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EXHIBIT (A)
ASSET PURCHASE AGREEMENT
Dated as of July 15, 1996
by and between
MAGNETIC TECHNOLOGIES CORPORATION
AND
AUSTRO MOLD, INC.
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SECTION 1. ASSETS TO BE ACQUIRED................................................. 1
1.1 Description of Purchased Assets.................................... 1
1.2 Excluded Assets.................................................... 5
SECTION 2. THE PURCHASE PRICE AND RELATED MATTERS................................ 6
2.1 Purchase Price. ................................................... 6
2.2 Purchase Price Adjustments......................................... 7
2.3 Allocation of Purchase Price....................................... 8
SECTION 3. ASSUMPTION OF ENUMERATED LIABILITIES.................................. 8
3.1 General Limitation on Assumption of Liabilities.................... 8
3.2 Excluded Liabilities............................................... 9
3.3 Employees. ........................................................ 11
SECTION 4. REPRESENTATIONS AND WARRANTIES OF SELLER.............................. 11
4.1 Organization and Good Standing..................................... 11
4.2 Corporate Authority................................................ 12
4.3 No Violation....................................................... 12
4.4 Consents and Approvals of Governmental Authorities and Others...... 13
4.5 Financial Statements............................................... 13
4.6 Litigation: Compliance with Laws.................................. 14
4.7 Intellectual Property.............................................. 14
4.8 No Prior Sale or Licensing of Purchased Assets..................... 15
4.9 Certain Fees....................................................... 15
4.10 Disclosure......................................................... 16
4.11 Solvency........................................................... 16
4.12 Purchased Assets................................................... 16
4.13 Technical Information.............................................. 17
4.14 Inventory.......................................................... 17
4.15 Contracts.......................................................... 17
4.16 Open Orders........................................................ 18
4.17 Permits and Licenses............................................... 18
4.18 Insurance.......................................................... 19
4.19 Product Liability.................................................. 19
4.20 Absence of Sensitive Payments...................................... 19
4.21 Taxes.............................................................. 19
4.22 Environmental Issues............................................... 20
4.23 Benefit Plans and Employment Arrangements.......................... 23
4.24 Undisclosed Liabilities............................................ 23
4.25 Transaction Relationship........................................... 24
SECTION 5. REPRESENTATIONS AND WARRANTIES OF BUYER............................... 25
5.1 Organization, Good Standing and Corporate Authority................ 25
5.2 No Violation....................................................... 25
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5.3 Consents and Approvals of Governmental Authorities and Others...... 25
5.4 Certain Fees....................................................... 26
5.5 Business Records................................................... 26
5.6 Seller's Accounts Receivable....................................... 26
SECTION 6. SELLER'S COVENANTS.................................................... 26
6.1 Employees.......................................................... 26
6.2 Sales Taxes; Equipment Appraisal................................... 26
6.3 Access to Offices, Officers, Accountants, Due Diligence, Etc....... 27
6.4 Environmental Investigation........................................ 27
6.5 Approvals; Consents................................................ 28
6.6 Preservation of Business Organization.............................. 28
6.7 Approval of Certain Transactions................................... 28
6.8 Exclusive Dealing.................................................. 29
6.9 Update Schedules................................................... 29
6.10 Employees; WARN.................................................... 29
6.11 Further Assurances................................................. 30
SECTION 7. THE CLOSING........................................................... 30
SECTION 8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER...................... 30
8.1 Corporate Action................................................... 30
8.2 Representations and Warranties..................................... 31
8.3 Performance of Obligations......................................... 31
8.4 Instruments of Conveyance, Etc..................................... 31
8.5 Delivery........................................................... 31
8.6 Opinion of Counsel................................................. 31
8.7 Required Consents.................................................. 31
8.8 Litigation......................................................... 32
8.9 Satisfactory Financing............................................. 32
8.10 No Material Adverse Change......................................... 32
8.11 Sublease........................................................... 32
8.12 Requirements Contract.............................................. 33
8.13 Release of Right of First Refusal.................................. 33
8.14 Backlog of Open Orders............................................. 33
SECTION 9. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER..................... 33
9.1 Representations and Warranties..................................... 33
9.2 Execution and Delivery............................................. 33
9.3 Payment............................................................ 34
SECTION 10. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
COVENANTS; FURTHER ACTION BY SELLER...................................... 34
10.1 Survival of Representations and Warranties......................... 34
10.2 Further Action by Seller........................................... 34
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SECTION 11. INDEMNIFICATION...................................................... 34
11.1 Indemnity by Seller............................................... 34
11.2 Indemnity by Buyer................................................ 36
11.3 Notice of Claim................................................... 36
11.4 Limitation of Indemnification..................................... 37
11.5 Set Off........................................................... 37
SECTION 12. TERMINATION; MODIFICATION OR WAIVER.................................. 37
12.1 Termination....................................................... 37
12.2 Modification...................................................... 37
12.3 Waiver............................................................ 38
SECTION 13. COSTS INCIDENT TO PREPARATION OF AGREEMENT........................... 38
SECTION 14. RISK OF LOSS; DAMAGE PRIOR TO CLOSING................................ 38
SECTION 15. BEST EFFORTS......................................................... 39
SECTION 16. GENERAL.............................................................. 39
16.1 Parties in Interest............................................... 39
16.2 Assignment........................................................ 39
16.3 Confidentiality................................................... 40
16.4 Public Statements................................................. 40
16.5 Choice of Law..................................................... 40
16.6 Mediation......................................................... 40
16.7 Notices........................................................... 41
16.8 Entire Agreement.................................................. 42
16.9 No Waiver......................................................... 42
16.10 Severability...................................................... 42
16.11 Headings.......................................................... 43
16.12 Counterparts...................................................... 43
16.13 Construction...................................................... 43
16.14 WAIVER OF JURY TRIAL.............................................. 43
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SCHEDULES
1.1.1 Intellectual Property
1.1.3 Fixed Assets and Equipment Leases
1.1.4(a) Rejected Inventory
1.1.4(b) Polaroid Inventory
1.1.4 Inventory and Supplement
1.1.5 Open Orders
1.1.6 Other Contracts
1.1.7 Permits
1.1.10 Computer Software Assets
1.1.11 Prepaid Expenses
1.2 Excluded Assets
2.2(d) Four Tools Detail
2.2(e) Agreed Inventory Value
2.2 Allocation of Purchase Price
4.5 Balance Sheet and Material Adverse Changes
4.6 Litigation
4.7 Intellectual Property Exceptions
4.13 Technical Information Additions
4.15 Contracts
4.16 Open Order Margins and Costs
4.21 Contested Taxes
4.22.1 Compliance with Environmental Law.
4.22.2 Environmental Permits
4.22.4 Off-Site Disposals
4.22.5 Hazardous or Toxic Materials
4.22.6 Environmentally Sensitive Areas
4.23 Benefit Plans and Employment Arrangements
EXHIBITS
A Real Property Lease
B Seller's Counsel Opinion
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GLOSSARY OF TERMS
Defined Term Section
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Agreement Heading
Balance Sheet 4.5
Books and Records 4.5
Business Recitals
Buyer Heading
CERCLA 4.22.3
Closing 7
Closing Date 7
Code 4.23.2
Computer Software Assets 1.1.10
Contamination 4.22.3
Contracts 1.1.6
Dandora 2.1
Disposal 4.22.4
Disposed 4.22.4
Environmental Permits 4.22
Environmental Laws 4.22
Equipment 1.1.3
Equipment Leases 1.1.3
ERISA 4.23.1
Excluded Assets 1.2
Excluded Liabilities 3.2
GAAP 1.1.11
Governmental Authority 4.22.4.2
Hazardous Substances 4.22.3
Hired Employees 3.3
Indebtedness 4.24
Indemnified Party 11.3
Indemnifying Party 11.3
Intellectual Property 1.1.1
Inventory 1.1.4
Liens 4.12.2
Losses 11.1
Note 2.1
Open Orders 1.1.5
Permits 1.1.7
Person 3.1
Polaroid Inventory 1.2.5
Product Liability 3.1
Purchase Price 2.1
Purchased Assets 1.1
Real Property Leases 1.1.8
Rejected Inventory 1.1.4
Related Rights 1.1.1
Seller Heading
Taxes 1.2.4
Technical Information 1.1.2
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ASSET PURCHASE AGREEMENT
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ASSET PURCHASE AGREEMENT dated this 15th day of July, 1996 ("Agreement") by
and between Magnetic Technologies Corporation, a Delaware corporation
("Seller"), and Austro Mold, Inc., a New York corporation ("Buyer").
RECITALS:
Seller is engaged, inter alia, in the business of tool and die production
and plastic injection molding (the "Business") through its Austro Mold division
(the "Division"). Seller desires to sell, and Buyer desires to acquire, certain
of the assets of the Business, free and clear of all liabilities and Liens
(capitalized terms shall be used as defined in the Sections mentioned in the
Glossary of Terms to this Agreement), all upon the terms and conditions set
forth herein.
In consideration of the mutual covenants, agreements, representations and
warranties contained herein, and in reliance thereon, Buyer and Seller,
intending to be legally bound, agree as follows:
SECTION 1. ASSETS TO BE ACQUIRED.
