EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is made and entered into as of
this 8th day of February, 1996, by and among OCEAN BIO-CHEM, INC., a Florida
corporation (the "Parent"), KINBRIGHT, INC., an Alabama corporation wholly-
owned by the Parent (the "Buyer"), KINPAK, INC., a Georgia corporation (the
"Seller"), and KINARK CORPORATION, a Delaware corporation (the "Shareholder"),
the sole shareholder of the Seller.
W I T N E S S E T H:
WHEREAS, the Seller is engaged in the business of blending, packaging and
distributing of antifreeze, including (i) blending, (ii) blow-molding plastic
containers, (iii) packaging, and (iv) distribution (the Seller's activities in
pursuing such businesses are herein referred to collectively as the
"Business"); and
WHEREAS, the Shareholder is the record and beneficial holder of 100% of
the issued and outstanding capital stock of the Seller, and the Shareholder is
the lessee under that certain Agreement with the Industrial Development Board
of the City of Xxxxxxxxxx dated as of September 1, 1979 relating to that
certain chemical packaging plant located in Montgomery, Alabama (the "Packaging
Facility Lease") and that certain Lease Agreement with the Alabama State Docks
Department dated as of October 1, 1979 (the "Dock Facility Lease"); and
WHEREAS, Seller and Shareholder desire to sell, convey, transfer, assign
and deliver to Buyer, the Business and certain of the assets, properties and
operations of the Seller used in the Business, and Buyer desires to purchase
the Business and such assets, properties and operations, on the terms and
conditions contained in this Agreement; and
WHEREAS, the Parent is the record and beneficial holder of all the
outstanding capital stock of the Buyer and desires that the Buyer purchase from
the Seller the Business and the assets, properties and operations of the Seller
used in the Business.
NOW, THEREFORE, in consideration of the mutual benefits to be derived from
this Agreement, the parties hereto hereby agree as follows:
1. SALE AND PURCHASE OF ASSETS.
1.1 Sale of Assets to Buyer. Upon the terms and subject to the
conditions herein set forth, at the Closing referred to in Section 3, Seller
and Shareholder shall sell, transfer, assign, convey and deliver to Buyer, and
Buyer shall purchase and acquire from Seller and Shareholder all of the right,
title and interest that the Seller and Shareholder possess and have the right
to transfer in and to (a) the Packaging Facility Lease and the Dock Facility
Lease, together with all improvements, fixtures and fittings on the real
property subject to such leases, and all easements, rights of way, and other
appurtenances thereto, (b) tangible personal property of Seller (such as
machinery, equipment, inventories of raw materials and supplies, manufactured
and purchased parts, goods and processed and finished goods, furniture,
automobiles, trucks, tractors, trailers and tools), including, but not limited
to, all of the personal property assets of the Seller set forth on Schedule
1.1, (c) intellectual property of the Seller, including trademarks, trade names
and patents, goodwill associated therewith, licenses and sublicenses granted
and obtained with respect thereto, and rights thereunder, remedies against
infringements thereof, and rights to protection of interests therein under the
laws of all jurisdictions, (d) leases and subleases of the Seller, and rights
thereunder, (e) agreements, contracts, indentures, mortgages, instruments,
security interests, guarantees, or other similar arrangements of Seller, and
rights thereunder, (f) claims, deposits, prepayments, refunds, causes of
action, choses in action, rights of recovery, rights of setoff, and rights of
recoupment of the Seller (excluding any such item relating to the payment of
taxes), (g) franchises, approvals, permits, licenses, orders, registrations,
certificates, variances of Seller, and similar rights obtained from governments
and governmental agencies by Seller, (h) books, records, ledgers, files,
documents, correspondence, lists, architectural plans, drawings and
specifications, creative materials, advertising and promotional materials,
studies, reports, and other printed or written materials of Seller
(collectively, the "Assets"). The Assets shall not include, (i) the corporate
charter, qualifications to conduct business as a foreign corporation,
arrangements with registered agents relating to foreign qualifications,
taxpayer and other identification numbers, seals, minute books, stock transfer
books, or other documents relating to the organization, maintenance, and
existence of the Seller and Shareholder as corporations, (ii) any cash
belonging to the Seller or the Shareholder as of the Closing Date (as
hereinafter defined), (iii) any accounts, notes or other receivables belonging
to the Seller or Shareholder as of the Closing Date, or (iv) any of the rights
of the Seller or Shareholder under this Agreement (or any side arrangement
between the Seller and Shareholder on the one hand and the Buyer and Parent on
the other hand entered into on or after the date of this Agreement). Seller
and Shareholder shall have the right to repair or replace, in the ordinary
course of business prior to the Closing Date, any of the personal property
Assets listed on Schedule 1.1 attached hereto.
