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ASSET PURCHASE AGREEMENT
BY AND AMONG
DYNAMOTION/ATI CORP.,
PMC ELECTRONICS, INC.
AND
SIEB & XXXXX ELEKTRONIK GMBH
SEPTEMBER 27, 1996
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TABLE OF CONTENTS
Page
----
1. Purchase of the Purchased Assets ................................ 1
1.1 Purchase of the Purchased Assets ....................... 1
1.2 The Excluded Assets .................................... 2
1.3 Purchased Assets Free of Liens ......................... 2
1.4 Assumption of Specified Liabilities .................... 2
1.5 Excluded Liabilities ................................... 3
1.6 Consideration for the Purchased Assets ................. 3
2. The Closing ................................................. 3
3. Representations and Warranties of Seller ........................ 3
3.1 Organization and Existence ............................. 3
3.2 Authorization of Seller ................................ 4
3.3 No Conflict or Violation ............................... 4
3.4 Consents and Approvals ................................. 4
3.5 No Actions or Proceedings Related to the Agreements .... 4
3.6 Violation of Applicable Law ............................ 4
3.7 Books and Records ...................................... 5
3.8 Financial Statements and Other Information ............. 5
3.9 No Material Adverse Change ............................. 5
3.10 Absence of Certain Changes or Events ................... 5
3.11 The Purchased Assets ................................... 6
3.12 Condition and Possession of the Purchased Assets ....... 6
3.13 Leases ................................................. 7
3.14 Assumed Contracts ...................................... 7
3.15 Customers and Suppliers ................................ 7
3.16 Insurance .............................................. 7
3.17 Permits ................................................ 7
3.18 Intellectual Property .................................. 8
3.19 Employees and Related Matters .......................... 8
3.20 Anticipated Receipts by Seller ......................... 8
3.21 Full Disclosure ........................................ 9
4. Representations and Warranties of Purchaser ..................... 9
4.1 Organization and Existence of Purchaser ................ 9
4.2 Authority of Purchaser ................................. 9
4.3 No Conflict or Violation ............................... 9
4.4 Consents and Approvals ................................. 9
4.5 No Actions or Proceedings Related to the Agreements .... 10
4.6 Capitalization of Purchaser ............................ 10
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5. Covenants of Seller .................................................... 10
5.1 Due Diligence Investigation ................................... 10
5.2 Conduct of Business ........................................... 10
5.3 Third Party Consents .......................................... 10
5.4 Payments of Remaining Account Receivable Owed to Sieb & Xxxxx . 10
6. Conditions Precedent to Purchaser's Performance ........................ 11
6.1 Accuracy of Representations and Warranties .................... 11
6.2 Performance of Seller ......................................... 11
6.3 Consents and Permits .......................................... 11
6.4 Absence of Litigation ......................................... 11
6.5 Absence of Material Adverse Changes ........................... 11
6.6 Updates to Schedule of Exceptions ............................. 11
6.7 Execution of Transfer Documents ............................... 11
6.8 Minimum Working Capital ....................................... 12
6.9 Execution of Lease ............................................ 12
6.10 Payment of Rents .............................................. 12
6.11 Payroll Obligations ........................................... 12
6.12 Additional Agreements ......................................... 12
7. Conditions Precedent to Seller's Performance ........................... 12
7.1 Accuracy of Purchaser's Representations and Warranties ........ 12
7.2 Performance of Purchaser ...................................... 13
7.3 Absence of Litigation ......................................... 13
7.4 Execution of Assumption Documents ............................. 13
7.5 Additional Agreements ......................................... 13
8. Indemnification ........................................................ 13
8.1 Indemnification by Seller ..................................... 13
8.2 Indemnification by Purchaser .................................. 14
8.3 Claims for Indemnity .......................................... 14
8.4 Insurance Proceeds ............................................ 14
8.5 Defense of Claimed Breaches ................................... 14
8.6 Limitations on Indemnification ................................ 14
8.7 Indemnification Exclusive ..................................... 15
9. Covenant Not to Compete ................................................ 15
9.1 Covenant Not to Compete ....................................... 15
9.2 Reasonableness of Restrictions ................................ 15
9.3 Injunctive Relief ............................................. 15
10. Miscellaneous Provisions ............................................... 16
10.1 Business Terms Going Forward .................................. 16
10.2 Purchaser to Act as Agent for Seller .......................... 16
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10.3 Termination Prior to Closing ......................... 16
10.4 Further Assurances ................................... 16
10.5 Bulk Sales Law ....................................... 16
10.6 No Third Party Beneficiaries ......................... 17
10.7 Confidentiality; Press Releases and Announcements .... 17
10.8 Taxes ............................................... 17
10.9 Survival of Representations and Warranties ........... 17
10.10 Expenses ........................................... 17
10.11 Entire Agreement ................................... 17
10.12 Governing Law and Choice of Forum .................. 17
10.13 Interpretation ..................................... 17
10.14 Waiver and Amendment ............................... 18
10.15 Assignment ......................................... 18
10.16 Notices ............................................ 18
10.17 Severability ....................................... 19
10.18 Counterparts ....................................... 19
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EXHIBITS
Exhibit A Form of Xxxx of Sale
Exhibit B Assumption Agreement
SCHEDULES
Schedule of Payables
Schedule of Assumed Contracts
Schedule of Other Assumed Liabilities
Schedule of Exceptions
Schedule of Tangible Property
Schedule of Benefit Plans
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ASSET PURCHASE AGREEMENT
------------------------
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into as of
September 27, 1996, by and among Dynamotion/ATI Corp., a New York corporation
("Seller"), PMC Electronics, Inc., a Delaware corporation ("Purchaser") and Sieb
& Xxxxx Elektronik GmbH, a German corporation ("Sieb & Xxxxx").
R E C I T A L S
---------------
A. Seller, through its PMC division (the "PMC Division"), the principal
executive offices of which are located at 0000 Xxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxx 00000, develops and sells computerized control systems for a
wide range of production machinery.
B. Purchaser was formed on September 25, 1996 as a wholly owned
subsidiary of Sieb & Xxxxx for the purpose of effecting the transactions
contemplated by this Agreement.
C. Purchaser desires to purchase all of the assets, and to assume
certain specified liabilities, of the PMC Division from Seller on the terms and
subject to the conditions of this Agreement, and Seller desires to sell all of
the assets, and assign certain specified liabilities, of the PMC Division to
Purchaser on the terms and subject to the conditions of this Agreement.
A G R E E M E N T
-----------------
In consideration of the foregoing recitals and the respective
covenants, agreements, representations and warranties contained herein, the
parties, intending to be legally bound, agree as follows:
1. PURCHASE OF THE PURCHASED ASSETS
1.1. PURCHASE OF THE PURCHASED ASSETS. Subject to the terms
and conditions of this Agreement, at the Closing (as such term is defined in
Section 2 below), Seller shall sell, transfer, assign and deliver to Purchaser,
and Purchaser shall purchase and acquire from Seller, all of Seller's right,
title and interest in and to all of the assets, rights and claims (other than
the Excluded Assets, as such term is defined in Section 1.2 below) used by,
useful in or allocated to the PMC Division (collectively, the "Purchased
Assets"), including without limitation, the following:
(i) all raw materials, parts, supplies, inventory,
work-in-process, finished goods and tooling;
(ii) all accounts receivable, notes receivable and other
receivables, all prepaid items, deposits and similar
assets;
(iii) all furniture, furnishings, fixtures, machinery,
vehicles, equipment and other items of tangible
property located at the offices or other facilities
of the PMC Division;
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(iv) all customer lists, supplier lists, catalogs, price
lists, brochures and related sales materials;
(v) all telephone and facsimile numbers, including "800"
numbers, all telephone directory listings and similar
listings pertaining to the PMC Division, and all post
office boxes, used in connection with the PMC
Division;
(vi) all PMC Intellectual Property (as such term is
defined in Section 3.18 below), including without
limitation, all rights to the names "PMC" and
"Production Machine Controls" and other names
utilizing "PMC" or "Production Machine Controls";
(vii) all of Seller's contract rights in and to open sales
orders and sales contracts;
(viii) all of Seller's rights under each of the Assumed
Contracts (as such term is defined in Section 1.4
below);
(ix) all Permits (as such term is defined in Section 3.17
below), to the extent transferable;
(x) all Books and Records (as such term is defined in
Section 3.7 below); and
(xi) the goodwill of the PMC Division.
