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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
BETWEEN
O.I. CORPORATION
AND
GENERAL ANALYSIS CORPORATION
DATED AS OF JANUARY 20, 1999
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TABLE OF CONTENTS
ARTICLE I
INTERPRETATION
--------------
Section 1.1 Defined Terms.......................................................................................1
Section 1.2 Sections and Headings...............................................................................5
Section 1.3 Schedules and Exhibits..............................................................................5
ARTICLE II
PURCHASE AND SALE OF ASSETS
---------------------------
Section 2.1 Asset Purchase......................................................................................5
Section 2.2 Excluded Assets.....................................................................................7
Section 2.3 Unassignable Contracts..............................................................................7
ARTICLE III
PURCHASE PRICE
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Section 3.1 Purchase Price......................................................................................8
Section 3.2 Payment on Execution of this Agreement..............................................................8
Section 3.3 Payment on Closing Date.............................................................................8
Section 3.4 Post-Closing Payments...............................................................................8
Section 3.5 Allocation of Purchase Price........................................................................9
Section 3.6 Costs...............................................................................................9
ARTICLE IV
ASSUMPTION OF CERTAIN LIABILITIES
---------------------------------
Section 4.1 Assumption of Certain Liabilities by the Purchaser.................................................10
Section 4.2 No Other Obligations Assumed.......................................................................11
Section 4.3 Product Liability Obligations......................................................................11
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE SELLER
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Section 5.1 Organization.......................................................................................11
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Section 5.2 Authorization.....................................................................................11
Section 5.3 No Other Agreements to Purchase or Option.........................................................12
Section 5.4 No Violation......................................................................................12
Section 5.5 Sufficiency of the Assets.........................................................................12
Section 5.6 Products Relating to the Business.................................................................12
Section 5.7 Year 2000 Compliance..............................................................................13
Section 5.8 Intellectual Property.............................................................................13
Section 5.9 Insurance.........................................................................................13
Section 5.10 No Expropriation..................................................................................13
Section 5.11 Agreements and Commitments........................................................................13
Section 5.12 Compliance with Laws; Governmental Authorization..................................................14
Section 5.13 Consents and Approvals............................................................................14
Section 5.14 Financial Statements; Books and Records...........................................................14
Section 5.15 Absence of Changes................................................................................14
Section 5.16 Non-Arm's Length Transactions.....................................................................15
Section 5.17 Taxes.............................................................................................16
Section 5.18 Litigation........................................................................................16
Section 5.19 Environmental.....................................................................................16
Section 5.20 Good Title........................................................................................17
Section 5.21 Customers and Suppliers...........................................................................17
Section 5.22 Warranties and Discounts..........................................................................17
Section 5.23 Equipment.........................................................................................18
Section 5.24 Employee Plans....................................................................................18
Section 5.25 Collective Agreements.............................................................................18
Section 5.26 Employees.........................................................................................19
Section 5.27 No Liabilities....................................................................................19
Section 5.28 Partnerships or Joint Ventures....................................................................19
Section 5.29 Lack of Restriction...............................................................................19
Section 5.30 Representations as to Inventory...................................................................19
Section 5.31 Representations as to Product Design..............................................................20
Section 5.32 Open Orders.......................................................................................20
Section 5.33 Full Disclosure...................................................................................20
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
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Section 6.1 Organization.......................................................................................20
Section 6.2 Authorization......................................................................................21
Section 6.3 No Violation.......................................................................................21
Section 6.4 Consents and Approvals.............................................................................21
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ARTICLE VII
SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES
-----------------------------------------------------
Section 7.1 Survival of Representations and Warranties of the Seller...........................................21
Section 7.2 Survival of Representations and Warranties of the Purchaser........................................22
Section 7.3 Survival of Covenants..............................................................................22
Section 7.4 Outstanding Claims.................................................................................22
ARTICLE VIII
COVENANTS
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Section 8.1 Use of Name........................................................................................22
Section 8.2 Competition........................................................................................22
Section 8.3 Financial Statements...............................................................................22
ARTICLE IX
CONDITIONS OF CLOSING
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Section 9.1 Conditions of Closing in Favor of the Purchaser....................................................23
Section 9.2 Conditions of Closing in Favor of the Seller.......................................................24
ARTICLE X
CLOSING DATE AND TRANSFER OF POSSESSION
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Section 10.1 Transfer..........................................................................................25
Section 10.2 Place of Closing..................................................................................25
Section 10.3 Further Assurances................................................................................25
Section 10.4 Insurance.........................................................................................25
ARTICLE XI
INDEMNIFICATION
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Section 11.1 Indemnification by the Seller.....................................................................25
Section 11.2 Indemnification by Xxxx Xxxxx.....................................................................26
Section 11.3 Indemnification by the Purchaser..................................................................26
Section 11.4 Notice of Claim...................................................................................26
Section 11.5 Direct Claims.....................................................................................27
Section 11.6 Third Party Claims................................................................................27
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Section 11.7 Settlement of Third Party Claims.................................................................28
Section 11.8 Cooperation......................................................................................28
Section 11.9 Exclusivity......................................................................................28
Section 11.10 Survival of Indemnification by the Seller........................................................28
Section 11.11 Offset...........................................................................................28
ARTICLE XII
MISCELLANEOUS
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Section 12.1 Notices...........................................................................................29
Section 12.2 Successors and Assignees..........................................................................30
Section 12.3 Best Efforts......................................................................................30
Section 12.4 Counterparts......................................................................................30
Section 12.5 Entire Agreement..................................................................................30
Section 12.6 Applicable Law....................................................................................30
Section 12.7 Severability......................................................................................30
Section 12.8 Amendments and Waivers............................................................................31
Section 12.9 No Third Party Beneficiary........................................................................31
Section 12.10 Survival..........................................................................................31
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SCHEDULES AND EXHIBITS
Schedule A Annual Financial Statements
Schedule B Interim Financial Statements
1.1 Permitted Encumbrances
2.1(a) GAC Product Line
2.1(b) Intellectual Property
2.1(c) Inventories and Inventory Supplies
2.1(d) Fixed Assets
2.1(e) Contracts
2.1(f) Licenses and Permits
2.1(g) Accounts Receivable
2.1(l) Telephone Numbers
2.2(c) Prepaid Expenses
2.2(d) Specified Excluded Assets
3.3 Payment on Closing Date
3.4 Additional Consideration
3.4(a) GAC Products
3.4(b) Disputed Inventory
4.1 Accounts Payable
4.1(c) Product Warranties
5.10 Agreements and Commitments
5.13 Consents and Approvals
5.15 Absence of Changes
5.16 Non-Arm's Length Transactions
5.18 Litigation
5.19 Environmental
5.21 Customers and Suppliers
5.22 Warranties and Discounts
5.23 Locations of Equipment
5.25 Collective Agreements
5.26 Employees
5.32 Open Orders
Exhibit A - Form of Non-Competition Agreement
Exhibit B - Form of Creditor Release
Exhibit C - Form of General Conveyance and Assignment
Exhibit D - Form of Patent Assignment
Exhibit E - Form of Trademark Assignment
Exhibit F - Form of Promissory Note
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ASSET PURCHASE AGREEMENT
Asset Purchase Agreement (this "Agreement") is entered into as
of January 20, 1999, by and between O.I. CORPORATION, a corporation incorporated
under the laws of the State of Oklahoma (hereinafter, the "Purchaser"), and
GENERAL ANALYSIS CORPORATION, a corporation incorporated under the laws of the
State of Connecticut (hereinafter, the "Seller").
