemplated hereby,
will:
(a) violate or conflict with any provision of the
Certificate of Incorporation or By-Laws of
Purchaser;
(b) violate or, alone or with notice or the
passage of time, result in the material breach or
termination of, or otherwise give any contracting party
the right to terminate, or declare a default under,
the terms of any agreement or other document or
undertaking, oral or written, to which Purchaser is a
party or by which it may be bound (except for such
violations, conflicts, breaches or defaults as to which
required waivers or consents by other parties have
been, or will, prior to the Closing, be obtained);
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(c) violate any judgment, order, injunction,
decree or award against, or binding upon,
Purchaser; or
(d) violate any law or regulation of any
jurisdiction relating to Purchaser.
4.5 No Brokers. All negotiations relative to this
Agreement and the transactions contemplated hereby have been
carried on directly with Seller by Purchaser without the
intervention of any broker, finder, investment banker or other
third party. Purchaser has not engaged, consented to, or
authorized any broker, tinder, investment banker or other third
party to act on its behalf, directly or indirectly, as a broker
or finder in connection with the transactions contemplated by
this Agreement. Purchaser hereby agrees to indemnify Seller, and
to hold Seller harmless, from and against any claim for brokerage
or similar commission or other compensation which may be made
against Seller by any third party in connection with any of the
transactions contemplated hereby, which claim shall be based upon
any action by or on behalf of Purchaser.
4.6 Untrue or Omitted Facts. No representation, warranty or
statement by Purchaser in this Agreement contains any untrue
statement of a material fact, or omits or will omit to state a
fact necessary in order to make such representations, warranties
or statements not materially misleading.
ARTICLE V. PRE-CLOSING COVENANTS.
Seller hereby covenants and agrees that, from and after
the date hereof and until the Closing or earlier termination of
this Agreement (the "Pre-Closing Period"):
5.1 Access. Seller shall afford to the officers,
attorneys, accountants and other authorized representatives of
Purchaser free and full access, during regular business hours and
upon reasonable notice, to all of the books, records, personnel
and properties of Seller and the Business in order that Purchaser
may have full opportunity to make such review, examinations and
investigations as it may desire of Seller, the Business and the
Purchased Assets in preparation of the operation of the Business.
In addition, if and to the extent requested by any Regulatory
Authority (as defined below), Seller shall furnish to Purchaser,
promptly following Purchaser's request therefor, written
authorization addressed to any Federal, state, local or other
governmental agency or authority (the "Regulatory Authorities")
permitting the release to Purchaser or its representatives all
results of any inquiries, investigations or reports on file with
such authority relating to Seller and the Business.
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5.2 Conduct of Business. Seller shall conduct the Business
only in the ordinary and usual course, and make no material
change in any of its policies without the prior written consent
of Purchaser. Seller shall not, without the prior written consent
of Purchaser: (i) make any commitments with respect to the
Business or the Purchased Assets other than in the ordinary
course; provided, however, that no lease or capital expenditure
commitment shall exceed $5,000.00 individually and all such
leases and capital expenditure commitments shall not exceed
$20,000.00 in the aggregate; or (ii) sell, assign, transfer or
otherwise dispose of any of the Purchased Assets or any rights
with respect to the Business other than in the ordinary course.