1.1 DESCRIPTION OF PURCHASED ASSETS. Subject to the terms and
conditions of this Agreement, and in reliance on the representations, warranties
and covenants contained herein, on and as of the Closing Date, Seller will sell,
convey, assign, transfer and deliver to Buyer, and Buyer will purchase and
acquire, the Business as a going concern and all of Seller's right, title and
interest in and to the assets, properties and rights of every kind and
description, real, personal and mixed, tangible and intangible, wherever
situated constituting or used in the Business (the "Purchased Assets"), as the
same shall exist on the Closing Date (other than the Excluded Assets), including
without limitation:
1.1.1 Intellectual Property and Related Rights. All unpatented
inventions, invention disclosures, multinational invention registrations,
patents and patent applications (including, but not limited to, all reissues,
divisions, continuations, continuations-in-part, extensions and
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reexaminations) and all rights therein provided by law, multinational treaties
or conventions; publications and copyrights; trade secrets, know-how and
show-how; formulas; and all common law and registered trademarks, trademark
registrations, applications for trademark registrations, tradenames, trade
dress, brand names, service marks and logos; the Division's name
Austro Mold; including in each case without limitation, those identified on
SCHEDULE 1.1.1, together with the goodwill associated therewith and symbolized
thereby, and an assignment of any licenses therefor to or from Seller including
the consent to such assignment where required by the terms of the license
(collectively, the "Intellectual Property"); together with an assignment of all
rights of Seller in and to, including rights to enforce the terms of,
confidentiality agreements and noncompetition agreements of, and any agreements
relating to the assignment of inventions made by, prior and present employees of
Seller and any such agreements with any other Person with respect to the
Intellectual Property (collectively, the "Related Rights");
1.1.2 Technical Information. All customer, dealer, supplier and
installation lists; serial number records; engineering, manufacturing, design,
installation and other technical drawings and specifications, calculations and
manufacturing and production processes and techniques; research and development
information; operating, maintenance and repair manuals and instruction books;
cost and estimating information, cost records, vendor data and other business
records (including without limitation, sales histories); sales inquiries;
consultant's reports; bills of material, test data and selected test material
samples; advertising and promotional literature, including reproducible masters
and all other commercial, sales, marketing and technical data (including, but
not limited to, data stored electronically or on other format, together with an
assignment of any third party licenses necessary to use such data)
(collectively, the "Technical Information");
1.1.3 Equipment. All of the machinery, equipment, leasehold
improvements,
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trucks, automobiles, office furniture, office equipment, computing
and telecommunications equipment of the Business listed on SCHEDULE 1.1.3,
including the software loaded on such equipment as on SCHEDULE 1.1.10
(collectively, the "Equipment") subject to the rights of third parties in the
equipment leases listed on SCHEDULE 1.1.3 (the "Equipment Leases");
1.1.4 Inventory. All raw materials inventory, work-in-process
inventory, finished goods inventory and spare parts inventory, including that
identified on SCHEDULE 1.1.4 (as updated in a supplement to SCHEDULE 1.1.4 to be
delivered at Closing), (a) less any raw materials, work-in-process and finished
goods inventory which Buyer may in its discretion designate at the Closing, as
set forth on SCHEDULE 1.1.4(a) (the "Rejected Inventory") and (b) less the
Polaroid Inventory, as set forth on SCHEDULE 1.1.4(b), excluded in Section
1.2.5, together with all manufacturing supplies and boxing, labeling and other
shipping materials and an assignment of all related manufacturer or fabricator
warranties, guaranties and indemnities (collectively, the "Inventory");
1.1.5 Open Orders. Open orders for goods and services with
customers of Seller set forth on SCHEDULE 1.1.5 (the "Open Orders"), together
with related purchase orders, contracts, subcontracts and credit support
associated with such Open Orders;
1.1.6 Other Contracts. All contracts, orders for spare parts,
distribution agreements, service agreements, development agreements, consulting
agreements, leases of machinery, equipment and other personal property,
guarantees, commitments, instruments and other agreements relating to the
acquisition or ownership or any of the Purchased Assets or the operation of the
Business, including those listed on SCHEDULE l.l.6 (the "Contracts");
1.1.7 Permits, Licenses. All governmental permits, licenses,
registrations, orders and approvals relating to the Business including those
listed on SCHEDULE 1.1.7, to the extent
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such permits, licenses, registrations, orders and approvals are transferrable to
Buyer (collectively, the "Permits");
1.1.8 Real Property. All rights in a lease dated December 18,
1992 for the land and buildings situate at 00-00 Xxxxxx Xxxxxx and 00 Xxxxxx
Xxxxxx, Xxxxxxxxx, Xxx Xxxx in which Seller is the tenant together with all
leasehold improvements thereon. A copy of the lease is attached hereto as
EXHIBIT A (the "Real Property Lease");
1.1.9 Business Records. All other records of Seller relating to
the Business, including property records;
1.1.10 Computer Software Assets. All other computer software,
data rights, documentation and associated license, escrow, support and
maintenance agreements, used in the conduct of the Business, including those
listed on SCHEDULE 1.1.10, which excludes Windows NT and Symix software, to the
extent they are transferrable by Seller with or without the consent of any other
party; provided, for any such software for which a consent to transfer is not
obtained, Seller shall arrange for Buyer to obtain the right to use that
software including payment of any transfer fees (the "Computer Software
Assets");
1.1.11 Prepaid Expenses. All payments made by Seller with respect
to the Business, except for those prepaid items listed in Section 1.2, which
constitute prepaid expenses of the Business in accordance with generally
accepted accounting principles ("GAAP") consistently applied, to the extent the
benefits thereof are transferable to Buyer, set forth on SCHEDULE 1.1.11 (the
"Prepaid Expenses");
1.1.12 Other Intangible Assets. All other assets (including
causes of action, rights of action, contract rights and warranty and product
liability claims against third parties) relating to the Purchased Assets or the
Business.
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1.2 EXCLUDED ASSETS. Notwithstanding Section 1.1, the following assets
(collectively, the "Excluded Assets") shall be excluded from this Agreement and
shall not be sold, assigned or transferred to Buyer:
1.2.1 Any insurance policies maintained by Seller with respect to
the Business;
1.2.2 Corporate minute books and stock books;
1.2.3 Any claims and rights against third parties (including,
without limitation, insurance carriers), to the extent they relate to
liabilities or obligations that are not assumed by Buyer;
1.2.4 All payments made by Seller with respect to the Business
which constitute prepaid Taxes of the Business and all claims for refunds of
Taxes and other governmental charges to the extent such refunds relate to
periods ending on or prior to the Closing Date; as used in this Agreement, the
term "Taxes" shall mean all income or profits taxes (including, but not limited
to, federal income taxes and state income taxes), estimated taxes, payroll and
employee withholding taxes, unemployment insurance, social security taxes, sales
and use taxes, value added taxes, excise taxes, capital stock or franchise
taxes, gross receipts taxes, business license taxes, occupation taxes, stamp
taxes, environmental taxes, transfer taxes, workers' compensation, Pension
Benefit Guaranty Corporation premium and other governmental charges, and other
obligations of the same or of a similar nature to any of the foregoing, which a
corporation may be required to pay, withhold or collect, imposed by any federal,
territorial, state, local or foreign government or any agency or political
subdivision of any such government;
1.2.5 Certain of Seller's plastic inventory of raw material (not
finished goods) relating to Polaroid Corp. will remain the property of Seller
(see SCHEDULE 1.1.4(b)) (the"Polaroid Inventory"). If Seller does not sell the
Polaroid Inventory to a third party it will remain at the
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Business premises and Buyer agrees to segregate it for a period of one (1) year
after Closing, in which event Buyer will pay for any Polaroid Inventory it uses
at Seller's cost. At the conclusion of one year after Closing Seller may remove
the Polaroid Inventory or abandon it in place, at its option; and
1.2.6 Cash, accounts receivable and any assets listed on SCHEDULE
1.2.
SECTION 2. THE PURCHASE PRICE AND RELATED MATTERS.
2.1 PURCHASE PRICE. In consideration of the sale, conveyance, assignment,
transfer and delivery of the Purchased Assets, Buyer agrees to pay and deliver
to Seller $1,635,504, subject to adjustments set forth in Section 2.2 (the
"Purchase Price"), on the Closing Date as follows:
(a) $167,007 by assumption of Seller's obligation under the Equipment
leases;
(b) $916,497 by wire transfer of immediately available funds to
Seller's bank account as designated by notice to Buyer at least three days
before the Closing Date (subject to adjustment provided in Section 2.2);
(c) $342,683 by a promissory note dated the date of Closing (subject
to adjustment provided in Section 2.2) payable with interest at the rate of 8%
per annum commencing to accrue one year after Closing with 48 level monthly
payments of principal and interest payable thereafter commencing on the first
day of the 13th month after Closing (the "Note"). The Note will be secured by a
lien upon the Purchased Assets, their replacement and the proceeds thereof which
lien will be subordinate in all respects to the lien to be held by one or more
financial institutions with an aggregate indebtedness not to exceed $1,750,000.
Collection of the Note shall be personally guaranteed by Xxxxx X. Dandora, Vice
President and majority shareholder of Buyer ("Dandora").
In addition to the above Buyer will pay to Seller at the Closing by check
the sum of the Prepaid Expenses.
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2.2 PURCHASE PRICE ADJUSTMENTS. $342,683.00 of the Purchase Price is based
upon a discount from the Division's physical inventory at cost which Purchase
Price will be recomputed at Closing based upon the physical inventory on that
date using the following percentage discounts; provided, however, that no
discount shall apply to work-in-process and tool room percentage of completion
contracts allocated to purchase orders of Seller:
(a) 25% discount from the physical inventory at cost of plastic raw
material inventory, less Rejected Inventory of plastic raw material and
less Polaroid Inventory;
(b) 30% discount from the physical inventory at cost of plastic
work-in-process less the Rejected Inventory of work-in-process;
(c) 25% discount from the physical inventory at cost of finished goods
less the Rejected Inventory of finished goods;
(d) 25% discount from the gross book value of tool room percentage of
completion contracts, which gross book value shall after a
contract-by-contract analysis provide, on an aggregate basis, that the
balance of xxxxxxxx on the contracts is adequate to cover (i) the costs to
completion and (ii) a percentage of the original estimated profit thereof
(such percentage being determined by taking the original estimated profit
to the total purchase order value and multiply by the balance of xxxxxxxx).
