EXHIBIT 2.5
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GREENSTEEL, INC.,
the Buyer,
PENINSULAR SLATE COMPANY
and
PENINSULAR SLATE COMPANY OF TEXAS,
the Sellers,
and
XXXX X. XXXXXXX,
the Stockholder
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ASSET PURCHASE AGREEMENT
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Dated January 21, 2000
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (this "Agreement"), dated January 21, 2000, by
and among GREENSTEEL, INC., a Delaware corporation and wholly-owned subsidiary
of PolyVision Corporation (the "Buyer"), and PENINSULAR SLATE COMPANY, a
Michigan corporation ("Peninsular Michigan"), and PENINSULAR SLATE COMPANY OF
TEXAS, a Texas corporation ("Peninsular Texas" and, together with Peninsular
Michigan, the "Sellers"), and XXXX X. XXXXXXX, an individual (the
"Stockholder").
W I T N E S S E T H:
WHEREAS, the Sellers are engaged primarily in the business of
constructing and installing chalkboards, message boards and related supplies as
a subcontractor to firms in the building and servicing of educational facilities
(the "Business");
WHEREAS, in connection with and in furtherance of its business, the
Sellers are the owner of certain assets and properties;
WHEREAS, the Sellers desire to sell certain of their assets and
properties to the Buyer, and the Buyer desires to purchase such assets and
properties, and the Business of the Sellers as a going concern, all upon the
terms and conditions set forth in this Agreement; and
WHEREAS, the Stockholder is the controlling owner of the issued and
outstanding capital stock of the Sellers, and will thus derive benefit from the
transactions contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereby agree as follows:
1. ACQUIRED ASSETS.
1.1 THE ASSETS. Subject to the terms and conditions of this
Agreement, on and as of the Closing Date (as such term is hereinafter defined),
the Sellers shall sell, transfer and deliver to the Buyer, and the Buyer shall
purchase and receive from the Sellers, all of the following assets, properties,
improvements and business of the Sellers as same are constituted on the Closing
Date (collectively, the "Assets"):
(a) All laminating and other machinery, equipment, tools,
aluminum profile and other dies, workbench set-ups and jigs, and vehicles
(including trucks and trailers) owned or leased by the Sellers, including but
not limited to those items listed on SCHEDULE 1.1 annexed hereto (collectively,
the "Fixed Assets");
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(b) All furniture and fixtures of the Sellers;
(c) All inventory and supplies of the Sellers
(collectively, the "Inventory");
(d) All customer deposits held by the Sellers, and all
accounts receivable, notes receivable, contract rights and other rights of the
Sellers to receive payment for products sold and/or services rendered;
(e) To the extent permitted by law and any subject warranty
agreement, all manufacturers' warranties and/or vendors' warranties in effect
with respect to any of the Fixed Assets and/or the Inventory;
(f) All patents, trademarks, tradenames, service marks,
copyrights and other intellectual property, and all pending applications and
registrations therefor, and all goodwill related thereto, in which the Sellers
have any rights (collectively, the "Intellectual Property");
(g) All rights under executory contracts and agreements (i)
between the Sellers and their customers relating to ongoing and/or future
products to be sold or services to be rendered to such customers and (ii)
between the Sellers and their vendors relating to ongoing and/or future
purchases of raw materials and other supplies, in either case to be assumed by
the Buyer pursuant to Section 2.1(b);
(h) Any and all deposits relating to any of the Assets and
any and all prepaid expenses and other prepayments (including, without
limitation, security deposits under leases and prepayments in respect of the
Assumed Liabilities described in Section 2.1 below) relating to any of the
Assets;
(i) All customer lists, supplier lists, operating manuals,
artwork, silkscreens, trade secrets, technical information, and other such
knowledge and information constituting the "know-how" of the Sellers, the name
"Peninsular Slate," and the goodwill of the Sellers; and
(j) All books, records, software, databases, printouts,
drawings, data, files, notes, notebooks, correspondence and memoranda relating
to the foregoing Assets.
1.2 EXCLUDED ASSETS. Anything elsewhere contained in this
Agreement to the contrary notwithstanding, the Sellers will not be selling,
assigning or transferring, and the Buyer will not be purchasing or acquiring,
any cash (other than amounts representing customer deposits), marketable
securities, life insurance policies, or ownership rights in real estate of the
Sellers.
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2. ASSUMED LIABILITIES.
2.1 ASSUMED LIABILITIES. Subject to the terms and conditions of
this Agreement, on and as of the Closing Date, the Sellers shall transfer and
assign to the Buyer, and the Buyer shall assume and thereafter pay as and when
due, the following liabilities of the Sellers as same are constituted on the
Closing Date (collectively, the "Assumed Liabilities"):
(a) the obligations of the Sellers from and after the
Closing Date under any leases with respect to operating equipment and machinery,
real property leases with respect to the Sellers' facilities in Troy, Michigan,
Bellaire, Texas and Columbia, South Carolina, and loans with respect to
operating vehicles, in each case relating to the operations of the Business and
to the extent disclosed in SCHEDULE 4.8 annexed hereto;
(b) (i) all unfilled purchase orders for the purchase of
raw materials and supplies for use in the Business including, without
limitation, those set forth in Part I of SCHEDULE 4.15 (the "Purchase Orders"),
and (ii) all unfilled sales orders from customers including, without limitation,
those set forth in Part II of SCHEDULE 4.15 (the "Sales Orders"); PROVIDED, that
nothing in this Agreement shall be construed as an assumption of any liabilities
or obligations of the Seller under any Purchase Order or Sales Order which, as a
matter of law, is nonassignable (or which is nonassignable without the consent
of a third party which has not given such consent); and
(c) all performance bonds and other bonds of the Sellers
relating to the operations of the Business.
2.2 DISCLAIMER OF LIABILITIES. Except for those specific
Assumed Liabilities described Section 2.1 above, the Buyer will not assume, and
hereby expressly disclaims any assumption of, any debts, liabilities or
obligations (absolute or contingent) of any kind of the Sellers, including but
not limited to (a) indebtedness for money borrowed, (b) income taxes, sales
taxes, payroll taxes, withholding taxes, franchise taxes and other taxes,
including but not limited to any taxes which may arise out of or be assessable
in respect of the transactions contemplated by this Agreement, (c) claims,
litigation, liabilities or obligations (whether now pending or hereafter
asserted) arising out of or relating to the operations of the Sellers prior to
the Closing Date, (d) lease obligations of any kind, (e) liabilities or
obligations of any kind in respect of any past or present Stockholder,
directors, officers, employees or consultants of the Sellers, whether under any
contract or agreement, pursuant to any pension plan or employee benefit or
welfare plan, or otherwise, (f) liabilities or obligations for accrued employee
benefits and/or severance benefits in respect of any past or present employee of
the Sellers, or any ongoing obligations of the Sellers under any employment,
consulting or management agreement, (g) any obligations or liabilities in
respect of any unfunded pension or retirement benefits, or in respect of any
funding obligations to, or transactions in or relating to any trust funds under,
any pension, employee benefit or retirement plans now or heretofore maintained
by or on behalf of the Sellers for the benefit of any past or present employees,
(h) claims, obligations or liabilities in respect of any environmental
remediation or any violation of any environmental laws or regulations, or any
other violation or alleged violation of applicable law
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by the Sellers, (i) liabilities or obligations relating to recapture of any
depreciation deduction or investment tax credit of the Sellers, and/or (j) any
other liabilities or obligations of or relating to the Sellers in any manner
whatsoever.
