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ASSET PURCHASE AGREEMENT
AMONG
PVC CONTAINER CORPORATION
AS PURCHASER
AND
XXXXXXXXX INVESTMENTS, INC.
AND
CHARTER SUPPLY COMPANY, INC., TRADING
AS XXXXXXXXX PLASTIC PACKAGING
AS SELLERS
AS OF MARCH 30, 1998
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TABLE OF CONTENTS
Item Page
---- ----
ARTICLE I SALE AND PURCHASE...........................................................................1
SECTION 1.1 Assets to be Sold and Purchased..................................................1
SECTION 1.2 Assumed Liabilities..............................................................3
SECTION 1.3 Excluded Liabilities.............................................................4
SECTION 1.4 Purchase Price...................................................................5
SECTION 1.5 Allocation of the Purchase Price.................................................5
SECTION 1.6 Closing..........................................................................5
SECTION 1.7 Non-Assignable Contracts.........................................................6
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER....................................................7
SECTION 2.1 Organization of Seller...........................................................7
SECTION 2.2 Due Authorization................................................................8
SECTION 2.3 No Violation; Consents and Approvals.............................................8
SECTION 2.4 Financial Information............................................................9
SECTION 2.5 Absence of Certain Changes or Events.............................................9
SECTION 2.6 Certain Contracts and Commitments................................................9
SECTION 2.7 Employee Benefit Plans......................................................... 10
SECTION 2.8 Litigation..................................................................... 10
SECTION 2.9 Assets......................................................................... 10
SECTION 2.10 Intellectual Property.......................................................... 11
SECTION 2.11 Compliance with Laws........................................................... 12
SECTION 2.12 Permits........................................................................ 12
SECTION 2.13 Inventory...................................................................... 12
SECTION 2.14 Brokers and Finders............................................................ 13
SECTION 2.15 Insurance...................................................................... 13
SECTION 2.16 Labor Matters.................................................................. 13
SECTION 2.17 Customers and Suppliers........................................................ 14
SECTION 2.18 Disclosure..................................................................... 14
SECTION 2.19 Taxes.......................................................................... 14
SECTION 2.20 Environmental Matters.......................................................... 15
SECTION 2.21 Accounts Receivable............................................................ 16
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER............................................... 17
SECTION 3.1 Organization of Purchaser...................................................... 17
SECTION 3.2 Execution and Binding Effect................................................... 17
SECTION 3.3 No Violation; Consents and Approvals........................................... 17
SECTION 3.4 Litigation..................................................................... 18
SECTION 3.5 Brokers and Finders............................................................ 18
ARTICLE IV COVENANTS................................................................................. 18
SECTION 4.1 Efforts; Further Assurances; Permits........................................... 18
SECTION 4.2 Employee Matters............................................................... 19
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SECTION 4.3 Transfer Taxes; Expenses....................................................... 21
SECTION 4.4 Access to Records.............................................................. 21
SECTION 4.5 Assets After Closing........................................................... 21
SECTION 4.6 Intellectual Property Cooperation.............................................. 22
ARTICLE V CONDITIONS TO PURCHASER'S OBLIGATIONS..................................................... 22
SECTION 5.1 Representations and Warranties of Sellers to be True;
Performance by Sellers; Certificates........................................... 22
SECTION 5.2 Agreements..................................................................... 22
SECTION 5.3 Survey and Title Insurance; Defects............................................ 22
SECTION 5.4 Consents....................................................................... 23
SECTION 5.5 No Proceeding or Litigation.................................................... 23
SECTION 5.6 Opinion of Counsel for Seller.................................................. 23
SECTION 5.7 Consent of Directors of Purchaser.............................................. 23
ARTICLE VI CONDITIONS TO SELLERS' OBLIGATIONS........................................................ 24
SECTION 6.1 Representations and Warranties of Purchaser to be True;
Performance by Purchaser; Certificate.......................................... 24
SECTION 6.2 Agreements..................................................................... 24
SECTION 6.3 Consents....................................................................... 24
SECTION 6.4 No Proceeding or Litigation.................................................... 24
SECTION 6.5 Opinion of Counsel for Purchaser............................................... 25
ARTICLE VII INDEMNIFICATION................................................................ 25
SECTION 7.1 Survival of Representations and Warranties..................................... 25
SECTION 7.2 Indemnification by Sellers..................................................... 25
SECTION 7.3 Indemnification by Purchaser................................................... 25
SECTION 7.4 General Indemnification Provisions............................................. 26
SECTION 7.5 Limits on Indemnification...................................................... 27
SECTION 7.6 Special Provisions Regarding Environmental Claims.............................. 27
ARTICLE VIII AMENDMENT AND WAIVER...................................................................... 27
SECTION 8.1 Amendment...................................................................... 27
SECTION 8.2 Waiver......................................................................... 27
ARTICLE IX NON-COMPETITION........................................................................... 28
SECTION 9.1 Non-Competition................................................................ 28
SECTION 9.2 Non Solicitation............................................................... 28
ARTICLE X MISCELLANEOUS............................................................................. 28
SECTION 10.1 Expenses....................................................................... 28
SECTION 10.2 Consents....................................................................... 28
SECTION 10.3 Assignment; Parties in Interest................................................ 28
SECTION 10.4 Further Assurances............................................................. 29
SECTION 10.5 Title and Risk of Loss......................................................... 29
SECTION 10.6 Entire Agreement............................................................... 29
SECTION 10.7 Headings....................................................................... 29
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SECTION 10.8 Notices........................................................................ 29
SECTION 10.9 Governing Law.................................................................. 30
SECTION 10.10 Bulk Sales Law................................................................. 30
SECTION 10.11 Counterparts................................................................... 30
SECTION 10.12 Certain Definitions............................................................ 31
SECTION 10.13 Publicity...................................................................... 31
SECTION 10.14 Closing Documents.............................................................. 31
SECTION 10.15 Designated Buyer............................................................... 31
SECTION 10.16 Definition of Knowledge........................................................ 31
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SCHEDULES
---------
Schedule 1.1(a)(i) Property
Schedule 1.1(a)(iii) Equipment
Schedule 1.1(a)(iv) Intellectual Property
Schedule 1.1(a)(vii) Assumed Contracts
Schedule 1.1(a)(viii) Inventory
Schedule 1.1(a)(ix) Permits
Schedule 1.2 Accounts Payable
Schedule 2.3 Consents and Approvals
Schedule 2.4 Financial Information
Schedule 2.5 Certain Changes
Schedule 2.7 Employee Benefit Plans
Schedule 2.8 Litigation
Schedule 2.9(a) Property Liens
Schedule 2.9(c) Assets
Schedule 2.11 Compliance With Laws
Schedule 2.13 Locations of Inventory
Schedule 2.15 Insurance
Schedule 2.16 Labor Matters
Schedule 2.17 Customers and Suppliers
Schedule 2.19 Taxes
Schedule 2.20 Environmental Matters
Schedule 2.21(a) Accounts Receivable
Schedule 2.21(b) Xxxx and Hold
Schedule 3.3 Consents and Approvals
Schedule 4.2 Employee Matters
Schedule 4.2(b) Purchaser Employee Benefits
EXHIBITS
--------
Exhibit A Xxxx of Sale, Assignment and Assumption
Agreement
Exhibit B Intellectual Property Assignments
Exhibit C Deed
Exhibit D Certificate of Seller
Exhibit E Certificate of Purchaser
Exhibit F Form of Opinion of Seller's Counsel
Exhibit G Form of Opinion of Purchaser's Counsel
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ASSET PURCHASE AGREEMENT, dated as of March 30, 1998 by and among
XXXXXXXXX INVESTMENTS, INC., a Delaware corporation ("MII") and CHARTER SUPPLY
COMPANY, INC., a Rhode Island corporation trading as XXXXXXXXX PLASTIC PACKAGING
("Seller"), jointly hereinafter referred to as the ("Sellers") and PVC CONTAINER
CORPORATION, a Delaware corporation, or a designated buyer as hereinafter
defined in Section 10.15 of this Agreement ("Purchaser").
WHEREAS, Seller is a subsidiary of MII; and
Seller is engaged in Philmont, New York in the business of developing,
manufacturing and selling plastic blow molded bottles of various sizes
("Products") utilizing primarily HDPE and PVC materials, blow molding machines
and silk-screening machinery (the "Business"); and
Seller desires to sell and assign and Purchaser desires to purchase the
assets and assume certain liabilities related to the Business upon and subject
to the terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the premises and of the mutual
agreements and covenants hereinafter set forth, the parties hereto agree as
follows:
ARTICLE I
SALE AND PURCHASE
SECTION 1.1 Assets to be Sold and Purchased.
(a) Subject to the Excluded Assets set forth in Section 1.1(b)
and the other terms and conditions hereof, Seller shall sell, assign, transfer,
convey and deliver to Purchaser on the Closing Date as hereinafter defined, and
Purchaser shall purchase from Seller, all of the property, assets and rights to
the extent that they are used in connection with the Business or the Products
(collectively, the "Assets"):
(i) all of Seller's rights in and to all real
property (and interests therein) owned by Seller and situated in Philmont, New
York, together with all buildings and improvements thereon (the "Property"), as
more particularly described in Schedule 1.1(a)(i);
(ii) all of Seller's accounts receivable and prepaid
expenses;
(iii) all of Seller's rights in and to the fixed
assets of the Business including but not limited to machinery, equipment, tools,
molds, supplies, spare parts, rolling stock, furniture and fixtures (the
"Equipment") and used in the Business on the Effective Date (as hereinafter
defined), a list of the Equipment (in the form customarily maintained by Seller)
on the Effective Date being annexed hereto as Schedule 1.1(a)(iii).