Notwithstanding the foregoing, four tools are excluded from the calculation
for which Seller will issue a purchase order on July 16, 1996 to build,
repair or complete the tools on a time and material basis, with time billed
at $40.00 per hour, with a maximum number of billable hours for each tool
set forth on Schedule 2.2(d); and
(e) Notwithstanding the above discount provisions, Buyer and Seller
can agree upon a value for the Inventory value which shall if so agreed be
set forth on SCHEDULE 2.2.(e) as the parties shall determine.
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The principal amount of the Note and the monthly payments due will be
modified to reflect the adjustment provided in this Section 2.2. above.
The $916,497 cash portion of the Purchase Price shall be adjusted by 50% of
the amount that the total of the assumed Equipment Lease liability is greater
than or less than $167,007. The variance shall be added to or subtracted from
the Purchase Price and shall be reflected by a change in the amount of cash paid
at Closing.
2.3 ALLOCATION OF PURCHASE PRICE. Seller and Buyer agree that the Purchase
Price shall be allocated to the various assets comprising the Purchased Assets
in accordance with SCHEDULE 2.2., including $1,083,504 for the Equipment. Seller
and Buyer acknowledge that such allocation represents the fair market value of
the Purchased Assets and shall be binding upon the parties for all applicable
federal, state, local and foreign tax purposes. Seller and Buyer covenant to
report gain or loss or cost basis, as the case may be, in a manner consistent
with Schedule 2.2 on all tax returns filed by either of them subsequent to
Closing and not to voluntarily take any inconsistent position therewith in any
administrative or judicial proceeding relating to such returns. Seller and Buyer
shall exchange mutually acceptable and completed IRS Forms 8594, which they
shall use to report the transaction contemplated hereunder to the Internal
Revenue Service in accordance with such allocation.
SECTION 3. ASSUMPTION OF ENUMERATED LIABILITIES.
3.1 GENERAL LIMITATION ON ASSUMPTION OF LIABILITIES. Seller shall transfer
the Purchased Assets to Buyer free and clear of all Liens, and without any
assumption of liabilities and obligations, except the Equipment Leases and
nonrent portion of the Real Property Lease and Buyer shall not, by virtue of its
purchase of the Purchased Assets, assume or become responsible for any
liabilities or obligations of Seller or any other Person except for the
Equipment Leases and Real Property Lease.
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As used in this Agreement, "Person" shall mean an individual, partnership,
corporation, business trust, joint stock company, trust, unincorporated
association, joint venture, limited liability company or any other entity of
whatever nature; and for purposes of this Section 3.1, the phrase "liabilities
and obligations" shall include, without limitation, any direct or indirect
indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost,
expense, obligation or responsibility, fixed or unfixed, known or unknown,
asserted or unasserted, xxxxxx or inchoate, liquidated or unliquidated, secured
or unsecured, whether arising in contract, tort or otherwise, whether now
existing or hereafter arising, related to, arising from or connected with the
Purchased Assets or the Business, including, but not limited to, any liability
for property damage, death or personal injury (whether suffered prior to or
after the Closing) with respect to products or services sold or delivered by
Seller or Seller's agents, whether sold, delivered or placed in use prior to or
after the Closing ("Product Liability"), and Seller shall convey no such
obligations or liabilities, contingent or otherwise, to Buyer, it being the
intention of Buyer and Seller that Buyer shall not be deemed a successor to
Seller.
3.2 EXCLUDED LIABILITIES. Without limiting the generality of Section 3.1,
the following liabilities and obligations, together with the liabilities and
obligations excluded in Section 3.1 and the employee obligations excluded in
Section 3.3 (collectively, the "Excluded Liabilities") shall specifically not be
assumed by Buyer and shall be paid by Seller:
3.2.1 the liabilities or obligations of Seller to its stockholders
respecting dividends, distributions to its stockholders in liquidation,
redemptions of stock, or otherwise;
3.2.2 liabilities or obligations of Seller arising out of any
transactions occurring, or obligations incurred, after the Closing;
3.2.3 any obligations of Seller for expenses, Taxes or fees incident
to or arising out of the negotiation, preparation, approval or authorization of
this Agreement or the
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consummation of the transactions contemplated hereby, including, without
limitation, all attorneys and accountants fees and all brokers or finders fees
or commissions payable by Seller;
3.2.4 any obligation of Seller under or arising out of this Agreement;
3.2.5 liabilities against which Seller is insured or otherwise
indemnified or which would have been covered by insurance (or indemnification)
but for a claim by the insurer (or the indemnitor) that the insured (or the
indemnities) had breached its obligations under the policy of insurance (or the
contract of indemnity) or had committed fraud in the insurance application;
3.2.6 any liabilities or obligations, the existence of which
constitute a breach of the representations, warranties or covenants of Seller
contained in this Agreement;
3.2.7 any obligations or liabilities of Seller to indemnify its
officers, directors, employees or agents;
3.2.8 all Taxes imposed on Seller, including any Tax of any other
corporation, which Tax is assessed against Seller by virtue of its status, prior
to the Closing Date, as a member of any consolidated group of which such other
corporation was also a member; and
3.2.9 all other liabilities of Seller relating to the Business that
arise as a result of actions or events occurring on or before the Closing Date,
including without limitation, accounts payable, Product Liability, liabilities
related to the infringement by Seller of any Intellectual Property or Related
Rights, liabilities of Seller relating to any environmental matters, and any
liabilities related to any lawsuit, cause of action, litigation or legal
proceeding with respect to any losses, occurrences or events occurring prior to
Closing, whether commenced prior to or after Closing.
Buyer in no event assumes any obligation of Seller for incidental,
consequential or punitive damages or for Product Liability.
3.3 EMPLOYEES. Buyer shall assume no and shall have no obligations to any
of Seller's
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employees for accrued benefits, severance or deferred pay, pension, medical or
disability benefits or any other payments or benefits, which may be or become
due to such employees from Seller. Seller agrees that, with respect to claims
for workers' compensation and all claims under Seller's employee benefit
programs by persons working for the Business arising out of events occurring
prior to the Closing, whether reported or unreported as of the Closing and
whether insured or uninsured (including, but not limited to, workers'
compensation, life insurance, medical and disability programs), Seller shall, at
its own expense, honor or cause its insurance carriers to honor such claims in
accordance with the terms and conditions of such programs or applicable workers'
compensation statutes. Without limiting the scope of the preceding sentence,
Seller shall be responsible for any and all claims and liabilities arising out
of or relating to (a) its employment of its employees, (b) the termination by
Seller of such employment of any such employees and (c) the provision of any
employee benefits to such employees (and their beneficiaries and eligible
dependents) attributable to their employment with, or their participation in any
plans or programs maintained or contributed to by Seller.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller hereby represents and warrants to Buyer that:
4.1 ORGANIZATION AND GOOD STANDING. Seller is a corporation duly organized,
validly existing and in good standing under the laws of Delaware, with full
corporate power and authority to carry on the Business as presently conducted by
it, and Seller is qualified to do business in the State of New York, which is
the only foreign jurisdiction where the failure to be so qualified would
materially and adversely affect the condition (financial or otherwise),
properties, assets or operations of Seller.
4.2 CORPORATE AUTHORITY. Seller has full corporate power and authority to
execute and
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deliver this Agreement and the instruments of transfer and other documents
delivered or to be delivered pursuant hereto, to perform all the terms and
conditions hereof and thereof to be performed by it and to consummate the
transactions contemplated hereby and thereby. This Agreement and all instruments
of transfer and other documents delivered or to be delivered by Seller in
connection with this Agreement have been duly authorized and approved by all
necessary and proper corporate action of Seller (including authorization by
Seller's Board of Directors) and constitute, and will constitute, the valid and
binding obligations of Seller enforceable in accordance with their respective
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws or equitable principles
from time to time in effect relating to or affecting the rights of creditors
generally.
4.3 NO VIOLATION. Neither the execution and delivery by Seller of this
Agreement or the instruments of transfer and other documents delivered or to be
delivered pursuant hereto by Seller and the performance by Seller hereunder or
thereunder, nor the consummation of the transactions contemplated hereby or
thereby, will violate, conflict with, result in the breach of or accelerate the
performance required by any of the terms, conditions or provisions of the
Articles of Incorporation or Bylaws of Seller or any covenant, agreement or
understanding to which Seller is a party or any order, ruling, decree, judgment,
arbitration award or stipulation to which Seller is subject, or constitute a
default thereunder or result in the creation or imposition of any Lien upon any
of the Purchased Assets or allow any Person to interfere with Buyer's full use
and enjoyment of any of the Purchased Assets.
4.4 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES AND OTHERS. No
approval or authorization of, filing or registration with, or notification to,
any governmental or regulatory authority is required in connection with the
execution and delivery of this Agreement by Seller or the
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performance of its obligations hereunder or the consummation of the transactions
contemplated hereby. No consent, approval or authorization of any Person is
required in connection with the execution or delivery of this Agreement by
Seller, the transfer to Buyer of the Purchased Assets or the performance by
Seller of any other obligation under this Agreement except the approval of the
landlord to sublet the premises under the Real Property Lease and the waiver by
the landlord of its right of first refusal to purchase the Purchased Assets,
which waiver has been obtained (the "Landlord Option").