3. PURCHASE PRICE.
3.1 CONSIDERATION TO THE SELLERS. The purchase price for the
Assets, subject to Section 3.2 below (the "Consideration"), shall be equal to
Four Million Two Hundred Thousand Dollars ($4,200,000), which shall be payable
by (a) delivering to and depositing with Suntrust Bank, as Escrow Agent under
the Escrow Agreement (as defined in Section 7.3), on behalf of the Sellers, Two
Hundred Thousand Dollars ($200,000), and (b) paying to the Sellers, subject to
Section 3.2 below, the remaining Consideration in cash, by wire transfer of
immediately available funds to such account or accounts as shall be designated
by the Sellers reasonably in advance of the Closing Date.
3.2 NET CONSIDERATION. To the extent that the Sellers have not
already paid their then existing bank or other secured debt out of its cash on
hand (other than trade payables and employee accruals incurred in the ordinary
course of business), the Buyer shall, on the Closing Date, apply a portion of
the Consideration payable pursuant to Section 3.1(b) above to the payment of the
Sellers' outstanding bank or other secured debt, so that such debt is paid in
full.
3.3 WORKING CAPITAL ADJUSTMENT. On the Closing Date, the
Sellers will deliver to the Buyer a schedule and aging of the then-outstanding
accounts receivable ("Closing Date Receivables"), accounts payable ("Closing
Date Payables") and accruals to the extent not prorated and adjusted at the
Closing (the "Closing Date Accruals") of the Business. On a monthly basis
subsequent to the Closing Date, the Buyer will provide a reasonably detailed
accounting of all collections of Closing Date Receivables made during the
preceding month, and all payments made in respect of Closing Date Payables and
Closing Date Accruals during such preceding month; and, from and after such time
as the aggregate collections in respect of Closing Date Receivables equals the
aggregate amount of Closing Date Payables and Closing Date Accruals, any further
collections in respect of Closing Date Receivables shall be deposited by the
Buyer into a segregated interest-bearing account, and the balance of funds in
such segregated account will be paid over to the Sellers (to an account
designated by them) reasonably promptly after each month. All payments received
by the Buyer after the Closing Date that are from a customer who also owes
accounts receivable that are part of the Closing Date Receivables and are not
disputed shall be applied (i) first to such receivables (be they Closing Date
Receivables or other receivables) and in such amounts as designated by such
customer at time of payment, (ii) if some portion of the payment is not
designated to a specific receivable, then such portion shall be applied against
the Closing Date Receivables as apply to that customer, and (iii) if the payment
has no designation to specific receivables, the entire payment shall be applied
against the Closing Date Receivables as apply to that customer until such
Closing Date Receivables as apply to that customer are collected in full. On or
about that date which is 180 days after the Closing Date, the Buyer and the
Sellers will consult with one another in good faith to determine the appropriate
treatment of any uncollected or disputed
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Closing Date Receivables (including any amounts representing contract
retainages), with a view to reaching final resolution on the aggregate
collectible amount of Closing Date Receivables and the correct aggregate amount
of Closing Date Payables and Closing Date Accruals. Any such reconciliation
and/or any payment made to the Sellers on the basis thereof shall be without
prejudice to the parties' rights in the event that actual collections or
liabilities are at variance with such reconciliation and/or payment. In the
event that the Sellers and the Buyer cannot agree on the resolution of any
disputed Closing Date Receivables prior to the end of the 180-day period
following the Closing Date, then following such 180-day period such disputed
Closing Date Receivables shall be assigned to the Sellers and the Sellers shall
thereafter be free to take whatever lawful action that may be reasonably and
commercially appropriate under the circumstances in connection with the
collection thereof of such receivables.
3.4 ALLOCATION OF CONSIDERATION. The Consideration specified in
Section 3.1 above shall be allocated, as among the Assets, in accordance with
SCHEDULE 3.4 annexed hereto, and the parties shall abide by such allocations in
all tax filings and other reports which the parties shall make or render.
3.5 SALES TAXES. To the extent that any sales or use taxes may
be payable in respect of the transactions pursuant to this Agreement, such sales
and use taxes shall be reported and paid by the Sellers in a timely manner.
4. REPRESENTATIONS AND WARRANTIES
OF THE SELLERS AND THE STOCKHOLDER.
In connection with the sale of the Assets to the Buyer, the
Sellers and the Stockholder hereby jointly and severally represent and warrant
to the Buyer as follows:
4.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. Each of the
Sellers is a corporation duly organized, validly existing and in good standing
under the laws of the state of its incorporation, with full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby, and to own its assets and conduct its business
as owned and conducted on the date hereof. The Sellers are not required to be
qualified as foreign corporations under the laws of any state, other than with
respect to Peninsular Michigan in the state of Indiana, and with respect to
Peninsular Texas in the states of Georgia and South Carolina, as to each of
which they are currently qualified as foreign corporations to do business.
4.2 AUTHORIZATION OF AGREEMENT. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by the Sellers have been duly and validly authorized by the
Board of Directors of each of the Sellers (to the extent required or permitted
by applicable law) and the Stockholder without dissent. No further corporate
authorization is required on the part of the Sellers to consummate the
transactions contemplated hereby.
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4.3 VALID AND BINDING AGREEMENTS. This Agreement, and, when
executed and delivered by the Sellers and the Stockholder, the Escrow Agreement,
the Xxxx of Sale, the Assumption Agreement, the Non-Competition Agreements and
the Lease (as such terms are hereinafter defined), constitute and will
constitute the legal, valid and binding obligations of the Sellers and the
Stockholder (to the extent a party thereto), enforceable against the Sellers and
the Stockholder in accordance with their respective terms.
4.4 NO BREACH OF STATUTE OR CONTRACT. Neither the execution and
delivery of this Agreement and/or the Escrow Agreement, the Xxxx of Sale, the
Assumption Agreement, the Non-Competition Agreements or the Lease by the Sellers
or the Stockholder, nor compliance with the terms and provisions of this
Agreement and/or the Escrow Agreement, the Xxxx of Sale, the Assumption
Agreement, the Non-Competition Agreements and the Lease on the part of the
Sellers and the Stockholder, will: (a) violate any statute or regulation of any
governmental authority, domestic or foreign, affecting the Sellers or the
Stockholder; (b) require the issuance or grant of any authorization, license,
consent or approval of any federal or state governmental agency or any other
person; or (c) conflict with or result in a breach of any of the terms,
conditions or provisions of the Sellers' articles of incorporation or by-laws or
any judgment, order, injunction, decree, agreement or instrument to which the
Sellers or the Stockholder is a party, or by which the Sellers or any of the
Stockholder is bound, or constitute a default thereunder.
4.5 SUBSIDIARIES AND INVESTMENTS. The Sellers do not own,
directly or indirectly, any stock or other equity securities of any corporation
or entity, or have any direct or indirect equity or ownership interest in any
person, firm, partnership, corporation, venture or business other than the
Business conducted by the Sellers.