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(iv) all of Seller's rights in, to and under all
domestic and foreign patents, patent applications, trade names, trademarks,
copyrights, servicemarks, trademark and servicemark registrations and
applications which are listed on Schedule 1.1(a)(iv);
(v) to the extent that they relate to the Products,
all of Seller's rights in, to and under trade secrets, product formulations and
associated manufacturing and process know-how, whether currently being used or
under development, including product testing and quality control procedures,
product applications and associated know-how, unpatented inventions, research
developments and know-how, technology, technical information, engineering and
other drawings, engineering data, design and engineering specifications, product
literature and related materials, and supplier lists and files and similar
marketing data in writing (which together with the intellectual property
described in Section 1.1(a)(iv), the "Intellectual Property"), and all of
Seller's books, records and computer programs relating to the Intellectual
Property;
(vi) all of Seller's rights in, to and under the
goodwill of the Business including without limitation the name "Charter Supply
Company" and any logos and tradenames used in connection with he conduct of the
Business and the sale of the Products. However, Purchaser shall not acquire any
ownership rights in or right to use the name "XxXxxxxxx".
(vii) subject to Section 1.7, Seller's rights under
all contracts, agreements, leases, arrangements, or understandings entered into
with customers, suppliers, dealers, distributors, warehousers and other third
parties which relate to the Business or to the Products, whether or not there
are any written contracts with respect thereto (such contracts, agreements,
arrangements and understandings, the "Assumed Contracts"), a list of the Assumed
Contracts on the date of this Agreement being annexed hereto as Schedule
1.1(a)(vii);
(viii) Seller's rights to all raw materials,
work-in-process and finished goods inventories relating to the conduct of the
Business and Products as such exist on the Effective Date (the "Inventories"),
and as set forth in a list of the Inventory as of the Effective Date by the
categories of finished goods, HDPE and PVC compounds, color concentrates,
packaging supplies, regrinds, work in process and all other Inventory annexed
hereto as Schedule 1.1(a)(viii);
(ix) all of Seller's rights under all licenses,
permits, consents and approvals necessary to the lawful operation, ownership and
conduct of the Business and listed on Schedule 1.1(a)(ix) (the "Permits"), to
the extent such Permits are transferable; provided, however, to the extent any
Permit is not transferable, Seller shall so indicate on Schedule 1.1(a)(ix).
(x) all operating data and records of Seller relating
to the Business, including without limitation all files, records,
correspondence, customer lists and records, referral sources, research and
development reports and records, reports and materials prepared by Seller,
production reports and records, equipment logs, operating guides and
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manuals, projections, accounting and personnel records and correspondence and
other similar documents and records;
(xi) all claims, warranty rights, causes of action
and other similar rights arising in the conduct of the Business on and prior to
the Effective Date ("Acquired Claims").
(xii) cash in an amount equal to all condemnation
proceeds and all property and casualty insurance proceeds (excluding business
interruption insurance) plus an amount equal to any deductible received by
Seller from any Person (other than Seller or any of its Affiliates) with respect
to the loss, damage, destruction or condemnation of any of the tangible Assets
identified in the preceding clauses (i) through (xi) other than Inventories, but
only to the extent not applied by Seller to the repair, restoration or
replacement thereof on or prior to the Effective Date; and
(xiii) all claims to property and casualty insurance
proceeds and condemnation proceeds (excluding business interruption insurance)
from any Person (other than Seller or any of its Affiliates) with respect to the
loss, damage, destruction or condemnation of any tangible Assets identified in
clauses (i) through (xi) other than Inventories to the extent proceeds of such
claims are not covered in clause (xii) above, but only to the extent Seller has
not paid for the repair, restoration or replacement thereof as of the Effective
Date.
(b) The Assets shall exclude all property, assets and rights
of Seller (the "Excluded Assets") set forth below:
(i) except as otherwise provided in Section
1.1(a)(xii), cash on hand, cash equivalents, investments (including, without
limitation, stock, debt instruments, options and other instruments and
securities) and bank deposits of Seller;
(ii) tax refunds and recoveries and similar benefits
of Seller, and all of Seller's tax returns and records;
(iii) all corporate records of Seller including,
without limitation, the stock ledger of Seller and the minute books regarding
meetings of the stockholders, directors and director committees of Seller;
(iv) Seller's rights under any Employee Plans, as
defined in Section 2.7; and
(v) subject to Sections 1.1(a)(xii) and (xiii), all
of Seller's rights under any insurance policies.
SECTION 1.2 Assumed Liabilities. Subject to the provisions of Sections 1.3
and 1.7, and except as provided herein Purchaser shall not assume, pay, fulfill,
perform or otherwise discharge any liabilities or obligations of Seller except
(a) under the Assumed
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Contracts; and (b) accounts payable, accrued liabilities, contracts and leases
in relation to the conduct of the Business (collectively, the "Assumed
Liabilities"). There is annexed hereto as Schedule 1.2 a listing and aging of
the accounts payable of Seller as of the Effective Date.
SECTION 1.3 Excluded Liabilities. Upon the terms and subject to the
conditions of this Agreement, Seller agrees to retain, and Seller shall defend,
indemnify and hold harmless Purchaser from and against, any and all of the
following liabilities and obligations of Seller, other than the Assumed
Liabilities (the "Excluded Liabilities") including without limitation:
(a) Seller's obligations and any liabilities of Seller arising
under this Agreement;
(b) subject to Section 4.7, any obligation of Seller for
federal, state or local income tax, or franchise tax, including interest,
penalties or additions to Tax relating thereto, arising from operations of the
Business up to and including the Effective Date;
(c) except as otherwise explicitly provided herein, any
obligation of Seller for expenses incurred by it in connection with the sale of
the Assets pursuant hereto, including, without limitation, the fees and expenses
of its counsel, consultants and independent auditors;
(d) any liability or obligation of Seller arising from
litigation or proceedings arising out of the conduct of the Business by Seller
up to and including the Effective Date, and any liability for Seller's
attorneys' fees or expenses;
(e) any obligation, responsibility or liability of Seller in
connection with any Employee Plan (as defined in Section 2.7);
(f) other than an Excluded Liability covered under subsection
(i) below, any liabilities or obligations of Seller relating to the Excluded
Assets;
(g) liabilities and obligations of Seller for borrowed money
and guarantees of borrowed money or letters of credit;
(h) any liabilities of Seller relating to its operations other
than the Business or the Products;
(i) any liabilities or obligations of Seller relating to (i)
any qualified employee benefit plans including, without limitation, those
arising under its 401K savings plan, group health and dental plan, and life,
accidental death and disability insurance policies or (ii) vacation pay
liability to employees accruing for service prior to August 1, 1997; and
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(j) the amount of any claim for Products sold or shipped by
Seller prior to the Effective Date and returned by the customer within ninety
(90) days after the Effective Date for any reason including claims for product
liability by the customer or third persons will become an obligation and
liability of Seller to Purchaser under Article VII hereof. Subject to
application of the "basket and cap" on liability contained in Section 7.5,
Purchaser will be reimbursed for the invoice price of any such returned Products
less 50% thereof representing the resin cost and less any adjustments that
Purchaser can make with the customer. Purchaser will use its best efforts to
mitigate and reduce any costs resulting from any customer return of Products.
SECTION 1.4 Purchase Price.
(a) The consideration for the Assets shall be $10,250,000 U.S.
Dollars (the "Purchase Price") and the assumption of the Assumed Liabilities.
(b) Purchaser shall pay Seller the Purchase Price, on the
Closing Date by wire transfer of immediately available funds in U.S. dollars;
provided Seller has given wire transfer instructions to Purchaser prior to the
Closing Date.
SECTION 1.5 Allocation of the Purchase Price. The allocation of
Purchase Price among the Assets shall be made by Purchaser, and the Sellers and
Purchaser shall mutually agree within sixty (60) days after the Closing Date as
to the determination of any such allocation. Each of the parties shall make all
appropriate tax and other filings on a basis consistent with such allocation.
The parties shall exchange drafts of any information returns required by Section
1060 of the Internal Revenue Code of 1986, as amended (the "Code"), and all
similar state statutes, ten days prior to filing any such return.
SECTION 1.6 Closing.
(a) Notwithstanding the date of this Agreement and the Closing
Date (as hereinafter defined), the effective date of this Agreement and the
Closing (as hereinafter defined) shall be as at the close of Business of the
Seller on March 28, 1998 (the "Effective Date").
(b) Subject to the terms and conditions of this Agreement, the
sale and purchase of the Assets contemplated hereby (the "Closing") shall take
place simultaneously with the execution of this Agreement, at [THE OFFICES OF
XXXX MARKS & XXXXX LLP, 805 THIRD AVENUE, NEW YORK, NEW YORK,] or at such other
place as the parties may agree, but in no event later than March 30, 1998 (the
"Closing Date"), and time is considered to be of the essence.
(c) At the Closing, Seller shall deliver to Purchaser:
(i) a Xxxx of Sale, Assignment and Assumption
Agreement substantially in the form attached hereto as Exhibit A (the "Xxxx of
Sale") pursuant to which
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Seller assigns to Purchaser Seller's right, title and interest under the Assumed
Contracts and Purchaser assumes Seller's obligations thereunder;
(ii) an assignment of trademarks and servicemarks,
including applications and registrations, an assignment of copyrights, including
applications and registrations, and an assignment of patents and patent
applications substantially in the forms attached hereto as Exhibit B (the
"Intellectual Property Assignments"), relating to the Intellectual Property;
(iii) a warranty deed to the Property substantially
in the form attached hereto as Exhibit C (the "Deed");
(iv) a certificate of an officer of Seller
substantially in the form attached hereto as Exhibit D (the "Seller
Certificate");
(v) any consents that Seller has obtained pursuant to
Sections 4.4 and 5.4; and
(vi) such other instruments of assignment or
conveyance as Purchaser may reasonably request as necessary or appropriate to
vest in Purchaser good and marketable title to the Assets to be sold by Seller
hereunder.
(d) At the Closing, Purchaser shall deliver to Seller:
(i) the Purchase Price;
(ii) the Assignment and Assumption Agreement;
(iii) the Intellectual Property Assignments;
(iv) any consents that Purchaser has obtained
pursuant to Sections 4.4 and 6.3; and
(v) a certificate of an officer of Purchaser
substantially in the form attached hereto as Exhibit E (the "Purchaser
Certificate").