Seller shall not, other than in the ordinary course: (i) dispose
of any records relating to the Business or the Purchased Assets;
(ii) permit or allow any of the Purchased Assets to become
subject to any mortgage, pledge, lien or encumbrance; (iii)
borrow or agree to borrow any funds or incur, or assume or become
subject to, whether directly or by way of guarantee or otherwise,
any obligation or liability (absolute, contingent or otherwise),
except obligations and liabilities incurred in the ordinary
course and consistent with past practices of the Business; (iv)
pay, discharge or satisfy any claim, liability or obligation
(absolute, accrued, contingent or otherwise) relating to the
Business or the Purchased Assets, other than such payment,
discharge or satisfaction in the ordinary course and consistent
with past practices of the Business; (v) cancel any debts or
waive any claims or rights of substantial value included in the
Business or the Purchased Assets (including settlement of any
claims or litigation); (vi) dispose of or permit to lapse, other
than through expiration by operation of law, any rights relating
to the use of any patent, trademark, service xxxx, trade name or
copyright included as part of the Purchased Assets or dispose of
or disclose to any person other than Purchaser (except as
necessitated by normal business practices under a confidentiality
agreement) any trade secret, formula, process or know-how owned
or used by or applicable to the Business or the Purchased Assets
and not theretofore a matter of public knowledge; (vii) lend or
advance any amount to, or sell, transfer or lease any properties
or assets to, or enter into any agreement or arrangement with,
any officer, director or employee of Seller or the Business; or
(viii) permit the levels of finished goods inventory to exceed
the levels thereof customarily maintained in connection with the
Business. Seller will not in any manner attempt to accelerate
the receipt of income or profits or to defer the incurring of
items of expense or deduction during the Pre-Closing Period,
except in the ordinary course of business. In addition, Seller
shall continue to discount and pay all of its accounts payable
relating to the Business, together with all other obligations of
Seller relating to the Purchased Assets and Business, as
punctually as heretofore paid.
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5.3 Preservation of Business. Seller shall use its best
efforts to preserve the Business intact and to keep available the
services of its present officers, employees and consultants in
connection therewith (except as Purchaser may otherwise approve)
and to preserve the good will and business relationships of
Seller with customers, suppliers, employees and others.
5.4 Insurance. Seller shall maintain in force all
insurance policies listed on Schedule 3.8.
5.5 Consents and Approvals. Seller shall use its best
efforts to obtain at the earliest practicable date and prior to
the Closing, all requisite consents and approvals of governmental
and other regulatory agencies and of other third parties to the
consummation of this Agreement, including without limitation, the
CIT Termination Documents and Additional Termination Documents.
5.6 Financial Information. Seller shall provide Purchaser
with such financial and other information relating to the
Business as Purchaser may from time to time reasonably request.
5.8 No Breach . Seller shall: (i) use its best efforts to
assure that each of its representations and warranties contained
herein are true in all material respects as of the Closing as it
repeated at and as of such time, and that no material breach or
default shall occur with respect to any of its covenants,
representations or warranties contained herein that has not been
cured by the Closing; (ii) not voluntarily take any action or do
anything which will cause a breach of or default respecting such
covenants, representations or warranties; and (iii) promptly
notify Purchaser of any event or fact which represents or is
likely to cause such a breach or default.
5.9 No Negotiations. Upon execution hereof and for so
long as this Agreement shall remain in effect, neither Seller,
Parent nor any of its respective officers, directors, agents,
stockholders or affiliates shall enter into or conduct
negotiations, or enter into any agreement or understanding, in
connection with the sale or possible sale of the Business or any
part or all of the Purchased Assets or the outstanding capital
stock of Seller with any person or entity other than Purchaser.
ARTICLE VI. CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF PURCHASER TO CLOSE.
The obligations of Purchaser to enter into and complete
the Closing are subject to the fulfillment, on or prior to the
Closing Date, of each of the following conditions, any one or
more of which may be waived by Purchaser (except when the
fulfillment of such condition is a requirement of law):
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6.1 Truth of Representations and Warranties. All
representations and warranties of Seller contained in this
Agreement and in any written statement or exhibit, certificate,
schedule or other document delivered pursuant hereto or in
connection with the transactions contemplated hereby shall be
true and correct in all material respects as of the Closing Date,
as if made at the Closing and as of the Closing Date.
6.2 Compliance with Covenants. Seller shall have
performed and complied in all material respects with all
covenants and agreements required by this Agreement to be
performed or complied with by each such party prior to or at the
Closing.
6.3 Accounts Receivable and Inventory Levels. The
respective amount of Seller's accounts receivable and inventory
shall not fall below the July 31, 1995 amounts set forth in
Sections 3.6 and 3.7.
6.4 Certificate. Purchaser shall have received a certifi-
cate, dated as of the Closing Date, duly executed by the
President and Secretary of Seller as to the satisfaction of the
conditions contained in Sections 6.1, 6.2 and 6.3 hereof.
6.5 Opinion. Purchaser shall have received the written
opinion of XXXX X. XXXXX, XX., ESQ., counsel to Seller, dated as
of the closing Date, in form and substance satisfactory to
Purchaser and its counsel.