W I T N E S S E T H:
WHEREAS, Seller is engaged in the business (the "Business") of
manufacturing, selling and renting proprietary infrared analytical instruments
primarily for use as continuous monitoring systems in the environmental and
industrial processing and food and beverage industries; and
WHEREAS, on the terms and subject to the conditions
hereinafter set forth, the Purchaser wishes to purchase from the Seller and the
Seller wishes to sell, assign and transfer to the Purchaser, the assets
identified in Article II herein (the "Assets");
NOW, THEREFORE, in consideration of these premises and of the
respective covenants, agreements, representations, warranties and indemnities of
the parties herein contained, and for other good and valuable consideration (the
receipt and sufficiency of which are acknowledged by each party), the Purchaser
and the Seller hereby agree as follows:
ARTICLE I
INTERPRETATION
Section 1.1 Defined Terms. For the purposes of this Agreement,
the following terms shall have the respective meanings set forth below and
grammatical variations of such terms shall have corresponding meanings:
"Accounts Payable" means, at any specified time, trade
payables incurred in the ordinary course of the Business and properly reflected
in the books, records and financial statements of the obligor;
"Accounts Receivable" means, at any specified time, trade
receivables incurred in the ordinary course of the Business and properly
reflected in the books, records and financial statements of the Seller;
"Additional Consideration" has the meaning and is calculated
as set forth in Schedule 3.4;
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"Affiliate" of a Person means another Person directly or
indirectly controlled by, controlling or under common control with such Person.
As used in this Agreement, "control" (including the terms "controlling,"
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
Contract or otherwise;
"Agreement" means this Asset Purchase Agreement together with
all amendments made pursuant to the provisions hereof and includes all Schedules
and Exhibits attached hereto;
"Annual Financial Statements" means the audited financial
statements of the Seller's business as it relates to the Business as at, and for
the three fiscal years ended June 30, 1998, each consisting of a balance sheet,
an income statement, a statement of cash flow, and a statement of Inventories by
location, copies of which are annexed hereto as Schedule A;
"Assets" has the meaning set forth in Article II;
"Associates" means, with respect to a corporation, its
Affiliates and the officers, directors, employees, shareholders, agents,
successors and assignees of such corporation and each of its Affiliates;
"Assumed Liabilities" has the meaning set forth in Section
4.1;
"Business" has the meaning set forth in the preliminary
statements hereto;
"Business Day" means any day (other than a Saturday or a
Sunday) on which the main branch of Citibank, N.A. in New York, New York is open
for business;
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time;
"Claim" means any claim, demand, action, suit or proceeding;
"Closing Date" means the date of payment of the Purchase Price
as specified in Article III herein;
"Contract" means any agreement, indenture, contract, lease,
deed of trust, license, option, instrument, purchase order, sales order, bid,
tender or other commitment, whether written or oral, including all amendments or
supplements thereto;
"Creditors" means those certain creditors set forth in
Schedule 3.3;
"Direct Claim" has the meaning set forth in Section 11.4;
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"Effective Time" means the close of business on the Closing
Date;
"Employees" means Seller's administrative employees and the
employees of the Seller engaged in the design, manufacture and sale of the GAC
Product Line;
"Encumbrance" means any encumbrance, lien, charge,
hypothecation, pledge, mortgage, title retention agreement, security interest,
adverse claim, exception, restriction, reservation, easement, right of
occupation, any matter capable of registration against title, option, right of
preemption or privilege, in each case of any kind or nature, or any Contract to
create any of the foregoing;
"Environmental Laws" means all applicable Laws relating to the
protection of the environment, occupational health and safety, industrial
hygiene or the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of any Hazardous Substance, including CERCLA,
the Superfund Amendments and Reauthorization Act of 1986, the Resource
Compensation and Recovery Act, the Toxic Substances Control Act, the Clean Air
Act, the Federal Water Pollution Control Act, the Safe Drinking Water Act, the
Occupational Safety and Health Act and the Hazardous Materials Transportation
Act, and comparable state and local equivalents, each as modified and amended
from time to time;
"Environmental Permits" has the meaning set forth in
Subsection 5.19(c);
"Equipment" has the meaning set forth in Subsection 2.1(d);
"Equipment Sales" has the meaning set forth in Schedule 3.4;
"Excluded Assets" has the meaning set forth in Section 2.2;
"Final Balance Sheet" has the meaning set forth in Subsection
3.4(b);
"Financial Statements" means the Annual Financial Statements
and the Interim Financial Statements;
"Governmental Charges" has the meaning set forth in Subsection
5.17(a);
"GAC Product Line" means all models manufactured and sold by
the Seller listed in Schedule 2.1(a);
"Hazardous Substance" means and includes any pollutants,
contaminants, chemical or industrial toxic or hazardous wastes or substances,
oil (including petroleum products, crude oil and any fraction thereof), solid
waste, radiation, coal tar, hazardous substance (as defined in Section 101(14)
of CERCLA and regulations thereunder), or other material that is toxic or
harmful to human health or the environment or the use, treatment, sale,
discharge or disposal of which is regulated by a local, state or federal
governmental authority charged with protection of health, safety or the
environment;
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"Indemnified Party" has the meaning set forth Section 11.4
and, where appropriate, includes the Associates of the Indemnified Party;
"Indemnifying Party" has the meaning set forth in Section
11.4;
"Intellectual Property" has the meaning set forth in
Subsection 2.1(b);
"Interim Financial Statements" means the unaudited financial
statements of the Business as at, and for the interim period ended December 31,
1998 consisting of a balance sheet and an income statement, copies of which are
annexed hereto as Schedule B;
"Inventories" has the meaning set forth in Subsection 2.1(c);
"Inventory Supplies" means all parts and consumables used in
the process of manufacturing and assembling the GAC Product Line, and all office
supplies used in connection with the Business;
"Law" means any and all local, municipal, state, federal and
foreign statutes, regulations, rules, codes, by-laws and ordinances and the
regulations, orders, directives, decisions, judgments, decrees, rules,
requirements and policies of any court or administrative or regulatory agency,
board, department or commission;
"Licenses" has the meaning set forth in Section 5.12;
"Losses" means, in respect of any matter, all Claims, losses,
damages, liabilities, deficiencies, costs and expenses (including all legal and
other professional fees and disbursements), interest, penalties and amounts paid
in settlement, arising directly or indirectly as a consequence of such matter;
"Net Book Value" means the difference in value between the
Assets and the Assumed Liabilities as disclosed on the Final Balance Sheet;
"Permitted Encumbrances" includes those liens set forth on
Schedule 1.1;
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency of political subdivision thereof;
"Purchase Price" has the meaning set forth in Section 3.1;
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"Purchaser" means O.I. Corporation, a corporation incorporated
under the laws of the State of Oklahoma;
"Rights" has the meaning set forth in Section 2.3;
"Seller" means General Analysis Corporation, a corporation
incorporated under the laws of the State of Connecticut.
"Third Party" has the meaning set forth in Section 11.6;
"Third Party Claim" has the meaning set forth in Section 11.4;
and
"Time of Closing" means the time of payment of the Purchase
Price as contemplated by Article III.
Section 1.2 Sections and Headings. The division of this
Agreement into Articles, Sections and Subsections and the insertion of headings
are for convenience of reference only and shall not affect the interpretation of
this Agreement.
Section 1.3 Schedules and Exhibits. The Schedules and Exhibits
attached hereto form part of this Agreement.