SECTION 1.7 Non-Assignable Contracts.
(a) Schedule 1.1(a)(vii) indicates which of the Assumed
Contracts are non-assignable. To the extent that any Assumed Contract is not
capable of being assigned, transferred, subleased or sublicensed without the
consent or waiver of the other party thereto or any third party (including a
government or governmental unit), or if such assignment, transfer, sublease or
sublicense or attempted assignment, transfer, sublease or sublicense would
constitute a breach thereof or a violation of any law, decree, order, regulation
or other governmental edict, this Agreement shall not constitute an assignment,
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transfer, sublease or sublicense thereof, or an attempted assignment, transfer,
sublease or sublicense of any such Assumed Contract.
(b) Anything in this Agreement to the contrary
notwithstanding, Seller is not obligated to transfer to Purchaser any of its
rights and obligations in and to any of the Assumed Contracts without first
having obtained all necessary consents and waivers. For a reasonable period of
time after the Closing Date, Seller shall use reasonable efforts (which shall
not require Seller to incur any financial obligation to third parties), and
Purchaser shall cooperate with Seller, to obtain the consents and waivers
referred to in Section 1.7(a) and to obtain any other consents and waivers
necessary to convey to Purchaser any of the Assumed Contracts.
(c) To the extent that such consents and waivers are not
obtained by Seller, Seller and Purchaser shall each use reasonable efforts to
establish arrangements that are reasonable and lawful as to Seller and
Purchaser, and which result in the benefits and obligations under such Assumed
Contracts being apportioned in a manner that is in accordance with the purpose
and intention of this Agreement.
(d) To the extent such consents and waivers are not obtained
by Seller, Purchaser shall have no obligations with respect thereto, except as
set forth in Section 1.7(c) above.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Sellers jointly and severally represent and warrant to Purchaser as
follows:
SECTION 2.1 Organization of Seller.
(a) Seller is duly organized, validly existing and in good
standing under the laws and jurisdiction of incorporation and has all requisite
power and authority to own the Assets and to carry on the Business as presently
conducted, to execute and deliver this Agreement and the other agreements and
instruments to be executed and delivered by the parties pursuant to this
Agreement, including without limitation the agreements and instruments listed as
Exhibits hereto (the "Ancillary Agreements"), and to consummate the transactions
contemplated hereby and thereby.
(b) Seller is duly licensed or qualified to do business and is
in good standing in each jurisdiction in which the ownership of the Assets or
the conduct of the Business requires such licensing or qualification, except
where the failure to be so licensed or qualified or in good standing would not
have a Material Adverse Effect.
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(c) For purposes of this Agreement, "Material Adverse Effect"
shall, as the case may be, mean a material adverse effect on the condition
(financial or otherwise), business, assets or results of operations of the
Business taken as a whole.
SECTION 2.2 Due Authorization. The execution and delivery of this
Agreement by Sellers and the execution and delivery of the Ancillary Agreements
by Sellers or either of them, and the performance by Sellers of this Agreement
and the Ancillary Agreements are within the corporate powers of such Sellers'
signatory thereto and have been duly authorized by all necessary corporate
action on the part of such Sellers' signatory thereto. Assuming due and valid
authorization, execution and delivery thereof by the other parties thereto, this
Agreement constitutes, and when executed and delivered the Ancillary Agreements
will constitute, valid and binding agreements of such Sellers' signatory
thereto, enforceable against such Sellers' signatory thereto in accordance with
their respective terms except as such enforceability may be limited by
bankruptcy, insolvency or similar laws and by equitable principles.
SECTION 2.3 No Violation; Consents and Approvals. Except as provided in
Schedule 2.3, neither the execution, delivery and performance by Sellers of this
Agreement or the Ancillary Agreements nor the consummation by Sellers of the
transactions contemplated hereby and thereby and compliance by Sellers with the
terms hereof and thereof will (i) conflict with, violate or result in any breach
of the terms, conditions or provisions of Sellers' certificates of incorporation
or by-laws, (ii) assuming all required consents are obtained on or prior to
Closing, conflict with, violate or result in any breach of, or constitute a
default or loss of any right under or an event which, with the lapse of time or
notice or both, would result in a default or loss of any right under or the
creation of any security interest upon any of the Assets (or give rise to any
right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any agreement, lease, instrument, obligation,
understanding or arrangement to which Sellers are a party or by which Sellers or
any of the Assets may be bound or subject, except for such defaults, losses (or
rights of termination, cancellation or acceleration) as to which requisite
waivers or consents have been obtained, (iii) assuming all required consents are
obtained on or prior to Closing, violate any statute, ordinance or law or any
rule, regulation, order, writ, injunction or decree of any court or of any
public, governmental or regulatory body, agency or authority applicable to
Sellers or by which any of its properties or assets may be bound or subject, or
(iv) require any filing (other than as may be required to transfer any Permit),
declaration or registration with, or permit, consent or approval of, or the
giving of any notice to, any public, governmental or regulatory body, agency or
authority; excluding from the foregoing clauses (ii), (iii) and (iv) such
conflicts, violations, breaches and defaults which, and filings, declarations,
registrations, permits, consents, approvals and notices the absence of which,
either singly or in the aggregate, would not have a Material Adverse Effect.
With respect to any Ancillary Agreements or any undertaking with respect to any
Ancillary Agreements, the representations made in this Agreement shall be
limited to such of Sellers as are a signatory to any such Ancillary Agreements.
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SECTION 2.4 Financial Information. Sellers have furnished to Purchaser
and there is annexed as Schedule 2.4 audited financial statements of Seller for
its fiscal year ended July 31, 1997 and unaudited financial statements as at
February 28, 1998. Such financial statements have been prepared in a manner
consistent with past practice and fairly and accurately present the financial
condition of Seller as of the dates thereof and Seller's earnings changes in
stockholder's equity and cash flow for the periods then ended.
SECTION 2.5 Absence of Certain Changes or Events. Except as set forth
on Schedule 2.5, with respect to both the Business and the Assets, Seller has
not since December 31, 1997:
(a) permitted or allowed any of the Assets to be mortgaged,
pledged or subjected to any lien or encumbrance, other than Permitted Liens (as
defined below);
(b) canceled or compromised any material claims, or waived any
other material rights relating to the Business, or sold, transferred or
otherwise disposed of any properties or assets, real, personal or mixed,
tangible or intangible, material to the Business, other than in the ordinary
course of business;
(c) transferred to any other Person any Intellectual Property;
(d) granted increases in the compensation of any employee
other than in the ordinary course of business;
(e) increased or decreased the level of Inventories other than
in the ordinary course of business;
(f) to its knowledge made any material change in the customary
methods used in operating the Business;
(g) to its knowledge suffered any Material Adverse Effect;
(h) received any written notice, or had actual knowledge, that
any supplier or customer of the Business has suffered a Material Adverse Effect;
or
(i) entered into, amended, renewed or terminated any material
contract, agreement, lease or Permit relating to the Business.
SECTION 2.6 Certain Contracts and Commitments.
(a) Schedule 1.1(a)(vii) sets forth a true and complete list
of Assumed Contracts as of the date of the Effective Date. Except as set forth
in Schedule 1.1(a)(vii), the enforceability of the Assumed Contracts will not be
affected in any material respect by the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby.
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(b) To Seller's knowledge all of the Assumed Contracts are in
full force and effect as of the Effective Date, enforceable against Seller in
accordance with their respective terms. Seller is not in default, and to
Seller's knowledge, no other party is in default, nor does there exist any event
that, with notice or lapse of time or both, would constitute an event of default
by Seller, or to its knowledge, any other party thereto, under any Assumed
Contract, except where all such events in the aggregate would not result in a
Material Adverse Effect.
SECTION 2.7 Employee Benefit Plans. Schedule 2.7 lists each of the
employee benefit plans, contracts, policies, manuals, and arrangements whether
in writing or oral which is currently sponsored, maintained or contributed to
by, or otherwise binding upon Seller for the benefit of the individuals
designated on Schedule 4.2.
SECTION 2.8 Litigation.
(a) Except as set forth in Schedule 2.8, there are no claims,
actions, suits, proceedings or investigations pending or, to Seller's knowledge,
threatened against Seller with respect to the Business, the Products or the
Assets, at law or in equity or before or by any Federal, state, municipal,
foreign or other governmental department, commission, board, agency,
instrumentality or authority which is reasonably likely to have a Material
Adverse Effect or which may have a material effect on the transactions
contemplated hereby.
(b) Seller is not a party to or, to the knowledge of Seller,
bound by any judgment, injunction, award or order of any governmental entity,
arbitrator or any other Person which would bind Purchaser after the Effective
Date which could reasonably be expected to have a Material Adverse Effect.
SECTION 2.9 Assets.
(a) Seller has good and insurable (subject only to standard
ALTA exceptions) fee simple title to the Property free and clear of any
mortgages, pledges, liens, security interests, conditional and installment sale
agreements, easements or other encumbrances, charges, rights or other claims of
third parties of any kind (collectively, "Liens"), other than (A) Liens securing
or relating to liabilities or obligations which are to be (i) assumed by
Purchaser pursuant to this Agreement or (ii) satisfied or discharged by Seller
on or prior to the Closing, (B) Liens for current taxes and assessments not yet
due, (C) Liens created by Purchaser; and (D) other Liens listed on Schedule
2.9(a) (the Liens referred to in clauses (A) through (D) collectively being
referred to as "Permitted Liens").
(b) To Seller's knowledge, no material zoning law or other
material ordinance or municipal regulation is violated by continuation of the
present use and operation of the Assets presently on the Property, and Seller
has not received written notice of any such violation. No outstanding notice of
condemnation of any of the
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Property has been delivered to Seller, nor, to Seller's knowledge, is any
condemnation proceeding of any of the Property threatened. To Seller's
knowledge, no fact or condition exists which would result in the termination or
curtailment of the current access from the Property to any presently existing
public roads adjoining the Property. All of the Property has direct access to
existing public roads and to all utilities utilized at such location.