1.2 Method of Conveyance. The sale, transfer, conveyance and assignment
by the Seller and Shareholder of the Assets to the Buyer and Parent in
accordance with Section 1.1 hereof shall be effected on the Closing Date by (a)
the Seller's execution and delivery to the Buyer of a xxxx of sale in the form
attached hereto as Exhibit A (the "Xxxx of Sale") and (b) the Shareholder's
execution and delivery to the Buyer of assignment and assumption agreements
relating to the Packaging Facility Lease and the Dock Facility Lease (as more
fully described in Section 2.4), and (c) the assignment, as necessary, of the
Scheduled Contracts listed on Schedule 4.7(a). At the Closing, all of the
Assets shall be transferred by the Seller to the Buyer free and clear of any
and all liens, encumbrances, mortgages, security interests, pledges, claims,
equities and other restrictions or charges of any kind or nature whatsoever
(collectively, "Liens"), except Permitted Liens (as hereinafter defined).
2. PURCHASE PRICE.
2.1. Amount and Payment of Consideration. The purchase price of the
Assets shall be One Million Eight Hundred Ninety Thousand and No/100 Dollars
($1,890,000.00) (the "Purchase Price"). The Purchase Price shall be paid as
follows:
(a) An xxxxxxx money deposit of Twenty Thousand and No/100
Dollars ($20,000.00) (the "Xxxxxxx Money Deposit") to be deposited with an
escrow agent acceptable to the parties hereto upon the execution of this
Agreement, which Xxxxxxx Money Deposit shall be paid to Seller and Shareholder
at Closing (as hereinafter defined) as a credit against the Purchase Price, or
returned to the Buyer or paid to the Seller upon termination of this Agreement
pursuant to the terms hereof; and
(b) Eight Hundred Eighty Thousand and No/100 Dollars
($880,000.00) in cash or immediately available funds at Closing; and
(c) The assumption of the Packaging Facility Lease, including
assumption of the Shareholder's obligation to satisfy the indebtedness under
the First Mortgage Industrial Revenue Bonds ("IRB") associated with such lease
and the option to purchase the real property subject to such lease; provided,
however, that the principal balance of the obligations under the IRB's shall
not exceed Nine Hundred Ninety Thousand and No/100 Dollars ($990,000.00), nor
shall the purchase option under the Packaging Facility Lease exceed One
Thousand and No/100 Dollars ($1,000.00).
2.2 Prorations. The following items shall be adjusted on a pro rata
basis between Seller and Buyer as of the Closing Date: (a) 1996 real estate and
personal property ad valorem taxes; (b) charges for electricity, gas, water and
sewer and other utilities to be based on projections from most recent invoices
or on recent meter readings; (c) employee payroll through the Closing Date; and
(d) lease payments (including principal and interest) through the Closing Date.