ARTICLE II
PURCHASE AND SALE OF ASSETS
Section 2.1 Asset Purchase. Subject to the terms and
conditions hereof, the Seller shall sell, assign and transfer to the Purchaser
and the Purchaser shall purchase from the Seller, effective as of the Effective
Time, the Assets as defined in this Article II free and clear of all Liens other
than Permitted Encumbrances. The Assets shall include the following:
(a) GAC Product Line. All models manufactured and sold by the
Seller listed in Schedule 2.1(a) (the "GAC Product Line");
(b) Intellectual Property. All research and development,
trademarks, logos, brand names, part number sequencing, model numbers,
trade names, copyrights, patents, computer programs and related source
code and E-Prom code, licenses and agreements, software licenses, trade
secrets, proprietary manufacturing information and know-how, commercial
and technical information, instruction manuals, blueprints, drawings
and designs, formulae, processes and technology that relate to the
Business (the "Intellectual Property") including, but not limited to
those described in Schedule 2.1(b);
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(c) Inventories and Inventory Supplies. All inventories,
including raw materials, work in progress and finished goods, used in
connection with the manufacture of the GAC Product Line, including the
items described in Schedule 2.1(c) (collectively, the "Inventories")
and the Inventory Supplies;
(d) Fixed Assets. The machinery, equipment, computers,
fixtures, furniture, furnishings and other fixed assets described in
Schedule 2.1(d) (collectively, the "Equipment");
(e) Contracts. All rights under all Contracts listed in
Schedule 2.1(e), including the full benefit of all existing
non-competition agreements in favor of the Seller and relating to the
Business. Purchaser shall not assume any rights or obligations under
Contracts which are not specifically listed on Schedule 2.1(e);
(f) Licenses and Permits. The licenses, permits, approvals,
consents, registrations, certificates and other authorizations relating
to the Business, whether currently in effect or pending approval or
renewal, including those described in Schedule 2.1(f);
(g) Accounts Receivable. All Accounts Receivable described in
Schedule 2.1(g) and the right to collect payment on such Accounts
Receivable. Any Accounts Receivable not collected within one year after
the Time of Closing shall be offset against any Additional
Consideration to be paid pursuant to Section 3.4 hereof and shall be
reassigned to the Seller for collection attempts; provided, however,
that offsets resulting from a claim compromised by Purchaser shall not
be so offset without the reasonable agreement of a representative of
Seller;
(h) Cash. Any cash on the Seller's balance sheet at the Time
of Closing.
(i) Books and Records. All books and records relating to the
Business (other than those required by law to be retained by the Seller
and the corporate minute books of the Seller, copies of which will be
made available to the Purchaser upon request), including customer
lists, sales records, quotation files, price lists and catalogs, sales
literature, equipment and parts lists and descriptions, advertising
material, manufacturing data, production records, employee manuals,
personnel records of any Employees hired by the Purchaser (provided
that each such Employee consents in writing to delivery thereof),
Inventory Supply records, Inventory records and correspondence files
(access to which will be made available to the Seller upon request)
(together with, in the case of any such information that is stored
electronically, the media on which the same is stored);
(j) Goodwill. All goodwill garnered by the Business in
connection with the manufacture and sale of the GAC Product Line,
together with all rights to the name "GAC" and related trademarks,
logos and any variations thereof;
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(k) Warranties. Any and all warranties for the benefit of the
Seller relating to the Business;
(l) Telephone Numbers. All telephone numbers used in
connection with the Business as set forth on Schedule 2.1(l) hereto;
and
(m) Claims. All choses in action and Claims for the benefit of
the Seller relating to the Business (including, but not limited to, all
Claims against suppliers for damaged or faulty merchandise, Claims
relating to any infringement or unauthorized use of Intellectual
Property, Claims against insurance carriers with respect to the
Business and Claims against customers for goods sold and delivered or
for services rendered) that the Seller, within ten days of its receipt
of actual notice of any such action or Claim, informs the Purchaser
that the Purchaser may pursue in the Seller's stead. If the Seller
alone pursues any action or Claim hereunder, any recovery on the same
shall belong wholly to the Seller; if the Purchaser pursues any action
or Claim under this Subsection 2.1(l), any recovery thereunder shall be
divided, after payment of all attorney's fees, between the Purchaser
and the Seller in proportion to their relative damages.
Section 2.2 Excluded Assets. The Assets to be purchased
hereunder shall not include any of the following property and assets
(collectively, the "Excluded Assets"):
(a) Income Taxes. All income tax installments paid by the
Seller and the right to receive any refund of income taxes so paid;
(b) Insurance. Any insurance policies maintained by the Seller
pertaining to the Business;
(c) Prepaid Expenses. Any and all prepaid expenses and
deposits. However, prepaid expenses shall not include those expenses
listed on Schedule 2.2(c);
(d) Specified Excluded Assets. Any and all property and assets
described in Schedule 2.2(d) hereof.
Section 2.3 Unassignable Contracts. If any rights, benefits or
remedies (collectively, the "Rights") under any Contracts to be assigned to the
Purchaser hereunder are not assignable by the Seller to the Purchaser without
the consent of the other party or parties thereto and such consent is not
obtained on or before the Time of Closing, then, upon request of the Purchaser
at any time or times after the Closing Date:
(a) the Seller shall hold the Rights for the benefit of the
Purchaser;
(b) the Seller will, at the request and expense and under the
direction of the Purchaser, in the name of the Seller or otherwise as
the Purchaser shall specify, take all such
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actions and do all such things as shall, in the opinion of the
Purchaser, be necessary or desirable in order that the obligations of
the Seller under such Contracts may be performed in a manner such that
the value of the Rights shall be preserved and shall inure to the
benefit of the Purchaser and such that all moneys receivable under such
Contracts may be received by the Purchaser;
(c) the Seller will promptly pay over to the Purchaser all
such moneys collected in respect of such Contracts; and
(d) to the extent permitted by the other party or parties to
such Contracts and provided, in the Purchaser's opinion, that it would
not be prejudicial to the Purchaser's rights to do so, the Purchaser
will perform the obligations under such Contracts on behalf of the
Seller and will indemnify the Seller against all Losses incurred in
performing such obligations.
ARTICLE III
PURCHASE PRICE
Section 3.1 Purchase Price. The purchase price (the "Purchase
Price") payable by the Purchaser to the Seller for the Assets shall be $273,134
in cash. The Purchaser has delivered or shall deliver such proceeds, on the
behalf of the Seller, directly to the Creditors and shall obtain a full
settlement and release from the Creditors of the Seller. The form of such
settlement and release shall be substantially as set forth in Exhibit B attached
hereto.
Section 3.2 Payment on Execution of this Agreement.
Simultaneous with the execution of this Agreement, Purchaser shall advance to
the Seller $75,000 in cash as a short term loan. In return, the Seller shall
give to the Purchaser a promissory note (the "Note") in substantially the form
attached hereto as Exhibit F. The Note will be secured by a lien on the Assets
in favor of the Purchaser and bear interest at ten percent annually. The Seller
will make quarterly payments on the Note over a two year period as described in
Exhibit F. The Note will be convertible at the Purchaser's option into ten
percent of the Seller's outstanding common stock on or after March 31, 1999 if
the Closing Date has not yet occurred. At the Time of Closing, the Note shall be
canceled, and the $75,000 will be offset against any payments to be made
pursuant to Section 3.4.
Section 3.3 Payment on Closing Date. At or prior to the Time
of Closing, the Purchaser shall pay to the Creditors, on behalf of the Seller,
the amounts disclosed in Schedule 3.3.
Section 3.4 Post-Closing Payments. (a) Seller shall also be
entitled to receive Additional Consideration as calculated in accordance with
Schedule 3.4. The Additional Consideration shall be calculated by the Purchaser
at the end of each calendar year and a statement of that calculation signed by
an officer of Purchaser, together with the payment, if any, due to Seller, shall
be sent to Seller at the address set forth in Section 12.1 herein. Seller shall
have the right,
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through a representative acceptable to Purchaser or through a mutually agreed
upon independent accounting firm, to inspect the Purchaser's books and records
in order to verify the calculation of the Additional Consideration. Such
inspection shall be at the Seller's expense. Any objections to the calculation
of the Additional Consideration which can not be reconciled by Seller and
Purchaser within 30 days after such inspection shall be submitted to a mutually
agreed upon independent accounting firm to be resolved in accordance with the
principles set forth in this Section 3.4. The fees and expenses of the
designated accounting firm mentioned above shall be shared equally by Seller and
Purchaser.