(c) Except as set forth in Schedule 2.9(c) and subject to
Section 1.8, on the Closing Date, Seller shall convey to Purchaser good and
marketable title, or valid and enforceable leasehold or other contractual
interest, in and to the Assets, Property and the Intellectual Property, free and
clear of any Liens other than (i) Permitted Liens and (ii) Liens disclosed on
any Schedule hereto. The Equipment is in good operating condition and repair,
normal wear and tear excepted. Except as set forth in Schedule 2.9(c), Seller
has not received any written notice within the twelve (12) months prior to the
date hereof of a violation of any ordinances, regulations or other laws with
respect to such Assets that could reasonably be expected to result in a Material
Adverse Effect.
SECTION 2.10 Intellectual Property.
(a) Schedule 1.1(a)(iv) sets forth a true and complete list of
all patents and patent applications, trade names, trademarks, service marks and
copyrights, including applications and registrations for all such items,
included in the Intellectual Property being transferred to Purchaser pursuant to
this Agreement. Seller shall convey to Purchaser good and marketable title in
and to all domestic and foreign patents, patent applications and copyright,
trademark and servicemark registrations and applications free and clear of any
liens other than (i) Permitted Liens and (ii) Liens disclosed in any Schedule
hereto.
(b) Seller has the right and authority to use and enforce its
rights to all of the Intellectual Property and, the operation of the Business,
the manufacture, use or sale of the Products by Seller or the use of the Assets
does not conflict with, infringe upon or violate any patent, trademark,
copyright, trade secret or other proprietary, personal or other right of any
other Person and no written claim has been made to that effect. There are no
pending, or to Seller's knowledge, threatened administrative, judicial,
arbitration or other adversary proceedings concerning the Intellectual Property.
(c) The Intellectual Property is not subject to any Liens,
licenses or sublicenses in favor of third parties, except any license agreements
set forth on Schedule 1.1(a)(vii). Such Schedule sets forth a complete and
correct list of each Intellectual Property license agreement to which Seller is
a party or by which it is bound (whether as the licensor or licensee)
indicating, as to each, the parties (specifying which party is the licensor and
which party is the licensee), the title of the agreement, the date executed, and
the general subject matter. Seller will not retain after the Closing any
interest in any intellectual property related to the Products.
(d) Schedule 1.1(a)(iv) sets forth a complete and correct list
of each United States and foreign (i) patent and patent application, indicating
as to each, the country, the patent number (or application number), the patent
title, the date filed, the date issued, and
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the expiry date; (ii) registered trademark, servicemark, or tradename and
application therefor, indicating, as to each, the country, the xxxx, the
registration number (or application number), the date issued, the date filed,
and the expiry date, and material nonregistered trademark; (iii) copyright
registration and copyright application indicating, as to each, the country, the
title of the work, the date issued, and the copyright number, and material
unregistered copyright; in each case owned in whole or in part by Seller and
included within the Intellectual Property. Except as and to the extent set forth
on Schedule 1.1(a)(iv), the applications and registrations set forth on Schedule
1.1(a)(iv) are subsisting in good standing, all maintenance fees have been paid,
and no challenges thereto are pending before the applicable intellectual
property registry. Seller is the current record owner of all registrations and
applications set forth on Schedule 1.1(a)(iv), except as noted on such Schedule.
(e) To Seller's knowledge, the items of Intellectual Property
are valid and enforceable and there are no infringements of Seller's rights in
and to the Intellectual Property by any third party. Seller has not entered into
any consent, indemnification, forbearance to xxx or settlement agreement with
any Person relating to any item of Intellectual Property.
SECTION 2.11 Compliance with Laws. Except as set forth on Schedule
2.11, Seller is conducting the Business in compliance with all applicable laws,
rules, regulations, notices, standards, conditions, approvals and orders, except
for instances of noncompliance that would not have a Material Adverse Effect,
and Seller has not received any notice with respect to the Business that it is
in breach of any such laws, rules, regulations, notices, standards, conditions,
approvals or orders, except for instances of noncompliance and breach where
enforcement would not have a Material Adverse Effect.
SECTION 2.12 Permits. Schedule 1.1(a)(ix) is a true and complete list
and description of all Permits held by Seller with respect to the Business.
Except as set forth in Schedule 1.1(a)(ix), Seller validly holds and is in
compliance with all Permits, except where noncompliance would not have a
Material Adverse Effect. Seller holds all Permits required under applicable
laws, rules, regulations and orders, except where the failure to so hold would
not have a Material Adverse Effect.
SECTION 2.13 Inventory. All Inventories described in Section
1.1(a)(viii) and Schedule 1.1(a)(viii) to be sold to Purchaser pursuant to this
Agreement shall be, as of the Effective Date, useable and saleable in the
ordinary course of the Business. All Inventory disposed of by Seller since
February 28, 1998 has been disposed of only in the ordinary course of the
Business consistent with past practice. The Inventory does not include any
materials held by Seller on consignment from third parties. In the event
Purchaser alleges a violation of the representation contained in this section
with regard to Inventory, it shall give Seller the option of disposing of any
alleged obsolete Inventory. Regardless of which party disposes of such
Inventory, all net proceeds of such disposition shall belong to or inure to the
benefit of Seller. There is annexed hereto as Schedule 2.13 the locations where
the Inventory is maintained.
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SECTION 2.14 Brokers and Finders. Seller will pay the expense of any
broker or finder employed by it for any brokerage fees, commissions or finders
fees incurred in connection with the transactions contemplated by this
Agreement.
SECTION 2.15 Insurance. Schedule 2.15 sets forth a true and complete
list of the insurance policies maintained on the date hereof with respect to the
Business and the Assets, and the type and amount of coverage thereunder. During
the three years prior to the date hereof, Seller has not been refused insurance
in connection with the Business. Seller has heretofore delivered to Purchaser a
claims report for such period in respect of the Business, which report is
annexed as part of Schedule 2.15. Such policies are in full force and effect,
and Seller is not delinquent in any material respect with respect to any premium
payments thereon. Claims thereunder are payable on an "occurrence basis" such
that a claim of a type covered by such policies that arises after the Effective
Date for an event which occurred prior to the Effective Date would be covered by
Seller's policy. Schedule 2.15 reflects all insurance, performance bonds and
letters of credit which are required by law or any agreement relating to the
Business to be maintained or entered into by Seller, all of which are in full
force and effect.
SECTION 2.16 Labor Matters. Except as set forth in Schedule 2.16: (i)
there is, and during the three years prior to the Effective Date there has been,
no labor strike, work stoppage or lockout pending, or, to the knowledge of
Seller, threatened against Seller and related to the Business; (ii) to Seller's
knowledge there is no union organizational campaign in progress with respect to
the employees of Seller who work in the Business ("Employees") and no question
concerning representation exists respecting such Employees; (iii) there are no
pending or, to the knowledge of Seller, threatened unfair labor practice charges
or complaints, arbitrations or union grievances against Seller and related to
the Business; (iv) there are no pending, or to the knowledge of Seller,
threatened, charges against Seller or any current or former Employee relating to
the Business before the Equal Employment Opportunity Commission or any state or
local agency responsible for the prevention of unlawful employment practices;
(v) there are no material written personnel policies, rules or procedures
applicable to Employees (other than those with respect to which complete and
correct copies have heretofore been delivered to Seller); (vi) Seller has no
collective bargaining contract; (vii) Seller has not received notice of the
intent of any governmental entity responsible for the enforcement of labor or
employment laws to conduct an investigation with respect to or relating to the
Business and no such investigation is in progress; (viii) there are no
complaints, lawsuits or other proceedings pending or, to the knowledge of
Seller, threatened in any forum by or on behalf of any present or former
Employee, any applicant for employment in the Business or classes of the
foregoing, alleging breach of any express or implied contract of employment, any
law governing employment or the termination thereof or other discriminatory,
wrongful or tortious conduct in connection with the employment relationship;
(ix) prior to the Effective Date, Seller has not effectuated (A) a "plant
closing" (as defined in the Worker Adjustment Retraining Notification Act of
1988 (the "WARN Act")) affecting the site of employment of the Business or one
or more facilities or operating units within any site of employment or facility
of the Business, or (B) a "mass layoff" (as defined in the WARN Act) affecting
the site of employment or facility of the Business; (x) Seller has not been
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affected by any transaction or engaged in layoffs or employment terminations in
respect of the Business sufficient in number to trigger application of any state
or local law comparable to the WARN Act; and (xi) Seller has complied with all
laws relating to employment or labor, including, without limitation, ERISA, the
WARN Act, the American with Disabilities Act, the Family Medical Leave Act and
federal, state and local laws relating to wages, hours, collective bargaining,
unemployment insurance, workers' compensation, equal employment opportunity and
payment and withholding of Taxes, except for instances of noncompliance that,
individually or in the aggregate, would not have a Material Adverse Effect.
SECTION 2.17 Customers and Suppliers. To Seller's knowledge, except as
set forth on Schedule 2.17, there have been no material adverse changes in the
relationships between Seller and the customers and suppliers of the Business
since December 31, 1997. Except as and to the extent set forth on Schedule 2.17,
Seller is not aware of any significant supplier or customer of the Business has
given Seller notice that it intends to cease doing business with Seller. Except
as and to the extent set forth on Schedule 2.17, to the knowledge of Seller,
there are no facts or circumstances (including, without limitation, the
transactions contemplated by this Agreement) that could reasonably be expected
to have a Material Adverse Effect on Seller's relationships with the customers
and suppliers of the Business. There is set forth in Schedule 2.17 a list of the
twenty largest customers and suppliers of Seller for each of the last three
fiscal years of Seller.
SECTION 2.18 Disclosure. Seller has not knowingly failed to disclose to
Purchaser any facts material to the Business, its results of operations, assets
and liabilities or financial condition.
