Exhibit 2.1
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement"), made and entered into as
of the 17th day of September 1997, by and between Noxso Corporation, a debtor
and debtor in possession in the below-referenced bankruptcy case and a Virginia
corporation having its principal office at 0000 Xxxxx Xxxx, Xxxxxx Xxxx,
Xxxxxxxxxxxx 00000 ("Noxso"), and Republic Financial Corporation, a Colorado
corporation, having its principal office at 0000 Xxxxx Xxxxxx Xxxx, Xxxxx 000,
Xxxxxx, Xxxxxxxx 00000 ("Republic").
WITNESSETH:
WHEREAS, on February 6, 1997, Xxxx Corporation ("Olin") and two other
creditors of Noxso filed an involuntary bankruptcy petition in the United States
Bankruptcy Court for the Eastern District of Tennessee ("Bankruptcy Court") at
Case No. 97-10709;
WHEREAS, on June 4, 1997, Noxso consented to the entry of an order for
relief and converted the case to a case under Chapter 11 of the United States
Bankruptcy Code (the "Bankruptcy Code");
WHEREAS, Noxso owns a liquid sulfur dioxide plant located on the Olin
property in Charleston, Tennessee (the "Facility") which is described with more
particularity in Exhibit A hereto;
WHEREAS, Noxso and Republic have entered into a letter of intent dated
August 15, 1997 (the "Letter of Intent") which Letter of Intent describes the
terms and conditions pursuant to which Noxso will sell, and Republic will
purchase, the Facility; and
WHEREAS, as contemplated by the Letter of Intent, Noxso and Republic desire
to set forth such terms and conditions in this definitive purchase and sale
agreement;
NOW, THEREFORE, in consideration of the mutual covenants, conditions,
stipulations and agreements hereinafter set forth, the parties hereto, intending
to be legally bound hereby, do mutually warrant, agree and covenant as follows:
1. Sale of Assets. On the terms and subject to the conditions of this
Agreement, on the Closing Date (as that term is defined in Section 3 hereof),
Noxso shall sell, convey, assign, transfer and deliver to Republic, and Republic
shall purchase and acquire from Noxso, the Facility and related assets
including, without limitation, the Noxso technical information related to the
Facility, the fixtures and personal property, all of which are part of or
located at the Facility and which are listed in Exhibit A hereto. Exhibit A may
be amended prior to the completion of due diligence. The Facility shall be
transferred pursuant to the Sale Order (as hereinafter defined) to Republic free
and clear of any claims, liens, encumbrances, rights of ownership or rights of
occupancy, possession or use by any party other than Republic.
2. Instruments of Conveyance and Transfer. On the Closing Date, Noxso shall
deliver to Republic such bills of sale and other good and sufficient instruments
of conveyance, satisfactory in form and substance to Republic, as shall be
effective pursuant to the Sale Order to vest in Republic, upon the Closing Date,
full and complete right, title and interest in and to the Facility, free and
clear of all claims, liens, encumbrances, rights of ownership or rights of
occupancy,
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possession or use by any party other than Republic. On the Closing Date, Noxso
shall deliver possession of the Facility to Republic.
3. Closing. The closing (the "Closing") shall be held on the first business
day that occurs at least eleven (11) days after the sale contemplated hereby is
approved by order of the Bankruptcy Court in the case of Noxso Corporation
administered at Case No. 97-10709, or on such other date as may be mutually
agreed to by the parties (the "Closing Date").
4. Purchase Price.
(a) Republic shall, on the Closing Date, in full consideration for the
Facility, pay to Noxso the sum of Eleven Million Dollars ($11,000,000) (the
"Purchase Price") in immediately available funds by wire transfer as follows:
PNC BANK, N.A.
ABA Transit #043 000096
For the Benefit of
Doepken Keevican & Xxxxx
Iolta Client Trust Account
Account #000268231
(b) Republic and Noxso agree that the Purchase Price shall be allocated as
set forth in a letter dated September 17, 1997, attached hereto as Exhibit D.