2.3 Assumed Liabilities. At the Closing, Buyer or Parent shall
assume and agree to satisfy and discharge as the same shall become due only
those liabilities and obligations of the Seller and Shareholder set forth on
Schedule 2.3 hereto (the "Assumed Liabilities"). The obligations of Seller and
Shareholder under the Assumed Liabilities assumed hereunder and under the
Assignment and Assumption Agreements (as defined in Section 2.4) are hereby
independently assumed by Buyer and Parent, subject to the representations,
warranties, covenants and conditions made herein as to that obligation. Except
as expressly set forth in the first sentence of this Section 2.3 and except for
Scheduled Contracts assigned to Buyer in accordance with Section 4.7 of this
Agreement, the Buyer and Parent shall not assume or otherwise be responsible at
any time for any liability, obligation, debt or commitment of the Seller and
Shareholder, whether absolute or contingent, accrued or unaccrued, asserted or
unasserted, or otherwise. The Seller acknowledges and agrees that the Buyer
has no obligation to employ any current or former employees of the Seller
following the Closing and is not assuming any liability, cost or expense with
respect thereto. In furtherance and not in limitation of the foregoing the
Seller understands and agrees that the Buyer may decide in its sole and
absolute discretion to employ certain employees of the Seller following the
Closing with such benefits (including vacation, pension, insurance and
severance benefits) as the Buyer may adopt from time to time in its sole and
absolute discretion and no such act of the Buyer shall be construed as an
assumption by the Buyer of any of such obligations of the Seller. The Seller
shall pay, satisfy and discharge (or make adequate provision therefor to
Buyer's satisfaction) as the same shall become due all the liabilities,
obligations, debts and commitments of the Seller not specifically assumed by
the Buyer hereunder. The Buyer, Shareholder, Seller and Parent intend that the
assumption of the Assumed Liabilities by Buyer and Parent shall not expand the
rights or remedies of third parties against the Buyer or Parent as compared to
the rights and remedies which such parties would have had against the Seller
had this Agreement not been consummated.
2.4 Method of Buyer's Assumption of Assumed Liabilities. At the
Closing, the Buyer shall assume, and shall agree to satisfy and discharge as
the same shall become due, (i) the IRB'S, (ii) all of Shareholder's liabilities
and obligations under the Packaging Facility Lease and the Dock Facility Lease,
and (iii) any other Assumed Liabilities, and in connection therewith the
Shareholder and the Buyer shall execute and deliver an assignment and
assumption agreement, substantially in the forms attached hereto as Exhibit B
and Exhibit C (the "Assignment and Assumption Agreements"). Each assignment
and assumption shall have been approved in writing by the Industrial
Development Board of the City of Xxxxxxxxxx and the Alabama State Docks
Department, as appropriate, prior to the Closing. The assumption shall be
approved without modification of the Assumed Liabilities and the principal
balance of the IRB's shall not exceed Nine Hundred Ninety Thousand and No/100
Dollars ($990,000.00) nor shall the purchase option under the Packaging
Facility Lease exceed One Thousand and No/100 Dollars ($1,000.00).
2.5 Purchase Price Allocations. Each of the parties hereto agrees
that the Purchase Price shall be allocated among the Assets purchased pursuant
to this Agreement, as determined by Buyer and agreed to by Seller. Such
allocation shall be set forth on Schedule 2.5 and attached hereto at Closing.
Each of the parties agrees (a) to utilize the foregoing allocations for tax
purposes, including in all filings with the Internal Revenue Service, and (b)
not to take any action inconsistent with such allocation.
3. CLOSING.
3.1 Date of Closing. Subject to the terms and conditions set forth
herein, the closing of the transactions contemplated hereby (the "Closing")
shall be held at 10:00 a.m. at the offices of Xxxxxx & Xxxxx, P.A., located at
000 X.X. Xxxxx Xxxxxx, Xxxxx 000, Xx. Xxxxxxxxxx, Xxxxxxx 00000, on or before
Thursday, February 15, 1996, or within fourteen (14) days thereafter if all
information and consents are not available prior thereto, provided that all
conditions to the Closing have been satisfied, or at such other time, date and
place as agreed among the parties hereto. The date on which the Closing shall
occur is referred to herein as the "Closing Date."
4. REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE SHAREHOLDER.
In order to induce the Parent and the Buyer to enter into this Agreement
and to consummate the transactions contemplated hereby, the Seller and the
Shareholder, jointly and severally, hereby represent and warrant to the Parent
and the Buyer, as of the date hereof and as of the Closing Date, as follows:
4.1 Organization and Authority. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Georgia. Seller has the full power and authority to own, operate and lease its
properties and assets, to carry on its business as it is now being conducted,
and to execute, deliver and perform its obligations under this Agreement and
consummate the transactions contemplated hereby. The Seller has delivered to
the Buyer complete and correct copies of its Articles of Incorporation and By-
laws, each as amended to date. Seller is duly qualified to do business as a
foreign corporation and in good standing in the State of Alabama.
4.2 Authorization of Agreement. The execution, delivery and
performance by the Seller and Shareholder of this Agreement and of each and
every document and instrument contemplated hereby and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized and approved by all necessary corporate action of the Seller and
Shareholder. This Agreement has been duly executed and delivered by the Seller
and Shareholder and constitutes (and, when executed and delivered, each such
other document and instrument to which Seller and/or Shareholder is a party
will constitute) a valid and binding obligation of the Seller and/or
Shareholder, as the case may be, enforceable against the Seller and/or
Shareholder in accordance with its terms.
4.3 Non-Contravention; Consents. The execution and delivery by the
Seller and Shareholder of this Agreement and the consummation by the Seller and
Shareholder of the transactions contemplated hereby, and compliance by the
Seller and Shareholder with any of the provisions hereof, will not (i) conflict
with or result in a breach of any provision of the Articles of Incorporation or
By-laws of the Seller and Shareholder, (ii) result in the breach of, or
conflict with, any of the terms and conditions of, or constitute a default
(with or without the giving of notice or the lapse of time or both) with
respect to, or result in the cancellation or termination of, or the
acceleration of the performance of any obligations or of any indebtedness under
any contract, agreement, lease, commitment, indenture, mortgage, note, bond,
license or other instrument or obligation to which the Seller is a party or by
which the Seller or any of the Assets may be bound or affected, (iii) result in
the creation of any Lien upon any of the Assets, or (iv) to Seller's and
Shareholder's knowledge, violate any law or any rule or regulation of any
administrative agency or governmental body, or any order, writ, injunction or
decree of any court, administrative agency or governmental body to which the
Seller or any of the Assets may be subject, the violation of which would have a
material adverse effect on the consummation of the transactions contemplated
hereby or the Buyer's operation of the Business or use of the Assets subsequent
to the Closing. Except as set forth in Schedule 4.3 hereto, to Seller's and
Shareholder's knowledge, no approval, authorization, consent or other order or
action of, or filing with or notice to any court, administrative agency or
other governmental authority or any other person is required for the execution
and delivery by the Seller of this Agreement or the consummation byexercise any
right or remedy which it may possess hereunder
shall not operate nor be construed as a bar to the exercise of such right or
remedy by such party upon the occurrence of any subsequent breach or violation.
14.5 Severability. The invalidity of any one or more of the words,
phrases, sentences, clauses, sections or subsections contained in this
Agreement shall not affect the enforceability of the remaining portions of this
Agreement or any part hereof, all of which are inserted conditionally on their
being valid in law, and, in the event that any one or more of the words,
phrases, sentences, clauses, sections or subsections contained in this
Agreement shall be declared invalid by a court of competent jurisdiction, this
Agreement shall be construed as if such invalid word or words, phrase or
phrases, sentence or sentences, clause or clauses, section or sections, or
subsection or subsections had not been inserted.
14.6 Descriptive Headings. Descriptive headings contained herein are
for convenience only and shall not control or affect the meaning or
construction of any provision of this
Agreement.