SECTION 2.19 Taxes.
(a) For purposes of this Agreement: (i) "Tax" or "Taxes" means
all Federal, state, local and foreign taxes, charges, fees, duties, levies,
imposts, customs or other assessments, including without limitation all net
income, gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, profit share, license, lease, service, service use, value
added, withholding, payroll, employment, excise, estimated, severance, stamp,
occupation, premium, property, windfall profits, or other taxes, fees,
assessments, customs, duties, levies, imposts, or charges of any kind
whatsoever, together with any interest, penalties, additions to tax, fines, or
other additional amounts imposed thereon or with respect thereto and interest in
respect of such penalties, addition to tax, fines or additional amounts; and
(ii) "pre-Closing Tax Period" means all taxable periods ending on or before the
Effective Date and the portion ending on the Effective Date of any taxable
period that includes (but does not end on) such day.
(b) Except as set forth in Schedule 2.19, (i) Seller, any
affiliated group, within the meaning of Section 1504 of the Code, of which
Seller is or has been a member, and any combined unitary or consolidated group
of which Seller is or has been a member has filed or will file in a timely
manner (within any applicable extension periods) all Tax returns, reports and
forms required to be filed by the Code or by applicable state, local or
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foreign Tax laws, rules or regulations in connection with the Business with
respect to all pre-Closing Tax Periods (a "Tax Return"); (ii) all such Tax
Returns are or will be true, correct and complete in all material respects;
(iii) all Taxes shown to be due on such Tax Returns have been timely paid in
full or will be timely paid in full by the due date thereof; (iv) no tax Liens
have been filed with respect to the Assets, and no claims have been asserted
against Seller in writing with respect to any such Taxes; and (v) Seller has
withheld and paid or made provisions on its balance sheet for all Taxes required
to have been withheld and paid in connection with amounts paid or owing to any
employee, recipient contractor, creditor, stockholder or other party arising out
of the operation of the Business.
(c) None of the Assets is property that Seller is subject to a
safe harbor lease pursuant to the provisions of Section 168(f)(8) of the Code
(as in effect prior to amendment by the Tax Return Act of 1986) or is
"tax-exempt use property" within the meaning of Section 168(h) of the Code.
(d) Seller is not a "Foreign Person" within the meaning of
Section 1445 of the Code.
SECTION 2.20 Environmental Matters. For purposes of this Agreement, the
following definitions shall apply:
"Environmental Laws" shall mean any statute, ordinance, rule,
regulation or order of any federal, state, or local government or governmental
agency relating to the protection of human health or the environment, including,
without limitation, CERCLA and RCRA.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act, as amended.
"RCRA" shall mean the Resource Conservation and Recovery Act,
as amended.
"Hazardous Substances" shall mean and include "hazardous
substances" as defined under CERCLA, "extremely hazardous substances" and "toxic
chemicals" as defined under the Emergency Planning and Community Right to Know
Act and "regulated substances" and "solid waste" as defined under RCRA and any
additional substance designated as hazardous under applicable state law.
Except as set forth on the Schedule 2.20:
(a) No governmental agency or other third party has made,
issued, filed in any court, or, to the knowledge of Seller threatened to make,
issue, or file, in writing, any notice of liability, notice of violation,
demand, claim, request for information, lien, citation, summons, complaint,
order, or settlement agreement with respect to:
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(i) Any alleged violation by Seller of any
Environmental Laws, with respect to the Business, the Property and Seller's
operations thereon, or
(ii) any alleged current failure by Seller to have or
comply with any Permit required under any Environmental Law (an "Environmental
Permit") for Seller's operation of the Business on the Property or its
management of Hazardous Substances, or
(iii) the use, storage, generation, emission,
discharge, transportation, treatment, recycling, or disposal of Hazardous
Substances by Seller or the release or threat of release of Hazardous Substances
by Seller in connection with Seller's operation of the Business and/or its
ownership of the Property.
(b) The Property is not now and has not been operated by
Seller as a treatment, storage, or disposal facility for hazardous waste (as
that term is defined under RCRA or any similar state statute), and Seller has
not received or ever applied for a Part A or Part B RCRA permit for the
operation on the Property of a treatment, storage or disposal facility for
hazardous waste (as defined in RCRA or any similar state statute).
(c) The Property is not listed, or to Seller's knowledge,
proposed for listing on the National Priorities List or any similar state
listing.
(d) Schedule 2.20(d) contains a complete list of disposal
facilities used by Seller for the disposal of hazardous or solid waste as
defined under applicable Environmental Laws as of the Effective Date.
(e) Except as listed on Schedule 2.20(e), no PCBs or active or
inactive underground storage tanks are presently located at the Property.
(f) Except as listed on Schedule 2.20(f), Seller holds all
Permits required for the operation of the Business in compliance with all
Environmental Laws, except when the failure to so hold would not have a Material
Adverse Effect.
(g) Seller is not in violation of any Environmental Law,
except for instances of noncompliance where enforcement would not have a
Material Adverse Effect.
(h) Seller hereby acknowledges receipt of a Phase I study
prepared by AccuTech Environmental Services, Inc. and dated March 5, 1998
conducted by Purchaser at the Property.
SECTION 2.21 Accounts Receivable. All of Seller's accounts receivable
reflected in the financial statements described in Section 2.4 and all accounts
receivable that have arisen since the dates of such financial statements (except
those which have been collected) and as set forth in Schedule 2.21(a) are valid
and enforceable claims and constitute bona fide accounts receivable arising in
the ordinary course of business in conformity with applicable purchase orders,
agreements and specifications. Such accounts receivable are subject to no
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valid defense, offsets, returns, allowances or credits of any kind other than in
the ordinary course of business and are fully collectible in accordance with
their terms except to the extent of the reserves reflected in such financial
statements and in Section 1.4 of this Agreement. There is annexed hereto as
Schedule 2.21(a) a description of aged accounts receivable as at the Effective
Date and in Schedule 2.21(b) a description of all Xxxx and Hold items as at the
Effective Date. Purchaser shall not make any claim against Sellers for any
alleged violation of this Section with respect to an account receivable until
such account receivable has not been paid within 120 days. In computing any
amount due to Purchaser hereunder, (i) Sellers shall be entitled to the benefit
of any reserve for collection or loss on the balance sheet on the Effective Date
and (ii) such claim is subject to the "basket" and "cap" on liability set forth
in Sections 7.1 and 7.5.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
SECTION 3.1 Organization of Purchaser. Purchaser is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, and has all requisite power and authority to execute and deliver
this Agreement and the Ancillary Agreements and to consummate the transactions
contemplated hereby and thereby.
SECTION 3.2 Execution and Binding Effect. The execution and delivery of
this Agreement by Purchaser and the execution and delivery of any Ancillary
Agreements by Purchaser, and the performance by Purchaser of this Agreement and
any Ancillary Agreements are within the powers of Purchaser and have been duly
authorized by all necessary corporate or comparable action on the part of
Purchaser. Assuming the due and valid authorization, execution and delivery
thereof by Seller, this Agreement constitutes, and when executed and delivered
the Ancillary Agreements will constitute, valid and binding agreements of
Purchaser, enforceable against it in accordance with its terms except as such
enforceability may be limited by bankruptcy, insolvency or similar laws and by
equitable principles.
SECTION 3.3 No Violation; Consents and Approvals. Except as provided in
Schedule 3.3, neither the execution, delivery or performance by Purchase of this
Agreement or the Ancillary Agreements nor the consummation by Purchaser of the
transactions contemplated hereby or thereby and compliance by it with the terms
hereof and thereof will (i) conflict with, violate or result in any breach of
the terms, conditions or provisions of Purchaser's organizational documents,
(ii) conflict with, violate or result in any breach of, or constitute a default
or loss of any right under or an event which, with the lapse of time or notice
or both, would result in a default or loss of any right thereunder (or give rise
to any right of termination, cancellation or acceleration) under, any of the
terms, conditions or provisions of any agreement, lease, instrument, obligation,
understanding or arrangement to which Purchaser is a party or by which Purchaser
may be bound or subject
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except for such defaults, losses (or rights of termination, cancellation or
acceleration) as to which requisite waivers or consents have been obtained,
(iii) assuming all required consents are obtained prior to Closing, violate any
statute, ordinance or law or any rule, regulation, order, writ, injunction or
decree of any court or of any public, governmental or regulatory body, agency or
authority applicable to Purchaser or by which any of its properties or assets
may be bound or subject, or (iv) require any filing (other than as may be
required to transfer any Permit), declaration or registration with, or permit,
consent or approval of, or the giving of any notice to, any public, governmental
or regulatory body, agency or authority; excluding from the foregoing clauses
(ii), (iii) and (iv) such conflicts, violations, breaches and defaults which,
and filings, declarations, registrations, permits, consents, approvals and
notices the absence of which, either singly or in the aggregate, would not
affect the consummation of the transactions contemplated hereby.
SECTION 3.4 Litigation. There are no claims, actions, suits,
proceedings or investigations pending or, to Purchaser's knowledge, threatened
by or against Purchaser with respect to, or which may have an effect on, the
transactions contemplated hereby, at law or in equity or before or by any
Federal, state, municipal, foreign or other governmental department, commission,
board, agency, instrumentality or authority.
SECTION 3.5 Brokers and Finders. Neither Purchaser nor any of its
officers, directors or employees has employed any broker or finder or incurred
any liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated by this Agreement.
ARTICLE IV
COVENANTS
SECTION 4.1 Efforts; Further Assurances; Permits.
(a) Each of the parties shall use its best efforts, and the
parties shall cooperate with each other (including without limitation by
exchange of information), to obtain all waivers, permits, consents and approvals
and to effect all registrations, filings and notices with governmental or public
bodies or authorities that are in the reasonable opinion of Seller or Purchaser
necessary or reasonably desirable in connection with the transactions
contemplated by this Agreement. Each party will pay all fees due with respect to
any government filings required to be made by it.