5. Liabilities Not Assumed. Noxso shall use its best efforts to obtain
Bankruptcy Court approval to assume the License Agreement for Sulfur Dioxide
Technology effective September 1, 1995, (the "License Agreement") between Noxso
and Calabrian Corporation
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("Calabrian") and to assign the License Agreement to Republic pursuant to the
Sale Order. In the event that Republic reaches agreement with Calabrian for use
of the Calabrian technology and proprietary information which is part of the
Facility, Republic shall provide Noxso with notice of said agreement. Noxso then
shall withdraw its request for approval of the License Agreement. Other than any
obligation arising under the License Agreement if and after it is assigned to
Republic, Republic shall not assume any existing or future liabilities or
obligations of Noxso with respect to the Facility.
6. Condition of Facility. As between Noxso and Republic, the Facility shall
be transferred on an "as is, where is" basis, and without any warranty, express
or implied (except as to title and as otherwise set forth herein), as to the
condition, value, suitability for a particular purpose, merchantability, or any
other representation or warranty by Noxso with respect to the Facility or its
condition, capabilities or operations.
7. Bankruptcy Court Approval. This Agreement is subject to the approval of
the Bankruptcy Court. Within five (5) days of the execution of this Agreement,
Noxso shall prepare and file a motion for Bankruptcy Court approval of this
transaction, including the assumption and assignment of the License Agreement,
which Noxso will use its best efforts to obtain (the "Sale Motion"). In the
event the Bankruptcy Court denies the Sale Motion on a substantive and not
procedural basis, Noxso shall have no obligation to appeal or to seek
reconsideration of any order of the Bankruptcy Court. The Sale Motion shall be
scheduled for hearing in order to comply with
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the notice provisions of the Bankruptcy Code and the Federal Rules of Bankruptcy
Procedure and subject to the Court's calendar.
8. Representations and Warranties of Noxso. Noxso hereby represents and
warrants to Republic as follows:
(a) Organization; Good Standing; Power. Noxso is a corporation duly
organized and validly existing under the laws of the Commonwealth of Virginia
with all requisite power and authority to own, operate and lease its properties,
to carry on its business as now being conducted and to enter into this Agreement
and perform its obligations hereunder.
(b) Authority Relative to Agreement. Subject to Bankruptcy Court approval,
the execution, delivery and performance of this Agreement by Noxso has been duly
and effectively authorized by all necessary corporate action on the part of
Noxso. Subject to Bankruptcy Court approval, this Agreement has been duly
executed by Noxso and is a valid, legally binding and enforceable obligation of
Noxso.
(c) Litigation. Except for the matters set forth in Exhibit B, there are no
actions, proceedings, judgments or claims now pending, or, to the best of
Noxso's knowledge, threatened against or regarding the Facility.
(d) Title to Facility. Noxso has good title to the Facility and will on the
Closing Date deliver possession and transfer, convey and assign good and
marketable title to Republic free and clear of all claims, liens, encumbrances,
rights of ownership or rights of occupancy, possession or use by any party other
than Republic.
(e) Solicitation. Noxso has not solicited or negotiated with other
prospective purchasers since the execution of the Letter of Intent.
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9. Representations, Warranties and Covenants of Republic. Republic
hereby represents and warrants to Noxso as follows:
(a) Organization; Good Standing; Power. Republic is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Colorado and has all requisite corporate power and authority to own, lease and
operate its properties, to carry on its business as now being conducted and to
enter into this Agreement and perform its obligations hereunder.
(b) Authority Relative to Agreement. On the Closing Date, the execution,
delivery and performance of this Agreement and the transactions contemplated
hereby by Republic will have been duly and effectively authorized and ratified
by all necessary corporate action by Republic. This Agreement has been duly
executed by Republic and is a valid, legally binding and enforceable obligation
of Republic.
(c) Financial Ability. As of the Closing Date, Republic will have adequate
funds available to it to purchase the Facility in accordance with this
Agreement.
10. Conditions Precedent to the Obligations of Republic. Other than the
condition specified in Section 10(a), Republic's obligation to purchase the
Facility shall be conditioned upon the following (collectively, the "Republic
Conditions Precedent") having been satisfied in a manner acceptable to Republic
or waived in Republic's sole discretion prior to the Closing Date.