4.5 FINANCIAL STATEMENTS. The summary balance sheets for the 12 month
periods ending July 31, 1993, 1994 and 1995 and the ten month period ending
May 24, 1996 and attached hereto as SCHEDULE 4.5 (the "Balance Sheet") has been
prepared in accordance with GAAP consistently applied except as may be noted
therein, is true and correct and presents fairly the financial condition of
Seller on those dates.
Except as set forth in SCHEDULE 4.5, there has not been since May 24, 1996
any material adverse change in the condition (financial or other), properties,
assets, liabilities or prospects of the Business, and Seller has no liabilities
or obligations (as defined in Section 3.1) relating to the Business, except:
4.5.1 those liabilities and obligations set forth on the Balance Sheet
and not heretofore paid or discharged;
4.5.2 those liabilities and obligations incurred in the ordinary
course of business consistent with past practice since May 24, 1996.
All books of account and other financial records of Seller directly
relating to the Business (the "Books and Records") are complete and correct and
have been made available to Buyer. All of the Books and Records have been
maintained in conformity with GAAP and in compliance with
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applicable laws, regulations and other requirements.
4.6 LITIGATION: COMPLIANCE WITH LAWS. Except as disclosed on SCHEDULE 4.6,
Seller is not engaged in, or a party to, or threatened with, any legal action,
suit, investigation or other proceeding by or before any court, arbitrator or
administrative agency concerning the Business, and after diligent inquiry,
Seller does not know of any basis for any such action, investigation or
proceeding. There are no outstanding orders, rulings, decrees, judgments or
stipulations or proceedings to which Seller is a party or by which Seller is
bound, by or with any court, arbitrator or administrative agency concerning the
Business. Seller is operating the Business in compliance with the requirements
of all federal, state and local laws, regulations, judgments, injunctions,
decrees, court orders and administrative orders regarding such operations.
4.7 INTELLECTUAL PROPERTY. To the best of Seller's knowledge, the
Intellectual Property includes all intellectual property that is necessary or
related to the operation of the Business. Except as described on SCHEDULE 4.7,
all patents, copyrights (where such registration is permitted or required by
applicable law), trademarks, tradenames and service marks included in the
Intellectual Property are registered to or owned by or licensed to Seller, are
valid and enforceable (and in the case of any unregistered or unpatented rights
may be freely used by Seller) or pending (in the case of patents), and all
annuities, if any, are fully paid. To the best of its knowledge, Seller has not
infringed and is not infringing, nor has Seller contributed to or is
contributing to the infringement of, any valid patents, copyrights, trademarks,
tradenames or service marks of any third party that are currently required for
the Business, and there are no pending or threatened actions against Seller for
infringement of any such patents, copyrights, trademarks, tradenames or service
marks. None of the patents or patent applications included in the Intellectual
Property is involved in a reissue, reexamination, interference, opposition or
similar proceeding, and there is no threat or other
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indication that any such proceeding will be declared or commenced. To the best
of its knowledge, Seller requires no rights under any patent, trade secret or
other proprietary information or computer software license which Seller does not
have or does not have the lawful right to use in order to conduct the Business
as currently conducted or to manufacture, sell, use or service any product
manufactured or serviced by the Business. To the best of its knowledge, Seller
is not using, without authorization, any trade or other business secret,
know-how or technical information of any Person in the conduct of the Business.
All licenses permitting Seller to use any Intellectual Property, Technical
Information or Computer Software Assets are in full force and effect, and the
terms of such licenses do not provide that they shall be terminated or
restricted as a result of the consummation of the transactions contemplated by
this Agreement.
4.8 NO PRIOR SALE OR LICENSING OF PURCHASED ASSETS. The Seller is not a
party to any license with respect to, and has not made any sale, pledge or other
transfer of, and has not granted any rights or options to purchase or acquire,
all or any part of the Purchased Assets, except as contemplated by this
Agreement except the Landlord Option.
4.9 CERTAIN FEES. Neither Seller nor any of its officers, directors,
employees or other affiliates has agreed to pay or has incurred any claims for
any brokerage fees, commissions or finders' fees in connection with the
transactions contemplated hereby except that Seller will pay a fee to Xxxxxx
Xxxxxx for his services rendered in connection with the sale of the Purchased
Assets and the management of the Business prior to Closing.
4.10 DISCLOSURE. No representations or warranties made by Seller in this
Agreement and no statements made by Seller in any certificate, schedule, exhibit
or other writing delivered by Seller to Buyer or referred to in or pursuant to
this Agreement contain, or at the date of its delivery will contain, any untrue
statement of a material fact or omit or will omit any statement of a material
fact
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necessary to make complete, accurate and not misleading every representation,
warranty and statement of Seller set forth in this Agreement or any such
certificate, schedule, exhibit or other writing.
4.11 SOLVENCY. The transfer of the Purchased Assets by Seller in return for
the Purchase Price will not render Seller insolvent or unable to pay its debts
as they become due in the ordinary course or leave Seller with an unreasonably
small capital for the business in which it will continue to engage.
4.12 PURCHASED ASSETS.
4.12.1 The use to which the property subject to the Real Property
Lease is put is not subject to any restriction or condition and conforms to
zoning, subdivision and/or planning regulations, fire and safety regulations, to
the requirements of the relevant local authorities and to all statutes governing
such property or use thereof and is not a temporary use. All necessary consents
to such existing use have been obtained. Seller has not received notice of
violation of any such regulation, ordinance or other law, order or requirement
from any court or Governmental Authority or of taking by eminent domain or
condemnation proceeding.
4.12.2 Seller has good and marketable title to, and all right, title
and interest in, all the personal properties and assets included in the
Purchased Assets, and will transfer and convey the Purchased Assets to Buyer,
free and clear of all Liens. None of such personal properties or assets were
purchased by Seller in a bulk sale. As used in this Agreement, "Liens" shall
mean and include all mortgages, liens, pledges, charges, title retention or
security agreements, claims, restrictions, leases, options, rights of first
offer or first refusal, confidentiality or secrecy agreements, noncompetition
agreements, defects of title or other encumbrances or rights of others not
otherwise disclosed herein.
4.12.3 All the tangible assets of Seller used and operated in the
Business are
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in conformity with all applicable laws and regulations and are in good operating
order and condition, subject to reasonable wear and tear, and are suitable for
their intended uses.
4.12.4 The Purchased Assets include all tangible and intangible
personal property which are related to the operation of the Business, except the
Excluded Assets.
4.13 TECHNICAL INFORMATION. To the best of Seller's knowledge, except as
expressly noted on the manufacturing drawings or on SCHEDULE 4.13, there exists
no undocumented manufacturing or assembly procedure nor any variance between
manufacturing drawings included in the Technical Information and the actual
manufacturing and assembly practices of Seller and Seller's vendors and
subcontractors. On the Closing Date, Seller will have delivered all patterns,
manufacturer's manuals and copies of all other Technical Information in its
possession to Buyer, and will have caused all third parties to return all
patterns and return or destroy all copies of Technical Information. All
Technical Information in electronic form and Computer Software Assets have been
scanned for and cleaned of all computer viruses.
4.14 INVENTORY. Except for the Polaroid Inventory and Rejected Inventory,
the physical counting of the Inventory was performed in accordance with GAAP
consistently applied.
4.15 CONTRACTS.
4.15.1 A true and correct copy of each Contract, including
manufacturer representative contracts, has previously been made available to
Buyer. All Contracts are valid, binding and in full force and effect, and
neither Seller nor, to Seller's knowledge, any other party to any such Contracts
is in default thereunder.
4.15.2 Except as set forth on SCHEDULE 4.15, none of the Contracts
contains any provision giving any party thereto the right to terminate such
agreement by reason of the execution of this Agreement or the consummation of
the transactions contemplated herein, and none
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of the terms of any Contract will be adversely altered in any material respect
by reason of the execution of this Agreement or the consummation of the
transactions contemplated herein.
4.16 OPEN ORDERS. To the best of Seller's knowledge, all Open Orders are
valid, binding and in full force and effect and neither Seller nor the other
party thereto is in default thereunder. Seller will deliver copies of all Open
Orders to Buyer for review of assignability at least five days prior to the
Closing Date. Seller will at Buyer's request use its best efforts to obtain
consents to assignment of any Open Order Buyer determines to be material to its
obtaining the backlog of Open Orders under Section 8.14. Seller has no
obligation to make any payments to representatives or any other Person on or
with respect to Open Orders, except for commissions due to manufacturer
representatives as set forth on SCHEDULE 4.16, which remain the Seller's
obligation with respect to goods shipped by the Business prior to the Closing
and will be the Buyer's obligation with respect to goods shipped by the Business
subsequent to the Closing. To the best of Seller's knowledge, the anticipated
margins and costs to complete each Open Order are correctly stated with respect
to each Open Order on SCHEDULE 4.16.
4.17 PERMITS AND LICENSES. The Permits and the Environmental Permits are
the only permits, franchises, licenses or authorizations used in or necessary
for the conduct of the Business. All Permits are in full force and effect and no
suspension or cancellation of any has been threatened. No Permits or parts
thereof are subject to loss by reason of dormancy or non-use. No claims have
been made by any third parties relating to the Permits and, to Seller's
knowledge, no such claim is contemplated by any Governmental Authority or other
Person nor does any basis therefor exist. No Permit will be terminated or
require the consent of the issuer as a result of the consummation of the
transactions contemplated by this Agreement, except those issued in the name of
Seller's corporate entity. True and correct copies of all Permits have been
delivered to Buyer for which assignment will
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be obtained.