(b) Promptly following the Closing Date (but in any event no
later than 60 days after the Closing Date) Seller shall prepare, and
Purchaser shall review, a final balance sheet (the "Final Balance
Sheet"). In connection with the preparation of the Final Balance Sheet,
Seller and Purchaser shall have conducted a physical inspection of the
inventory of Seller, and shall have agreed as to the count and
valuation (including agreement as to the valuation of excess and
obsolete items) of such inventory. To the extent that Seller and
Purchaser agree on the value of such inventory, such valuation shall be
included on the Final Balance Sheet. To the extent that Seller and
Purchaser cannot agree on the valuation of such inventory, such items
as to which Seller and Purchaser cannot reach agreement shall be set
forth on Schedule 3.4(b), and resolved in accordance with the
principles more specifically set forth therein. Any objections to the
Final Balance Sheet which can not be reconciled by Seller and Purchaser
within 30 days after Purchaser's receipt of the Final Balance Sheet
shall be submitted to a mutually agreed upon independent accounting
firm to be resolved in accordance with the principles set forth in this
Section 3.4. The fees and expenses of the designated accounting firm
mentioned above shall be shared equally by Seller and Purchaser. In the
event that the Net Book Value is less than $273,134, such difference
shall be offset against any Additional Consideration payable to Seller
in accordance with Schedule 3.4. In the alternative, to the extent that
the Net Book Value is greater than $273,134, such difference will be
added to the Additional Consideration payable to Seller.
Section 3.5 Allocation of Purchase Price. For tax purposes
only, the Seller and the Purchaser shall agree on a reasonable allocation of the
Purchase Price and report the sale and purchase of the Assets for all federal,
state and local tax purposes, in a manner consistent with such allocation.
Purchaser shall prepare Internal Revenue Service Form 8594 for the 1998 taxation
year and shall provide Seller with an opportunity to review such form prior to
filing the form.
Section 3.6 Costs. Costs and expenses relating to the
transactions contemplated by this Agreement shall be borne and paid as follows:
(a) Any sales, use or excise taxes or other transfer taxes not
otherwise provided for herein relating to the purchase and sale of the
Assets shall be paid by the Seller;
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(b) All taxes and fees required for compliance with
Environmental Laws including discharge, omissions and inspection fees
and waste disposal taxes required to be paid on or prior to the Closing
Date shall be paid by the Seller;
(c) Except as otherwise specifically provided in this
Agreement, the Seller and the Purchaser shall bear their own costs and
expenses arising out of the negotiation, execution, delivery and
performance of this Agreement, and the consummation of the transactions
contemplated herein, including legal and accounting fees and expenses,
and the fees and expenses of any consultants and experts, including
fees incurred by Seller relating to the services provided;
ARTICLE IV
ASSUMPTION OF CERTAIN
LIABILITIES
Section 4.1 Assumption of Certain Liabilities by the
Purchaser. Subject to the provisions of this Agreement, the Purchaser agrees to
assume pay, satisfy, discharge, perform and fulfill, from and after the Closing
Date, those certain obligations and liabilities of the Seller referable to any
period subsequent to the Closing Date and that arise after the Closing Date
under:
(a) the Contracts described in Schedule 2.1(e) and the
software licenses described in Schedule 2.1(b);
(b) the licenses, permits, approvals, consents, registrations,
certificates and other authorizations described in Schedule 2.1(f) that
are transferable or assignable to the Purchaser;
(c) all product warranties guaranteeing repair and/or
replacement work on in warranty products in the GAC Product Line sold
prior to the Closing Date as disclosed on Schedule 4.1(c), including
all costs incurred in repairing or replacing such products; provided,
however, that the Seller shall reimburse the Purchaser for 100% of
Purchaser's cost under such product warranties. The Purchaser may elect
to offset any amounts paid by Purchaser with respect to such warranties
against any amounts payable to the Seller pursuant Section 3.4;
as well as all Accounts Payable listed on Schedule 4.1, as updated by the Final
Balance Sheet (the foregoing, collectively, the "Assumed Liabilities"). In
addition, at the Time of Closing, Purchaser will pay to Sandomar Corporation the
amount disclosed in Schedule 4.1. After the Time of Closing, upon a written
request of Seller accompanied by the appropriate invoices, Purchaser will
advance to Seller an amount not to exceed $25,000 to cover reasonable attorneys'
and accountants' fees incurred in connection with the closing of this
transaction and the dissolution of each of Seller and
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Seller's wholly-owned subsidiary, GAC Asia-Pacific Pte. Ltd. Any amounts
advanced to Seller to cover such fees will be offset against the Additional
Consideration payable to Seller.
Except as set forth in the foregoing provisions of this
Section 4.1, the Purchaser does not assume, and Assumed Liabilities shall not
include, any Contracts or obligations that pertain to: the lease, purchase or
ownership of real property, any employment Contract or arrangement with any
Employee, or any Employee Plan and any Accounts Payable arising after the Time
of Closing and any Government Charges relating to activities of the Seller.
Unless otherwise specified, all Assumed Liabilities expressly assumed by the
Purchaser pursuant to this Section 4.1 shall be paid or discharged in the
ordinary course of business when such liabilities become due and payable. The
assumption by the Purchaser of the Assumed Liabilities shall not enlarge any
rights or remedies of any third party thereunder and the Purchaser shall not be
prevented from contesting in good faith any of the Assumed Liabilities. To the
extent the Purchaser successfully contests any of the Assumed Liabilities after
the completion of the Final Balance Sheet, such amounts, less any costs incurred
by Purchaser in contesting the Assumed Liabilities, will be credited to the
Additional Consideration pursuant to Section 3.4.
Section 4.2 No Other Obligations Assumed. Except as provided
in Section 4.1 with respect to the Assumed Liabilities, and without in any way
limiting Section 11.1 hereof, the Purchaser expressly disclaims responsibility
for, and shall not assume nor be obligated to pay, perform or discharge, and the
Seller shall release, and shall pay, perform, discharge and indemnify and hold
the Purchaser and its Associates harmless from and against, any and all Losses
and obligations, of any nature whatsoever, whether absolute or contingent, known
or unknown, arising out of or in connection with ownership of the Assets or the
conduct of the Business or the operations of the Seller on or prior to the
Closing Date.
Section 4.3 Product Liability Obligations. Without in any way
limiting Section 4.1 and Section 11.1, the Purchaser shall not assume, and the
Seller shall be responsible for and shall indemnify and hold harmless the
Purchaser and its Associates from and against, all product liability and similar
Claims and obligations respecting products sold or services rendered by the
Seller on or prior to the Closing Date, which products or services shall have
failed to conform to any applicable express warranty given by the Seller, or
implied by Law, in connection therewith.
ARTICLE V
REPRESENTATIONS AND
WARRANTIES OF THE SELLER
The Seller represents and warrants to the Purchaser as follows
and acknowledges and confirms that the Purchaser is relying on such
representations and warranties in connection with its purchase of the Assets of
the Business:
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Section 5.1 Organization. The Seller is a corporation duly
incorporated, organized and validly existing under the laws of the State of
Connecticut and has the corporate power to enter into this Agreement and to
perform its obligations hereunder. The Seller has the corporate power to own or
to lease its property and to carry on its business as now being conducted.
Section 5.2 Authorization. This Agreement has been duly
authorized, executed and delivered by the Seller and is a legal, valid and
binding obligation of the Seller enforceable against the Seller in accordance
with its terms, except as such enforcement may be limited by bankruptcy,
insolvency and other laws affecting the rights of creditors generally and
general equitable principles, whether applied by a court of law or equity.
Section 5.3 No Other Agreements to Purchase or Option. No
Person other than the Purchaser has any written or oral agreement or option or
any right or privilege (whether by law, preemption or Contract) capable of
becoming an agreement or option for the purchase from the Seller of any of the
Assets.
Section 5.4 No Violation. The execution and delivery of this
Agreement by the Seller and the consummation of the transactions herein provided
for will not:
(a) result in the breach or violation of any of the provisions
of, or constitute a default under, or conflict with or cause the
acceleration of any obligation of the Seller under:
(i) any Contract to which the Seller is a party or by
which the Seller or the properties of the Seller are bound;
(ii) any provision of the charter documents or by-laws or
resolutions of the board of directors (or any committee
thereof) or shareholders of the Seller;
(iii) any judgment, decree, order or award of any court,
governmental body or arbitrator having jurisdiction over the
Seller or any of the properties of the Seller;
(iv) any license, permit, approval, consent or
authorization necessary to the proper operation of the
Business;
(v) any applicable Law; or
(b) result in the creation or imposition of any Encumbrance on
any of the Assets; or
(c) require the consent, authorization, notification or
approval of any Person (whether pursuant to any Law, Contract or
otherwise) in addition to those described in Schedule 5.13.