(a) Republic or its consultants shall have conducted due diligence
satisfactory to Republic in its sole discretion, exercised in Republic's
reasonable business judgment, confirming, by an independent engineering firm,
the adequacy of the technology for the Facility and confirming other matters
that may come to Republic's attention during due diligence deemed necessary to
the continued operation and condition of the Facility, including regulatory
issues
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related to the Facility, in each case in form and substance satisfactory to
Republic; provided, however, that, in any event, such due diligence shall be
completed prior to the date of the hearing on the Sale Motion. Republic shall
notify Noxso in writing prior to the hearing date that it has completed its due
diligence and, unless it has given or concurrently gives a notice of termination
pursuant to Section 12 hereof as a result of said due diligence, that subject to
the satisfaction of the other conditions set forth in this Xxxxxxx 00, Xxxxxxxx
will close the transactions contemplated hereby on the terms and conditions
contained herein.
(b) The Bankruptcy Court shall have approved this Agreement by order ("the
Sale Order") (i) which shall grant the Sale Motion, (ii) which shall provide
that the transfer of the Facility to Republic shall be free and clear of all
claims, liens, encumbrances, rights of ownership, or rights of occupancy,
possession or use by any party other than Republic, (iii) which shall provide
that this Agreement, any related agreements and the transactions contemplated
hereby and thereby are approved, (iv) which shall provide that Republic shall
have no liability for any obligations or liabilities of Noxso other than as set
forth herein, (v) which shall provide that all liens, encumbrances, claims and
interests with respect to the Facility shall attach to the proceeds of the sale,
(vi) which shall provide that the License Agreement is assumed and assigned to
Republic (unless Republic and Calabrian enter into a separate license
agreement), (vii) which shall be in form and substance satisfactory to Republic
and, (vii) from which Sale Order no appeal shall have been filed or, if an
appeal is filed, no court of competent jurisdiction has issued a stay of the
Sale Order.
(c) Olin and Republic shall have entered into an SO2 Purchase Contract for
output from the Facility in a form and with terms and conditions satisfactory to
both Olin and Republic and all conditions precedent in the SO2 Purchase Contract
shall have been satisfied except for the closing of the sale;
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(d) Republic shall have entered into a Backup SO2 Supply Agreement in form
and with terms and conditions satisfactory to Republic and all conditions
precedent in the Backup SO2 Supply Agreement shall have been satisfied except
for the closing of the sale;
(e) Republic shall have entered into an elemental sulfur Purchase Agreement
and a Backup Sulfur Agreement, a Commodity Swap Agreement or other support
mechanism (the "Sulfur Agreements") in form and with terms and conditions
satisfactory to Republic and all conditions precedent in the Sulfur Agreements
shall have been satisfied except for the closing of the sale;
(f) Republic shall have entered into an Operation and Maintenance Contract
with an operator satisfactory to Republic in form and with terms and conditions
satisfactory to Republic and all conditions precedent in the Operation and
Maintenance Contract shall have been satisfied except for the closing of the
sale;
(g) Republic shall have entered into or obtained such other agreements or
consents which it deems to be necessary in its reasonable business judgement for
the ownership or operation of the Facility;
(h) Republic shall have entered into an agreement with Calabrian with
regard to the use of Calabrian technology and proprietary information in form
and with terms and conditions satisfactory to Republic (the "Republic/Calabrian
Agreement") and all conditions precedent in the Republic/Calabrian Agreement
shall have been satisfied except for the closing of the sale.
(i) Republic shall have entered into a Technical Support Agreement with
Olin or an engineering firm in form and with terms and conditions satisfactory
to Republic;
(j) Republic shall have entered into Purchase Agreements for the provision
of any chemicals, gases or other input/process materials required for the
effective operation of the
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Facility for the purpose for which it was built in form and with terms and
conditions satisfactory to Republic;
(k) Republic shall have entered into a ground lease with Olin for the site
of the Facility having a base term of at least twenty four (24) years and being
in a form and having other terms and conditions satisfactory to Republic;
(l) Any and all existing or potential litigation brought by Noxso against
Olin shall have been resolved to the satisfaction of Republic;
(m) Any and all existing or potential claims, litigation, mechanics' liens
or encumbrances alleged by any creditor of Noxso against Olin regarding the
Facility shall have been resolved to the satisfaction of Republic;
(n) The representations and warranties of Noxso set forth in Section 8
shall be true and correct as of the Closing Date;
(o) All consents, approvals, permits and other requirements prescribed by
any law, rule or regulation which must be obtained by Republic and which are
necessary for the consummation of the transaction shall have been obtained from
the appropriate governmental bodies or agencies, as determined in Republic's and
Olin's discretion;
(p) No material adverse change in the condition, rights to use, or
operation of the Facility shall have occurred since the completion of due
diligence pursuant to Section 10(a).