6.6 Consents; Licenses and Permits. Seller has obtained
all consents, approvals, licenses and permits of governmental and
regulatory authorities or other third parties necessary for the
performance of its obligations under this Agreement. Purchaser
shall have received confirmation that all leases set forth on
Schedule 3.13 have been validly assigned and transferred to
Purchaser.
6.7 Facility Lease. Purchaser shall have entered into a
lease for the Facility on terms and conditions acceptable to
Purchaser.
6.8 Schedules and Exhibits Satisfactory. Purchaser shall
have approved the disclosures made by Seller in Seller's
Schedules attached hereto by initialing the Schedules at Closing.
Purchaser shall have approved all Exhibits attached hereto.
6.9 Xxxx of Sale and Other Assignments. Purchaser shall
have received a duly executed xxxx of sale, trademark assignments
and general assignment and assumption agreement, all as set forth
in Section 8.1 hereof.
6.10 Due Diligence Investigations. All due diligence
investigations and examinations undertaken by Purchaser and its
attorneys,
20
accountants and others in respect of the Business and
the Purchased Assets and the operations, financial status or
future prospects thereof shall have been completed to the
satisfaction of Purchaser, in Purchaser's sole discretion.
6.11 Trademark License Agreement. Seller shall have entered
into the Trademark License Agreement attached as Exhibit B (the
"Trademark License Agreement").
6.12 NonCompetition Agreement. Seller, Parent and S. Xxxx
Xxxxxxxxx shall have entered into the NonCompetition Agreement
attached as Exhibit C (the "NonCompetition Agreement").
6.13 Services Agreement. Seller shall have entered into the
Services Agreement attached as Exhibit D (the "Services
Agreement"), whereby Seller agrees to supply certain personnel as
needed for Purchaser's operation of the Facility.
6.14 Management Employees. Seller shall have terminated the
employment of those non-union management personnel at the
Facility which Purchaser desires to hire, and Purchaser shall
have entered into satisfactory employment arrangements with such
personnel.
6.15 CIT Termination Documents. CIT shall have executed and
delivered to Purchaser all of the CIT Termination Documents as
set forth in Section 2.1.1 hereof.
6.16 Additional Documents. Seller shall have delivered all
such other certificates and documents as Purchaser or its counsel
may have reasonably requested, including the Additional
Termination Documents as set forth in Section 2.1.2 hereof.
6.17 Approval of Counsel. All actions, proceedings,
instruments and documents required to carry out this Agreement,
or incidental thereto, and all other related legal matters shall
have been approved as to the form and substance by counsel to
Purchaser, which approval shall not be unreasonably withheld or
delayed.
ARTICLE VII. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER.
The obligations of Seller to enter into and complete
the Closing are subject to the fulfillment, on or prior to the
Closing Date, of each of the following conditions, any one or
more of which may be waived by Seller (except when the
fulfillment of such condition is a requirement of law):
7.1 Truth of Representations and Warranties. All
representations and warranties of Purchaser contained in this
Agreement and in any written statement, exhibit, schedule or
other document delivered pursuant hereto or in connection with
the transactions
21
contemplated hereby shall be true and correct in
all material respects as at the Closing Date, as if made at the
Closing and as of the Closing Date.
7.2 Compliance with Covenants. Purchaser shall have
performed and complied in all material respects with all
covenants and agreements required by this Agreement to be
performed or complied with by it prior to or at the Closing.
7.3 Certificate. Seller shall have received a certificate
duly executed by the President of Purchaser, dated as of the
Closing Date, as to the satisfaction of the conditions contained
in Sections 7.1 and 7.2.
7.4 Opinion. Seller shall have received the opinion of
Husch & Eppenberger, counsel to Purchaser, dated as of the
Closing Date, in form and substance satisfactory to Seller and
its counsel.
7.5 Additional Agreements. Purchaser has entered into the
Trademark License Agreement, the NonCompetition Agreement and the
Services Agreement.
7.6 Additional Documents. Purchaser shall have delivered
all such certified resolutions, certificates and documents with
respect to Purchaser as Seller or its counsel may have reasonably
requested.