4.18 INSURANCE. Seller maintains such types and amounts of insurance
against such risks and losses as are required by law or the terms of any
contract and as are customary for companies similarly situated in the business
in which Seller is engaged and at the locations where Seller conducts such
business, and Seller has not received any notice of actual or proposed
cancellation or of reduction in coverage of, or of any increase in premium
under, such policies of insurance.
4.19 PRODUCT LIABILITY. There is not presently any action, suit,
proceeding, claim or investigation pending, or to Seller's knowledge threatened,
against Seller for personal injury or property damage or otherwise relating to
the safety or fitness of the goods or products of Seller.
4.20 ABSENCE OF SENSITIVE PAYMENTS. Seller has not made any contributions,
payments or gifts to or for the private use of any governmental official,
governmental employee or governmental agent in any amount where either the
payment or the purpose in making such contribution, payment or gift is illegal
under the laws of the United States or any other jurisdiction; Seller has not
established or maintained any unrecorded fund or asset for any purpose or made
any false or artificial entries on its books; and Seller has not made any
payments to any Person with the intention or understanding that any part of such
payment was to be used for any purpose other than that described in the document
supporting the payment.
4.21 TAXES. Except as described on SCHEDULE 4.21 attached hereto, Seller
has duly and timely filed all tax returns required to be filed by it or for
which it may be held responsible, and has paid all Taxes, interest, penalties,
duties, assessments and deficiencies due and payable by it.
4.22 ENVIRONMENTAL ISSUES.
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4.22.1 Except as set forth in SCHEDULE 4.22.1, all activities of the
Business while under Seller's ownership have been conducted in compliance with,
and all properties owned, leased or operated in connection with the Business
comply with, all environmental or health and safety statutes, ordinances,
regulations, orders, directives, decrees and requirements of common law
concerning (1) those activities, (2) those properties, (3) repairs or
construction of any improvements, (4) handling of any materials, (5) discharges
to the air, soil, surface water or ground water, and (6) storage, treatment or
disposal of any waste at or connected with any activity at such properties
("Environmental Laws").
4.22.2 All permits necessary for the operation of the Business in
compliance with Environmental Laws ("Environmental Permits") have been obtained
by Seller and are listed in SCHEDULE 4.22.2. SCHEDULE 4.22.2 also lists all of
the conditions contained in the Environmental Permits which remain unsatisfied.
Except as disclosed in SCHEDULE 4.22.2, all Environmental Permits are in full
force and effect and are not subject to any appeals or further proceedings or to
any unsatisfied conditions. No modification, suspension, recision, relocation or
cancellation of any Environmental Permit is pending or threatened, and no
Environmental Permit will be adversely affected by the consummation of the
transactions contemplated by this Agreement. Seller has made or caused to have
been made all notifications and done all other things necessary, or will do so
before Closing, to ensure that, following the consummation of the transactions
contemplated by this Agreement, all previously issued Environmental Permits in
connection with the Business shall remain in full force and effect.
4.22.3 To the best of Seller's knowledge, no Contamination is present
at any property now or previously owned, leased or operated by Seller in
connection with the Business. The term "Contamination" means the uncontained
presence of Hazardous Substances at any property, or
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arising from any property, which may require remediation under any applicable
law, and the term "Hazardous Substances" means "hazardous substances" or
"pollutant" or contaminants" as defined pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), as amended,
"regulated substances" within the meaning of subtitle I of the Resource
Conservation and Liability Act, as amended, hazardous substances as defined
under any applicable state or local Environmental Laws, petroleum or petroleum
products, or any other substance considered toxic, hazardous or a potential
threat to human health or the environment under any applicable law, the presence
of which might result in (1) an environmental Lien, or (2) a party incurring
costs or being ordered or directed to investigate, remediate or otherwise
respond to a potential environmental threat posed by such substance.
4.22.4 To the best of Seller's knowledge, SCHEDULE 4.22.4 identifies
all sites at or to which any waste generated by or on behalf of the Business, or
otherwise, in connection with any of its respective operations has been
transported, stored, treated or disposed ("Disposed" or "Disposal") and all
arrangements for Disposal. Except as identified in SCHEDULE 4.22.4:
4.22.4.1 To the best of Seller's knowledge, none of the sites
identified in SCHEDULE 4.22.4 is or may become the subject of a response action
under CERCLA or any similar federal, state or local law imposing liability for
remediation;
4.22.4.2 Seller has not received in connection with the
Business (A) a request for information from any Governmental Authority with
respect to any discharge or removal of any Hazardous Substance, or (B) other
notice that it has been identified in any litigation, administrative proceeding
or investigation as a responsible party or a potentially responsible party for
any liability under any Environmental Law. "Governmental Authority" shall mean
the government of the United States, any state or political subdivision
thereof, or any foreign country and any entity
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exercising executive, legislative, regulatory or administrative functions of or
pertaining to government;
4.22.4.3 Seller has not filed on behalf of the Business any notice
under any federal, state or local law, regulation or order reporting a release
of Hazardous Substances;
4.22.4.4 Seller has not entered into on behalf of the Business any
negotiations or agreements with any Person relating to any response action or
other cleanup or remediation of any Hazardous Substance, except that the Seller
charged the prior owner of the Business in connection with the removal of an
underground fuel oil tank.
4.22.5 Except as set forth in SCHEDULE 4.22.5, no portion of any
property owned, leased or operated by Seller in connection with the Business
contains any of the following:
4.22.5.1 polychlorinated biphenyls or substances containing
polychlorinated biphenyls;
4.22.5.2 asbestos or materials containing asbestos; or
4.22.5.3 urea formaldehyde foam insulation;
4.22.5.4 tanks presently or formerly used for the storage of any
liquid or gas above or below ground.
4.22.6 To the best of Seller's knowledge, except as set forth in
SCHEDULE 4.22.6, no portion of any property owned, leased or operated by Seller
in connection with the Business constitutes any of the following:
4.22.6.1 a wetland or other "water of the United States" for purposes
of Section 404 of the federal Clean Water Act, or any similar area regulated
under any applicable state law;
4.22.6.2 a floodplain or other flood hazard area;
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4.22.6.3 a portion of the coastal zone for purposes of the
federal Coastal Zone Management Act; or
4.22.6.4 any other area development of which is specifically
restricted under applicable law by reason of its physical characteristics or
prior use.
4.23 BENEFIT PLANS AND EMPLOYMENT ARRANGEMENTS.
4.23.1 Except for Seller's 401(k) plan and cafeteria benefit plan,
Seller has not maintained, for the benefit of employees of the Business, and
does not maintain, any welfare plan as defined in the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"); pension plan, as defined in Section
3(2) of ERISA; or retirement, insurance, bonus, deferred compensation or other
plan or arrangement.
4.23.2 Except as set forth in SCHEDULE 4.23, each group health plan
that provides health coverage to any present or former employee of the Business
has operated in compliance with all requirements of Sections 601 through 608 of
ERISA and Section 4980B of the Internal Revenue Code and the regulations
promulgated under former Section 162(i)(2) and (u) of the Code relating to the
continuation of coverage under certain circumstances in which coverage would
otherwise cease.
4.23.3 Seller has not carried on discussions regarding organization
with any labor union for the Business and there has not been any strike, work
stoppage, labor dispute or other labor trouble relating to employees of the
Business, and there are no significant threats of work stoppage or labor trouble
by employees of Seller.
4.24 UNDISCLOSED LIABILITIES. Seller has no liability or obligation of any
nature in connection with the Business, whether due or to become due, absolute,
contingent or otherwise, including without limitation, liabilities for or in
respect of Indebtedness or Taxes or penalties except for
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liabilities that (a) are disclosed in this Agreement or on a schedule to this
Agreement, (b) are incurred in the ordinary course of business since May 24,
1996, and fully reflected as liabilities on the Seller's Books and Records or
(c) Seller's obligations under two covenants-not-to-compete and the Real
Property Lease with the prior owners of the Business. "Indebtedness" shall mean
all items which, in accordance with GAAP, would be included in determining total
liabilities as shown on the liabilities side of the balance sheet as at the date
Indebtedness is to be determined, except accounts payable which are not more
than 90 days past due and accrued liabilities arising in the ordinary course of
business, and in any event shall include (i) all indebtedness for borrowed money
or for the deferred purchase price of property or services, (ii) liabilities as
lessee under leases of real and/or personal property which have been or should
be, in accordance with GAAP, recorded as capital leases, (iii) liabilities
secured by any Lien on property owned or acquired, whether or not such liability
shall have been assumed, (iv) indemnities, guarantees, endorsements (other than
for collection in the ordinary course of business) and other contingent
obligations whether secured or not in respect of the obligations of other
Persons, (v) liabilities in respect of unfunded vested benefits, including
without limitation, under employee benefit plans and severance or termination
pay obligations, (vi) reimbursement or other obligations in respect of letters
of credit, banker's acceptances, surety or other bonds and similar instruments
whether or not matured, and (vii) all obligations arising under any consulting
or noncompetition agreement entered into in connection with an acquisition of
assets or the purchase of shares or other equity interests of any Person, to the
extent such obligations have been capitalized.
4.25 TRANSACTION RELATIONSHIP. This Agreement has been entered into as a
result of arms length negotiations between Buyer and Seller and there is no
special relationship between Buyer and Seller or facts and circumstances whereby
Seller is obligated to obtain a fairness opinion as to the
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Purchase Price for the Purchased Assets and the value thereof.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents and warrants to Seller as follows:
5.1 ORGANIZATION, GOOD STANDING AND CORPORATE AUTHORITY. Buyer is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of New York and has full corporate power authority to execute
this Agreement and the other documents delivered or to be delivered pursuant
hereto, to perform all the terms and conditions hereof and thereof to be
performed by it and to consummate the transactions contemplated hereby and
thereby, and this Agreement and the other documents delivered or to be delivered
pursuant hereto constitute the valid and binding obligations of Buyer,
enforceable in accordance with their terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws or equitable principles from time to time in effect relating to or
affecting the rights of creditors generally.