1.2. THE EXCLUDED ASSETS. The foregoing notwithstanding, but
without waiving or limiting the minimum working capital condition set forth in
Section 6.8, the Purchased Assets shall not include cash on hand or in bank
accounts (the "Excluded Assets").
1.3. PURCHASED ASSETS FREE OF LIENS. Except as otherwise
specifically provided in this Agreement, all of the Purchased Assets shall be
transferred by Seller to Purchaser free and clear of any claims, liens, pledges,
options, charges, security interests, restrictions, encumbrances or other rights
of third parties, of any kind or nature ("Encumbrances").
1.4. ASSUMPTION OF SPECIFIED LIABILITIES. Purchaser shall, on
and as of the Closing Date, expressly assume and agree to pay, perform or
otherwise discharge as the same shall become due in accordance with their
respective terms, all of the following liabilities, obligations and commitments
of Seller, but only such liabilities, obligations and commitments (the "Assumed
Liabilities"):
(i) the accounts payable listed on the Schedule of
Payables attached hereto;
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(ii) Seller's liabilities, obligations and commitments
arising under the contracts listed on the Schedule of
Assumed Contracts attached hereto (the "Assumed
Contracts"); and
(iii) the liabilities and obligations listed on the
Schedule of Other Assumed Liabilities attached
hereto.
1.5. EXCLUDED LIABILITIES. Except for the Assumed Liabilities,
Purchaser shall not assume or be responsible for any liabilities, obligations or
commitments of Seller, whether arising before, on or after the Closing Date, and
all such liabilities, obligations and commitments (the "Excluded Liabilities")
shall remain the exclusive liabilities, obligations and commitments of Seller.
1.6. CONSIDERATION FOR THE PURCHASED ASSETS. Subject to the
terms and conditions hereof, at the Closing, as consideration for the sale,
transfer, assignment and delivery of the Purchased Assets to Purchaser,
Purchaser shall (i) assume the Assumed Liabilities, (ii) pay to Seller Three
Hundred Thousand Dollars ($300,000) by wire transfer to such account as Seller
may designate and (iii) deem the Assigned Account Receivable (as such term is
defined in Section 4.6 below) to be paid in full. The purchase price shall be
allocated among the Purchased Assets in the manner required by Section 1060 of
the Internal Revenue Code and the regulations thereunder.
2. THE CLOSING. Subject to the satisfaction of the conditions set forth
in Sections 6 and 7 hereof, the closing of the sale and purchase of the
Purchased Assets (the "Closing") shall take place at the Orange County office of
Xxxxxxx & XxXxxxxx on September 30, 1996 and shall be effective as of 12:01 a.m.
on October 1, 1996 (the "Closing Date"). At the Closing, Seller shall deliver to
Purchaser a Xxxx of Sale in substantially the form attached hereto as Exhibit A
and such other instruments of transfer as may be reasonably necessary to
transfer to Purchaser all of Seller's right, title and interest in and to the
Purchased Assets, all in form and substance reasonably satisfactory to Purchaser
and duly executed by Seller, against delivery by Purchaser to Seller of the
payment provided for in Section 1.6 hereof. At the Closing, Purchaser shall
deliver to Seller an Instrument of Assumption in substantially the form attached
hereto as Exhibit B and such other instruments of assumption as may be
reasonably necessary to evidence Purchaser's assumption of the Assumed
Liabilities, all in the form and substance reasonably satisfactory to Seller and
duly executed by Purchaser.
3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser that, except to the extent
otherwise set forth on the schedule of exceptions attached hereto (the "Schedule
of Exceptions"), the following statements are true and correct:
3.1. ORGANIZATION AND EXISTENCE. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New York. Seller has the requisite corporate power and authority to own the
Purchased Assets and operate the PMC
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Division as presently conducted. Seller is qualified to do business as a foreign
corporation in Ohio and each other jurisdiction in which the conduct of the
business of the PMC Division or the ownership of the Purchased Assets makes such
qualification necessary.
3.2. AUTHORIZATION OF SELLER. Seller has full power, authority
and legal right and capacity to enter into this Agreement, to perform its
obligations hereunder, and to consummate the transactions contemplated hereby.
The execution, delivery and performance by Seller of this Agreement have been
duly authorized by all necessary corporate action. This Agreement has been duly
executed and delivered by Seller and constitutes a valid and binding obligation
of Seller, enforceable against Seller in accordance with its terms.
3.3. NO CONFLICT OR VIOLATION. Neither the execution and
delivery of this Agreement by Seller, nor the consummation of the transactions
contemplated hereby, will result in (i) a violation of, or a conflict with,
Seller's Articles of Incorporation or Bylaws, (ii) a breach of, or a default (or
an event which, with notice or lapse of time or both would constitute a default)
under or result in the termination of, or accelerate the performance required
by, or create a right of termination or acceleration under, any contract or
Permit to which Seller is a party or by which the Purchased Assets or the PMC
Division is bound or affected, (iii) a violation by Seller of any applicable
law, statute, code, ordinance, rule, regulation or order whether federal, state,
local or other ("Laws"), or a violation by Seller of any order, judgment, writ,
injunction, decree or award to which Seller is a party or by which the Purchased
Assets or the PMC Division are bound, or (iv) an imposition of any Encumbrance
on the Purchased Assets.
3.4. CONSENTS AND APPROVALS. No consent, Permit, approval or
authorization of, or declaration, filing, application, transfer or registration
with, any governmental or regulatory authority, or any other person or entity is
required to be made or obtained by Seller by virtue of its execution, delivery
and performance of this Agreement or to avoid the loss of any Permit, or the
violation, breach or termination of, or the creation of Encumbrances on any
Purchased Assets pursuant to the terms of, any Law, or to enable Purchaser to
own the Purchased Assets and continue the operation of the PMC Division on and
after the Closing Date in substantially the same manner as it is presently
conducted by Seller.
3.5. NO ACTIONS OR PROCEEDINGS RELATED TO THE AGREEMENTS.
There are no pending or, to Seller's knowledge, threatened actions, claims,
lawsuits, proceedings, arbitrations, mediations or other disputes ("Actions"),
whether private or public, affecting the PMC Division or the Purchased Assets or
which could reasonably be expected to affect the enforceability of this
Agreement or Seller's ability to consummate the transactions contemplated by
this Agreement.
3.6. VIOLATION OF APPLICABLE LAW. Seller's operation of the
PMC Division and ownership and/or use of the Purchased Assets is in compliance
with all Laws (including, but not limited to, environmental Laws). Seller has
not received any notice from or otherwise been advised that any governmental
authority or other person is claiming any violation or potential
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violation of any Law. Seller has delivered to the Purchaser a copy of the Phase
I environmental investigation relating to the facility occupied by the PMC
Division.