ARTICLE VIII. ITEMS TO BE DELIVERED AT CLOSING.
8.1 Items to be Delivered by Seller. At the Closing,
Seller will deliver or cause to be delivered to Purchaser each of
the following instruments and documents:
(a) a xxxx of sale in the form annexed hereto as
Exhibit E executed by Seller;
(b) assignment of trade names in the form annexed
hereto as Exhibit F executed by Seller;
(c) general assignment in the form annexed hereto
as Exhibit G executed by Seller;
(d) the Assumption Agreement in the form annexed
as Exhibit H (the "Assumption Agreement"), executed by
Seller, whereby Purchaser shall have assumed the
Assumed Contracts listed on the schedule to the
Assumption Agreement;
(e) such other deeds, instruments of conveyance,
assignment and transfer executed by Seller, in form and
22
substance satisfactory to Purchaser and its counsel, as
shall be necessary or appropriate to convey, transfer
and assign and to vest in, Purchaser good and market-
able title to the Purchased Assets, free and clear of
all liabilities, obligations, liens and encumbrances of
any kind or nature whatsoever;
(f) the executed certificate required by
Section 6.4;
(g) the executed opinion required by Section 6.5;
(h) evidence that all of the consents and
approvals required by Section 6.6 have been obtained;
(i) all assignments of agreements, and all
applicable consents of other parties thereto, required
by Section 6.6;
(j) the NonCompetition Agreement executed by
Seller and Parent;
(k) the Second Amendment to Escrow Agreement
executed by Escrow Agent, Seller and Parent;
(l) the Trademark License Agreement executed by
Seller;
(m) the Services Agreement executed by Seller;
(n) CIT Termination Documents;
(o) the Additional Termination Documents;
(p) all keys and combinations to locks, safes and
security systems relating to the Purchased Assets;
(q) all records, files and other data and
documents pertaining to the Purchased Assets and the
Business; and
(r) such other certified resolutions, documents
and certificates as are required to be delivered by
Seller pursuant to the provisions of this Agreement.
8.2 Items to be Delivered by Purchaser. At the closing,
Purchaser will deliver or cause to be delivered to Seller each of
the following instruments and documents:
(a) immediately available funds in the amount of
the Purchase Price less the Escrowed Funds;
23
(b) the Services Agreement executed by Purchaser;
(c) the Second Amendment to Escrow Agreement
executed by Purchaser;
(d) the executed certificate required by
Section 7.3;
(e) the executed opinion required by Section 7.4;
(f) the Assumption Agreement executed by
Purchaser;
(g) the Trademark License Agreement executed by
Purchaser;
(h) the NonCompetition Agreement executed by
Purchaser; and
(i) such other certified resolutions, documents
and certificates as are required to be delivered by
Purchaser pursuant to the provisions of this Agreement.
ARTICLE IX. SURVIVAL OF REPRESENTATIONS;INDEMNIFICATION
9.1 Survival. The parties hereby agree that their
respective representations, warranties, covenants and agreements
contained in this Agreement shall survive the Closing for a
period of three (3) years.
9.2 Indemnification. Seller and Parent hereby jointly and
severally agree to save, defend, indemnify and hold harmless
Purchaser and its officers, directors, stockholders and agents
(collectively, the "Indemnified Parties") from and against any
and all demands, claims, losses, damages, liabilities,
obligations, costs and expenses of every kind, nature and
description, including, without limitation, reasonable attorneys'
fees and expenses in connection with any action, claim or
proceeding relating to such liabilities (collectively, the
"Liabilities"), suffered, sustained, incurred or required to be
paid at any time by any of the Indemnified Parties resulting
from, arising out of or relating to: (a) the untruth, inaccuracy
or breach of any representation, warranty, covenant or agreement
of Seller or Parent contained in or made pursuant to this
Agreement or in any schedule, document, instrument or certificate
delivered by or on behalf of Seller or Parent pursuant hereto;
(b) the failure of Seller or Parent to pay, perform or discharge
any liability or obligation of the Business which has not been
specifically assumed by Purchaser pursuant to Section 1.3; (c)
any transaction, action or event commencing or occurring on or
prior to the Closing Date, whether absolute or contingent,
matured or unmatured or known or unknown
24
(including without limitation, any tax liabilities), related to
Seller, the Business or the Purchased Assets; (d) any and all
matters related to Seller's employees, including Seller's union
contracts, employee benefits, pension or benefit plans, or
otherwise; and (e) failure of Seller and Purchaser to comply with
the provisions of any bulk transfer law or similar law
applicable to the sale of the Purchased Assets.