4.6 FINANCIAL INFORMATION.
(a) Annexed hereto as SCHEDULE 4.6 are the (i) unaudited,
compiled balance sheets of Peninsular Michigan as of December 31, 1998 and 1997,
and the related statements of income, retained earnings and cash flows for the
years then ended, and supplementary schedules of manufacturing and construction
expenses and selling and administrative expenses, and (ii) unaudited, compiled
balance sheets of Peninsular Texas as of April 30, 1999 and 1998, and the
related statements of income, stockholder's equity and cash flows for the years
then ended, and supplementary schedules of operating profit by state,
manufacturing and construction expenses and selling and administrative expenses,
(collectively, the "Financial Statements"), all of which fairly reflect, in all
material respects, the financial condition and results of operations of the
Sellers as of the dates thereof and for the years then ended, in accordance with
generally accepted accounting principles consistently applied; and, without
limitation of the foregoing, the Sellers have no material liabilities, fixed or
contingent, known or unknown, except to the extent reflected in the most recent
of such Financial Statements or thereafter incurred in the normal course of the
Sellers' business.
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(b) The Sellers have not experienced any substantial
variations or inconsistencies in its accounts receivable collections or accounts
payable payments since the date of the most recent of the Financial Statements.
(c) Since the date of the most recent of the Financial
Statements, (i) the business of the Sellers has been operated solely in the
normal course, (ii) there has been no material adverse change in the assets,
financial condition, operations, business or prospects of the Sellers from that
reflected in such Financial Statements, (iii) the Sellers have not incurred any
material obligation or liability except in the normal course of the Business,
(iv) the Sellers have not paid or declared any dividend or distribution other
than in cash to the Stockholder, (v) the Sellers have not granted or authorized
any increase in the rate of salary or compensation paid or payable to any
employee, consultant or any other person performing services in the Business
except for such increases made in the ordinary course of business and disclosed
in SCHEDULE 4.6 annexed hereto, and (vi) the Sellers have not experienced any
material adverse change in their relationships with customers and/or suppliers,
or received any written notice of any existing, announced or anticipated changes
in the policies of any material customers or suppliers which would materially
adversely affect the Business except with respect to Claridge Company.
4.7 TAX MATTERS.
(a) The Sellers have, to the date hereof, filed all tax
reports and tax returns required to be filed by the Sellers, and the Sellers
and/or the Stockholder (as applicable) have paid all taxes, assessments and
other impositions with respect to the Sellers and their income as and to the
extent required by applicable law. All taxes and other assessments and levies
which the Sellers are required by law to withhold or to collect have been duly
withheld and collected, and have been paid over to the proper governmental
authorities to the extent due and payable on or before the date hereof. There
are no outstanding or pending claims, deficiencies or assessments for taxes,
interest or penalties with respect to any taxable period of the Sellers. The
Sellers will, from time to time from and after the date hereof, provide to the
Buyer and its representatives, upon request therefor, copies any and all tax
reports and/or tax returns heretofore filed by the Sellers.
(b) There are no audits pending with respect to any
federal, state or local tax reports or tax returns of the Sellers, and no waiver
of statutes of limitations have been given or requested with respect to any tax
years or tax filings of the Sellers.
4.8 TITLE TO THE ASSETS. The Sellers have and own good and
marketable title to all of the Assets, free and clear of all liens, pledges,
claims, security interests and encumbrances of every kind and nature, other than
(a) the security interests securing the promissory notes issued to NBD Bank, and
(b) interests of equipment lessors pursuant to those lease agreements set forth
in SCHEDULE 4.8 annexed hereto. Substantially all of the Fixed Assets are listed
in SCHEDULE 1.1, and the Fixed Assets, in the aggregate, are in good operating
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condition and repair (reasonable wear and tear excepted), are adequate for their
use in the Business as presently conducted, and are sufficient for the continued
conduct of such Business. The trucks included in the Assets are current in their
required inspections, and the Sellers hold all licenses and permits required for
the operation thereof in the Business.
4.9 INVENTORIES. All supplies and other inventories reflected
in the Financial Statements, and all inventories thereafter acquired by the
Sellers prior to the Closing Date, have been valued at the lower of cost or
market (on a first-in, first-out basis), and consist of items which are of a
quality and quantity which are useable in the ordinary course of the Business.
4.10 RECEIVABLES. All of the accounts receivable included in the
Assets represent bona fide sales made or services rendered by the Sellers prior
to the Closing Date. To the best of the Sellers' and the Stockholder' knowledge,
(i) no offsets, deductions or claims have been asserted against or in respect of
any of such accounts receivable, and (ii) all of such accounts receivable will
be collectible by the Buyer in the ordinary course of business (and without
requirement to resort to any legal proceedings) subsequent to the Closing Date,
except for the receivable from Xxxxxxxx.
4.11 REAL PROPERTY. The Sellers do not own real estate or any
interest therein, and have heretofore occupied their business premises on a
rental basis, other than the Lapeer, Michigan plant, which is not included in
the Assets.
4.12 LEGAL COMPLIANCE.
(a) The Sellers are (and have been at all times in the past
three (3) years) in compliance in all material respects with all laws, statutes,
regulations, rules and ordinances applicable to the conduct of its business
(including, without limitation, all environmental laws, rules and regulations,
and all other legal requirements relating to the storage, handling, processing,
use, transport or disposal of hazardous or regulated substances), and have in
full force and effect all licenses, permits and other authorizations required
for the conduct of the Business as presently constituted; and the Sellers have
not received notice of any default or violation in respect of or under any of
the foregoing. Neither the Sellers nor the Stockholder has any knowledge of any
reason why the Buyer will not be able to renew or have reissued (to the extent
required by applicable law) any of the licenses, permits and other
authorizations required for the continued conduct of the Business from and after
the Closing Date.
(b) Neither the Sellers nor the Stockholder has received
any written notice of default or violation by the Sellers with respect to any
judgment, order, writ, injunction, decree, demand or assessment issued by any
court or any federal, state, local, municipal or other governmental agency,
board, commission, bureau, instrumentality or department, domestic or foreign,
relating to any aspect of the Business or the Assets; and neither the Sellers
nor any of its officers, directors or employees has received written notice of,
been charged with, or is under investigation with respect to, any violation of
any provision of
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any federal, state, local, municipal or other law or administrative rule or
regulation, domestic or foreign, relating to any aspect of the Business or the
Assets.
4.13 EMPLOYEES. Except as disclosed in SCHEDULE 4.13 annexed
hereto, the Sellers are not a party to or bound by any collective bargaining
agreement, employment agreement, consulting agreement, management agreement or
other commitment for the employment or retention of any person, and no union is
now certified or, to the best of the Sellers' and the Stockholder's knowledge,
claims to be certified as a collective bargaining agent to represent any
employees of the Business. There are no labor disputes existing or, to the best
of the Sellers' and the Stockholder's knowledge, threatened, involving any
employees of the Business, and the Sellers have not had any unfair labor
practice charges or material labor difficulty in the past two (2) years.
4.14 EMPLOYEE BENEFITS. Except as disclosed in SCHEDULE 4.14
annexed hereto, the Sellers do not maintain and are not required to make any
contributions to any pension, profit-sharing, retirement, deferred compensation
or other such plan or arrangement for the benefit of any employee, former
employee or other person. The Sellers have, through the date hereof, made all
required payments, contributions and filings under or in respect of any such
plans or arrangements, and there has not occurred any act, omission, event or
condition such as would give rise to any liability of the Sellers thereunder
other than the obligations to make normal payments and contributions thereunder.