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Section 5.5 Sufficiency of the Assets. The Assets to be sold
to the Purchaser hereunder constitute all of the assets used in the Business
except for the Excluded Assets, and are sufficient to carry on such Business as
carried on by the Seller on or prior to the Closing Date. With the exception of
Inventory and Inventory Supplies in transit and the Seller's mobile equipment
located at or traveling to or from sites in connection with the performance by
the Seller of on-going Contracts, all the tangible Assets are situated at the
Seller's business address as set forth in Section 12.1 hereof.
Section 5.6 Products Relating to the Business. All open
customer orders for products in the GAC Product Line can be satisfied with
products manufactured in accordance with the design of such products as existing
on the Closing Date and with existing manufacturing processes without
modification. All products relating to the Business perform, function and
operate as represented in published product marketing brochures, product
specifications, bids or quotations and customer orders accepted, and the
necessary documentation exists including, but not limited to, blueprints, bills
of materials, specifications and assembly and test instructions to allow a
person of average skill in manufacturing to produce such products.
Section 5.7 Year 2000 Compliance. All computer-based
information systems, embedded chip systems and software codes utilized in
products relating to the Business are capable of functioning in the year 2000
and beyond or are capable of being converted to provide full functionality in
the year 2000 and beyond without material expense to the Purchaser.
Section 5.8 Intellectual Property. Schedule 2.1(b) sets out
all registered or pending Intellectual Property (including particulars of
registration or application for registration) and all licenses, registered user
agreements and other Contracts that comprise or relate to the Intellectual
Property. The Intellectual Property comprises all trade or brand names, business
names, trademarks, service marks, copyrights, patents, trade secrets, know how,
inventions, designs and other industrial or intellectual property necessary to
manufacture and sell the GAC Product Line. The Seller is the beneficial owner of
the Intellectual Property and is not a party to or bound by any Contract or any
other obligation whatsoever that limits or impairs its ability to sell,
transfer, assign or convey, or that otherwise affects, the Intellectual
Property. There are no Encumbrances on any of the Intellectual Property
excluding the unregistered trade names and trademarks or on the unregistered
trade names and trademarks included in the Intellectual Property. Except as
provided in Schedule 2.1(b), no Person has been granted any interest in or right
to use all or any portion of the Intellectual Property. The manufacture, sale
and use of the products in the GAC Product Line does not infringe the
intellectual property rights of any other Person, nor has the Seller received
any notice alleging that its conduct, including the use of the Intellectual
Property, infringes upon or breaches any intellectual property rights of any
other Person, there is no infringement or violation of any of the rights of the
Seller in the Intellectual Property. There is no state of facts that casts doubt
on the validity or enforceability of any of the Intellectual Property. The
Seller has provided to the Purchaser a true and complete copy of all Contracts
that comprise or relate to the Intellectual Property.
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Section 5.9 Insurance. The Seller has insured the Assets
against loss or damage by all insurable hazards or risks on a replacement cost
basis. Such insurance coverage will be continued in full force and effect to and
including the Closing Date.
Section 5.10 No Expropriation. No part of the Assets has been
taken or expropriated by any federal, state, municipal or other authority, nor
has any notice or proceeding in respect thereof been given or commenced, nor is
there any intent or proposal to give any such notice or commence any such
proceedings.
Section 5.11 Agreements and Commitments. Except for the
Contracts described in Schedule 2.1(e), the Seller is not a party to or bound by
any Contract relating to the Business. The Seller has performed all of the
obligations required to be performed by it and is entitled to all benefits
under, and is not in default or alleged to be in default in respect of, any
Contract set forth in Schedule 2.1(e), and all such Contracts are in good
standing and in full force and effect, and no event, condition or occurrence
exists that, after notice or lapse of time or both, would constitute a default
under any of the foregoing. The Seller has provided to the Purchaser a true and
complete copy of each Contract listed or described in Schedule 2.1(e). Schedule
2.1(e) sets forth a complete list of all service contracts entered into by the
Business with its customers.
Section 5.12 Compliance with Laws; Governmental Authorization.
The Seller has complied with all Laws, including Environmental Laws, applicable
to the Business. Schedule 2.1(d) sets out a complete and accurate list of all
licenses, permits, approvals, consents, certificates, registrations and
authorizations (whether governmental, regulatory or otherwise) (collectively,
the "Licenses") held by or granted to the Seller to carry on the Seller's
business as it relates to the Business, and there are no other licenses,
permits, approvals, consents, certificates, registrations or authorizations
necessary to carry on the Seller's business as it relates to the Business or to
own or lease any of the Business. Each License is valid and in good standing
and, except as disclosed in Schedule 2.1(d). The Seller is not in default or
breach of any License and no proceeding is pending or, threatened to revoke or
limit any License. The Seller has provided a true and complete copy of each
License and all amendments thereto to the Purchaser.
Section 5.13 Consents and Approvals. There is no requirement
to make any filing with, give any notice to or to obtain any license, permit,
certificate, registration, authorization, consent or approval of any
governmental or regulatory authority as a condition to the lawful consummation
of the transactions contemplated by this Agreement, except for the filings,
notifications, licenses, permits, certificates, registrations, consents and
approvals described in Schedule 5.13 or that relate solely to the identity of
the Purchaser. There is no requirement under any Contract relating to the
Business to which the Seller is a party or by which the Seller is bound to give
any notice to, or to obtain the consent or approval of, any party to such
Contract relating to the assignment of such Contract or consummation of the
transactions contemplated by this Agreement, except for the notifications,
consents and approvals described in Schedule 5.13.
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Section 5.14 Financial Statements; Books and Records. The
Financial Statements and all of the Seller's books and records are accurate and
complete in all material respects. There have been no material changes in the
Seller's business that make such Financial Statements and books and records
incorrect. The Seller has provided true and complete copies of the Financial
Statements to the Purchaser.
Section 5.15 Absence of Changes. Except as set forth in
Schedule 5.15, since the date of the Interim Financial Statements, the Seller
has carried on its business as it relates to the Business only in the ordinary
and normal course consistent with past practice, and there has not been:
(a) any material adverse change in the condition (financial or
otherwise), assets, liabilities, operations, earnings, business or
prospects of the Seller's business as it relates to the Business except
as shown in the Interim Financial Statements;
(b) any damage, destruction or loss (whether or not covered by
insurance) affecting any of the Business;
(c) any obligation or liability (whether absolute, accrued,
contingent or otherwise, and whether due or to become due) incurred by
the Seller in connection with the Business that, under this Agreement,
is an Assumed Liability;
(d) any license, sale, assignment, transfer, disposition,
pledge, mortgage or granting of a security interest or other
Encumbrance on or over any Asset, other than sales of Inventory to
customers in the ordinary and normal course of business;
(e) any purchase commitment in excess of the Seller's
requirements for normal operating Inventories and Supply Inventories or
at a price higher than the current market price;
(f) any sales commitment other than in the ordinary and normal
course of business or at a price less than 80% of the prices quoted by
the Seller to end users and or on other than customary terms to
distributors for the same goods or services as at September 30, 1998,
or any failure to satisfy any accepted order for goods or services; or
(g) any change in the credit terms offered to customers of, or
by suppliers to, the Seller.