5.2 NO VIOLATION. Neither the execution and delivery by Buyer of this
Agreement or the instruments of transfer and other documents delivered or to be
delivered pursuant hereto by Buyer and the performance by Buyer hereunder or
thereunder, nor the consummation of the transactions contemplated hereby or
thereby, will violate, conflict with, result in the breach of or accelerate the
performance required by any of the terms, conditions or provisions of the
Certificate of Incorporation or Bylaws of Buyer or any covenant, agreement or
understanding to which Buyer is a party or any order, ruling, decree, judgment,
arbitration award or stipulation to which Buyer is subject, or constitute a
default thereunder.
5.3 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES AND OTHERS. No
approval or authorization of, filing or registration with, or notification to,
any Governmental Authority is required
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in connection with the execution and delivery of this Agreement by Buyer or the
performance of its obligations hereunder or the consummation of the transactions
contemplated hereby.
5.4 CERTAIN FEES. Neither Buyer nor any of its officers, directors,
employees or other affiliates has agreed to pay or has incurred any claims for
any brokerage fees, commissions or finders' fees in connection with the
transactions contemplated hereby.
5.5 BUSINESS RECORDS. From and after Closing Buyer will provide Seller and
its representatives access, from time to time, to the Business records acquired
by Buyer hereunder as may be reasonably required by Seller and will permit
Seller to make copies thereof.
5.6 SELLER'S ACCOUNTS RECEIVABLE. From and after the Closing, Buyer upon
receipt of payments on account of Seller's Accounts Receivable, based upon a
customers notification on the check, will promptly deliver them to Seller in the
form received. If a payment is received covering accounts receivable of both
Buyer and Seller, Buyer upon the check of the customer clearing will promptly
transmit to Seller the amount due to it. Buyer will not suggest to or otherwise
persuade customers to pay an invoice of Buyer prior to paying an invoice of
Seller.
SECTION 6. SELLER'S COVENANTS.
6.1 EMPLOYEES. Seller shall permit Buyer to discuss the possibility of
employment with current employees of the Business, and shall not interfere with
or impede Buyer's right to do so, either directly or indirectly.
6.2 SALES TAXES; EQUIPMENT APPRAISAL. Buyer and Seller agree that they will
share and pay equally all sales, use and transfer Taxes, if any, arising from
the sale of the Purchased Assets pursuant hereto and provided that, if the
closing is completed hereunder, Seller will pay one-half of the Buyer's cost of
an appraisal of the Equipment.
6.3 ACCESS TO OFFICES, OFFICERS, ACCOUNTANTS, DUE DILIGENCE, ETC. Seller
will continue to
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afford to the officers and authorized representatives of Buyer (including
without limitation, attorneys, accountants, surveyors, building inspectors,
engineers, environmental consultants, insurance brokers, financial advisors and
bankers) access to the offices, officers, properties, books and records of
Seller concerning the Business and of the Business, including contact with
attorneys, accountants and other representatives of Seller and with any and all
Persons Buyer deems appropriate in order to consummate the transactions
contemplated hereby, and will furnish Buyer with such additional financial and
operating data and other information as to the Business and Purchased Assets as
Buyer may from time to time reasonably request. Seller will cooperate with Buyer
to facilitate Buyer's contacting vendors, dealers, customers and such other
Persons as Buyer and its representatives may reasonably desire to contact in
connection with Buyer's investigation of the Business. Investigations conducted
by Buyer and its agents shall be conducted in such a manner as to minimize, to
the extent reasonably practicable, the disruption of orderly business operations
of Seller and the Business and properties examined shall be returned to their
preexamination condition by Buyer.
6.4 ENVIRONMENTAL INVESTIGATION. Seller has commissioned at its expense an
update of its Phase I investigation of the premises and operation of the
Business to determine compliance with Environmental Laws, the presence of
Hazardous Substances or other toxic or hazardous materials on properties owned
or operated by the Business. Buyer shall be under no obligation to continue with
its due diligence investigation or to close under this Agreement if, at any
time, the results of its due diligence investigation under Section 6.3 or this
Section 6.4 are not satisfactory to Buyer for any reason in its sole discretion.
6.5 APPROVALS; CONSENTS. Seller will use its best efforts to obtain the
consents of all parties to all Contracts, Open Orders, Permits, Environmental
Permits and rights of Seller, which require the consent of such parties for the
consummation of the transactions contemplated hereby.
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6.6 PRESERVATION OF BUSINESS ORGANIZATION. Seller will conduct the Business
in the ordinary course, in a manner consistent with applicable federal and state
regulations, and will use its best efforts to preserve Seller's business
relationships intact and to preserve the goodwill of Seller with its suppliers,
customers and others having business relations with it.
6.7 APPROVAL OF CERTAIN TRANSACTIONS. Except as specifically contemplated
by this Agreement, without the prior written consent of Buyer, Seller will not,
in the conduct of the Business:
6.7.1 incur or agree to incur any liability or obligation or enter
into any agreement or transaction which cannot be cancelled upon thirty days
(30) notice, except renewals or replacements of existing Contracts in the
ordinary course on substantially the same terms;
6.7.2 mortgage, pledge, sell, lease, distribute, dispose of or
otherwise encumber or convey any interest in any Purchased Assets, except the
sale of finished goods inventory in the ordinary course of business;
6.7.3 make capital expenditures in excess of $15,000;
6.7.4 conduct its business other than in the ordinary course;
6.7.5 waive or release any material rights with respect to the
Purchased Assets or the Business;
6.7.6 change its methods of accounting; or
6.7.7 take any other action (i) which would result in a material
adverse change in the condition (financial or other), of the Business or the
Purchased Assets or (ii) which if taken prior to the date hereof would
constitute a breach of any representation or warranty contained in Section 4 of
this Agreement.
6.8 EXCLUSIVE DEALING. Seller will not:
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6.8.1 solicit or initiate discussions or engage in negotiations with
any Person, other than Buyer (whether or not such discussions are initiated by
Seller), with respect to the possible acquisition of the Business or the
Purchased Assets by such Person (whether by merger, purchase of capital stock,
purchase of assets or otherwise);
6.8.2 provide any information with respect to the Business or the
Purchased Assets to any Person, other than Buyer, seeking the possible
acquisition of the Business or the Purchased Assets by such Person (whether by
merger, purchase of capital stock, purchase of assets or otherwise); or
6.8.3 enter into a transaction with any Person, other than Buyer,
concerning the possible acquisition of the Business or the Purchased Assets by
such Person (whether by merger, purchase of capital stock, purchase of assets or
otherwise).
6.9 UPDATE SCHEDULES. Seller will promptly disclose to Buyer any
information contained in the representations and warranties of Seller contained
in Section 4 or in the Schedules which is no longer true or complete; provided
that no such disclosure shall be deemed to modify, amend or supplement Seller's
representations and warranties.
6.10 EMPLOYEES; WARN. Seller will pay all wages, salaries and other sums
due employees through the close of business on the day before the Closing Date,
and terminate the employment of all employees as of the close of business on the
day before the Closing Date. Seller shall give all required notices and make all
filings and otherwise comply with all provisions of the Worker Adjustment
Retraining and Notification Act and any similar state statutes with respect to
termination of employees of Seller.
6.11 FURTHER ASSURANCES. From time to time after the Closing, at Buyer's
reasonable request and without further consideration, Seller will execute and
deliver such other and further instruments
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of conveyance, assignment and transfer, and take such other action, as Buyer may
reasonably request for the more effective conveyance and transfer of the
Purchased Assets to Buyer. To the extent that the assignment of confidentiality
agreements to Buyer is not enforceable against the other parties to such
agreements, Seller shall use its best efforts to enforce such agreements with
respect to the Business. Seller shall cooperate with Buyer in obtaining
execution of any documents by current employees of Seller with respect to
inventions, invention disclosures and patent applications for goods or processes
invented prior to the Closing Date.
SECTION 7. THE CLOSING.
The closing of the sale and purchase of the Purchased Assets (the
"Closing") shall take place at the offices of the Seller, 000 Xxxxxx Xxxxxx,
Xxxxxxxxx, Xxx Xxxx at 10:00 a.m. local time on July 15, 1996 or such other time
and place as shall be mutually agreed. In the event that Buyer's bank is unable
to close the loan for acquisition of the Purchased Assets and working capital by
July 15, 1996, the Closing will be postponed on a day to day basis, but no later
than July 15, 1996 (such date being herein sometimes referred to as the "Closing
Date").
SECTION 8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER.
The obligation of Buyer to acquire the Purchased Assets and to pay the
Purchase Price is subject to the satisfaction, or waiver in writing by Buyer, on
or prior to the Closing Date of each of the following conditions:
8.1 CORPORATE ACTION. All corporate and other actions necessary to
authorize and effectuate the consummation of the transactions contemplated
hereby by Seller and Buyer shall have been duly taken prior to the Closing, and
Seller shall have delivered to Buyer a certificate of duly authorized officers
or employees of Seller to that effect with respect to Seller, together with
certified copies of resolutions of the Board of Directors of Seller authorizing
the execution and delivery of this
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Agreement and the consummation of the transactions contemplated hereby.