4.15 CONTRACTS. (a) The Sellers have no contracts or commitments
relating to the Assets or the Business, whether written or oral and whether or
not legally binding, other than:
(i) the contracts and commitments set forth in SCHEDULE
4.15 annexed hereto;
(ii) purchase orders, each of which (1) is in the
ordinary course of business, (2) involves a purchase price of less than
$10,000, and (3) is performable by the Sellers within six months from
the date hereof;
(iii) sales orders, each of which (1) is in the
ordinary course of business, (2) involves pricing consistent with the
Sellers' usual practice, (3) involves an aggregate sales price of less
than $10,000, and (4) is performable by the Sellers within six months
from the date hereof; and
(iv) maintenance, service and other contracts relating
to the Assets or the Business, each of which (1) is in the ordinary
course of business, (2) involves an aggregate expenditure of less than
$10,000 after the date hereof, and (3) is terminable by the Sellers
without penalty on notice of 30 days or less.
(b) The Sellers are not in default under any of the
contracts set forth in Parts I and II of SCHEDULE 4.15, and have no knowledge of
any default with respect to any such
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contract by the other party to any such contract or any claim of default by any
such party. Complete and correct copies of all contracts together with all
amendments thereto (or, in the case of oral contracts and commitments, a
description thereof) referred to in paragraph (a)(i) of this Section 4.15 and
listed in SCHEDULE 4.15 have been delivered to the Buyer.
(c) All of the Purchase Orders and Sales Orders were made
by the Sellers in the ordinary course of the Business. The Purchase Orders do
not include the sale of additional products or services or grant special
discounts other than as is stated in any applicable written purchase order
contract.
4.16 LITIGATION. Except as disclosed in SCHEDULE 4.16 annexed
hereto, there is no pending or, to the best knowledge of the Sellers and the
Stockholder, threatened litigation, arbitration, administrative proceeding or
other legal action or proceeding against the Sellers or relating to its
Business. Neither the Sellers nor any of the Stockholder is aware of any event,
cause or condition which might reasonably give rise to or properly form the
basis of any such suit, action, arbitration or proceeding. The Sellers are not
currently engaged in any legal action to recover any sums of money due to the
Sellers or damages sustained by the Sellers.
4.17 INTELLECTUAL PROPERTY. The Sellers have the valid right to
utilize any and all trade names and other intellectual property utilized in its
Business (including but not limited to the Intellectual Property, all of which
is disclosed in SCHEDULE 4.17 annexed hereto), and have not received notice of
any pending challenge to its rights therein or any claimed infringement of such
intellectual property with the rights or property of any other person. The
Sellers have not granted any license or other right to any person to utilize any
of the Intellectual Property for any purpose.
4.18 YEAR 2000. None of the Fixed Assets or any stored
information relating to any of the Assets contains or relies upon embedded
information which will suffer any material disruption or interruption by reason
of or in respect of the entry of dates which are on or after January 1, 2000, or
the operation thereof on or after January 1, 2000.
4.19 AFFILIATE TRANSACTIONS. Except as disclosed in SCHEDULE
4.19 annexed hereto, none of the assets required for the operation of the
Business is owned by, leased from or leased to the Stockholder or any of their
respective affiliates.
4.20 GOING CONCERN. Neither the Sellers nor the Stockholder has
any knowledge of any fact, event, circumstance or condition (including but not
limited to any announced or anticipated changes in the policies of any material
customer) that would materially impair the ability of the Buyer to continue the
Business heretofore conducted by the Sellers in substantially the manner
heretofore conducted by the Sellers (other than general, industry-wide
conditions).
4.21 ACCURACY OF INFORMATION. None of the representations and
warranties of the Sellers or the Stockholder contained herein or in any Schedule
hereto contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the
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statements therein not misleading in light of the circumstances in which made.
To the best of the Sellers' and the Stockholder's knowledge, the Sellers and the
Stockholder have disclosed to the Buyer, as the purchaser of the Assets and the
Business, all material information relating to the Assets and the Business.
5. REPRESENTATIONS AND WARRANTIES OF THE BUYER.
In connection with the Sellers' sale of the Assets to the Buyer,
the Buyer hereby represents and warrants to the Sellers and the Stockholder as
follows:
5.1 ORGANIZATION, GOOD STANDING AND OWNERSHIP. The Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, with all necessary power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
5.2 AUTHORIZATION OF AGREEMENT. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by the Buyer has been duly and validly authorized by the
Board of Directors of the Buyer. No further corporate authorization is required
on the part of the Buyer to consummate the transactions contemplated hereby.
5.3 VALID AND BINDING AGREEMENT. This Agreement, and, when
executed and delivered by the Buyer, the Escrow Agreement, the Assumption
Agreement, the Non-Competition Agreements and the Lease (as such terms are
hereinafter defined), constitute and will constitute the legal, valid and
binding obligations of the Buyer, enforceable against the Buyer in accordance
with their respective terms.
5.4 NO BREACH OF STATUTE OR CONTRACT. Neither the execution and
delivery of this Agreement and/or the Escrow Agreement, the Assumption
Agreement, the Non-Competition Agreements or the Lease by the Buyer, nor
compliance with the terms and provisions of this Agreement and/or the Escrow
Agreement, the Assumption Agreement, the Non-Competition Agreements and the
Lease on the part of the Buyer, will: (a) violate any statute or regulation of
any governmental authority, domestic or foreign, affecting the Buyer; (b)
require the issuance of any authorization, license, consent or approval of any
federal or state governmental agency; or (c) conflict with or result in a breach
of any of the terms, conditions or provisions of any judgment, order,
injunction, decree, note, indenture, loan agreement or other agreement or
instrument to which the Buyer is a party, or by which the Buyer is bound, or
constitute a default thereunder.
5.5 ACCURACY OF INFORMATION. None of the representations and
warranties of the Buyer contained herein contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements therein not misleading in light of the circumstances in which made.
To the best of the Buyer's knowledge, the Buyer has disclosed to the Sellers, as
the sellers of the Assets and the Business, all material information relating to
the Buyer's ability to perform hereunder.
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6. THE SELLERS' OBLIGATIONS BEFORE THE CLOSING DATE.
The Sellers covenant and agree that, from the date hereof until
the Closing Date:
6.1 ACCESS TO INFORMATION.
(a) The Sellers shall permit the Buyer and its counsel,
accountants and other representatives, upon reasonable advance notice to the
Sellers, during normal business hours and without undue disruption of the
business of the Sellers, to have reasonable access to all properties, books,
accounts, records, contracts, documents and information relating to the Sellers
and the Business. The Buyer and its representatives shall also be permitted to
freely consult with the Sellers' counsel concerning the Sellers and the
Business.
(b) The Sellers will make available to the Buyer and its
accountants all financial and tax records relating to the Sellers and the
Business, and shall cause the Sellers' accountants to cooperate with the Buyer's
accountants and make available to the Buyer's accountants all work papers and
other materials developed by or in the possession of the Sellers' accountants,
for the purpose of assisting the Buyer's accountants in (i) verifying the
accuracy of the Financial Statements and the other representations and
warranties of the Sellers and the Stockholder pursuant to Sections 4.6 and 4.8
above.
6.2 CONDUCT OF BUSINESS IN NORMAL COURSE. The Sellers shall
carry on their business activities in substantially the same manner as
heretofore conducted, shall maintain inventories in types and amounts consistent
with historical practice, and shall not make or institute any unusual or novel
practices or methods of service, sale, purchase, lease, management, accounting
or operation that will vary materially from those methods used by the Sellers as
of the date hereof, without in each instance obtaining the prior written consent
of the Buyer.