3.7. BOOKS AND RECORDS. Seller has made and kept Books and
Records pertaining to the PMC Division, which, in reasonable detail, accurately
and fairly reflect, in all material respects, the activities and transactions of
the PMC Division, the Purchased Assets, the Assumed Liabilities and the
financial condition and results of operations of the PMC Division. As used
herein, "Books and Records" means all books, ledgers, files, records, manuals
and other materials (in any form or medium) maintained by Seller with respect to
the business of the PMC Division or the Purchased Assets, including, but not
limited to, any and all correspondence, personnel records, purchasing records,
credit information, vendor lists, operation and quality control records and
procedures, research and development files, intellectual property disclosures
and documentation, accounting records and systems, litigation files, sales order
files, purchase order files, advertising materials, catalogs, price lists,
brochures, mailing lists, customer lists, distribution lists, sales and
promotional materials and all other records utilized by Seller in connection
with the PMC Division and all computer hardware, software and data files
necessary to access or review or continue to compile or utilize any of the
foregoing.
3.8. FINANCIAL STATEMENTS AND OTHER INFORMATION. Seller has
furnished to Purchaser copies of the monthly financial statements for the PMC
Division for March, April, May, June and July 1996 (the "Financial Statements").
The Financial Statements are complete and correct, have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis during the respective periods, and fairly present in all material respects
the financial condition of the PMC Division as of the dates thereof and the
results of operations of the PMC Division for the periods covered by the
statements of income contained therein. All reserves made by Seller in the
Financial Statements are appropriate and adequate for all known or anticipated
liabilities. Seller has provided and disclosed to Purchaser, its accountants and
other representatives all material facts and information relating to the
preparation of the Financial Statements.
3.9. NO MATERIAL ADVERSE CHANGE. Since July 31, 1996, there
have been no changes in the condition, financial or otherwise, of the PMC
Division, or in its prospects, earnings or properties, whether or not arising
from transactions in the ordinary course of business, that, individually or in
the aggregate, have been, or could reasonably be expected to be, materially
adverse to the prospects, earnings, properties or condition, financial or
otherwise, of the PMC Division.
3.10. ABSENCE OF CERTAIN CHANGES OR EVENTS. Since July 31,
1996, there has not been any:
(i) transaction by Seller in connection with the
conduct of the PMC Division except in the ordinary course of business;
(ii) destruction, damage to, or loss of any material
asset of Seller (whether or not covered by insurance) used in the PMC Division;
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(iii) labor dispute or other event or condition of
any character materially and adversely affecting the prospects, earnings,
properties or condition, financial or otherwise, of the PMC Division;
(v) increase in the salary or other compensation
payable or to become payable by Seller to any of its officers, consultants,
contractors or employees employed in the PMC Division, or the declaration,
payment, commitment or obligation of any kind for the payment, by Seller, of a
bonus or other additional salary or compensation to any such person;
(vi) amendment or termination of any contract or
Permit related to either the Purchased Assets or the PMC Division, except in the
ordinary course of business;
(vii) grant of any preferential rights to purchase
any of the assets, properties or rights (including management and control
thereof) related to the PMC Division, or requiring the consent of any party to
the transfer or assignment of any such assets, properties or rights (including
management and control thereof);
(viii) agreement by Seller to do any of the things
described in clauses (i) through (vii), above;
(ix) failure to pay or satisfy when due any
obligation of the PMC Division;
(x) citation or notice of threatened citation
received for any violations or alleged violations of any Law or by any
governmental entity or agency;
(xi) claim incurred for damages or alleged damages
for actual or alleged negligence or other tort or breach of contract (whether or
not fully covered by insurance); or
(xii) other event or condition of any character which
it is reasonable to expect will or could, individually or in the aggregate,
materially and adversely affect the Purchased Assets or the PMC Division.
3.11. THE PURCHASED ASSETS. Seller either owns or holds under
leases or licenses all of the material properties used by in the PMC Division
and all such properties other than the Excluded Assets are included in the
Purchased Assets. Seller has good, indefeasible and marketable title to all of
the Purchased Assets, free and clear of all Encumbrances. The Schedule of
Tangible Property attached hereto lists the furniture, furnishings, fixtures,
machinery, vehicles, equipment and other items of tangible property located at
the offices or other facilities of the PMC Division and included in the
Purchased Assets, as shown on Seller's books.
3.12. CONDITION AND POSSESSION OF THE PURCHASED ASSETS. The
Purchased Assets are adequate and sufficient for the operation of the business
of the PMC Division as presently conducted by Seller. Seller enjoys peaceful and
undisturbed possession of all of the
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Purchased Assets. None of the Purchased Assets is subject to any commitment or
other arrangement for their use by any affiliated party of Seller or any third
party. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER EXCLUDES AND
DISCLAIMS ANY AND ALL EXPRESS AND IMPLIED WARRANTIES, INCLUDING, WITHOUT
LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. SELLER MAKES NO WARRANTIES OTHER THAN THOSE EXPRESSLY SET
FORTH IN THIS AGREEMENT.
3.13. LEASES. True and complete copies of all leases,
subleases, and other occupancy or lease agreements under which Seller leases,
subleases, occupies or uses any real or personal property included in the
Purchased Assets, including all amendments, modifications, renewals and
extensions thereof (the "Leases") have been previously furnished to Purchaser.
All of the Leases are legal, valid and binding obligations of the parties
thereto and are in full force and effect. There is no existing default,
violation or breach under any Lease nor any event or condition which after
notice or lapse of time or both would constitute such a default, violation or
breach.
3.14. ASSUMED CONTRACTS. True and complete copies of all
Assumed Contracts and all material contracts of the PMC Division with customers,
suppliers, vendors, and employees including all amendments, modifications,
renewals or extensions thereof, have been previously furnished to Purchaser. All
of the Assumed Contracts are enforceable, legal, valid and binding obligations
of the parties thereto and are in full force and effect.
3.15. CUSTOMERS AND SUPPLIERS. A true and correct list of all
of the customers and suppliers of the PMC Division during the twelve full months
prior to the date hereof, indicating the existing contractual arrangements with
each, has been previously furnished to Purchaser. The PMC Division has no
outstanding contracts with any customers or suppliers which require payments in
excess of $10,000 on an annualized basis. There are no outstanding disputes with
any major customer or supplier and no major customer or supplier has refused to
do business with the PMC Division or has stated its intention not to continue to
do business with or increase or reduce its purchases from or sales to the PMC
Division or Purchaser upon consummation of the transactions contemplated hereby.
Seller has no reason to believe that any customer account of the PMC Division is
not collectible in accordance with its terms except to the extent of any
reserves reflected in the Financial Statements. No existing contractual
arrangement with a customer of the PMC Division other than purchase orders which
will be filled within twelve months contains any fixed price arrangement.
3.16. INSURANCE. Purchaser has been provided with a true and
complete list and summary of all insurance policies currently maintained by
Seller with respect to the PMC Division or the Purchased Assets.
3.17. PERMITS. Seller holds, free from all Encumbrances and
burdensome restrictions, all permits, licenses, qualifications, approvals,
authorizations, orders, consents, and other rights from, and filings with, any
governmental authority necessary for the lawful and
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efficient operation of the PMC Division as presently conducted or the ownership
of the Assets ("Permits"). A true and complete list of all Permits has been
furnished to Purchaser.