(b) In the case at any time after the Closing Date any further
action is reasonably deemed necessary or desirable to carry out the purposes of
this Agreement, including action to fully vest in Purchaser its rights in the
Assets, to perfect the assumption by Purchaser of the Assumed Liabilities or to
perfect the retention by Seller of the Excluded Assets and the Excluded
Liabilities, the proper officers and/or directors of Seller and Purchaser shall
on the written request of either of them take all such necessary desirable
action.
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(c) Seller shall, at its own expense (but without the payment
of money or providing any guarantees), promptly apply for or otherwise seek and
use commercially reasonable efforts to obtain all authorizations, consents,
waivers and approvals as may be required in connection with the assignment of
the Assumed Contracts to Purchaser. Upon Purchaser's request, and at Purchaser's
expense, Seller will also use commercially reasonable efforts (not including the
payment of money, incurring any out-of-pocket costs or providing any guarantees)
to cooperate with Purchaser in its obtaining any permits, licenses or other
authorizations after the Closing Date necessary for Purchaser's operation of the
Business after the Closing Date in a manner consistent with past practice.
(d) In the event that any time, any order, decree or
injunction shall be entered which prevents or delays the consummation of any of
the transactions contemplated by this Agreement, each party shall promptly use
its best efforts to cause such order, decree or injunction to be reversed,
vacated or modified in order to permit such transactions to proceed as
expeditiously as possible.
SECTION 4.2 Employee Matters.
(a) On or prior to the Closing Date, Purchaser shall offer
employment to substantially all of the employees of Seller designated on
Schedule 4.2 ("Employees") on the Effective Date, at salary, hourly rates and
rates of commission, bonuses and other forms of benefits and incentive
compensation generally comparable to those provided to Purchaser's current
employees in similar positions and, to the extent practicable, for the similar
job position as currently provided by Purchaser to its current employees;
provided however that any offer of employment shall be contingent upon the
Closing actually occurring. All decisions regarding the hiring or employment by
Purchaser of any person shall be Purchaser's sole decision. Seller shall not
provide input, advice or counsel on any such decision. Purchaser acknowledges
that it is not relying on any information of Seller in making employment
decisions. As at the Effective Date, all employees of Seller will be terminated
by Seller. Schedule 4.2 contains a description of the amount of each Employee's
compensation and title. Prior to the Closing, Seller will not terminate except
for cause the employment of or transfer any Employee to another business of
Seller, and Seller will not take any action to hinder Purchaser's efforts to
hire or retain any Employee. Effective as of the Closing Date, all such
designated Employees who accept Purchaser's offer of employment and are actively
at work will become employees of Purchaser ("Transferred Employees"). Any
employee who receives an offer of employment in accordance with the provisions
of this Section 4.2 which such Employee does not affirmatively accept and, who
does not report to work on the workday immediately following the Closing Date
shall be deemed to have rejected Purchaser's offer of employment.
Notwithstanding the foregoing, any such Employee who provides notification to
his or her supervisor of a reasonably acceptable reason for such absence (which
may include without limitation, previously scheduled and approved vacation, jury
duty, funeral or bereavement leave or illness) within ten (10) business days
after the Closing Date and who is available to report to work upon the earlier
of the conclusion of the pre-approved leave or ten (10) business days after the
Closing Date, shall be permitted to accept Purchaser's offer of employment. With
respect to each Transferred Employee, Purchaser
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shall use its best efforts to cause to be waived pre-existing condition
requirements, evidence of insurability provisions, waiting period requirements
or any similar provisions under any employee benefit plan or compensation
arrangement maintained or sponsored by or contributed to by Purchaser for such
individuals after the Closing Date; provided that any pre-existing condition
requirements, evidence of insurability provisions, waiting period requirements
or any similar provisions under any employee benefit plan or compensation
arrangement maintained or sponsored by or contributed to by the Purchaser will
apply with respect to any Transferred Employee (or covered dependent of a
Transferred Employee) who, as of the Closing Date is subject to a similar
limitation under Seller's plan. All Transferred Employees, their spouses and
dependents will be covered after the Effective Date by the Purchaser's Group
Health, Dental and Drug Plans, and Purchaser will not pay or provide
reimbursement for health care continuation coverage by Seller under COBRA for
any Transferred Employee, their spouse or dependents.
(b) With respect to Purchaser's pension, savings, vacation and
health and welfare and disability benefits, executive compensation, incentive
and bonus arrangements (except with respect to plans not listed on Schedule
4.2(b) which are adopted after the Closing Date and which do not give credit for
past services), Purchaser shall recognize for purposes of participation,
eligibility, vesting and benefit accruals (including any early retirement
benefits available under Purchaser's pension plans (within the meaning of
Section 3(2) of ERISA)) under employee benefit plans and compensation
arrangements of Purchaser the service of any Transferred Employee with Seller,
or its predecessors, prior to the Closing Date, subject to appropriate offsets
to avoid duplication of benefits. Purchaser may, in its sole discretion, adjust
from time to time the wages paid to the Transferred Employees after the Closing
Date in order to compensate them for any differential that may exist in the
benefit plans of Seller as compared to those of Purchaser which will become
applicable to such Transferred Employees after the Closing Date until such time
as the benefits granted to the Transferred Employees after the Closing Date are
reasonably equal to those benefits being granted to the employees of Purchaser
at and after the Closing Date.
(c) As of the Closing Date, Purchaser will not assume any
obligations of Seller to Transferred Employees for any vacation entitlement,
vacation pay entitlement or severance pay arising or accruing prior to August 1,
1997. Purchaser shall provide vacation benefits to Transferred Employees in
accordance with Section 4.2(b).
(d) Except as specifically set forth in this Agreement, no
assets held in trust for any benefit plan of Seller shall be transferred to
Purchaser or to any plan adopted or maintained by Purchaser.
(e) No provision of this Agreement shall create any third
party beneficiary or other rights in any employee or former employee (including
any beneficiary or dependent thereof) of Seller in respect of employment with
Purchaser or in respect of any benefits that may be provided, directly or
indirectly, under any employee benefit plan, contract, policy or arrangement
which may be established by Purchaser. No provision of
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this Agreement shall constitute a limitation on rights to amend, modify or
terminate after the Closing Date any such plans, contracts, policies or
arrangements of Purchaser.
SECTION 4.3 Transfer Taxes; Expenses. All excise, sales, value added,
use, registration, stamp, transfer and similar taxes, levies, charges and fees,
including, without limitation, any real estate transfer taxes relating to the
Property, any fees required to record the Deed, any personal property transfer
taxes relating to the Assets and any fees required for the transfer and
recording of the Intellectual Property, incurred in connection with this
Agreement and the transactions contemplated hereby shall be borne by Sellers.
Purchaser will cooperate with Sellers in providing any appropriate resale
exemption certificates and other appropriate tax documentation.
SECTION 4.4 Access to Records.
(a) After the Closing and from time to time, Purchaser shall
permit Sellers and their authorized officers, employees, attorneys, accountants
and other representatives to have access during regular business hours and upon
reasonable notice, to inspect and copy agreements, records, books and other
documents that are included in the Assets and identified with reasonable
particularity, wherever located, for the purposes of (i) preparing tax returns
and financial statements and responding to tax audits, and (ii) prosecuting or
defending any claim, litigation, proceeding or investigation which arises out of
or relates to the Business or the Assets. If, after the Closing, Purchaser
determines to destroy any agreements, records, books or documents referred to
above, it will give to Sellers at least three months' prior written notice
thereof, and Sellers shall have the right during such three-month period upon
reasonable notice and during regular business hours to take possession of any
such agreements, records, books or documents.
(b) After the Closing and from time to time, Purchaser shall
permit Sellers and their authorized officers, employees, attorneys, accountants
and other agents to have access upon reasonable notice to the Property, and
shall make available to Sellers employees or other representatives of Purchaser
(including, where appropriate, Transferred Employees specified by Seller), at
the sole cost and expense of Sellers, for purposes of (i) permitting Sellers to
perform their obligations hereunder and (ii) prosecuting or defending any claim,
litigation, proceeding or investigation which arises out of or relates to the
Business, the Products or the Assets.
SECTION 4.5 Assets After Closing. In the event that a payment is
received by Sellers from any Person and such payment specifically indicates an
intent (or is accompanied by or is the subject of any other unsolicited,
unambiguous indication of intent) that the payment is being made with respect to
Products sold, or services performed before or after Closing, then Sellers shall
forward such payment to Purchaser as promptly as practicable after receipt.
Effective upon the Closing Date, Purchaser shall have the right to receive and
open all mail, packages and other communications which relate to the Business
addressed to Sellers; and Sellers agrees to promptly deliver to Purchaser any
such mail, packages or other communications received directly or indirectly by
Sellers or any of its affiliates and which relate to the Business but not to
Sellers. Purchaser shall promptly
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deliver to Sellers all mail, packages and other communications received by it
which relate to Sellers but not to the Business.
SECTION 4.6 Intellectual Property Cooperation. Sellers covenants and
agrees that at any time from and after the Closing Date upon reasonable and
specific written request of Purchaser, Sellers will use commercially reasonable
efforts to communicate to Purchaser all information known to it constituting a
part of the Intellectual Property, and will execute and deliver any papers, make
all rightful oaths, testify in any legal proceedings and perform all other
lawful acts reasonably deemed necessary or desirable by Purchaser to convey or
perfect title to the Intellectual Property and to enforce or defend Purchaser's
rights in and to the Intellectual Property or assist Purchaser in obtaining or
enforcing Purchaser's rights in and to the Intellectual Property. Purchase shall
reimburse Sellers for all reasonable and documented out-of-pocket expenses
incurred in providing cooperation pursuant to this Section 4.6.
ARTICLE V
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligations of Purchaser under this Agreement are subject to the
fulfillment, prior to or on the Closing Date, of the following conditions, any
of which may be waived in writing in whole or in part by Purchaser as provided
herein, except as otherwise provided by law:
SECTION 5.1 Representations and Warranties of Sellers to be True;
Performance by Sellers; Certificates.