6.3 PRESERVATION OF BUSINESS AND RELATIONSHIPS. The Sellers
shall, without making or incurring any unusual commitments or expenditures, use
all reasonable efforts to preserve their business organizations intact, and
preserve their present relationships with referral sources, clients, customers,
suppliers and others having business relationships with the Sellers.
6.4 MAINTENANCE OF INSURANCE. The Sellers shall continue to
carry their existing insurance, to the extent obtainable upon reasonable terms.
6.5 CORPORATE MATTERS. Neither of the Sellers shall, without
the prior written consent of the Buyer in each instance:
(a) amend, cancel or modify any material contract or enter
into any material new agreement, commitment or transaction except, in each
instance, in the ordinary course of business;
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(b) pay, grant or authorize any material salary increases
or bonuses except in the ordinary course of business and consistent with past
practice, or enter into any employment, consulting or management agreements;
(c) modify in any material respect any material agreement
to which the Sellers is a party or by which it may be bound, except in the
ordinary course of business;
(d) make any change in management personnel;
(e) except pursuant to commitments in effect on the date
hereof (to the extent disclosed in this Agreement or in any Schedule hereto),
make any capital expenditure(s) or commitment(s), whether by means of purchase,
lease or otherwise, or any operating lease commitment(s), in excess of $25,000
in the aggregate;
(f) dispose of or transfer any asset outside of the
ordinary course of the Business, or sell, assign or dispose of any capital
asset(s) with a net book value in excess of $5,000 as to any one item or $25,000
in the aggregate as to all items;
(g) materially change its method of collection of accounts
or notes receivable, or slow in any material respect its payment of accounts
payable;
(h) make any payment or distribution of any assets or
property other than cash to the Stockholder;
(i) incur any material liability or indebtedness except, in
each instance, in the ordinary course of business;
(j) subject any of its assets or properties to any liens or
encumbrances; or
(k) agree to do, or take any action in furtherance of, any
of the foregoing.
7. ADDITIONAL AGREEMENTS OF THE PARTIES.
7.1 CONFIDENTIALITY. Notwithstanding anything to the contrary
contained in this Agreement, and subject only to any disclosure requirements
which may be imposed upon any party under applicable state or federal securities
or antitrust laws, it is expressly understood and agreed by the parties that,
except with respect to matters or information which are publicly available other
than by reason of a breach of this Section 7.1, (i) this Agreement, the
Schedules hereto, and the conversations, negotiations and transactions relating
hereto and/or contemplated hereby, and (ii) all financial information, business
records and other non-public information concerning either party which the other
party or its representatives has received or may hereafter receive, shall be
maintained in the strictest confidence by the recipient and its
14
representatives, and shall not be disclosed to any person that is not associated
or affiliated with the recipient and involved in the transactions contemplated
hereby, without the prior written approval of the party which provided the
information. The parties hereto shall use their best efforts to avoid disclosure
of any of the foregoing or undue disruption of any of the business operations or
personnel of the parties, and no party shall issue any press release or other
public announcement regarding the transactions contemplated hereby without the
prior approval of each other party (such approval not to be unreasonably
withheld or delayed) unless compelled to do so upon advice of counsel and there
is insufficient time to practicably obtain approval hereunder. In the event that
the transactions contemplated hereby shall not be consummated for any reason,
each party covenants and agrees that neither it nor any of its representatives
shall, except to the extent required in connection with any claims arising out
of the termination of this Agreement, retain (other than information which is
publicly available other than by reason of a breach of this Section 7.1) any
documents, lists or other writings of any other party which it may have received
or obtained in connection herewith or any documents incorporating any of the
information contained in any of the same (all of which, and all copies thereof
in the possession or control of the recipient or its representatives, shall be
returned to the party which provided the information).
7.2 EXCLUSIVITY. From the date hereof through any termination
of this Agreement in accordance with Section 11 below, the Sellers and the
Stockholder shall not (and shall not permit any of their directors, officers or
affiliates to) negotiate with or enter into any other commitments, agreements or
understandings with any person, firm or corporation (other than the Buyer) in
respect of any sale of capital stock or assets of the Sellers, any merger,
consolidation or corporate reorganization, or any other such transaction
relating to the Sellers or the Business.
7.3 COVENANT NOT TO COMPETE. The Sellers acknowledge that an
important part of the consideration which the Buyer will receive in connection
with the transactions contemplated hereby is the goodwill of the Business and
the confidential information of the Sellers (including, without limitation,
trade secrets, customer lists, manufacturing processes, technology, know-how and
other proprietary information). In order that the Buyer may enjoy the benefits
of such goodwill and such confidential information, the Sellers will not in any
manner compete with the Buyer or, directly or indirectly, own, manage, operate,
control, be a consultant to, participate or have any interest in or be connected
in any manner with, the ownership, management, operation or control of any
business manufacturing or selling chalkboards or other visual display boards in
the United States of America until the fifth anniversary of the Closing.
7.4 ESCROW AGREEMENT; XXXX OF SALE; TRANSFER DOCUMENTS;
ASSUMPTION AGREEMENT.
(a) On the Closing Date, (i) the Sellers and the Escrow
Agent named therein shall execute and deliver to the Buyer an escrow agreement
in respect of a portion of the Consideration in substantially the form of
EXHIBIT A annexed hereto (the "Escrow Agreement"), and (ii) the Sellers shall
execute and deliver to the Buyer a Xxxx of Sale and Assignment in
15
respect of the Assets in substantially the form of EXHIBIT B annexed hereto (the
"Xxxx of Sale"). In addition, to the extent that specific assignments may be
necessary or appropriate in respect of any of the Assets, and/or to the extent
that any of the Assets are represented by certificates of title or other
documents, then the Sellers shall, on the Closing Date, execute and deliver to
the Buyer any and all additional transfer documents, and shall endorse to and in
the name of the Buyer all certificates of title and other such documents, as may
be necessary or appropriate in order to effect the full transfer to the Buyer of
all of the Assets.
(b) On the Closing Date, the Sellers and the Buyer shall
execute and deliver to one another an Instrument of Assumption in respect of the
Assumed Liabilities in substantially the form of EXHIBIT C annexed hereto (the
"Assumption Agreement"). In addition, to the extent that specific assignments
may be required in order to effect the assignment to and assumption by the Buyer
of any particular Assumed Liabilities, the Sellers and the Buyer shall, on the
Closing Date, execute and deliver to one another such additional assignment and
assumption documents.
7.5 NON-COMPETITION AGREEMENTS. On the Closing Date, the Buyer
(on the one hand) and each of the Sellers, Xxxx X. Xxxxxxx and Xxxx X. Xxxxxxx
(on the other hand) shall execute and deliver to one another Non-Competition and
Non-Disclosure Agreements in substantially the form of EXHIBIT D annexed hereto
(the "Non-Competition Agreements").
7.6 EMPLOYMENT AGREEMENT. On the Closing Date, the Buyer and
Xxxx X. Xxxxxxx shall execute and deliver to one another an Employment Agreement
in substantially the form of EXHIBIT E annexed hereto (the "Employment
Agreement").
7.7 RENTAL AGREEMENT. On the Closing Date, Peninsular Michigan
and the Buyer shall enter into a Rental Agreement providing for space in the
Lapeer, Michigan building owned by Peninsular Michigan at the rent and for the
term specified therein, in substantially the form of EXHIBIT F annexed hereto
(the "Lease").