8.2 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
Seller set forth in this Agreement shall be true and correct on and as of the
Closing Date with the same effect as though all such representations and
warranties had been made on and as of such date and there shall have been
delivered to Buyer a certificate to that effect, dated the Closing Date, signed
by a duly authorized officer of Seller.
8.3 PERFORMANCE OF OBLIGATIONS. Each and all of the covenants and
agreements of Seller to be performed or complied with pursuant to this Agreement
on or prior to the Closing Date shall have been duly performed and complied with
or duly waived and there shall have been delivered to Buyer a certificate to
that effect, dated the Closing Date, signed by a duly authorized officer of
Seller.
8.4 INSTRUMENTS OF CONVEYANCE. ETC. Seller shall have executed and
delivered to Buyer such bills of sale, assignments and instruments of transfer
and conveyance and certificates of title as shall be reasonably required by
Buyer for the transfer to Buyer of all of Seller's right, title and interest to
and in the Purchased Assets free and clear of Liens.
8.5 DELIVERY. On the Closing Date, Seller shall deliver physical possession
of all Equipment, Inventory, Technical Information and tangible property
included in the Purchased Assets and any tangible evidence of all Intellectual
Property and Open Orders to Buyer.
8.6 OPINION OF COUNSEL. Buyer shall have been provided with an opinion of
Seller's counsel substantially in form attached as Exhibit B.
8.7 REQUIRED CONSENTS. Seller shall have obtained all consents and
approvals of all third parties and all Governmental Authorities required for the
transactions contemplated hereby.
8.8 LITIGATION. No order of any court or administrative agency shall be in
effect which restrains or prohibits the transactions contemplated hereby and
there shall not have been threatened,
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nor shall there be pending, any action or proceeding by or before any court or
governmental agency or other regulatory or administrative agency or commission,
challenging any of the transactions contemplated by this Agreement or seeking
monetary relief by reason of the consummation of such transactions.
8.9 SATISFACTORY FINANCING. Buyer shall have received on or before July 15,
1996, a commitment for financing from such lenders as Buyer in its sole
discretion shall have deemed satisfactory to effectuate the transactions covered
by this Agreement.
8.10 NO MATERIAL ADVERSE CHANGE. There shall not have occurred any material
adverse change in the business, financial condition prospects, assets or
operations of the Business.
8.11 SUBLEASE. Buyer shall have executed a sublease for the real property
occupied by the Business on terms satisfactory to it from the Seller for a term
ending December 31, 1997 at a monthly rental of $11,500, and Buyer will assume
all of the nonrent obligations of Seller under the Real Property Lease. Buyer
will name Seller as a loss payee under the insurance policies which Buyer will
obtain relative to the leased premises for the duration of the sublease. At the
termination of the sublease, Buyer and Seller will jointly cause a Phase I
environmental report to be prepared relative to the leased premises and will
each pay for one-half of the cost thereof. Buyer will indemnify and hold Seller
harmless, for a period of three (3) years from the end of the Sublease Term,
from and against any claim brought in such period by reason of, or pertaining
to, the failure by Buyer to have complied with any Environmental Statutes or
regulations promulgated thereunder during the sublease period or thereafter,
including without limitation any failures or violations reported in such Phase I
environmental report which were not reported in the Phase I environmental report
to be delivered by Seller to the Buyer at the Closing.
8.12 REQUIREMENTS CONTRACT. Seller and Buyer shall have entered into a
contract under
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which Seller agrees for a period of 5 years after the Closing to purchase from
Buyer all of Seller's requirements for the products currently being produced by
the Business for the Seller, provided that, Buyer is at all times competitive
with third party sources for such products in terms of quality, cost and
delivery.
8.13 RELEASE OF RIGHT OF FIRST REFUSAL. Seller shall have delivered to
Buyer on or before Closing either (i) a release of the right of first refusal to
acquire the Purchased Assets held by a third party, or (ii) an affidavit of a
corporate officer of the Seller that the third party has forfeited their right
to exercise the right of first refusal under the terms thereof.
8.14 BACKLOG OF OPEN ORDERS. There shall exist a backlog of Open Orders
obtained in the ordinary course of business in an amount between $1,000,000 and
$1,300,000 as shown on an update to SCHEDULE 4.16.
SECTION 9. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER.
The obligation of Seller to sell or otherwise transfer the benefits of the
Purchased Assets hereunder is subject to the satisfaction, or waiver in writing
by Seller, on or prior to the Closing Date of each of the following conditions:
9.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
Buyer set forth in this Agreement shall be true and correct on and as of the
Closing Date with the same effect as though all such representations and
warranties had been made on and as of such date and there shall have been
delivered to Seller a certificate to that effect, dated the Closing Date, signed
by a duly authorized officer of Buyer.
9.2 EXECUTION AND DELIVERY. The execution and delivery of this Agreement by
Buyer and consummation by Buyer of the transactions contemplated hereby shall
have been duly authorized by all necessary corporate action of Buyer and there
shall have been delivered to Seller a certificate of
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duly authorized officers or employees of Buyer to that effect, together with
certified copies of resolutions of the Board of Directors of Buyer authorizing
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby.
9.3 PAYMENT. Buyer shall have paid the Purchase Price to Seller according
to Section 2 of this Agreement, including delivery of the cash payment, and the
Note, guarantee of Note by Dandora, security agreement and financing statements
all in form and substance reasonably satisfactory to Seller.
SECTION 10. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS; FURTHER
ACTION BY SELLER.
10.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made by Seller or Buyer as to any fact or condition existing on or
before the Closing Date in this Agreement, in any Schedule or in any certificate
delivered pursuant hereto, shall survive the Closing for a period of three (3)
years. All such representations and warranties shall be unaffected by any
investigation made by or on behalf of Buyer or by knowledge obtained as a result
thereof or otherwise. Except as otherwise expressly provided in this Agreement,
all covenants, agreements, undertakings and indemnities set forth in this
Agreement shall survive for a period of three (3) years.
10.2 FURTHER ACTION BY SELLER. Immediately following Closing, Seller will
withdraw its registration of the trade name "Austro Mold" and shall execute any
consents necessary to Buyer's or its designee's use of such name.
SECTION 11. INDEMNIFICATION.
11.1 INDEMNITY BY SELLER. The Seller shall defend, indemnify and hold
Buyer, its officers, directors, employees and subsidiaries harmless from and
against all claims, damages, losses, liabilities, costs and expenses (including
attorneys' fees and disbursements and any other legal costs)
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(collectively, "Losses") arising out of or resulting from:
11.1.1 any and all events or occurrences occurring prior to the
Closing Date and any and all obligations of Seller relating to the Business, the
Purchased Assets, and the Excluded Liabilities, now or hereafter arising except
the Equipment Leases and any other obligations expressly assumed by Buyer at the
Closing;
11.1.2 any infringement of patent, trademark, copyright and/or unfair
competition rights arising out of Buyer's or customer's use of any Intellectual
Property, Technical Information or Computer Software Assets, or the manufacture,
use or sale by Buyer or customers of any products or services incorporating or
reflecting any Intellectual Property or Technical Information and all suits or
legal proceedings based thereon or resulting therefrom except by reason of
either (a) Buyer's misuse or different use of Technical Information or Computer
Software, or (b) new third-party patent, trademark, copyright and/or unfair
competition rights which might be created subsequent to the Closing;
11.1.3 all Losses arising out of or resulting from the breach by
Seller of any of its covenants contained herein;
11.1.4 all Losses arising out of or resulting from the failure of any
representation or warranty of Seller contained herein, in any Schedule hereto or
in any certificate delivered pursuant hereto to be true and correct; and
11.1.5 any Loss resulting from a failure by Seller to comply with or
to have complied with any Environmental Statutes or regulations promulgated
thereunder.
11.2 INDEMNITY BY BUYER. Buyer will indemnify and hold the Seller harmless
from and against all Losses arising out of or resulting from Buyer's operation
or ownership of the Business or
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the Purchased Assets on and after the Closing Date.
11.3 NOTICE OF CLAIM. Promptly after service of notice of any claim or of
process on Buyer or on the Seller (hereinafter in this Section 11.3, the
"Indemnified Party") by any third party, or promptly after obtaining actual
knowledge by the Indemnified Party of any other claim, in any matter in respect
of which indemnity may be sought pursuant to this Section 11, the Indemnified
Party shall promptly notify Buyer or the Seller (hereinafter in this Section
11.3, the "Indemnifying Party") of the receipt thereof. In the case of any
action or proceeding by a third party, the Indemnifying Party shall have the
right to participate in, or assume, at its own expense, the defense of any such
claim or process or settlement thereof. After notice from the Indemnifying Party
of its election so to assume the defense thereof, the Indemnified Party shall
not be liable to the Indemnifying Party for any legal or other expense in
connection with such defense. Such defense shall be conducted expeditiously (but
with due regard for obtaining the most favorable outcome reasonably likely under
the circumstances, taking into account costs and expenditures) and the
Indemnified Party shall be advised of all developments. With respect to any
matter which is the subject of any such claim and as to which the Indemnified
Party fails to give the Indemnifying Party such notice as aforesaid, and such
failure adversely affects the ability of the Indemnifying Party to defend such
claim or materially increases the amount of indemnification which the
Indemnifying Party is obligated to pay hereunder, the amount of indemnification
which the Indemnified Party shall be entitled to receive shall be reduced to an
amount which the Indemnified Party would have been entitled to receive had such
notice been timely given.