Section 5.16 Non-Arm's Length Transactions. Except as
disclosed in Schedule 5.16, with respect to the Business:
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(a) the Seller is not a party to any Contract with any
officer, director, Employee, shareholder or any other Person not
dealing at arm's length with the Seller or any Affiliate of the Seller;
and
(b) no officer, director, Affiliate or shareholder of the
Seller:
(i) owns, directly or indirectly, any interest in
(except for shares representing less than one percent of the
outstanding shares of any class or series of any publicly
traded company), or is an officer, director, employee or
consultant of, any Person that is, or is engaged in business
as, a competitor of either of the Seller, or a lessor, lessee,
supplier, distributor, sales agent or customer of the Seller;
(ii) owns, directly or indirectly, in whole or in
part, any property or rights that the Seller uses in its
operations; or
(iii) has any cause of action or other Claim
whatsoever against, or owes any amount to, the Seller, except
for any liabilities reflected in the Annual Financial
Statements dated June 30, 1998 and Claims in the ordinary
course of business for accrued benefits under Employee Plans.
Section 5.17 Taxes.
For purposes of this Section 5.17, the term "Governmental
Charges" means and includes all taxes, customs duties, rates, levies, fees,
assessments, reassessments and other charges, together with all penalties,
interest and fines with respect thereto, payable to any federal, state,
municipal, local or other government or governmental agency, authority, board,
bureau or commission, domestic or foreign.
The Seller has paid all Governmental Charges that could result
in a lien on the Assets and that are due and payable by it on or before the date
hereof. Adequate provision was made in the Annual Financial Statements and
Interim Financial Statements, respectively, for all Governmental Charges payable
in respect of the periods covered thereby. The Seller does not have any
liability for Governmental Charges other than those provided for in the Annual
Financial Statements dated June 30, 1998 and those arising in the ordinary
course of the operation of the Seller's business as it relates to the Business
since the date of such Annual Financial Statements.
Section 5.18 Litigation. Except as described in Schedule 5.18,
there are no actions, suits or proceedings (whether or not purportedly on behalf
of the Seller) pending or, threatened against or affecting the Business at law
or in equity or before or by any federal, state, municipal or other governmental
department, court, commission, board, bureau, agency or instrumentality,
domestic or foreign, or before or by an arbitrator or arbitration board. The
Seller is not aware of any ground on which any such action, suit or proceeding
might be commenced with any reasonable likelihood of success.
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Section 5.19 Environmental. Schedule 5.19 describes all
environmental audits, evaluations, assessments, studies and tests performed in
connection with the Business. Except as described in Schedule 5.19, with respect
to the Business:
(a) the Seller has been and currently is in compliance with
all Environmental Laws, including, but not limited to, with respect to
Hazardous Substances that have been used, generated, manufactured,
handled, processed, distributed, recycled, transferred, received,
stored, treated, disposed of, landfilled, transported or in any way
released (and no release is threatened) at, on, under, to, or from any
property used in the Business;
(b) the Seller has not entered into any agreement to assume or
retain any obligations, undertakings or liabilities arising out of or
relating to Hazardous Substances or compliance with Environmental Laws;
(c) the Seller has obtained or applied for all required
licenses, permits, approvals, consents, certificates, registrations and
other authorizations under Environmental Laws (the "Environmental
Permits") to operate its Business, all of which are described in
Schedule 2.1(f). Each Environmental Permit is valid, existing and in
good standing, and Seller is not in default or breach of any
Environmental Permit and no proceeding is pending or threatened to
revoke or limit any Environmental Permit;
(d) the Seller has not received any notice of any violation
of, non-compliance with, or remedial obligation under, Environmental
Laws;
(e) the Seller has not been named as a potentially responsible
party under CERCLA, comparable state law or other Environmental Laws
requiring corrective or remedial action. Seller has not received any
notice, nor is any notice proposed, of any existing or potential
investigation, Claim, removal or remedial action under any
Environmental Laws; and
(f) there has been no exposure of any Person, property, or
natural resources to Hazardous Substances or to any other substance for
which exposure is limited under any Environmental Laws which exposure
has resulted in a Claim against the Seller or which exposure would
result in the imposition of liability on the Purchaser for Losses
arising from such exposure.
Section 5.20 Good Title. The Assets are free and clear of all
Liens, other than Permitted Encumbrances.
Section 5.21 Customers and Suppliers. Schedule 5.21 sets out
all of Seller's customers, including distributors, with respect to the GAC
Product Line and, there has been no termination or cancellation of, and no
modification or change in, the business relationship of the Seller with any
distributor or a material number of customers. There is no reason to believe
that the
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benefits of any relationship with any of its distributors, customers or
suppliers will not continue after the Closing Date in substantially the same
manner as prior to the date of this Agreement. Except as identified in Schedule
5.21, none of such customers is an Affiliate of the Seller.
Section 5.22 Warranties and Discounts. With respect to the GAC
Product Line, except as described in Schedule 5.22:
(a) the Seller has not given any guarantee or warranty in
respect of any of the products it has sold or the services it has
provided, except warranties provided in the sale of its products.
Copies of the forms of all warranties that remain in effect as of the
date hereof are contained in Schedule 5.22;
(b) during the period of twelve months prior to the date
hereof, no Claims have been made against the Seller for breach of
warranty or contract requirement or negligence or for a price
adjustment or other concession in respect of any defect in or failure
to perform or deliver any products, services or work which had, in any
such year, a cost exceeding $1,000 individually;
(c) there are no repair Contracts or maintenance obligations
in favor of the Seller's customers or users of the Seller's products
except obligations incurred in the ordinary course of business and in
accordance with the Seller's standard terms, a copy of which has been
provided to the Purchaser;
(d) Except as listed in Schedule 5.22 the Seller is not
subject to any Contract, and has not within twelve months prior to the
date hereof entered into any Contract, with any customer that would
require the repurchase of any products sold to such customers or
adjustment of any price or the granting of any refund, discount or
other concession to such customer for products sold or services
rendered. To the extent a Contract listed on Schedule 5.22 results in
any such repurchase, price adjustment, refund, discount or other
concession, such amount shall be offset, pursuant to Schedule 5.22,
against the Additional Consideration to be paid to Seller; and
(e) with respect to the Assumed Liabilities, the Seller is not
required to provide any letters of credit, bonds or other financial
security arrangements in connection with any transactions with any
suppliers or customers.
Section 5.23 Equipment. The Equipment and all other tangible
Assets are located at the addresses set forth in Schedule 5.23.
Section 5.24 Employee Plans. There are no audits or
investigations pending or, to the Seller's knowledge, threatened by any
governmental or regulatory agency or authority involving or relating to any
Employee Plan and there are no Claims (except for undisputed Claims for benefits
payable in the normal operation of the Employee Plans), suits, audits,
investigations or other
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proceedings pending, or to the Seller's knowledge, threatened against any
Employee Plan, including any funding medium thereunder, that could give rise to
a lien on the Assets nor, to the Seller's knowledge, are there any facts that
could give rise to any lien on the Business in the event of any such audit,
investigation, Claim, suit or proceeding.
Section 5.25 Collective Agreements. Except as described in
Schedule 5.25, the Seller is not a party to any Contracts with any labor union
or employee association nor has the Seller made commitments to or conducted
negotiations with any labor union or employee association with respect to any
future Contracts.
Section 5.26 Employees. As of the date hereof, the Seller
employed 27 persons.
(a) other than as identified in Schedule 5.26, there are no
charges, complaints, investigations or litigation by, on behalf of or
relating to one or more Employees with respect to alleged employment
discrimination, unfair labor practices, equal pay discrimination,
affirmative action compliance, breach of contract, employee benefit
matters, wrongful discharge or other employment related matters;
(b) there are no outstanding investigations, orders or charges
against the Seller relating to any Employees or former employees under
any applicable health and safety Laws;
(c) all levies, assessments and penalties made against the
Seller pursuant to any applicable workers' compensation legislation
have been paid by the Seller and the Seller has not been reassessed
under any such legislation during the past three years; and
(d) the Seller shall not hire, attempt to hire or otherwise
solicit for hire, for or on its own behalf or for or on behalf of any
Person, any Employee for a period of five years from the Closing Date
without prior written approval of the Purchaser.
Section 5.27 No Liabilities. There are no debts, obligations
or liabilities of the Seller or its Affiliates, whether or not accrued,
contingent, determined or determinable, in respect of which the Purchaser may
become liable on or after the consummation of the transactions herein provided
for, other than the Assumed Liabilities.