14.7 Counterparts. This Agreement may be executed in any number of
counterparts and by the separate parties hereto in separate counterparts, each
of which shall be deemed to be one and the same instrument.
14.8 Notices. All notices, consents, requests, instructions,
approvals and other communications provided for herein and all legal process in
regard hereto shall be in writing and shall be deemed to have been duly given,
when delivered by hand or three (3) days after deposited in the United States
mail, by registered or certified mail, return receipt requested, postage
prepaid, as follows:
If to the Buyer Ocean Bio-Chem, Inc.
or the Parent: 0000 XX 00xx Xxxxxx Xxxx Xxxxxxxxxx,
Xxxxxxx 00000
Attn: Xxxxx Xxxxxx
With a copy to: Xxxxxx & Xxxxx, P.A.
000 X.X. Xxxxx Xxxxxx Xxxxx 000 Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Laz X. Xxxxxxxxx, Esq.
If to the Seller Kinark Corporation
or the Shareholder: 0000 Xxxxx Xxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxx X. Xxxxxxxx
Fax No.: (000) 000-0000
With a copy to: Nelson, Mullins, Xxxxx
& Scarborough, L.L.P.
000 Xxxxxx Xxxxxx, Xxxxx 0000
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxxx, Esq.
Fax No.: (000) 000-0000
or to such other address as any party hereto may from time to time designate in
writing delivered in a like manner.
14.9 Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and assigns. None of the parties hereto shall assign any of its
rights or obligations hereunder except with the express written consent of the
other parties hereto; provided, that the Buyer may assign its right hereunder
to any subsidiary or affiliate of the Buyer without the consent of the other
parties hereto.
14.10 Applicable Law. This Agreement shall be construed,
interpreted and enforced in accordance with, the internal laws of the State of
Alabama.
14.11 Expenses. Each of the parties hereto agrees to pay all of
the respective expenses incurred by it in connection with the negotiation,
preparation, execution, delivery and performance of this Agreement and the
consummation of the transaction contemplated hereby.
14.12 Confidentiality. Except to the extent required for any
party to obtain any approvals or consents required pursuant to the terms
hereof, no party hereto shall divulge the existence of the terms of this
Agreement or the transactions contemplated hereby without the prior written
approval of all of the parties hereto, except and as to the extent (i)
obligated by law or (ii) necessary for such party to defend or prosecute any
litigation in connection with the transactions contemplated hereby.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
on the date first above written.
OCEAN BIO-CHEM, INC.
By:/s/Xxxxx XxXxxx
Name: Xxxxx XxXxxx
Title: Vice President-Finance
KINBRIGHT, INC.
By:/s/Xxxxx XxXxxx
Name: Xxxxx XxXxxx
Title: Vice President-Finance
KINPAK, INC,
By:/s/Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: President
KINARK CORPORATION
By:/s/Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Vice-President
LIST OF OMITTED SCHEDULES
Schedule 1.1 Personal Property Assets
Schedule 2.3 Assumed Liabilities
Schedule 2.5 Purchase Price Allocation
Schedule 4.3 Third Party Consents
Schedule 4.4(a) Permitted Liens
Schedule 4.7(a) Scheduled Contracts
Schedule 4.11 Warranties
Schedule 4.12 Trademarks, Patents
Schedule 4.13 List of Key Employees of Seller with brief summary of
titles, duties, terms of employment and compensation
arrangements.
Schedule 4.14 Accounts Payable
Schedule 8.2(l) Environmental Certification
Schedule 8.2(q) Key Employees of Seller
LIST OF OMITTED EXHIBITS
Exhibit A Xxxx of Sale
Exhibit B Assignment and Assumption Agreement (Packaging Facility
Lease)
Exhibit C Assignment and Assumption Agreement (Docking Facility
Lease)
Exhibit D Non-Competition Agreement
Exhibit E Environmental Remediation Matters