9.3 Defense of Claims. Purchaser hereby agrees to notify
Seller and Parent with reasonable promptness of any claim
asserted against it by any third party which Seller or Parent may
be obligated to indemnify under this Agreement, which
notification shall be accompanied by a written statement setting
forth the basis of such claim in reasonable detail, and, if
possible, the manner of calculation thereof. Seller/Parent shall
have the right to assume the defense of any such third-party
claim asserted against Seller/Parent and/or Purchaser, whereupon
Seller/Parent shall defend such claim at its own expense and with
counsel of its choice, which counsel shall be reasonably
satisfactory to Purchaser, and Seller/Parent shall not be liable
to Purchaser for any fees of other counsel, unless, in the
reasonable judgment of Purchaser, representation of both
Purchaser and Seller/Parent by the same counsel would be
inappropriate due to an actual or potential conflict of interest
between such parties. Notwithstanding the foregoing, Purchaser
may, at its sole option, employ counsel to represent it in such
action, at Purchaser's sole expense, and in such event, counsel
selected by Seller/Parent shall cooperate with Purchaser's
counsel in the defense, compromise or settlement of such claim.
If, however, in the reasonable opinion of Purchaser, any such
claim shall involve a matter which could have a material adverse
effect upon the Business or Purchased Assets, then Purchaser
shall have the right to assume the defense of such claim. In the
event that Seller/Parent fails or elects not to exercise its
right to defend such claim or Purchaser otherwise assumes the
defense of such claim hereunder, then Purchaser may take whatever
action it deems appropriate, and any final action with respect to
such claim shall be binding and conclusive upon Seller/Parent as
to the amount of and the liability for such claim. The parties
hereby agree to cooperate to the fullest extent possible in
connection with any claim for which indemnification is or may be
sought hereunder.
9.5 Rights without Prejudice. The rights of Purchaser
under this Article IX are without prejudice to any other right or
remedies that they may have by reason of this Agreement or as
otherwise provided at law or in equity.
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ARTICLE X. ACTIONS FOLLOWING THE CLOSING DATE.
10.1 Further Assurances. Following the Closing Date, each
party hereto shall execute and deliver, or cause to be executed
and delivered, such other documents and instruments, and will do
and perform all other acts as may reasonably be required by such
other party to evidence the validity of, or to perfect the full
and proper performance of this Agreement. Seller hereby agrees
that it will make available, without any cost, fee, expense or
charge, to Purchaser and its employees, agents, representatives,
attorneys and accountants, all books and records in the
possession or control of Seller and its affiliates, to the extent
such books and records relate to the operation of the Business
and the Purchased Assets.
10.2 Power of Attorney. Without limitation of any
provisions of this Agreement, effective upon the Closing, Seller
hereby duly constitutes and appoints Purchaser and any of
Purchaser's officers and their respective successors and assigns,
and each of them, as the true and lawful attorneys of Seller,
with full power of substitution, in their own names or in the
name of Seller, but for their own benefit and at their own
expense: (a) to institute and prosecute all proceedings which any
of them may deem proper in order to collect, assert or enforce
any claim, right or title of any kind in or to the assets and
properties comprising the Business and the Purchased Assets and
to do all such acts and things in relation thereto as they shall
deem advisable; and (b) to take all actions which any of them may
deem proper in order to provide for them the licenses,
commitments, orders and other documents or instruments comprising
all or any part of the Business or the Purchased Assets. Seller
hereby acknowledges that the foregoing powers are coupled with an
interest and, upon the Closing, shall not be revocable thereafter
in any manner or for any reason.