Republic shall attempt in good faith to satisfy those Republic Conditions
Precedent over which it has control and which in its reasonable business
judgment are capable of satisfaction. Acceptance or a waiver of any of the
Republic Conditions Precedent will be at the sole discretion of Republic.
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11. Conditions Precedent to the Obligations of Noxso. Noxso's obligation to
sell the Facility shall be conditioned upon the following Conditions Precedent:
(a) Entry of the Sale Order and no appeal from the Sale Order shall have
been filed or, if an appeal is filed, no court of competent jurisdiction has
issued a stay of the Sale Order.
(b) The representations, warranties, and covenants of Republic set forth in
Section 9 shall be true and correct as of the Closing Date.
12. Termination.
(a) This Agreement may be terminated at any time prior to the Closing Date
by mutual written consent of Republic and Noxso.
(b) Republic may terminate this Agreement at its option by written notice
to Noxso (i) that, prior to the hearing on the Sale Motion and in accordance
with Section 10(a), it determines through its due diligence for any reason that
the technology for the Facility or any other material aspect of the Facility,
including regulatory approvals, is inadequate or (ii) in the event that Closing
has not occurred on or before December 31, 1997 for any reason other than
Republic's material breach of its obligations hereunder.
(c) Noxso may terminate this Agreement at its option by written notice to
Republic in the event that Closing does not occur on or before December 31, 1997
for any reason other than Noxso's material breach of its obligation hereunder.
13. Exclusivity/Higher and Better Offers.
(a) Noxso acknowledges its obligations not to negotiate or solicit offers
under the Letter of Intent. Upon signing this Agreement, Noxso agrees that it
will not negotiate terms of any alternative funding or sale of the Facility with
any third party or execute any agreement
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with any third party for the purchase of the Facility. Noxso further agrees that
it will not permit any agent or representative of Noxso to do so.
(b) Republic recognizes that the proposed purchase is subject to higher and
better offers, which may be presented at the hearing on the Sale Motion.
Accordingly, subject to the restriction in Section 13(a) above, Noxso, Olin and
the Committee may, without the participation of Republic, provide any
information or documentation reasonably required by other potential bidders.
14. Fees, Expenses, Overbid Protection.
(a) In the event that Noxso does not or cannot proceed with the sale of the
Facility because (i) Noxso refuses to sell to Republic, (ii) the Bankruptcy
Court refuses to enter the Sale Order or (iii) the Facility is sold to a third
party or is refinanced, then Republic shall be entitled to receive reimbursement
of its reasonable, documented out-of-pocket expenses plus a fee equal to 2% of
$11,000,000. In no event will such reimbursement and fee exceed $385,000.
(b) In the event that the sale is not consummated because any of the
Republic Conditions Precedent to the sale are not satisfied or waived by
Republic, Republic shall not be entitled to such reimbursement or fee.
(c) This obligation for reimbursement of the expenses and payment of the
fee will be treated as Administrative Expenses of Noxso's bankruptcy case.
(d) Noxso agrees to pay any expenses and the fee due to Republic at the
earlier of (i) payment of Administrative Expenses in the bankruptcy case or any
subsequent Chapter 7 case , (ii) the closing on the sale of the Facility to a
third party following a hearing on the Sale Motion, (iii) the closing of a
financing secured by the Facility or, (iv) upon receipt of other
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revenues which Noxso may receive with respect to the Facility or its operation
or with respect to supplying sulfur to the Facility.
(e) At the hearing on the proposed sale to Republic, the initial topping
bid from a third party, if any, must represent a purchase price that is at least
3.5% higher than $11,000,000, a total purchase price of at least $11,385,000 or
its equivalent as concerns Noxso's unsecured creditors.
15. Miscellaneous Provisions.
(a) Expenses. Except as provided in Section 14 above, Noxso and Republic
each will bear its own expenses required by or incident to this Agreement.