3.18. INTELLECTUAL PROPERTY. Seller owns, has a license for,
or rightfully possesses all designs, drawings, patterns, processes, trade names,
trademarks, copyrights, patents, licenses, patent applications, trademark
registrations, trade secrets, inventions, know-how, formulae and other
information and intellectual property necessary and sufficient for the lawful
and efficient operation of the PMC Division as presently conducted, including
all rights to the name "PMC" and other names utilizing "PMC" (the "PMC
Intellectual Property"), without any known conflict with the rights of others.
There are no outstanding licenses or agreements of any kind relating to Seller's
grant of any of its rights, title and interest in and to any PMC Intellectual
Property. Seller has not received any communication alleging that it has
violated or, by operating the business of the PMC Division, would violate, any
of the proprietary rights of any other person or entity.
3.19. EMPLOYEES AND RELATED MATTERS. Purchaser has been
provided with a list of the names, current annual salaries, bonuses, employee
benefits, accrued vacation times, sick pay and other compensation, date of hire
and location of all the present employees of Seller who provide services to the
PMC Division. The Schedule of Benefit Plans attached hereto includes a true and
complete list of all pension, bonus, profit sharing, stock option and employee
benefit plans maintained by Seller or to which Seller contributes or is required
to contribute ("Benefit Plans"). All Benefit Plans have been maintained and
administered in compliance with the provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and all other applicable Laws. There
are no employment or consulting contracts or arrangements, including pensions,
bonus or profit sharing plans, or other severance or termination contracts or
arrangements which may constitute contractual obligations of Seller relating to
the PMC Division which are not terminable on 30 days' notice or less. There are
no collective bargaining agreements with any union or other bargaining group for
any of Seller's employees employed in the PMC Division, nor is Seller aware of
any efforts by any such employees to organize or participate in any of the
foregoing. To the best knowledge of Seller, no employee of the PMC Division is
in violation of any of its obligations to, or any employment agreement with, a
prior employer. Seller has conducted the business of the PMC Division in
compliance with all Laws pertaining to the employment of employees, including,
without limitation, all Laws relating to labor relations, equal employment
practices, fair employment practices, entitlements, COBRA, prohibited
discrimination, ERISA, terms and conditions of employment, wages and hours, and
other similar employment practices and acts, and Seller is not engaged in any
unfair labor practices and is not a party to any Action involving a violation or
alleged violation of any of the foregoing Laws. There are no pending or, to
Seller's knowledge, threatened Actions against Seller by any employee with
respect to any matter arising out of, relating to or in connection with such
employee's employment by Seller.
3.20. ANTICIPATED RECEIPTS BY SELLER. Seller is a party to an
agreement with a customer pursuant to which such customer has agreed to pay to
Seller at least $1,500,000 prior to the date hereof. Although such payment has
not been received to date, Seller is not aware
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of any reason that such payment will not be made and believes in good faith that
it will receive such payment prior to October 31, 1996.
3.21. FULL DISCLOSURE. No representation, warranty or other
statement of Seller contained in this Agreement or any other document,
certificate or written statement furnished to Purchaser in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser and Sieb & Xxxxx represent and warrant to Seller that the
following statements are true and correct:
4.1. ORGANIZATION AND EXISTENCE OF PURCHASER. Purchaser is a
corporation duly incorporated, validly existing and in good standing under the
Laws of the State of Delaware. Sieb & Xxxxx is a Gesellshaft mit beschrankter
Haftung, duly formed and validly existing under German law. Purchaser and Sieb &
Xxxxx have all requisite corporate power to enter into and perform this
Agreement and the transactions contemplated hereby. Purchaser was formed for the
purpose of consummating the transactions contemplated by this Agreement and has
conducted no business except in connection therewith.
4.2. AUTHORITY OF PURCHASER. Purchaser and Sieb & Xxxxx have
full power, authority and legal right and capacity to enter into this Agreement,
to perform their obligations hereunder, and to consummate the transactions
contemplated hereby. The execution, delivery and performance by Purchaser of
this Agreement have been duly authorized by Purchaser and Sieb & Xxxxx and no
further corporate action is necessary on the part of Purchaser or Sieb & Xxxxx
to make this Agreement valid and binding upon them in accordance with its terms.
This Agreement has been duly executed and delivered by Purchaser and Sieb &
Xxxxx and constitutes a valid and binding obligation of Purchaser and Sieb &
Xxxxx, enforceable against each of them in accordance with its terms.
4.3. NO CONFLICT OR VIOLATION. Neither the execution and
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will result in (i) a violation of, or a conflict with,
Purchaser's Certificate of Incorporation or Bylaws, (ii) a violation by
Purchaser or Sieb & Xxxxx of any Law, or (iii) a violation by Purchaser or Sieb
& Xxxxx of any order, judgment, writ, injunction decree or award to which
Purchaser or Sieb & Xxxxx is a party.
4.4. CONSENTS AND APPROVALS. No consent, permit, approval or
authorization of, or declaration, filing, application, transfer or registration
with, any governmental or regulatory authority, or any other person or entity is
required to be made or obtained by Purchaser or Sieb & Xxxxx by virtue of their
execution, delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby.
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4.5. NO ACTIONS OR PROCEEDINGS RELATED TO THE AGREEMENTS.
There is no pending or, to Purchaser's or Sieb & Xxxxx'x knowledge, threatened
Action affecting Purchaser or Sieb & Xxxxx which could reasonably be expected to
affect the enforceability of this Agreement or which could reasonably be
expected to materially and adversely affect Purchaser's or Sieb & Xxxxx'x
ability to consummate the transactions contemplated by, or to perform their
obligations under, this Agreement.
4.6. CAPITALIZATION OF PURCHASER. Sieb & Xxxxx has
capitalized, or prior to the Closing will capitalize, Purchaser, by contributing
and/or lending to Purchaser a cash amount at least equal to the cash to be paid
to Seller pursuant to Section 1.6 and by assigning the right to receive $700,000
of the amounts owed to Sieb & Xxxxx by Seller for products sold to Seller by
Sieb & Xxxxx, including interest thereon (the "Assigned Account Receivable") to
Purchaser. At such time as Purchaser deems the Assigned Account Receivable to be
paid in full as contemplated by Section 1.6, the parties agree that the balance
of the amount owed by Seller to Sieb & Xxxxx for products delivered on or prior
to September 30, 1996 will be $500,000 (the "Remaining Account Receivable").
5. COVENANTS OF SELLER
5.1. DUE DILIGENCE INVESTIGATION. From and after the date
hereof until the Closing Date, Seller shall (i) grant Purchaser and its counsel,
accountants and other representatives full access during normal business hours
to all properties, Books and Records, contracts, Permits and other documents of
or relating to the PMC Division and the Purchased Assets and (ii) furnish or
cause to be furnished to Purchaser and its representatives all data and
information concerning the business of the PMC Division, its finances and
properties as may reasonably be requested.
5.2. CONDUCT OF BUSINESS. From and after the date hereof until
the Closing Date, Seller will carry on the business of the PMC Division
diligently, in the ordinary course and in substantially the same manner as it
has previously been conducted. Without limiting the generality of the foregoing,
Seller shall use reasonable efforts to (i) preserve the business of the PMC
Division intact, and (ii) preserve the present relationships between the PMC
Division and its customers, suppliers, employees and others having business
relationships with Seller.