10.3 Bulk Transfer Laws. Seller and Parent shall jointly
and severally indemnify and hold Purchaser harmless from and
against any and all claims and liabilities which may be asserted
at any time by any third parties against Purchaser or its
successors and assigns resulting from Seller's non-compliance
with any such bulk transfer or similar type of law applicable to
the sale of the Purchased Assets hereunder. In addition, Seller
hereby waives any vendor liens on or attaching to the Purchased
Assets.
10.4 Name Change. Following the Closing, Seller shall
immediately change its name in Texas, Ohio and in every other
jurisdiction where it is qualified to do business to a name which
does not have the term "Test Switch" or any other similar term.
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ARTICLE XI. TERMINATION.
11.1 Termination of Agreement. Certain of the parties may
terminate this Agreement as provided for below:
(i) Purchaser and Seller may terminate this
Agreement by mutual written consent at any time prior
to the Closing;
(ii) Purchaser may terminate this Agreement by giving
written notice to Seller at any time prior to Closing in the
event Seller is in breach, and Seller may terminate this
Agreement by giving written notice to Purchaser at any time
prior the Closing in the event Purchaser is in breach, of
any material representation, warranty or covenant contained
in this Agreement in any material respect;
(iii) Purchaser may terminate this Agreement by giving
written notice to Seller any time prior to the Closing if
the Closing shall not have occurred on or before October 31,
1995 by reason of the failure of any condition precedent
under Section 6 hereof (unless the failure results solely
from Purchaser itself breaching any representation,
warranty, or covenant contained in this Agreement in any
material respect);
(iv) Purchaser may terminate this Agreement by giving
written notice to Seller on or before the Closing if
Purchaser is not satisfied with the results of its
continuing business, legal, and accounting due diligence
regarding Seller.
11.2 Effect of Termination. If any party terminates this
Agreement pursuant to Section 11.1 above, all 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).
ARTICLE XII. ESCROW PROVISIONS.
12.1 Mutual Termination. In the event this Agreement is
terminated pursuant to the provisions of Section 11.1(i), the
Escrowed Funds shall be immediately returned to Purchaser.
12.2 Failure of Conditions; Breach by Seller. In the event
this Agreement is terminated as a result of any of the conditions
set forth in Section 6 failing to be satisfied, or in the event
Seller breaches this Agreement, Purchaser shall so notify the
Escrow Agent, who shall immediately return the Escrowed Funds to
Purchaser.
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12.3 Breach by Purchaser. In the event this Agreement is
terminated solely as a result of an unwarranted breach by
Purchaser of its obligation to close, the Escrow Agent shall
immediately disburse $10,000.00 of the Escrowed Funds to Seller,
as liquidated damages, and Purchaser shall have no further
liability or obligation to Seller or Parent, and the Escrow Agent
shall immediately disburse the balance of the Escrowed Funds to
Purchaser.
ARTICLE XIII. MISCELLANEOUS PROVISIONS.
13.1 Expenses; Transfer Taxes. Except as otherwise
expressly provided in this Agreement, each of the parties hereto
shall bear its own expenses in connection with this Agreement and
the transactions contemplated hereby. Any transfer, documentary,
gross receipts, sales and use taxes or other similar taxes
resulting from the sale, assignment, transfer and delivery of the
Purchased Assets hereunder shall be borne exclusively by Seller.
13.2 Confidential Information. Each party hereby agrees
that such party and its or his representatives will hold in
strict confidence all information and documents received from the
other parties and, if the transaction herein contemplated shall
not be consummated, each party will continue to hold such
information and documents in strict confidence and will return to
such other parties all such documents (including the Schedules
hereto) then in such receiving party's possession without
retaining copies thereof; provided, however, that each party's
obligations under this Section 13.2 to maintain such
confidentiality shall not apply to any information or documents
that are in the public domain at the time furnished by the others
or that become in the public domain thereafter through any means
other than as a result of any act of the receiving party or of
its agents, officers, directors or stockholders, as the case may
be, which constitutes a breach of this Agreement, or that are
required by applicable law to be disclosed. The parties hereby
agree that the remedy at law for any breach of this Section 13.2
will be inadequate and a non-breaching party will be entitled to
injunctive relief to compel the breaching party to perform or
refrain from action required or prohibited hereunder. The
remedies set forth in this Section 13.2 shall not be deemed to be
exclusive of any rights or remedies which the non- breaching
party may be entitled to at law, in equity or otherwise.