7.8 PERFORMANCE BONDS. The Buyer shall use its commercially
reasonable efforts to assume or, if the assumption of such bonds is not
permissible, replace the Sellers under, the performance bonds listed in SCHEDULE
7.8 annexed hereto, to be effective on the Closing Date.
7.9 NAME CHANGES. On the Closing Date, the Sellers shall
execute and deliver to the Buyer, for filing with the Secretary of State of the
States of Michigan and Texas, articles of amendment of the articles of
incorporation of each of the Sellers whereby the corporate name of the Sellers
will be changed to a name that does not include "Peninsular Slate" or any
confusingly similar name (the "Articles of Amendment").
7.10 ADDITIONAL AGREEMENTS AND INSTRUMENTS. On or before the
Closing Date, the Buyer, the Sellers and the Stockholder shall execute, deliver
and file all exhibits, agreements, certificates, instruments and other
documents, not inconsistent with the provisions of this Agreement, which, in the
opinion of counsel to the parties hereto, shall reasonably be
16
required to be executed, delivered and filed in order to consummate the
transactions contemplated by this Agreement.
7.11 NON-INTERFERENCE. None of the Buyer, the Sellers or the
Stockholder shall cause to occur any act, event or condition which would cause
any of their respective representations and warranties made in this Agreement to
be or become untrue or incorrect in any material respect as of the Closing Date,
or would interfere with, frustrate or render unreasonably expensive the
satisfaction by the other party or parties of any of the conditions precedent
set forth in Sections 8 and 9 below.
8. CONDITIONS PRECEDENT TO THE BUYER'S PERFORMANCE.
In addition to the fulfillment of the parties' agreements in
Section 7 above, the obligations of the Buyer to consummate the transactions
contemplated by this Agreement are further subject to the satisfaction, at or
before the Closing Date, of all the following conditions, any one or more of
which may be waived in writing by the Buyer:
8.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made by the Sellers and/or the Stockholder in
this Agreement and in any letter, written statement, certificate or other
document delivered to the Buyer pursuant to this Agreement shall be true and
correct on and as of the Closing Date as though such representations and
warranties were made on and as of that date.
8.2 PERFORMANCE. The Sellers and the Stockholder shall have
performed, satisfied and complied with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by them
on or before the Closing Date.
8.3 CERTIFICATION. The Buyer shall have received a certificate,
dated the Closing Date, signed by the Sellers and the Stockholder, certifying,
in such detail as the Buyer and its counsel may reasonably request, that the
conditions specified in Sections 8.1 and 8.2 above have been fulfilled.
8.4 RESOLUTIONS. The Buyer shall have received certified
resolutions of the Board of Directors and the Stockholders of each of the
Sellers, in form reasonably satisfactory to counsel for the Buyer, authorizing
the Sellers' execution, delivery and performance of this Agreement and all
actions to be taken by the Sellers hereunder.
8.5 OPINION OF THE SELLERS' COUNSEL. The Buyer shall have
received a written opinion from Xxxxxxx Trogen Young & Schloss, P.C., counsel
for the Sellers, addressed to the Buyer and dated the Closing Date, satisfactory
to the Buyer as to form and substance, in substantially the form of EXHIBIT G
annexed hereto.
8.6 ABSENCE OF LITIGATION. No action, suit or proceeding by or
before any court or any governmental body or authority, against the Sellers or
pertaining to the transactions contemplated by this Agreement or their
consummation, shall have been instituted
17
on or before the Closing Date, which action, suit or proceeding would, if
determined adversely, have a material adverse effect on the Business or any
material portion of the Assets.
8.7 CONSENTS. All necessary disclosures to and agreements and
consents of (i) any parties to any material contracts and/or any licensing
authorities which are material to the Business, and (ii) any governmental
authorities or agencies to the extent required to be obtained prior to the
Closing in connection with the transactions contemplated by this Agreement,
shall have been obtained and true and complete copies thereof delivered to the
Buyer. Any such consents must be obtained without imposing any unreasonable
burden or obligation on the Buyer or the Business from and after the Closing
Date.
8.8 AVAILABILITY OF FUNDS. The Buyer shall have available on
the Closing Date sufficient funds to enable it to consummate the transactions
contemplated by this Agreement.
8.9 EXECUTION AND DELIVERY OF EXHIBITS. On or before the
Closing Date, (a) the Sellers shall have executed and delivered to the Buyer the
Escrow Agreement, the Xxxx of Sale, the Lease, the Assumption Agreement and the
Articles of Amendment, (b) the Stockholder and the other parties thereto shall
have executed and delivered to the Buyer the Non-Competition Agreements, and (c)
the Escrow Agent shall have executed and delivered to the Buyer the Escrow
Agreement.
9. CONDITIONS PRECEDENT TO THE SELLERS'
AND THE STOCKHOLDER'S PERFORMANCE.
In addition to the fulfillment of the parties' agreements in
Section 7 above, the obligations of the Sellers and the Stockholder to
consummate the transactions contemplated by this Agreement are further subject
to the satisfaction, at or before the Closing Date, of all of the following
conditions, any one or more of which may be waived in writing by the Sellers and
the Stockholder:
9.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made by the Buyer in this Agreement and in any
letter, written statement, certificate or other document delivered to the
Sellers and/or the Stockholder pursuant to this Agreement shall be true and
correct on and as of the Closing Date as though such representations and
warranties were made on and as of that date.
9.2 PERFORMANCE. The Buyer shall have performed, satisfied and
complied with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Buyer on or before
the Closing Date.
9.3 CERTIFICATION. The Sellers and the Stockholder shall have
received a certificate, dated the Closing Date, signed by the Buyer, certifying,
in such detail as the Sellers and the Stockholder and its counsel may reasonably
request, that the conditions specified in Sections 9.1 and 9.2 above have been
fulfilled.
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9.4 OPINION OF THE BUYER'S COUNSEL. The Sellers shall have
received a written opinion from Xxxxxxxxx Traurig, counsel for the Buyer,
addressed to the Sellers and dated the Closing Date, satisfactory to the Sellers
as to form and substance, in substantially the form of EXHIBIT H annexed hereto.
9.5 EXECUTION AND DELIVERY OF EXHIBITS. On or before the
Closing Date, (a) the Buyer shall have executed and delivered to the Sellers the
Lease, the Escrow Agreement and the Assumption Agreement, and (b) the Buyer
shall have executed and delivered to the Stockholder and the other parties
thereto the Non-Competition Agreements.
10. CLOSING.
10.1 PLACE AND DATE OF CLOSING. Unless this Agreement shall be
terminated pursuant to Section 11 below, the consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place at the location
as is agreed to between the parties, at 10:00 a.m., local time, on January 21,
2000, or such later date (not later than February 15, 2000) as may be reasonably
agreeable to all parties (the date of the Closing being referred to in this
Agreement as the "Closing Date").
10.2 ACTIONS AT CLOSING. On the Closing Date, (a) the Buyer
shall pay to the Seller the portion of the Consideration provided in Section
3.1(b) above, (b) the Seller shall execute and deliver to the Buyer the Lease
and a Xxxx of Sale in respect of the Assets, together with such further
conveyancing documents in respect of the Assets (including but not limited to
endorsements of vehicle titles and other title documents, as appropriate) as may
be necessary or appropriate in order to effect the transfer of the Assets to the
Buyer, (c) the Buyer and Xxxx X. Xxxxxxx and Xxxx X. Xxxxxxx shall execute and
deliver to one another Non-Competition Agreements, (d) the Buyer and Xxxx X.