Section 5.28 Partnerships or Joint Ventures. In relation to
the Business, the Seller is not a partner or participant in any partnership,
joint venture, profit-sharing arrangement or other association of any kind and
is not party to any Contract under which the Seller agrees to carry on any part
of its business in such manner or by which the Seller agrees to share any
revenue or profits of its business with any other Person.
Section 5.29 Lack of Restriction. Seller is not, and following
the Closing Date Purchaser will not be, limited or restricted in any way in
manufacturing or selling products to any
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Person or for any use worldwide, except where the general application of U.S.
law restricts such sales or manufacture.
Section 5.30 Representations as to Inventory. In relation to
the Business, all Inventory including finished products, work in progress, and
raw materials shall:
(a) have been procured, processed and/or assembled by Seller
or companies under the control of Seller;
(b) conform strictly to the design criteria, specifications
(including general specifications and quality requirements), drawings,
samples and other descriptions referred to in this Agreement and in
publications by Seller regarding the Product Line;
(c) be free from defects in design, material and workmanship;
and
(d) be free and clear of all liens, encumbrances and other
claims against title.
Section 5.31 Representations as to Product Design.
(a) all product designs are free of defects which would
prevent products manufactured therefrom from properly performing,
functioning, and complying with published specifications and
representations as to such products made in any publication by Seller,
including sales brochures and other marketing materials, etc.; and
(b) each product has adequate manufacturing documentation,
including drawings, specifications, manufacturing process descriptions,
xxxx of material, assembly instruction and test procedure so that a
worker of average skill in manufacturing will be able to assemble and
test such product to conform with published specifications.
Section 5.32 Open Orders. Except as disclosed in Schedule
5.32, the Business has no open orders for Inventory Supplies.
Section 5.33 Full Disclosure. Neither this Agreement nor any
certificate, report, statement or other document delivered or to be delivered to
the Purchaser by the Seller in connection with the negotiation of this Agreement
or consummation of the transactions contemplated hereby contains or will contain
any untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the statements contained herein or therein not
misleading.
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ARTICLE VI
REPRESENTATIONS AND
WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Seller as follows
and acknowledges and confirms that Seller is relying on such representations and
warranties in connection with its sale of the Assets:
Section 6.1 Organization. The Purchaser is a corporation duly
incorporated and organized and validly existing under the laws of the State of
Oklahoma and has the corporate power to enter into this Agreement and to perform
its obligations hereunder.
Section 6.2 Authorization. This Agreement has been duly
authorized, executed and delivered by the Purchaser and is a legal, valid and
binding obligation of the Purchaser enforceable against the Purchaser in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency and other laws affecting the rights of creditors
generally and general equitable principles, whether applied by a court of law or
equity.
Section 6.3 No Violation. The execution and delivery of this
Agreement by the Purchaser and the consummation of the transactions herein
provided for will not result in the breach or violation of, or constitute a
default under, or conflict with or cause the acceleration of any obligation of
the Purchaser under:
(a) any Contract to which the Purchaser is a party or by which
it or its properties is or are bound;
(b) any provision of the charter documents or by laws or
resolutions of the board of directors (or any committee thereof) or
shareholders of the Purchaser;
(c) any judgment, decree, order or award of any court,
governmental body or arbitrator having jurisdiction over the Purchaser
or any of its properties; or
(d) any applicable Law.
Section 6.4 Consents and Approvals. There is no requirement
for the Purchaser to make any filing with, give any notice to or obtain any
license, permit, certificate, registration, authorization, consent or approval
of, any government or regulatory authority as a condition to the lawful
consummation of the transactions contemplated by this Agreement.
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ARTICLE VII
SURVIVAL OF COVENANTS,
REPRESENTATIONS AND
WARRANTIES
Section 7.1 Survival of Representations and Warranties of the
Seller. The representations and warranties of the Seller contained in this
Agreement and any agreement, instrument, certificate or other document executed
and delivered pursuant hereto shall survive the closing of the transactions
contemplated hereby and, notwithstanding such closing and any investigation made
by or on behalf of the Purchaser, shall continue in full force and effect for
the benefit of the Purchaser until: the expiration of the statute of limitations
for claims relating to environmental, tax intellectual property or product
liability matters occurring prior to the Closing Date and until the fifth
anniversary of the Closing Date for all other matters; provided, however, that a
claim for any breach by the Seller of any representations and warranties
contained in this Agreement or in any agreement, instrument, certificate or
other document executed or delivered pursuant hereto involving fraud or
fraudulent misrepresentation may be made at any time following the Closing Date,
subject only to applicable limitation periods imposed by law.
Section 7.2 Survival of Representations and Warranties of the
Purchaser. The representations and warranties of the Purchaser contained in this
Agreement and any agreement, instrument, certificate or other document executed
and delivered pursuant hereto shall survive the closing of the transactions
contemplated hereby and, notwithstanding such closing and any investigation made
by or on behalf of the Seller, shall continue in full force and effect for the
benefit of the Seller until the expiration of the statute of limitations for
claims relating to environmental or tax matters occurring prior to the Closing
Date and until the fifth anniversary of the Closing Date for all other matters.
Section 7.3 Survival of Covenants. The covenants of the Seller
and the Purchaser set forth in Article VIII and elsewhere in this Agreement
shall survive the closing of the transactions contemplated hereby and,
notwithstanding such closing, shall continue in full force and effect for the
benefit of the other parties in accordance with the terms thereof.
Section 7.4 Outstanding Claims. Any Claim by a party hereunder
for breach of a representation, warranty or covenant or indemnification with
respect thereto shall be preserved despite the subsequent occurrence of the
termination of the applicable survival period hereunder, provided notice of such
Claim is given in accordance with Section 11.4 at the time of or prior to the
termination of such survival period.
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ARTICLE VIII
COVENANTS
Section 8.1 Use of Name. The Seller agrees that from and after
the Closing Date neither Seller nor any of its Affiliates will use the word
"GAC" or any part thereof or any similar words or any acronyms derived therefrom
or any of the Sellers intellectual property.
Section 8.2 Competition. The Seller acknowledges that, at the
Effective Time, it no longer has any right, title or interest in the Assets and
agrees to refer all inquiries regarding the Business to the Purchaser. The
Seller also agrees that it will not compete with Purchaser or distribute or sell
to, or otherwise assist in any way, any Person with regard to any product
competitive with the GAC Product Line.
Section 8.3 Financial Statements. Seller agrees to promptly
provide audited financial statements for the three years ended June 30, 1998 at
Seller's cost.
ARTICLE IX
CONDITIONS OF CLOSING
Section 9.1 Conditions of Closing in Favor of the Purchaser.
The sale and purchase of the Assets are subject to the following terms and
conditions for the exclusive benefit of the Purchaser, to be performed or
fulfilled at or prior to the Time of Closing:
(a) Covenants. All of the terms, covenants and conditions of
this Agreement to be complied with or performed by the Seller at or
before the Time of Closing shall have been complied with or performed,
and a certificate of a senior officer of the Seller dated the Closing
Date, to that effect shall have been delivered to the Purchaser, such
certificate to be in form and substance reasonably satisfactory to the
Purchaser;
(b) Regulatory Consents. There shall have been given or
obtained from all appropriate foreign and domestic federal, state,
municipal and other governmental and administrative bodies such
notices, licenses, permits, consents, approvals, certificates,
registrations and authorizations as are required to be obtained by the
Seller or the Purchaser to permit the change of ownership of the Assets
contemplated hereby, including those described in Schedule 5.13, in
each case in form and substance reasonably satisfactory to the
Purchaser;
(c) Contractual Consents. The Seller shall have given or
obtained the notices, consents and approvals described in Schedule
5.13, in each case in form and substance reasonably satisfactory to the
Purchaser;
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(d) Non-competition Agreements. Xxxx Xxxxx and Xxx Xxxxx shall
enter into non-competition agreements, substantially in the form
attached hereto as Exhibit A, with Purchaser for a period of five (5)
years from the date of closing.