(b) The Sale Motion, the Sale Order, and any other motion or order
involving the Facility, Republic, Olin, or parties asserting liens on the
Facility must be reviewed and approved by Republic prior to submission.
(c) Governing Law. This Agreement and the transactions contemplated herein
shall be governed by, interpreted, construed and enforced in accordance with the
laws of the State of Tennessee. For as long as Noxso's bankruptcy case remains
open, disputes relating to the interpretation or enforcement of this Agreement
shall be heard by the Bankruptcy Court. Thereafter, disputes relating to the
interpretation or enforcement of this Agreement may be heard by any court of
competent jurisdiction.
(d) Entire Agreement. This Agreement constitutes the entire agreement
between the parties relating to the sale and purchase of the Facility and
supersedes the Letter of Intent dated August 15, 1997, between Noxso and
Republic.
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(e) Amendments and Modifications. This Agreement shall not be modified,
amended or changed in any respect except in writing duly signed by an authorized
officer of each of the parties hereto.
(f) Captions. The captions in this Agreement are solely for the purpose of
reference and shall not in any manner alter or vary the interpretation or
construction of this Agreement.
(g) Successors and Assigns. At any time prior to Closing, Republic may
assign its rights under this Agreement to an affiliate. In the event that
Republic assigns this Agreement to an affiliate, Republic shall remain liable
for the obligations hereunder. All the terms and provisions of this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their heirs, personal representatives, transferees, successors, and assigns
including any Trustee appointed by the Bankruptcy Court.
(h) Severability. If any provision of this Agreement or the application of
such provision to any person or circumstance shall be held invalid, the
remainder of this Agreement or the application of such provision to persons or
circumstances, other than those to which it is held invalid, shall not be
affected thereby.
(i) Nonwaiver. The specified remedies to which Republic or Noxso may resort
under the terms of this Agreement are cumulative and are not intended to be
exclusive of any other remedies or means of redress to which either party may be
lawfully entitled in case of any breach or threatened breach by either party of
any provisions of this Agreement. The failure of either party to insist in any
one or more instances upon the strict performance of any of the terms or
conditions of this Agreement shall not be construed as a waiver or
relinquishment for the future of such terms or conditions.
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16. Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
17. Sales Tax. Any Tennessee or Pennsylvania sales, use or other intangible
tax arising out of the transaction contemplated herein shall be paid by Noxso.
18. Broker's Fee. The parties represent and agree that no broker or finder
has been retained other than Xxxxx, Xxxxxx & Peppet. Any broker's fee or
finder's fee in connection with this Agreement or the transactions contemplated
hereby shall be paid by Noxso.
19. Press Releases. Neither Noxso nor Republic will issue any press
releases regarding this Agreement prior to Closing without prior written
approval of the other.
20. Department of Energy. Following the Closing, Republic agrees (with the
consent of Olin) to grant the Department of Energy ("DOE"), on a confidential
basis, access to the Facility and such operating data as set forth in Exhibit C.
21. Notices. Any notice required or permitted to be given by either party
shall be deemed to be given when received by certified mail, return receipt
requested or recognized overnight delivery service, charges paid, to the offices
of the parties as follows:
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(a) If to Noxso:
Xxxxx X. Xxxxxxx
Noxso Corporation
0000 Xxxxx Xxxx
Xxxxxx Xxxx, XX 00000
with a copy to:
Xxxx X. Xxxxxx
Doepken Keevican & Xxxxx
58th Floor, USX Tower
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
(b) If to Republic:
Xxxxxx Xxxxxxx
Republic Financial Corporation
0000 X. Xxxxxx Xxxx, 0xx Xxxxx
Xxxxxx, XX 00000
with a copy to:
Xxxxx X. Xxxxxxxx
Xxxxxx, Xxxx & Xxxxxx
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
or at such other addresses as a party shall designate in writing.
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IN WITNESS WHEREOF, the parties hereto have executed or caused to be
executed this Agreement on the day and year first above written.
REPUBLIC FINANCIAL CORPORATION
By: s/W. Xxxxxxx Xxxxxxxx
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W. Xxxxxxx Xxxxxxxx
Senior Vice President
NOXSO CORPORATION
By: s/Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
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