Xxxxxxx shall execute and deliver to one another the Employment Agreement and
(e) the Sellers shall deliver to the Buyer correct and complete pay-off letters
of the Sellers' bank or other secured creditors as of the Closing Date (setting
forth names, addresses and amounts owed), and the Buyer shall, out of the
Consideration, remit payment to the subject creditors of the full amounts
reflected in such schedule.
11. TERMINATION OF AGREEMENT.
11.1 GENERAL. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing: (a) by the mutual written consent of the Buyer, the Sellers and the
Stockholder; (b) by the Buyer, or by the Sellers and the Stockholder; if: (i) a
material breach shall exist with respect to the written representations and
warranties made by the other party or parties, as the case may be, (ii) the
other party or parties, as the case may be, shall take any action prohibited by
this Agreement, if such actions shall or may have a material adverse effect on
the Business and/or the transactions contemplated hereby, (iii) the other party
or parties, as the case may be, shall not have furnished, upon reasonable notice
therefor, such certificates and documents required in connection with the
transactions contemplated hereby and matters incidental thereto as it or
19
they shall have agreed to furnish, and it is reasonably unlikely that the other
party or parties will be able to furnish such item(s) prior to the Outside
Closing Date specified below, or (iv) any consent of any third party to the
transactions contemplated hereby (whether or not the necessity of which is
disclosed herein or in any Schedule hereto) is reasonably necessary to prevent a
default under any outstanding material obligation of the Buyer or the Sellers,
and such consent is not obtainable without material cost or penalty (unless the
party or parties not seeking to terminate this Agreement agrees or agree to pay
such cost or penalty); or (c) by the Buyer or by the Sellers and the
Stockholder, at any time on or after February 15, 2000 (the "Outside Closing
Date"), if the transactions contemplated hereby shall not have been consummated
prior thereto, and the party directing termination shall not then be in breach
or default of any obligations imposed upon such party by this Agreement.
11.2 EFFECT OF TERMINATION. In the event of termination by
either party as above provided in this Section 11, prompt written notice shall
be given to the other party. Termination of this Agreement shall not relieve any
party of any of its obligations pursuant to Section 7.1 above, and shall not
relieve any breaching party from liability for any breach of this Agreement.
12. INDEMNIFICATION.
12.1 GENERAL.
(a) Without prejudice to any rights of contribution as
between or among the Sellers and the Stockholder, the Sellers and the
Stockholder shall jointly and severally defend, indemnify and hold harmless the
Buyer from, against and in respect of any and all claims, losses, costs,
expenses, obligations, liabilities, damages, recoveries and deficiencies,
including interest, penalties and reasonable attorneys' fees, that the Buyer may
incur, sustain or suffer ("Losses") as a result of (i) any breach of, or failure
by the Sellers or the Stockholder to perform, any of the representations,
warranties, covenants or agreements of the Sellers or the Stockholder contained
in this Agreement or in any Schedule to this Agreement, and/or (ii) any failure
by the Sellers to pay or perform when due any of its retained liabilities.
(b) The Buyer shall defend, indemnify and hold harmless the
Sellers and the Stockholder from, against and in respect of any and all claims,
losses, costs, expenses, obligations, liabilities, damages, recoveries and
deficiencies, including interest, penalties and reasonable attorneys' fees, that
the Sellers or the Stockholder may incur, sustain or suffer as a result of (i)
any breach of, or failure by the Buyer to perform, any of the representations,
warranties, covenants or agreements of the Buyer contained in this Agreement,
and/or (ii) any failure by the Buyer to pay or perform when due any of the
Assumed Liabilities.
12.2 LIMITATIONS ON CERTAIN INDEMNITY.
(a) Notwithstanding any other provision of this Agreement
to the contrary, neither the Sellers nor the Stockholder shall be liable to the
Buyer with respect to Losses unless and until the aggregate amount of all Losses
incurred by the Buyer shall exceed
20
the sum of $10,000 (the "Basket"); PROVIDED, HOWEVER, that the Basket shall not
be available with respect to any Losses under Section 12.1(a)(ii) above or any
Losses involving proven fraud by the Sellers or the Stockholder. The Sellers and
the Stockholder shall thereafter be jointly and severally liable for all Losses
in excess of the Basket, provided that the Sellers' and the Stockholder's
maximum aggregate liability in respect of all Losses shall not in any event
exceed the aggregate amount of $1,000,000 (the "Limitation"); PROVIDED, HOWEVER,
that the Limitation shall not be available with respect to any Losses under
Sections 4.7, 4.8, 4.12 and 4.14 or any Losses involving proven fraud by the
Sellers or the Stockholder. The Buyer shall, in respect of any such Losses, seek
recourse first against the Escrow Fund in accordance with the procedures set
forth in this Section 12 and the Escrow Agreement.
(b) The Buyer shall be entitled to indemnification by the
Sellers and the Stockholder for Losses only in respect of claims for which
notice of claim shall have been given to the Sellers or the Stockholder on or
before the second anniversary of the Closing Date.
12.3 CLAIMS FOR INDEMNITY. Whenever a claim shall arise for
which any party shall be entitled to indemnification hereunder, the indemnified
party shall notify the indemnifying party in writing within sixty (60) days of
the indemnified party's first receipt of notice of, or the indemnified party's
obtaining actual knowledge of, such claim, and in any event within such shorter
period as may be necessary for the indemnifying party or parties to take
appropriate action to resist such claim. Such notice shall specify all facts
known to the indemnified party giving rise to such indemnity rights and shall
estimate (to the extent reasonably possible) the amount of potential liability
arising therefrom. If the indemnifying party shall be duly notified of such
dispute, the parties to this Agreement shall attempt to settle and compromise
the same or may agree to submit the same to arbitration or, if unable or
unwilling to do any of the foregoing, such dispute shall be settled by
appropriate litigation, and any rights of indemnification established by reason
of such settlement, compromise, arbitration or litigation shall promptly
thereafter be paid and satisfied by those indemnifying parties obligated to make
indemnification hereunder.
12.4 RIGHT TO DEFEND. If the facts giving rise to any claim for
indemnification shall involve any actual or threatened action or demand by any
third party against the indemnified party or any of its affiliates, the
indemnifying party or parties shall be entitled (without prejudice to the
indemnified party's right to participate at its own expense through counsel of
its own choosing), at their expense and through a single counsel of their own
choosing, to defend or prosecute such claim in the name of the indemnifying
party or parties, or any of them, or if necessary, in the name of the
indemnified party. In any event, the indemnified party shall give the
indemnifying party advance written notice of any proposed compromise or
settlement of any such claim. If the remedy sought in any such action or demand
is solely money damages, the indemnifying party shall have fifteen (15) days
after receipt of such notice of settlement to object to the proposed compromise
or settlement, and if it does so object, the indemnifying party shall be
required to undertake, conduct and control, though counsel of its own choosing
and at its sole expense, the settlement or defense thereof, and the indemnified
party shall cooperate with the indemnifying party in connection therewith.
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13. POST-CLOSING EVENTS.
13.1 CONTINUING SELLERS' LIABILITIES. From and after the Closing
Date, the Sellers shall timely pay and perform their retained liabilities,
including but not limited to all liabilities of the type described in Section
2.2 above.