5.3. THIRD PARTY CONSENTS. Seller shall take, as promptly as
possible, all action to obtain all waivers, Permits, consents, approvals,
authorizations and clearances and to effect all registrations, filings and
notices with or to third parties or governmental, regulatory or public bodies or
authorities which are, in the reasonable opinion of Purchaser, necessary or
desirable in connection with the transactions contemplated by this Agreement.
5.4. PAYMENTS OF REMAINING ACCOUNT RECEIVABLE OWED TO SIEB &
XXXXX. Seller shall pay the Remaining Account Receivable as soon as and to the
extent Seller has available cash flow; provided, however, that in any event
Seller shall pay in full the Remaining Account Receivable on or prior to
December 31, 1996. Sieb & Xxxxx shall not impose any interest charge with
respect to the Remaining Account Receivable; provided, however, that to
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the extent any portion of the Remaining Account Receivable has not been paid by
December 31, 1996, Sieb & Xxxxx shall be entitled to interest at the rate of 8%
per annum from and after January 1, 1997 and shall be entitled to pursue any and
all lawful remedies to collect such unpaid account.
6. CONDITIONS PRECEDENT TO PURCHASER'S PERFORMANCE. The obligation of
Purchaser to purchase the Purchased Assets pursuant to this Agreement is subject
to the satisfaction, at or before the Closing Date, of all of the following
conditions:
6.1. ACCURACY OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made by Seller in this Agreement or in any
written Schedule or statement delivered to Purchaser by Seller under this
Agreement shall be true, correct and not materially misleading on and as of the
Closing Date as though made on the Closing Date.
6.2. PERFORMANCE OF SELLER. Seller shall have performed,
satisfied and complied with all covenants, agreements and conditions required by
this Agreement to be performed or complied with by it on or before the Closing
Date.
6.3. CONSENTS AND PERMITS. All agreements, waivers, approvals,
authorizations, assurances and consents of third parties and all Permits
necessary for the consummation of the transactions contemplated by this
Agreement shall have been obtained by Seller in form and substance reasonably
satisfactory to Purchaser.
6.4. ABSENCE OF LITIGATION. No Action shall have been
instituted or threatened which (i) questions the validity or enforceability of
the transactions contemplated hereby, (ii) materially and adversely affects the
Purchased Assets or the PMC Division, (iii) is reasonably likely to result in
any material liability to Purchaser if the transactions contemplated by this
Agreement are consummated, or (iv) could reasonably be expected to adversely
affect Purchaser's ability to own the Purchased Assets following the Closing
Date.
6.5. ABSENCE OF MATERIAL ADVERSE CHANGES. There shall not have
occurred any damage, destruction or loss which has (whether or not covered by
insurance) materially and adversely affected the Purchased Assets nor any
material adverse change in the business of the PMC Division nor shall there
exist any event or condition of any character which, individually or in the
aggregate, could reasonably be expected to materially and adversely affect the
assets, properties, financial condition, operating results or prospects of the
PMC Division.
6.6. UPDATES TO SCHEDULE OF EXCEPTIONS. Seller shall have
delivered to Purchaser a revised Schedule of Exceptions reflecting any and all
changes thereto necessary to make the Schedule of Exceptions accurate as of the
Closing Date; provided, however, that nothing herein shall relieve Seller of any
liability hereunder due to the fact that the Schedule of Exceptions was not true
and correct, or was materially misleading, as of the date hereof. Purchaser
shall have approved all changes to the Schedule of Exceptions.
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6.7. EXECUTION OF TRANSFER DOCUMENTS. Seller shall have
executed and delivered to Purchaser a Xxxx of Sale in substantially the form
attached hereto as Exhibit A and such other assignments, certificates of title
and any and all other instruments of conveyance and transfer as shall have been
required by Purchaser in order to effectively convey and transfer to Purchaser
the Purchased Assets, free and clear of all Encumbrances. Without limiting the
generability of the foregoing, Seller shall deliver to Purchaser releases, in
form and substance satisfactory to Purchaser from IBJ Xxxxxxxx, Coast Business
Credit and any other creditor with a security interest in any of the Purchased
Assets, which release shall confirm the release of all such security interests
and shall include a covenant to take all reasonable action, including without
limitation, the filing of termination statements, necessary to evidence such
release.
6.8. MINIMUM WORKING CAPITAL. Purchaser shall have received a
working capital schedule, certified by the Chief Financial Officer of Seller,
listing as of the Closing Date (a) all of the accounts payable, accrued paid
time off and miscellaneous expenses as set forth in the balance sheet dated as
of the Closing Date (collectively, the "Selected Current Liabilities") and (b)
all of the accounts receivable (including interest accrued in connection
therewith), prepaid expenses and other assets and other currents assets as set
forth in the balance sheet as of the Closing Date (collectively, the "Selected
Current Assets"). As of the Closing Date, the working capital of the PMC
Division (defined for the purposes of this Agreement only as the Selected
Current Assets minus the Selected Current Liabilities) shall be at least equal
to One Dollar ($1.00).
6.9. EXECUTION OF LEASE. Purchaser shall have entered into a
lease (or a sublease with Seller) of the facility (the "PMC Facility") currently
leased by the PMC Division on terms and conditions acceptable to Purchaser.
6.10. PAYMENT OF RENTS. Seller shall pay any amounts due to
Xxxxxx-Xxxxxxxxx Partners ("Lessor") on or prior to the Closing Date in
connection with Seller's lease with Lessor of the PMC Facility.
6.11. PAYROLL OBLIGATIONS. Seller shall pay the payroll for
the PMC Division through and including the Closing Date (excluding any
obligation with respect to paid time off).
6.12. ADDITIONAL AGREEMENTS. Seller shall have executed and
delivered to Purchaser (a) an agreement (the "Joint Development Agreement")
between Seller and Purchaser regarding the joint development of products between
Seller and Purchaser, and (b) an agreement (the "Pricing Agreement") between
Seller and Purchaser regarding the pricing terms of certain products to be sold
by Purchaser to Seller after the Closing Date.
7. CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE. The obligation of
Seller to sell and transfer the Purchased Assets under this Agreement is subject
to the satisfaction, at or before the Closing Date, of all the following
conditions:
7.1. ACCURACY OF PURCHASER'S REPRESENTATIONS AND WARRANTIES.
All representations and warranties by Purchaser contained in this Agreement
shall be true, correct
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and not materially misleading on and as of the Closing Date as though made on
the Closing Date.
7.2. PERFORMANCE OF PURCHASER. Purchaser shall have performed,
satisfied and complied with all covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied with by it on or before
the Closing Date.
7.3. ABSENCE OF LITIGATION. No Action shall have been
instituted or threatened which (i) questions the validity or enforceability of
the transactions contemplated hereby, (ii) materially and adversely affects
Purchaser's business, or (iii) is reasonably likely to result in any material
liability to Seller if the transactions contemplated by this Agreement are
consummated.
7.4. EXECUTION OF ASSUMPTION DOCUMENTS. Purchaser shall have
executed and delivered to Seller an Instrument of Assumption in substantially
the form attached hereto as Exhibit B and such other instruments of assumption
as may be reasonably necessary to evidence Purchaser's assumption of the Assumed
Liabilities.
7.5. ADDITIONAL AGREEMENTS. Purchaser shall have executed and
delivered to Seller the Joint Development Agreement and the Pricing Agreement.