(a) The representations and warranties of Sellers contained in
this Agreement shall be true and correct in all material respects.
(b) Sellers shall have performed and complied in all material
respects with all of its agreements, covenants and conditions required by this
Agreement to be performed or complied with by it prior to or at the Closing
Date.
(c) Seller shall have delivered to Purchaser the Seller
Certificate dated as of the Closing Date and certifying the fulfillment of the
conditions set forth in this Section 5.1.
SECTION 5.2 Agreements. Seller shall have executed and delivered to
Purchaser the Xxxx of Sale, the Assignment and Assumption Agreement, the
Intellectual Property Assignments and the Deed.
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SECTION 5.3 Survey and Title Insurance; Defects.
(a) Seller shall have procured (i) title insurance, subject
only to Permitted Liens and such exceptions as are customary on the ALTA
standard title insurance form or which are specifically agreed to by Purchaser,
with respect to the Property from a title insurance company reasonably
satisfactory to Purchaser (not in excess of the portion of the Purchase Price
allocated to the Property pursuant to Section 1.6) and (ii) a recent survey, by
a licensed surveyor, of the Property, showing the boundaries, monuments,
easements and rights-of-way of record, improvements and encroachments, if any.
Purchaser and Seller shall share equally any costs incurred hereunder.
(b) If Seller is unable to convey title to the Property as
required by this Agreement, Purchaser may elect to (i) accept such title as
Seller is able to convey, (ii) if Seller so consents, adjourn the Closing for a
period reasonably necessary for Seller to cure or remove any conditions of title
subject to which Purchaser is not obligated to take the Property or (iii)
terminate this Agreement.
SECTION 5.4 Consents. All notices to, and declarations, filings and
registrations with, and consents, approvals and waivers from, and waiting
periods required by, governmental and regulatory agencies required in order for
Seller to consummate the transactions contemplated hereby shall have been made
or obtained or shall have expired, as the case may be.
SECTION 5.5 No Proceeding or Litigation.
(a) No preliminary or permanent injunction or other order
shall have been issued by any court of competent jurisdiction, whether federal,
state or foreign, or by any governmental or regulatory body, whether federal,
state or foreign, nor shall any statute, rule, regulation or executive order be
promulgated or enacted by any governmental authority, whether federal, state or
foreign, which prevents the consummation of the transactions contemplated in
this Agreement.
(b) No suit, action, claim, proceeding or investigation before
any court, arbitrator or administrative, governmental or regulatory body,
whether federal, state or foreign, shall have been commenced by any Person
(other than the parties hereto and their Affiliates) and be pending against
Seller, Purchaser or any of their respective Affiliates, associates, officers or
directors seeking to prevent the sale of the Assets or the Business or asserting
that the sale of the Assets or the Business would be illegal.
(c) The Purchaser will provide the Seller with reasonable
assistance and make available such books and records as may be reasonably
required in connection with any claims or litigation relating to the Business
and arising prior to the Effective Date.
SECTION 5.6 Opinion of Counsel for Seller. Purchaser shall have
received from Butzel Long, Esqs., counsel to Seller, a written opinion, dated as
of the Closing Date, substantially in the form attached hereto as Exhibit F.
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SECTION 5.7 Consent of Directors of Purchaser. Purchaser shall have
received approval of the transactions contemplated by this Agreement and the
authority to execute and deliver this Agreement by the Directors of Purchaser.
ARTICLE VI
CONDITIONS TO SELLERS' OBLIGATIONS
The obligations of Sellers under this Agreement are subject to the
fulfillment, prior to or on the Closing Date, of each of the following
conditions, any of which may be waived in whole or in part by Seller as provided
herein, except as otherwise provided by law:
SECTION 6.1 Representations and Warranties of Purchaser to be True;
Performance by Purchaser; Certificate.
(a) The representations and warranties of Purchaser contained
in this Agreement shall be true and correct in all material respects.
(b) Purchaser shall have performed and complied in all
material respects with all of its agreements, covenants and conditions required
by this Agreement to be performed or complied with by it prior to or at the
Closing Date.
(c) Purchaser shall have delivered to Sellers the Purchaser
Certificate dated as of the Closing Date and certifying the fulfillment of the
conditions set forth in this Section 6.1.
SECTION 6.2 Agreements. Purchaser shall have executed and delivered to
Sellers the Intellectual Property Assignments and the Assignment and Assumption
Agreement.
SECTION 6.3 Consents. All notices to, and declarations, filings and
registrations with, and consents, approvals and waivers from, and waiting
periods required by, governmental and regulatory agencies required in order for
Purchaser to consummate the transactions contemplated hereby shall have been
made or obtained or shall have expired, as the case may be.
SECTION 6.4 No Proceeding or Litigation.
(a) No preliminary or permanent injunction or other order
shall have been issued by any court of competent jurisdiction, whether federal,
state or foreign, or by any governmental or regulatory body, whether federal,
state or foreign, nor shall any statute, rule, regulation or executive order be
promulgated or enacted by any governmental authority, whether federal, state or
foreign, which prevents the consummation of the transactions contemplated in
this Agreement.
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(b) No suit, action, claim, proceeding or investigation before
any court, arbitrator or administrative, governmental or regulatory body,
whether federal, state or foreign, shall have been commenced by any Person
(other than the parties hereto and their Affiliates) and be pending against
Seller or Purchaser or any of their respective Affiliates, associates, officers
or directors seeking to prevent the sale of the Assets or the Business or
asserting that the sale of the Assets or the Business would be illegal.
SECTION 6.5 Opinion of Counsel for Purchaser. Seller shall have
received from Xxxx Marks & Xxxxx, counsel to Seller, a written opinion, dated as
of the Closing Date, substantially in the form attached hereto as Exhibit G.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 Survival of Representations and Warranties. Except
hereinafter provided the representations and warranties of Sellers in Article II
and of Purchaser in Article III shall survive the Closing until 15 months
following the Closing Date and thereafter no claim (and no action or proceeding
arising out of any such claim) may be brought in respect of any
misrepresentation or breach of warranty; provided, however, that (i)
representations and warranties relating to Taxes shall survive until the running
of the statute of limitations with respect to such matters and (ii)
representations and warranties relating to title to the Property shall not
terminate. The representations and warranties under Section 2.20 of this
Agreement shall survive the Closing for a period of three (3) years following
the Closing Date. If written notice of a claim has been given prior to the
expiration of the applicable representations and warranties by a party in whose
favor such representations and warranties have been made to the party that made
such representations and warranties, then the relevant representations and
warranties shall survive as to such claim until the claim has been finally
resolved.
SECTION 7.2 Indemnification by Sellers. Except as otherwise limited by
this Article VII, Purchaser and its officers, directors, employees, agents,
successors and assigns shall be indemnified and held harmless by Sellers,
jointly and severally, from any and all liabilities, losses, damages, claims,
costs and expenses, interest, awards, judgments and penalties (including,
without limitation, reasonable attorneys' fees and expenses) suffered or
incurred by it (hereinafter "Purchaser Losses"), arising out of or resulting
from:
(a) the breach of any representation or warranty by Sellers
contained herein or in any document delivered hereunder at the Closing; or
(b) the breach of any covenant or agreement by Sellers
contained herein or in any document delivered hereunder at the Closing; or
(c) Excluded Liabilities.
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SECTION 7.3 Indemnification by Purchaser. Except as otherwise limited
by this Article VII, Sellers and their officers, directors, employees, agents,
successors and assigns shall be indemnified and held harmless by Purchaser from
any and all liabilities, losses, damages, claims, costs and expenses, interest,
awards, judgments and penalties (including, without limitation, reasonable
attorneys' fees and expenses) suffered or incurred by it (hereinafter "Sellers
Losses"), arising out of or resulting from:
(a) the breach of any representation or warranty by Purchaser
contained herein or in any document delivered hereunder at the Closing; or
(b) the breach of any covenant or agreement by Purchaser
contained herein or in any document delivered hereunder at the Closing; or
(c) the Assumed Liabilities; or
(d) Purchaser's operation of the Business after the Closing
Date.
SECTION 7.4 General Indemnification Provisions.
(a) For the purposes of this Section 7.4, the term
"Indemnitee" shall refer to the Person or Persons indemnified, or entitled, or
claiming to be entitled to be indemnified, pursuant to the provisions of Section
7.2 or 7.3, as the case may be; the term "Indemnitor" shall refer to the Person
having the obligation to indemnify pursuant to such provisions; and "Losses"
shall refer to the "Seller Losses" or the "Purchaser Losses", as the case may
be.
(b) An Indemnitee shall promptly give the Indemnitor notice of
any matter which an Indemnitee has determined has given or could give rise to a
right of indemnification under this Agreement, stating the amount of the Losses,
if known, the method of computation thereof and the basis for the claim, all
with reasonable particularity; provided that, subject to the provisions of
Section 7.1 hereof, the failure to provide such notice shall not affect the
obligations of the Indemnitor unless it is actually prejudiced thereby. The
obligations and liabilities of an Indemnitor under this Article VII with respect
to Losses arising from claims of any third party that are subject to the
indemnification provided for in this Article VII ("Third Party Claims") shall be
governed by and contingent upon the following additional terms and conditions:
If an Indemnitee shall receive notice of any Third Party Claim, the Indemnitee
shall give the Indemnitor prompt notice of such Third Party Claim and shall
permit the Indemnitor, at its option, to assume and control the defense and/or
management of such Third Party Claim at its expense and through counsel of its
choice if it gives prompt notice of intention to do so to the Indemnitee. In the
event the Indemnitor exercises its right to undertake the defense against or
management of any such Third Party Claim as provided above, the Indemnitee shall
cooperate with the Indemnitor in such defense or management and make available
to the Indemnitor all witnesses, pertinent records, materials and information in
its possession or under its control relating thereto as is reasonably required
by the Indemnitor. Similarly, in the event the Indemnitor does not exercise its
right to undertake the defense or
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management of any Third Party Claim and the Indemnitee is, directly or
indirectly, conducting the defense against or management of any such Third Party
Claim, the Indemnitor shall cooperate with the Indemnitee in such defense or
management and make available to it all such witnesses, pertinent records,
materials and information in its possession or under its control relating
thereto as is reasonably required by the Indemnitee. Except for the settlement
of a Third Party Claim which involves the payment of money only and for which
the Indemnitee is totally indemnified by the Indemnitor, no Third Party Claim
may be settled by the Indemnitor without the prior written consent of the
Indemnitee. Similarly, no Third Party Claim may be settled by the Indemnitee
without the prior written consent of the Indemnitor.