11.4 LIMITATION OF INDEMNIFICATION. The obligation of Seller to indemnify
Buyer under Section 11.1 shall terminate three years after the Closing Date and
the obligation of Buyer to
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indemnify the Seller under Section 11.2 shall terminate three years after the
Closing Date, except in each case as to matters as to which an Indemnified
Person has given notice of a claim for indemnification in accordance with
Section 11.3 on or prior to such date, in which case the Buyer's or Seller's
obligation shall survive until the claim is finally resolved, and (b) except
with respect to any fraudulent misrepresentation or fraudulent material omission
or fraudulent breach of warranty, which shall terminate five years after the
Closing Date.
11.5 SET OFF. Buyer and Seller are each hereby authorized at any time and
from time to time to set off and apply against any sum which is due and payable
to the other, the amount of any sum which may be owed to the offsetting party by
the other party under this Agreement. The rights under this Section 11.5 are in
addition to any other rights and remedies which Buyer or Seller may otherwise
have.
SECTION 12. TERMINATION; MODIFICATION OR WAIVER.
12.1 TERMINATION. This Agreement may be terminated at any time prior to the
Closing:
12.1.1 by mutual written agreement of Buyer and Seller;
12.1.2 by Buyer pursuant to Section 6.4 of this Agreement;
12.1.3 by Buyer if such transactions have not been consummated,
through no fault or failure of Buyer, on or before July 31, 1996; or
12.1.4 by Seller if such transactions have not been consummated,
through no fault or failure of Seller, on or before July 31, 1996.
12.2 MODIFICATION. This Agreement may be amended, modified and supplemented
only by written agreement of the parties hereto.
12.3 WAIVER. Any failure of the Seller or Buyer to comply with any
obligation, covenant,
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agreement or condition contained herein may be expressly waived in writing by
Buyer in the case of any such failure by the Seller or by the Seller in the case
of any such failure by Buyer, but such waiver or failure to insist upon strict
compliance shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure. Whenever this Agreement requires or permits consent
by or on behalf of any party hereto, such consent shall be given in writing in a
manner consistent with the requirements for a waiver of compliance as set forth
in this Section 12.3.
SECTION 13. COSTS INCIDENT TO PREPARATION OF AGREEMENT.
Except as set forth in the next sentence, each of the parties hereto shall
pay, without right of reimbursement from the other, all costs incurred by it
incident to the preparation, execution and delivery of this Agreement and the
performance of its obligations hereunder, whether or not the transactions
contemplated by this Agreement shall be consummated, including without
limitation fees and disbursements of legal counsel, accountants and consultants
employed by the respective parties hereto in connection with the transactions
contemplated by this Agreement. In the event the transactions contemplated by
this Agreement are terminated as a result of a breach of a representation or
warranty or failure of a party to perform it obligations hereunder, the
breaching party shall be responsible for payment of the nonbreaching party's
expenses incurred in connection with due diligence and the negotiation and
preparation of this Agreement.
SECTION 14. RISK OF LOSS; DAMAGE PRIOR TO CLOSING.
14.1 All risk of damage or loss of any sort from any cause with respect to
the Purchased Assets shall remain with Seller until the Closing.
14.2 This Agreement as well as all obligations and liabilities of Seller
and Buyer hereunder shall terminate in the event of (i) a seizure prior to
Closing by any Governmental Authority of all or
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a material portion of the Purchased Assets, or (ii) material damage, destruction
or other impairment of or to all or a material portion of the Purchased Assets
including, without limitation, damage, destruction or other impairment caused by
theft, fire, any casualty or the negligence of any Person, including Seller, if
such seizure, damage, destruction or impairment shall not in Buyer's sole
opinion have been satisfactorily cured or remedied prior to the Closing Date;
provided, however, that nothing herein shall impose on Seller any obligation to
rebuild, repair or replace all or any portion of the Purchased Assets in the
event of any such seizure, damage, destruction or other impairment.
SECTION 15. BEST EFFORTS.
Each of the parties covenants to use its best efforts to cause the
satisfaction of all conditions to Closing to be performed by it or satisfied on
its part at or prior to Closing.
SECTION 16. GENERAL.
16.1 PARTIES IN INTEREST. This Agreement shall be binding upon, and inure
to the benefit of, the parties hereto and their respective successors and
permitted assigns. This Agreement is not made for the benefit of any Person not
a party hereto, and nothing in this Agreement will be construed as giving any
Person, other than the parties hereto and their respective successors and
permitted assigns, any right, remedy or claim under or in respect of this
Agreement, or any provision hereof.
16.2 ASSIGNMENT. Buyer may assign this Agreement, provided that Buyer shall
remain liable for all obligations to be performed by the assignee hereunder.
Seller shall not assign its rights and obligations under this Agreement without
the prior written consent of Buyer.
16.3 CONFIDENTIALITY. Each party to this Agreement shall take all
reasonable precautions to maintain the confidentiality of the negotiation or
existence of this Agreement, the identity of the parties hereto and any
nonpublic information concerning the other parties or their subsidiaries or
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affiliates provided to or discovered by it or its representatives and shall not
disclose any of the above information to anyone other than (i) those people
directly involved in the investigation and negotiations pertaining to the
transactions contemplated by this Agreement, including without limitation,
attorneys, accountants and similar representatives, (ii) such lenders or
investors as may be necessary to finance the transactions contemplated hereby,
(iii) such Persons or Governmental Authorities whose consents or approvals may
be necessary or to whom notice needs to be given to permit consummation of the
transactions contemplated hereby and (iv) to the Securities and Exchange
Commission in filings and reports required by the Securities Exchange Act of
1934. In the event of termination of this Agreement prior to Closing, Buyer
shall promptly return or destroy all documents, records or other information
concerning Seller and/or the Business and shall not retain any copies of same.
16.4 PUBLIC STATEMENTS. Seller shall make or cause to be made such press
release or other public statement or announcement that may be required to comply
with applicable securities laws and regulations.
16.5 CHOICE OF LAW. This Agreement shall be governed by, construed,
interpreted and the rights of the parties determined in accordance with the
laws, including equitable principles but without regard to principles of
conflict of laws, of the State of New York.
16.6 MEDIATION. In the event of a dispute arising out of or related to this
Agreement, the parties shall, prior to initiating litigation, first submit the
dispute to non-binding mediation under the commercial mediation rules of the
American Arbitration Association. The parties hereby acknowledge and agree that
such mediation shall be deemed to be in the nature of settlement discussions and
that neither the fact that such discussions took place, nor any statement or
conduct of any participant in
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such discussions shall be admissible into evidence in any subsequent litigation
or in any arbitration or other dispute resolution proceeding involving the
parties. It is further understood and agreed that any disclosure in any form,
including oral, by any Person participating in such mediation shall not operate
as a waiver of any privilege, including work product or attorney-client
privilege, applicable to the subject matter thereof.
16.7 NOTICES. Any notice, request, consent, waiver or other communication
required or permitted to be given hereunder shall be effective only if in
writing and shall be deemed sufficiently given only if delivered in person or
sent by express delivery service, telecopy, telegram, cable or by certified or
registered mail, postage prepaid, return receipt requested, addressed as
follows:
If to Buyer:
Austro Mold, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxx X. Dandora, President
with a copy to:
Xxxxxx and Xxxxxxx
000 Xxxxx Xxxxxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, Esquire
If to Seller:
Magnetic Technologies Corporation
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. XxXxxx, President
with a copy to:
Xxxxxx X. Xxxxxx, Esquire
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0000 X. Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxx 00000
or to such other Person or address as any such party may have specified in a
notice duly given by the sender as provided herein. Such notice or communication
shall be deemed to have been given as of the day after transmittal by express
delivery service; the day of transmittal by telecopy, telegram or cable; and
three days after posting by certified or registered mail.
16.8 ENTIRE AGREEMENT. This Agreement (including the schedules and exhibits
attached hereto) and the documents referred to herein as having been entered
into by any of the parties hereto or delivered by a party hereto to another
party hereto constitute the entire agreement and understanding of the parties
relating to the subject matter hereof and supersede all prior and
contemporaneous agreements and understandings, representations and warranties,
whether oral or written, relating to the subject matter hereof. The terms of
this Agreement cannot be changed, modified, released or discharged orally.
16.9 NO WAIVER. No delay or failure on the part of any party in exercising
any rights hereunder, and no partial or single exercise thereof, will constitute
a waiver of such rights or of any other rights hereunder. The rights and
remedies provided in this Agreement are cumulative and are not exclusive of any
rights or remedies a party may otherwise have at law or in equity.
16.10 SEVERABILITY. The unenforceability or invalidity of any Section or
subsection or provision of this Agreement shall not affect the enforceability or
validity of the balance of this Agreement. If any provision of this Agreement is
so broad as to be unenforceable, such provision shall be interpreted to be only
as broad as is enforceable.
16.11 HEADINGS. The headings of the Sections and subsections contained in
this Agreement
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are for reference purposes only and shall not in any way affect the meaning,
interpretation, enforceability or validity of this Agreement.
16.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which so executed will be deemed to be an original, but
all of which together will constitute one and the same agreement.
16.13 CONSTRUCTION. Within this Agreement, the singular shall include the
plural and the plural shall include the singular, and any gender shall include
all other genders, all as the meaning and the context of this Agreement shall
require.
16.14 WAIVER OF JURY TRIAL. SELLER AND BUYER HEREBY WAIVE ALL RIGHT TO A
TRIAL BY JURY IN ANY LITIGATION RELATING TO THIS AGREEMENT AND THE OTHER
DOCUMENTS EXECUTED IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
MAGNETIC TECHNOLOGIES CORPORATION
By: /s/ Xxxxxx X. XxXxxx, President
-----------------------------------
Title: President
--------------------------------
AUSTRO MOLD, INC.
By: /s/ Xxxxx X. Dandora
-----------------------------------
Title: Vice President
--------------------------------
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