8. INDEMNIFICATION
8.1. INDEMNIFICATION BY SELLER. Seller shall indemnify, defend
and hold harmless Purchaser, Sieb & Xxxxx and Purchaser's and Sieb & Xxxxx'x
respective affiliates, officers, directors, partners, agents, employees,
attorneys and representatives, and their respective heirs, executors,
administrators, successors and assigns (collectively, "Purchaser Indemnified
Parties"), and shall reimburse each Purchaser Indemnified Party, on demand, for
any claim, demand, loss, liability, damage or expense, including without
limitation, interest, penalties and reasonable attorneys', accountants' and
experts' fees and costs of investigation incurred as a result thereof
("Damages"), resulting from, arising from or relating to the following: (i) the
Excluded Liabilities; (ii) the operation of the PMC Division on or prior to the
Closing Date; (iii) any breach or default in the performance by Seller of any
covenant or agreement of Seller contained herein, or in any Schedule or Exhibit
hereto, or in any other instrument delivered or to be delivered by or on behalf
of Seller pursuant hereto; (iv) any breach of warranty or inaccurate or
erroneous representation made by Seller herein, or in any Schedule or Exhibit
hereto, or in any other instrument delivered or to be delivered by or on behalf
of Seller pursuant hereto; (v) the failure to comply with any applicable bulk
sale or transfer Law in connection with the transactions contemplated hereby;
and (vi) any liability arising out of any and all Actions, demands, judgments,
costs and expenses incident to any of the foregoing; provided, however, that the
foregoing indemnification obligation shall not apply to the Assumed liabilities.
8.2. INDEMNIFICATION BY PURCHASER. Purchaser shall indemnify,
defend and hold harmless Seller and all of Seller's affiliates and their
respective officers, directors, partners,
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agents, employees, attorneys and representatives, and their respective heirs,
executors, administrators, successors and assigns (collectively, "Seller
Indemnified Parties"), and shall reimburse each Seller Indemnified Party, on
demand, for any Damages resulting from, arising from or relating to the
following: (i) the Assumed Liabilities; (ii) the operation of the PMC Division
after the Closing Date; (iii) any breach or default in the performance by
Purchaser of any covenant or agreement of Purchaser contained herein, or in any
Schedule or Exhibit hereto, or in any other instrument delivered or to be
delivered by or on behalf of Purchaser pursuant hereto; (iv) any breach of
warranty or inaccurate or erroneous representation made by Purchaser herein, or
in any Schedule or Exhibit hereto, or in any other instrument delivered or to be
delivered by or on behalf of Purchaser pursuant hereto; and (v) any liability
arising out of any and all Actions, demands, judgments, costs and expenses
incident to any of the foregoing.
8.3. CLAIMS FOR INDEMNITY. Whenever a claim for Damages shall
arise for which one party (the "Indemnified Party") shall be entitled to
indemnification hereunder, the Indemnified Party shall notify the other party
hereto (the "Indemnifying Party") in writing within 30 days of the first receipt
of notice of such claim, and in any event within such shorter period as may be
necessary for the Indemnifying Party to take appropriate action to resist such
claim. Such notice shall specify all facts known to the Indemnified Party giving
rise to such indemnity rights and shall estimate the amount of the liability
arising therefrom. The right of the Indemnified Party to indemnification and the
estimated amount thereof, as set forth in this notice, shall be deemed agreed to
by the Indemnifying Party unless, within 30 days after the mailing of such
notice, the Indemnifying Party shall notify the Indemnified Party in writing
that it disputes the right of the Indemnified Party to indemnification. If the
Indemnified Party shall be duly notified of such dispute, the parties shall
attempt to settle and compromise the same, or if unable to do so within 20 days
of the Indemnifying Party's delivery of notice of a dispute, such dispute shall
be settled by binding arbitration before a single arbitrator in the County of
Xxxxxxxx, State of Ohio, in proceedings conducted by the American Arbitration
Association and pursuant to such organization's rules for commercial disputes,
and any rights of indemnification established by reason of such settlement,
compromise or arbitration shall promptly thereafter be paid and satisfied by the
Indemnifying Party.
8.4. INSURANCE PROCEEDS. Neither party shall be entitled to
indemnification for any claim for Damages for which it would otherwise be
entitled to indemnification hereunder to the extent that such party has received
insurance proceeds covering such Damages.
8.5. DEFENSE OF CLAIMED BREACHES. For purposes of this
Section, any assertion of fact and/or law by a third party which, if true, would
constitute a breach of a representation or warranty made by a party to this
Agreement shall, on the date that assertion is made, immediately invoke that
party's obligation to protect, defend, hold harmless and indemnify the other
party to this Agreement.
8.6. LIMITATIONS ON INDEMNIFICATION. No amount may be
recovered by any Indemnified Party under this Section 8 unless and until the
aggregate amount of the Damages suffered by such Indemnified Party exceeds
$10,000, whereupon such Indemnified Party shall be entitled to recover all
Damages in excess of such amount; provided that the maximum
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aggregate amount of Damages for which any Indemnified Party shall be entitled to
indemnification shall in no event exceed $1,000,000. Seller's liability for
indemnification under clauses (iii) and (iv) of Section 8.1 shall expire on the
first day of the first month which begins twenty-four (24) months after the
Closing Date as to all claims not asserted by written notice specifying the
basis for such claim and referring to this Agreement by such date, except for
obligations arising or under Section 3.2 hereof, the second sentence of Section
3.11 hereof and Section 9 hereof.
8.7. INDEMNIFICATION EXCLUSIVE. Following the Closing, the
indemnification provisions of this Section 8 shall be the exclusive remedy for
any breach of any representation, warranty, covenant or agreement made in this
Agreement.
9. COVENANT NOT TO COMPETE
9.1. COVENANT NOT TO COMPETE. Seller shall not, for a period
of five years from the Closing Date, directly or indirectly, own, manage,
finance, operate, join, control or participate in the ownership, management,
financing, operation or control of, or connected in any manner with, any
business that competes with the PMC Division in the areas of business in which
the PMC Division operates as of the Closing Date; provided, however, that this
Section 9.1 shall not preclude Seller from developing, for use in its own
products and not for separate resale to others, computerized control systems
which do not incorporate any proprietary technology owned by Purchaser. For
purposes of this Agreement, the term "compete" shall mean (i) calling on,
soliciting or taking away, as a client or customer any individual or entity that
was a client or customer of the PMC Division, during the 24 calendar month
period immediately preceding any such act for the purpose of competing with
Purchaser; (ii) hiring, soliciting, taking away or attempting to hire, solicit
or take away any employee of Purchaser either on behalf of itself or any other
person or entity; or (iii) entering into or attempting to enter into any
business substantially similar to or competing in any way with the business of
the PMC Division, either alone or with any individual or entity in the areas of
business in which the PMC Division operates as of the Closing Date.
9.2. REASONABLENESS OF RESTRICTIONS. Seller agrees that the
restrictions set forth in Section 9.1, above are reasonable and not burdensome
and that they are properly required to protect the goodwill of the business of
the PMC Division for Purchaser. In the event that such restrictions are deemed
to be unreasonable by a court of competent jurisdiction in any respect, then
Seller and Purchaser agree that they will submit to the reduction of such
restrictions to such extent as the court shall deem reasonable.
9.3. INJUNCTIVE RELIEF. Seller acknowledges that a breach by
it of the provisions of this Section 9 cannot be reasonably or adequately
compensated in damages in an action at law and that such breach will cause
Purchaser irreparable injury and damage. By reason thereof, Seller agrees that
Purchaser shall be entitled, in addition to any other remedies it may have under
this Agreement or otherwise, to temporary, preliminary and/or permanent
injunctive and other equitable relief to prevent or curtail any breach of this
Agreement, without
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proof of actual damages that have been or may be caused to Purchaser by such
breach or threatened breach.