SECTION 7.5 Limits on Indemnification. Except as hereinafter provided
no claim may be made against an Indemnitor for indemnification pursuant to
Section 7.2 or 7.3, as the case may be, unless and only to the extent the
aggregate of all Losses of the Indemnitee with respect to such Sections shall
exceed $25,000. In no event shall the Indemnitor's liability under Section 7.2
or 7.3, as the case may be, exceed Three Hundred Fifty Thousand Dollars
($350,000). There is no minimum with respect to any claim pursuant to Section
7.2(c) of this Agreement or for violation of Section 2.20.
SECTION 7.6 Special Provisions Regarding Environmental Claims.
Notwithstanding any other provision hereunder, in the event Purchaser shall
allege a violation of any representation contained in Section 2.20, it shall
take no remedial action until it has offered Seller the opportunity to
investigate and, if necessary, correct or remediate the alleged condition.
Seller, at its expense, may retain such experts, attorneys and consultants as it
deems appropriate. In the event Seller elects to control the remediation, any
remediation shall be done in a manner determined by Seller and to standards
approved by Seller; provided (i) such remediation shall cause the affected
property to comply with applicable Environmental Laws and (ii) Seller shall
cooperate with Purchaser to limit or minimize interference with Purchaser's
operations or use of the facility. In no event shall Seller's costs or
obligation arising due to a breach of a representation contained in Section 2.20
exceed Three Million Dollars ($3,000,000).
ARTICLE VIII
AMENDMENT AND WAIVER
SECTION 8.1 Amendment. This Agreement may not be amended except by an
instrument in writing signed by Purchaser and Sellers.
SECTION 8.2 Waiver. Any failure of either of the parties to comply with
any provision hereof may be waived by the party entitled to the benefit thereof
only by a written instrument signed by the party granting such waiver, but such
waiver or failure to insist upon strict compliance with such provision shall not
operate as a waiver of or estoppel with respect to, any subsequent or other
failure.
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ARTICLE IX
NON-COMPETITION
SECTION 9.1 Non-Competition. Subject to consummation of the
transactions contemplated hereby, Sellers will not, and will cause its
Affiliates not to, for a period of three (3) years from and after the Closing
Date, engage, without Purchaser's prior written consent, directly or indirectly,
whether for their own account or otherwise, in the Business as conducted on the
day prior to the Closing Date (a "Competing Business"); provided, however, that
Sellers or any of its Affiliates may own as an investment, directly or
indirectly, securities of any corporation or other entity engaged in a Competing
Business which are publicly traded if Sellers or any of their Affiliates do not,
directly or indirectly, beneficially own 5% or more of the outstanding shares of
such entity.
SECTION 9.2 Non Solicitation. For a period of twenty four months after
the Closing Date, Sellers shall not directly or indirectly solicit for
employment by Sellers or any other Affiliates any Transferred Employee except
(i) with the prior written consent of Purchaser, or (ii) in the event that the
Transferred Employee's employment has been terminated by Purchaser. In the event
Sellers solicit for employment a Transferred Employee prior to the expiration of
twenty four months following the Closing Date without meeting one of the
exceptions set forth in the preceding sentence, Sellers shall pay Purchaser as
liquidated damages, and not as a penalty, a sum equal to one year's current
salary of such Transferred Employee. This represents the reasonable endeavor by
the parties hereto to estimate a fair compensation for the foreseeable and
unforeseeable losses that might result from any such violation of this Section
9.2.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Expenses. All costs and expenses, including, without
limitation, fees and disbursements of counsel, financial advisors and
accountants, incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such costs and
expenses, whether or not the Closing shall have occurred. Purchaser shall be
entitled to be reimbursed by Seller for any expenses which are the obligation of
Seller but which have been paid by the Company.
SECTION 10.2 Consents. Whenever this Agreement requires a permit or
consent by or on behalf of either party hereto, such consent shall be given in
writing in a manner consistent with the requirements for a waiver of compliance
as set forth in Section 8.4.
SECTION 10.3 Assignment; Parties in Interest. This Agreement and all of
the provisions hereof shall be binding upon and inure to the benefit of, and be
enforceable by, the parties hereto and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights, interests or
obligations herein shall be assigned, except by
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operation of law, by any party hereto without the prior written consent of the
other party, which consent may be withheld by either party in its sole
discretion. Notwithstanding the foregoing, (i) Purchaser may assign this
Agreement and any and all of its rights hereunder, in whole or in part, to any
Affiliate of Purchaser and as provided for in Section 10.15 hereof without the
prior written consent of Seller, it being understood that no such assignment
shall in any way affect the obligations of Purchaser hereunder.
SECTION 10.4 Further Assurances. Each of the parties hereto agrees
that, from and after the Closing, upon the reasonable request of any other party
hereto and without further consideration, such party will execute and deliver to
such other party such documents and further assurances and will take such other
actions (without cost to such party) as such other party may reasonably request
in order to carry out the purpose and intention of this Agreement.
SECTION 10.5 Title and Risk of Loss. Legal title, equitable title and
risk of loss with respect to the Assets and rights to be transferred hereunder
shall not pass to Purchaser until the Assets or right are transferred at the
Closing hereunder.
SECTION 10.6 Entire Agreement. This Agreement and the Schedules and
Exhibits and other writings referred to herein or delivered pursuant hereto
which form a part hereof contain the entire understanding of the parties with
respect to the subject matter hereof. This Agreement supersedes all prior
agreements, except that the obligations of the parties under the Confidentiality
Agreement, dated December 22, 1997, between Devoto & Company, Inc. and Purchaser
shall survive and be binding on the parties.
SECTION 10.7 Headings. The Article and Section headings contained in
this Agreement are for reference purposes only and will not affect in any way
the meaning or interpretation of this Agreement.
SECTION 10.8 Notices. All notices, claims, certificates, requests,
demands and other communications hereunder will be in writing and will be deemed
to have been duly given if personally delivered or on the date of receipt or
refusal indicated on the return receipt if delivered or sent by facsimile or
mailed (registered or certified mail, postage prepaid, return receipt requested)
as follows:
(a) If to Sellers:
XxXxxxxxx Investments, Inc.
0000 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxx, CFO
Fax: (000) 000-0000
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with a copy to:
Butzel Long Esqs.
00000 Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
(b) If to Purchaser:
PVC Container Corporation
000 Xxxxxxxxxx Xxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Fax: (000) 000-0000
with a copy to:
Xxxx Marks & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
or to such other address as the Person to whom notice is to be given may have
previously furnished to the other in writing in the manner set forth above.
SECTION 10.9 Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York
without regard to its provisions concerning conflicts or choice of law. The
parties hereto irrevocably: (a) agree that any suit, action or other legal
proceeding arising out of this Agreement or the Confidentiality Agreement
referred to in Section 10.6 may be brought in the courts of the State of New
York, (b) consent to the jurisdiction of each court in any such suit, action or
proceeding, (c) waive any objection which they, or any of them, may have to the
laying of venue of any such suit, action or proceeding in any of such courts,
and (d) waives the right to a trial by jury in any such suit, action or other
legal proceeding.
SECTION 10.10 Bulk Sales Law. Purchaser and Seller waive compliance
with the provision of any applicable bulk sales laws.
SECTION 10.11 Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
when taken together shall constitute one and the same agreement.
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SECTION 10.12 Certain Definitions. As used herein, an "Affiliate" of
Purchaser or Seller shall mean any Person controlling, controlled by or under
common control with, Purchaser or Seller, as the case may be, and for this
purpose "control" of any entity shall mean the direct or indirect beneficial
ownership of fifty percent (50%) or more of the voting interest in such Person,
or such other relationship as, in fact, constitutes actual control thereof. As
used herein, the term "Person" shall mean an individual, corporation,
partnership, joint venture, association, trust, unincorporated organization or
other entity, including a governmental entity.
SECTION 10.13 Publicity. Purchaser and Seller shall cooperate in any
public disclosure of the transaction which is the subject hereof within thirty
(30) days of the Closing. During this period, each party will provide a copy of
any proposed public statement and make reasonable modifications to such proposed
statement suggested by the other party prior to issuing such statement.
SECTION 10.14 Closing Documents. Any documents executed and delivered
by the parties pursuant to Section 1.7 may be delivered by fax with an
originally signed document to be delivered by courier.
SECTION 10.15 Designated Buyer. It is understood and agreed between the
parties that Purchaser may cause one or more Affiliates, direct or indirect
Subsidiaries or other entities designated by it (the "Designated Buyer") to
carry out all or part of the transactions to be carried out by Purchaser under
this Agreement; provided, however, that Purchaser nevertheless shall remain
liable (as principal and not as guarantor) for all of its obligations and those
of any Designated Buyer hereunder.
SECTION 10.16 Definition of Knowledge. The term "knowledge" as used in
this Agreement with respect to: (a) any individual shall mean actual knowledge
and (b) any corporation shall mean the actual knowledge of the directors and
executive officers of such corporation.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of Sellers and Purchaser as of the date first
above written.
PVC CONTAINER CORPORATION
By:
---------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
XXXXXXXXX INVESTMENTS, INC.
By:
---------------------------------
Name:
Title:
CHARTER SUPPLY COMPANY, INC.
By:
---------------------------------
Name:
Title:
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