13.3 Modification, Termination or Waiver. This Agreement
may be amended, modified, superseded or terminated, and any of
the terms, covenants, representations, warranties or conditions
hereof may be waived, but only by a written instrument executed
by the party waiving compliance. The failure of any party at any
time or times to require performance of any provision hereof
shall in no
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manner affect the right of such party at a later time to enforce
the same.
13.4 Publicity. The parties hereby agree that no publicity,
release or other public announcement concerning the transactions
contemplated by this Agreement shall be issued by either party
without the advance approval of both the form and substance of
the same by the other party and its counsel, which approval, in
the case of any publicity, release or other public announcement
required by applicable law, shall not be unreasonably withheld or
delayed.
13.5 Notices. Any notice or other communication required or
which may be given hereunder shall be in writing and either be
delivered personally or be mailed by certified or registered
mail, postage prepaid, and shall be deemed given when so
delivered personally, or if mailed, three (3) days after the date
of mailing, as follows:
if to Seller or Parent, at:
Test Switch Technology, Inc.
c/o Electric & Gas Technology, Inc.
00000 Xxxxxxx Xxxx
Xxxxxx, Xxxxx 00000-0000
Attention; S. Xxxx Xxxxxxxxx, President
with a copy, to:
Xxxx X. Xxxxx, Xx., Esq.
Xxxx Lakes Tower
0000 X. Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
if to Purchaser, at:
The Durham Company
X.0. Xxx 000
Xxxxxxx, XX 00000
Attention; Xxxx Xxxxxxx, President
with a copy to:
Husch & Eppenberger
0000 Xxxx, Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Attention: E. Xxxxx Xxxxxx
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The parties may change the persons and addresses to which the
notices or other communications are to be sent by giving written
notice of any such change in the manner provided herein for
giving notice.
13.6 Binding Effect and Assignment. This Agreement shall be
binding upon and inure to the benefit of the respective
successors and assigns of the parties hereto. No assignment of
any rights or delegation of any obligations provided for herein
may be made by any party hereto without the express written
consent of the other party; provided, however, that Purchaser may
at any time assign all or any portion of its right, title and
interest under this Agreement to any of its Affiliates without
the consent or approval of Seller.
13.7 Entire Agreement. This Agreement contains the entire
agreement between the parties with respect to the subject matter
hereof, and merges and supersedes all prior agreements and
understandings, written or oral, with respect thereto.
13.8 Schedules; Exhibits. All Schedules and Exhibits
annexed hereto and the documents and instruments referred to
herein or required to be delivered simultaneously herewith or at
the Closing are expressly made a part of this Agreement as fully
as though completely set forth herein, and all references to this
Agreement herein or in any of such Exhibits, documents or
instruments shall be deemed to refer to and include all such
Schedules, Exhibits, documents and instruments.
13.9 Affiliates. For purposes of this Agreement, an
"affiliate" of any party hereto is a person or entity that
directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such
party. As used in the foregoing sentence, the term "control"
means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a
person or entity whether through the ownership of voting
securities by contract or otherwise.
13.10 Governing Law. This Agreement shall be governed by,
and construed in accordance with, the internal laws of the State
of Ohio, without giving effect to principles of conflicts of law.
13.11 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original,
but which together shall constitute one and the same instrument.
13.12 Section Headings. The section headings contained in this
Agreement are inserted for conveniences of reference only and shall
not affect the meaning or interpretation of this Agreement. Any
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reference in this Agreement to the plural form shall also be
deemed to refer to the singular form when appropriate.
IN WITNESS WHEREOF, the parties hereto have executed
this
Agreement as of the day and year first above written.
SELLER:
TEST SWITCH TECHNOLOGY, INC.
By: /s/ S. Xxxx Xxxxxxxxx
S. Xxxx Xxxxxxxxx, President
PURCHASER:
THE DURHAM CO.
By: /s/ Xxxx Xxxxxxx
Xxxx Xxxxxxx, President
PARENT:
ELECTRIC & GAS TECHNOLOGY, INC.
By: /s/ Xxxxxx X. Xxxxxx
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