10. MISCELLANEOUS PROVISIONS
10.1. BUSINESS TERMS GOING FORWARD. Sieb & Xxxxx shall process
each purchase order from Seller received by Sieb & Xxxxx after the Closing Date
and prior to the date Seller has paid in full the Remaining Account Receivable
in a similar manner as Sieb & Xxxxx has processed purchase orders of Seller
during the previous two months; provided, however, that prior to the date Seller
has paid in full the Remaining Account Receivable, Sieb & Xxxxx shall be under
no obligation to sell or ship any products to Seller in connection with any
purchase order unless Seller provides Sieb & Xxxxx with written confirmation of
the Federal Wire Transfer Number for a wire in an amount which is sufficient to
cover payment of the products requested in such purchase order.
10.2. PURCHASER TO ACT AS AGENT FOR SELLER. Nothing in this
Agreement is intended to constitute an agreement to assign any asset, right or
claim if such assignment, without the consent of another party, would be
ineffective or would constitute a breach of an agreement relating thereto or
otherwise adversely affect the value of such asset, right or claim such that
Purchaser would not receive all of the value thereof. To the extent any such
third party consent is required with respect to any asset, right or claim, then
Seller shall provide to Purchaser the benefits thereunder, including without
limitation, enforcement thereof for the benefit of Purchaser.
10.3. TERMINATION PRIOR TO CLOSING. This Agreement and the
transactions contemplated hereby may be terminated at any time prior to the
Closing Date (i) by the mutual written consent of Purchaser and Seller, (ii) by
either Purchaser or Seller in writing, without liability to the party
terminating this Agreement on account of such termination, if the Closing shall
not have occurred on or before October 15, 1996, or (iii) by either Purchaser or
Seller in writing, without liability to the party terminating this Agreement on
account of such termination, if the non-terminating party (A) fails to perform
in any material respect any agreement contained herein required to be performed
prior to the Closing Date, or (B) materially breaches any of its
representations, warranties or covenants contained herein; provided, however,
that termination pursuant to this Section 10.3 shall not relieve the defaulting
or breaching party from any liability to the non-defaulting party.
10.4. FURTHER ASSURANCES. Each party hereto shall, at any time
on or after the Closing Date, execute, acknowledge and deliver any further
assignments and other assurances, documents and instruments of transfer,
reasonably requested by the other party, and will take any other action that may
be requested by the other party, for the purpose of assigning, transferring,
granting, conveying and confirming to Purchaser, or reducing to possession, any
or all property to be conveyed and transferred by this Agreement. Without
limiting the generality of the foregoing, from and after the Closing Date,
Seller shall promptly, and in any event within three business days, transfer or
convey to Purchaser any cash or other property which may come into Seller's
possession relating to the Purchased Assets or the PMC Division.
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10.5. BULK SALES LAW. Without admitting that the bulk sales
law of any state is applicable to the transactions contemplated by this
Agreement, the parties waive compliance with the bulk sales laws of all states.
10.6. NO THIRD PARTY BENEFICIARIES. The representations,
warranties, covenants and agreements contained in this Agreement are for the
sole benefit of the parties hereto, and their respective successors and
permitted assigns, and no provision of this Agreement shall be construed as
conferring any rights on any third party or parties.
10.7. CONFIDENTIALITY; PRESS RELEASES AND ANNOUNCEMENTS. The
parties shall, and shall cause their respective employees, officers, directors
and other representatives to, hold in strict confidence any and all information
or data obtained in connection with this Agreement. Except as may otherwise
required by Law, neither party will issue or authorize to be issued any press
release or other announcement concerning this Agreement or any of the terms
hereof or the transactions contemplated hereby without the prior written
approval of the other party.
10.8. TAXES. Seller shall pay all sales and use taxes and
transfer fees, if any, arising out of the transfer of the Purchased Assets and
shall pay its portion, prorated as of the Closing Date, of state and local
property taxes. Purchaser shall not be responsible for any payroll, excise,
income, business, occupation, withholding or similar tax, or any taxes of any
kind, related to any period up to and including the Closing Date.
10.9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Regardless
of any investigation at any time made by or on behalf of any party, or of any
information any party may have in respect thereof, all representations and
warranties made hereunder or pursuant hereto or in connection with the
transactions contemplated hereby shall survive the Closing.
10.10. EXPENSES. Each of the parties shall pay all costs and
expenses incurred by it or on its behalf in connection with this Agreement and
the transactions contemplated hereby, including, without limiting the generality
of the foregoing, fees and expenses of its own financial consultants,
accountants and counsel.
10.11. ENTIRE AGREEMENT. All agreements, covenants,
representations and warranties, express or implied, oral and written, of the
parties with regard to the subject matter of this Agreement are contained in
this Agreement, the Schedules and Exhibits hereto, the documents referred to
herein or the documents or instruments implementing the provisions hereof. This
is an integrated agreement.
10.12. GOVERNING LAW AND CHOICE OF FORUM. The validity,
construction and performance of this Agreement, and any Action arising out of or
relating to this Agreement, shall be governed by the Laws of the State of Ohio,
without regard to the Laws as to choice or conflict of Laws.
10.13. INTERPRETATION. The language in all parts of this
Agreement shall be in all cases construed simply according to its fair meaning
and not strictly for or against any party.
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The captions of the Sections and Subsections of this Agreement are for
convenience only and shall not affect the construction or interpretation of any
of the provisions of this Agreement.
10.14. WAIVER AND AMENDMENT. This Agreement may be amended,
supplemented or modified only through an express written instrument signed by
both parties or their respective successors and permitted assigns. Any party may
specifically and expressly waive in writing any portion of this Agreement or any
breach hereof, but only to the extent such provision is for the benefit of the
waiving party, and no such waiver shall constitute a further or continuing
waiver of any preceding or succeeding breach of the same or any other provision.
The consent by one party to any act for which such consent was required shall
not be deemed to imply consent or waiver of the necessity of obtaining such
consent for the same or similar acts in the future, and no forbearance by a
party to seek a remedy for noncompliance or breach by the other party shall be
construed as a waiver of any right or remedy with respect to such noncompliance
or breach.
10.15. ASSIGNMENT. Neither this Agreement nor any interest
herein or right hereunder shall be assignable (voluntarily, involuntarily, by
judicial process, operation of Law or otherwise), in whole or in part, by any
party without the prior written consent of all other parties. Any attempt at
such an assignment without such consent shall be void. Notwithstanding the other
provisions of this Section 10.15, if Seller, in connection with any sale of all
or substantially all of its assets or any merger or consolidation in which
Seller does not survive, obtains a written agreement from the purchaser of such
assets or the surviving entity in such merger or consolidation expressly
assuming and agreeing to perform, for the benefit of Purchaser, all of Seller's
obligations hereunder, then Purchaser's consent shall not be required. Each of
the terms, provisions and obligations of this Agreement shall be binding upon,
shall inure to the benefit of, and shall be enforceable by the parties and their
respective legal representatives, successors and permitted assigns.
10.16. NOTICES. All notices, requests, demands and other
communications made under this Agreement shall be in writing, correctly
addressed to the recipient at the addresses set forth below and shall be deemed
to have been duly given (i) upon delivery, if served personally on the party to
whom notice is to be given, (ii) upon transmittal, if telecopied and receipt is
confirmed, or (iii) on the date or receipt, refusal or non-delivery indicated on
the receipt if mailed to the party to whom notice is to be given by first class
mail, registered or certified, postage prepaid, or by air courier:
If to Seller: Dynamotion/ATI Corp.