13.2 CORPORATE NAME. From and after the Closing Date, the
Sellers shall cease and desist from any and all further use of the name
"Peninsular Slate" or any confusingly similar name, other than for purposes of
filing routine corporate reports, tax returns and other such items. The Sellers
shall, upon request of the Buyer made at any time from and after the Closing
Date, execute and deliver (and permit the Buyer to file) an amendment of the
Sellers' Articles of Incorporation whereby the corporate name of the Sellers
shall be changed to a name that does not include the name "Peninsular Slate" or
any confusingly similar name.
13.3 ACCOUNTS RECEIVABLE COLLECTIONS. Subject to the provisions
set forth in Section 3.3, To the extent that, at any time from and after the
Closing Date, the Sellers shall receive payment of any accounts receivable
included in the Assets, the Sellers shall immediately turn same over to the
Buyer in the form received (subject to any necessary endorsement), and pending
such delivery, shall hold same in trust for the benefit of the Buyer. Each of
the Buyer and the Sellers shall be permitted to pursue collection of its
accounts receivable in the normal course of business and utilizing collection
methods which are customary in the historic operation of its business.
13.4 FURTHER ASSURANCES. From time to time from and after the
Closing Date, the parties will execute and deliver to one another any and all
further agreements, instruments, certificates and other documents as may
reasonably be requested by any other party in order more fully to consummate the
transactions contemplated hereby, and to effect an orderly transition of the
business being acquired by the Buyer hereunder.
14. COSTS.
14.1 FINDER'S OR BROKER'S FEES. Each of the Buyer, the Sellers
and the Stockholder represents and warrants that neither they nor any of their
respective affiliates have dealt with any broker or finder in connection with
any of the transactions contemplated by this Agreement, and no broker or other
person is entitled to any commission or finder's fee in connection with any of
these transactions.
14.2 EXPENSES. The Buyer, the Sellers and the Stockholder shall
each pay all costs and expenses incurred or to be incurred by them,
respectively, in negotiating and preparing this Agreement and in closing and
carrying out the transactions contemplated by this Agreement.
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15. FORM OF AGREEMENT.
15.1 EFFECT OF HEADINGS. The Section headings used in this
Agreement and the titles of the Schedules hereto are included for purposes of
convenience only, and shall not affect the construction or interpretation of any
of the provisions hereof or of the information set forth in such Schedules.
15.2 ENTIRE AGREEMENT; WAIVERS. This Agreement and the other
agreements and instruments referred to herein constitute the entire agreement
between the parties pertaining to the subject matter hereof, and supersede all
prior agreements or understandings as to such subject matter. No party hereto
has made any representation or warranty or given any covenant to the other
except as set forth in this Agreement, the Schedules hereto, and the other
agreements and instruments referred to herein. No waiver of any of the
provisions of this Agreement shall be deemed, or shall constitute, a waiver of
any other provisions, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless executed in writing by the
party making the waiver.
15.3 COUNTERPARTS. This Agreement may be executed simultaneously
in any number of counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
16. PARTIES.
16.1 PARTIES IN INTEREST. Nothing in this Agreement, whether
expressed or implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any persons other than the parties to it and their
respective heirs, executors, administrators, personal representatives,
successors and permitted assigns, nor is anything in this Agreement intended to
relieve or discharge the obligations or liability of any third persons to any
party to this Agreement, nor shall any provision give any third persons any
right of subrogation or action over or against any party to this Agreement.
16.2 NOTICES. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if served personally on the party to
whom notice is to be given, on the first day after delivery thereof to a
recognized overnight delivery service for next day delivery with all charges
prepaid or billed to the account of the sender, or on the third day after
mailing if mailed to the party to whom notice is to be given, by first class
mail, registered or certified, postage prepaid, and properly addressed as
follows:
(a) If to the Sellers and/or the Stockholder, to:
Xx. Xxxx X. Xxxxxxx
0000 Xxxx Xxx Xxxxxx Xxxx
Xxxx, Xxxxxxxx 00000
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with a copy to:
Xxxxxxx Xxxxxx Xxxxx & Xxxxxxx, P.C.
00000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxx, Esq.
(b) If to the Buyer, to:
Greensteel, Inc.
c/o PolyVision Corporation
0000 Xxxxx Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Attn: Xx. Xxxxxxx X. Xxxx
President and Chief Executive Officer
with a copy to:
Xxxxxxxxx Traurig
MetLife Building
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
or to such other address as either party shall have specified by notice in
writing given to the other party.
17. MISCELLANEOUS.
17.1 AMENDMENTS AND MODIFICATIONS. No amendment or modification
of this Agreement or any Schedule hereto shall be valid unless made in writing
and signed by the party to be charged therewith.
17.2 NON-ASSIGNABILITY; BINDING EFFECT. Neither this Agreement,
nor any of the rights or obligations of the parties hereunder, shall be
assignable by any party hereto without the prior written consent of all other
parties hereto. Otherwise, this Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and permitted assigns.
17.3 GOVERNING LAW; JURISDICTION. This Agreement shall be
construed and interpreted and the rights granted herein governed in accordance
with the laws of the State of Georgia applicable to contracts made and to be
performed wholly within such State. Except as otherwise provided in Section 12.3
above, any claim, dispute or controversy arising under or in connection with
this Agreement or any actual or alleged breach hereof shall be settled
exclusively by arbitration to be held before a single arbitrator in New York,
New York, or in
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any other locale or venue as legal jurisdiction may otherwise be had over the
party against whom the proceeding is commenced, in accordance with the
commercial arbitration rules of the American Arbitration Association then
obtaining. As part of his or her award, the arbitrator shall make a fair
allocation of the fee of the American Arbitration Association, the cost of any
transcript, and the parties' reasonable attorneys' fees, taking into account the
merits and good faith of the parties' claims and defenses. Judgment may be
entered on the award so rendered in any court having jurisdiction. Any process
or other papers hereunder may be served by
25
registered or certified mail, return receipt requested, or by personal service,
provided that a reasonable time for appearance or response is allowed.
IN WITNESS WHEREOF, the parties have executed this Agreement on and as
of the date first set forth above.
GREENSTEEL, INC.
By:/s/Xxxxxxx X. Xxxx
-----------------------------------------
Xxxxxxx X. Xxxx, President
PENINSULAR SLATE COMPANY
By:/s/Xxxx X. Xxxxxxx
-----------------------------------------
Xxxx X. Xxxxxxx
PENINSULAR SLATE COMPANY
OF TEXAS
By:/s/Xxxx X. Xxxxxxx
-----------------------------------------
Xxxx X. Xxxxxxx
/s/Xxxx X. Xxxxxxx
--------------------------------------------
Xxxx X. Xxxxxxx
The undersigned, being the sole stockholder of Greensteel, Inc., the
Buyer named in and party to the foregoing Agreement, hereby unconditionally
guarantees the timely performance by such Buyer of its obligations under Section
3.3 of the foregoing Agreement, and agrees that such guarantee shall not in any
manner be affected or impaired by (a) any amendment or modification of the
Agreement or any other agreements executed and delivered in connection therewith
(collectively, the "Transaction Documents"), (b) any waiver or indulgence
granted or permitted under any of the Transaction Documents, (c) any bankruptcy,
insolvency, reorganization or other such proceeding at any time against the
Buyer, or (d) any other fact,
26
event, circumstance or condition which might constitute a legal or equitable
defense to the obligations of a guarantor.
POLYVISION CORPORATION
By: /s/Xxxxxxx X. Xxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxx
Title: President and Chief Executive Officer
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