0000 X. Xxxxxxx Xxx.
Xxxxx Xxx, Xxxxxxxxxx 00000
Attn: President
Facsimile: (000) 000-0000
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with a copy to: Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
If to Purchaser: PMC Electronics, Inc.
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxx 00000
Attn: President
Facsimile: (000) 000-0000
with copies to: Sieb & Xxxxx Elektronik GmbH
Auf dem Xxxxxxxxxxx 00
X-00000 Xxxxxxxx
Xxxxxxx
Attn: President
Facsimile: 00-0000-0000
Xxxxxxx & XxXxxxxx
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Loss, Esq.
Facsimile: (000) 000-0000
Any party may give written notice of a change of address in accordance with the
provisions of this Section 10.16 and after such notice of change has been
received, any subsequent notice shall be given to such party in the manner
described at such new address.
10.17. SEVERABILITY. Each provision of this Agreement is
intended to be severable. Should any provision of this Agreement or the
application thereof be judicially declared to be or become illegal, invalid,
unenforceable or void, the remainder of this Agreement shall continue in full
force and effect and the application of such provision to other persons or
circumstances will be interpreted so as reasonably to effect the intent of the
parties hereto.
10.18. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute a single agreement.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement as
of the date first above written.
"SELLER": "PURCHASER":
DYNAMOTION/ATI CORP., PMC ELECTRONICS, INC.,
a New York corporation a Delaware corporation
By:__________________________ By:__________________________
_____________________________ _____________________________
Print or Type Name Print or Type Name
_____________________________ _____________________________
Print or Type Title Print or Type Title
"SIEB & XXXXX":
SIEB & XXXXX ELEKTRONIK
GMBH, a German corporation
By:__________________________
_____________________________
Print or Type Name
_____________________________
Print or Type Title
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EXHIBIT A
XXXX OF SALE
THIS XXXX OF SALE (this "Xxxx of Sale") is being executed and delivered
by Dynamotion/ATI Corp., a New York corporation ("Seller"), pursuant to Section
2 of that certain Asset Purchase Agreement dated September 27, 1996 (the "Asset
Purchase Agreement"), by and among Seller, PMC Electronics, Inc., a Delaware
corporation ("Purchaser"), and Sieb & Xxxxx Elektronik GmbH, a German
corporation. Capitalized terms used herein without definition shall have the
meanings given to them in the Asset Purchase Agreement.
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of
which are hereby acknowledged, Seller does hereby give, grant, bargain, sell,
transfer, set over, assign and deliver unto Purchaser, all of Seller's right,
title and interest in and to all of the Purchased Assets as such term is defined
in Section 1.1 of the Asset Purchase Agreement. The transfer evidenced by this
Xxxx of Sale is made free and clear of all claims, liens, rights, restrictions,
equities, security interests, title defects or other encumbrances of any nature.
Seller hereby covenants that it will, at any time and from time to
time, upon written request therefor, execute and deliver to Purchaser, or to
Purchaser's successors, nominees or assigns, any new or confirmatory instruments
which may be reasonably necessary or desirable in order to protect or to fully
assign and transfer to and vest in Purchaser or such successor, nominee or
assign, all of Seller's right, title and interest in and to the Purchased
Assets.
This Xxxx of Sale shall be binding upon and inure to the benefit of the
legal representatives, successors and assigns of Seller and Purchaser.
IN WITNESS WHEREOF, Seller has duly executed this Xxxx of Sale as of
September 30, 1996.
DYNAMOTION/ATI CORP.,
a New York corporation
By:___________________________
______________________________
Print or Type Name
______________________________
Print or Type Title
27
EXHIBIT B
ASSUMPTION AGREEMENT
Pursuant to that certain Asset Purchase Agreement dated as of September
27, 1996 (the "Agreement") by and among Dynamotion/ATI Corp., a New York
corporation ("Seller"), PMC Electronics, Inc., a Delaware corporation
("Purchaser"), and Sieb & Xxxxx Elektronik GmbH, a German corporation, for good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Purchaser hereby assumes the Assumed Liabilities (as such term is
defined in Section 1.4 of the Agreement) by and subject to the terms and
conditions of the Agreement. Except as expressly assumed herein, Purchaser does
not assume and shall not in any manner be responsible for any Excluded
Liabilities (as such term is defined in Section 1.5 of the Agreement).
Dated this 30th day of September, 1996.
PMC ELECTRONICS, INC.
By:___________________________
Its:__________________________
28
Schedule of Payables
29
Schedule of Assumed Contracts
1. Seller's Quotation for Advanced Technology Inc. dated as of
August 19, 1996
2. Lease between Seller (as lessee) and Pitney Xxxxx Credit
Corporation (as lessor) dated as of January 27, 1994
3. Letter from Seller to Xxxxxxxx X. Xxxxxxxxx dated August 19,
1996
4. Obligations of Seller under outstanding Purchase Orders of
Seller as set forth on attached Schedule
5. Obligations of Seller under the Escrow Agreement between
Seller, Advanced Technology Inc. and Xxxxxxx X. Xxxxxxx, as
escrow agent dated as of August 20, 1996
6. Obligations of Seller under Section 15 of the Purchase and
Sale Agreement between Seller and Advanced Technology Inc.
dated as of August 20, 1996
7. Obligations of Seller under the Software License Agreement
dated November 29, 1995 between Seller and Integrated Systems,
Inc.
8. Obligations of Seller under the Master Binary Software License
Agreement dated February 28, 1986, as amended, between Seller
and Microtec (formerly Ready Systems Corporation)
30
Schedule of Other Assumed Liabilities
1. Accrued paid time off
2. Accrued Workers Compensation
3. Personal property taxes
31
Schedule of Exceptions
3.4 CONSENTS AND APPROVALS
Seller is required to file with the Securities and
Exchange Commission a Form 8-K related to the
disposition of the PMC Division
3.8 FINANCIAL STATEMENTS AND OTHER INFORMATION
Seller believes an appropriate and adequate reserve
for inventory would be approximately $25,000-$50,000,
however, the inventory is currently reserved at
approximately $2,500
3.10 ABSENCE OF CERTAIN CHANGES OR EVENTS
(ix) Failure to pay or satisfy when due any
obligation of the PMC Division.
Seller is in default under its credit facility with
IBJ Xxxxxxxx Bank & Trust Company
Seller defines past due as any trade payables due
more than 45 days. The total past due balance for PMC Division
trade payables totals $24,040. See the Schedule of Payables
for the detail on the vendors and balances exceeding 45 days
32
Schedule of Tangible Property
33
Schedule of Benefit Plans
Regular employees of Seller are eligible for benefits after 90 days unless
otherwise stated.
1. Medical-California residents are eligible for HMO or PPO.
Out of state employees are eligible for PPO only.
(See attached rate sheet)
2. Dental and Life insurance is at no cost to the employee. This
cost is basically included in the Medical premium. The life
insurance policy is two times the employees annual salary up
to $50K.
3. Employees are eligible after 90 days to enroll in the 401(k)
plan. Enrollment is quarterly and vesting is 100% immediately.
Seller matches 20% of the first $2000 of employee deferment.
($400 maximum).
4. Long term disability is available to the employee, at their
cost.
5. Credit Union benefits are also available to employees.
6. Direct Deposit of payroll checks is available.
7. Paid time off ("PTO") is accrued at date of hire. Attached is
the PTO policy.
34
Schedule of Accounts Receivable