(e) Release of Creditors. Seller shall have obtained a full
settlement and release from the Creditors in substantially the form as
set forth in Exhibit B attached hereto;
(f) Legal Matters. All actions, proceedings, instruments and
documents required to implement this Agreement, or instrumental
thereto, and all legal matters relating to the purchase of the Assets,
shall have been approved as to form and legality to the reasonable
satisfaction of Xxxxxxx & Xxxxx L.L.P., counsel for the Purchaser with
no qualifications or exceptions that are not acceptable to the
Purchaser;
(g) Customer Orders. There shall have been no material change
in Seller's backlog from the date of execution of this Agreement to the
Time of Closing;
(h) Lease. Purchaser shall have entered into an acceptable
lease arrangement with the landlord for the property located at 000
Xxxxx Xxxxxx, Xxxxx Xxxxxxx, Xxxxxxxxxxx 00000;
(i) Delivery of Documents. Seller shall have delivered to
Purchaser duly executed and authorized copies of the (i) General
Conveyance and Assignment, (ii) Patent Assignment, and (iii) Trademark
Assignment in the forms attached hereto as Exhibits C, D and E
respectively.
Any such condition may be waived in whole or in part by the
Purchaser without prejudice to any claims it may have for breach of covenant,
representation or warranty.
Section 9.2 Conditions of Closing in Favor of the Seller. The
sale and purchase of the Assets are subject to the following terms and
conditions for the exclusive benefit of the Seller, to be performed at or prior
to the Time of Closing:
(a) Covenants. All of the terms, covenants and conditions of
this Agreement to he complied with or performed by the Purchaser at or
before the Time of Closing shall have been complied with or performed,
and a certificate of a senior officer of the Purchaser, dated the
Closing Date, to that effect shall have been delivered to the Seller,
such certificate to be in form and substance reasonably satisfactory to
the Seller; and
(b) Regulatory Consents. There shall have been given or
obtained from all appropriate foreign and domestic federal, state,
municipal and other governmental and administrative bodies such
notices, licenses, permits, consents, approvals, certificates,
registrations and authorizations as are required to be obtained by the
Seller to permit the change of ownership of the Assets contemplated
hereby, in each case in form and substance reasonably satisfactory to
the Seller.
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(c) Legal Matters. All actions, proceedings, instruments and
documents required to implement this Agreement, or instrumental
thereto, and all legal matters relating to the purchase of the Assets,
shall have been approved as to form and legality to the reasonable
satisfaction of Xxxxx X. Xxxxxx, counsel for the Seller with no
qualifications or exceptions that are not acceptable to the Seller;
Any such condition may be jointly waived in whole or in part
by the Seller without prejudice to any claims it may have for breach of
covenant, representation or warranty.
ARTICLE X
CLOSING DATE AND TRANSFER OF
POSSESSION
Section 10.1 Transfer. Subject to compliance with the terms
and conditions hereof, the transfer of possession of the Business shall be
deemed to take effect as at the Effective Time.
Section 10.2 Place of Closing. The closing shall take place at
the Time of Closing at the offices of the Business, Norwalk, Connecticut.
Section 10.3 Further Assurances. From time to time subsequent
to the Closing Date, each party to this Agreement covenants and agrees that it
will, upon request and at the expense of the requesting party, promptly execute
and deliver all such documents, including all such additional conveyances,
transfers, consents and other assurances, and do all such other acts and things
as the other party may from time to time reasonably request be executed or done
in order to better evidence or perfect or effectuate any provision of this
Agreement or of any agreement or other document executed pursuant to this
Agreement or any of the respective obligations intended to be created hereby or
thereby.
Section 10.4 Insurance. As of and from the Closing Date, the
Purchaser will insure all of the Assets under its own policies and will not
assume any insurance policies of the Seller.
ARTICLE XI
INDEMNIFICATION
Section 11.1 Indemnification by the Seller. The Seller agrees
to indemnify and hold harmless the Purchaser and its Associates from all losses
suffered or incurred by any of them as a result of or arising directly or
indirectly out of or in connection with:
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(a) any breach by the Seller of, or any inaccuracy of any
representation or warranty of, the Seller contained in this Agreement
or in any agreement, certificate or other document delivered pursuant
hereto;
(b) any breach or non-performance by the Seller of any
covenant to be performed by it that is contained in this Agreement or
in any agreement, certificate or other document delivered pursuant
hereto;
(c) any failure by the Seller to pay, satisfy, discharge,
perform or fulfill any liabilities or obligations except for the
Assumed Liabilities;
(d) any claim by a third party alleging it has any rights to
any of the Assets; and
(e) the operations of the Seller's business on or prior to the
Closing Date including any liabilities or corrective or remedial
obligations incurred after the Closing Date pursuant to Environmental
Laws that arise out of the conduct of the Seller or any of its
predecessors on or prior to the Closing Date.
Section 11.2 Indemnification by Xxxx X. Xxxxx, Xx.. Xxxx X.
Xxxxx, Xx. agrees to indemnify and hold harmless the Seller and its Associates
from all losses suffered or incurred by any of them as a result of or arising
directly or indirectly out of or in connection with:
(a) any breach of the representations and warranties relating
to environmental compliance, as set forth in Section 5.19 hereof; and
(b) any breach of the following representation made by Xxxx X.
Xxxxx, Xx.: I did not personally, nor as an officer or director of the
Seller, take any action, nor am I aware of any actions taken (other
than the grant of a security interest to Den Danske Bank to secure
borrowings) that would result in a valid claim that the Seller does not
have clear title and right to convey such title of the Assets to be
conveyed under this Agreement. I did not personally, nor as an officer
or director of the Seller, take any action, nor am I aware of any
actions taken (other than the grant of a security interest to Den
Danske Bank to secure borrowings) that would result in such conveyance
constituting a breach or violation of any obligation of the Seller.
Section 11.3 Indemnification by Xxxxxx X. Xxxxx. Xxxxxx X.
Xxxxx agrees to indemnify and hold harmless the Seller and its Associates from
all losses suffered or incurred by any of them as a result of or arising
directly or indirectly out of or in connection with: any breach of the following
representation made by Xxxxxx X. Xxxxx: I did not personally, nor as an officer
or director of the Seller, take any action, nor am I aware of any actions taken
(other than the grant of a security interest to Den Danske Bank to secure
borrowings) that would result in a valid claim that the Seller does not have
clear title and right to convey such title of the Assets to be conveyed under
this Agreement. I did not personally, nor as an officer or director of the
Seller, take any action, nor am
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I aware of any actions taken (other than the grant of a security interest to Den
Danske Bank to secure borrowings) that would result in such conveyance
constituting a breach or violation of any obligation of the Seller.
Section 11.4 Indemnification by the Purchaser. The Purchaser
agrees to indemnify and hold harmless the Seller and its Associates from all
losses suffered or incurred by any of them as a result of or arising directly or
indirectly out of or in connection with:
(a) any breach by the Purchaser of or any inaccuracy of any
representation or warranty contained in this Agreement or in any
agreement, instrument, certificate or other document delivered pursuant
hereto;
(b) any breach or non-performance by the Purchaser of any
covenant to be performed by it that is contained in this Agreement or
in any agreement, certificate or other document delivered pursuant
hereto;
(c) any failure by the Purchaser to pay, satisfy, discharge,
perform or fulfill any of the Assumed Liabilities; and
(d) the operations of the Purchaser's business after the
Closing Date including any liabilities or corrective or remedial
obligations incurred after the Closing Date pursuant to Environmental
Laws that arise out of the conduct of the Purchaser after the Closing
Date.
Section 11.5 Notice of Claim. In the event that a party (the
"Indemnified Party") shall become aware of any Claim in respect of which another
party (the "Indemnifying Party") agreed to indemnify the Indemnified Party
pursuant to this Agreement, the Indemnified Party shall promptly give written
notice thereof to the Indemnifying Party. Such notice shall state whether the
Claim arises as a result of a Claim by a Person against the Indemnified Party (a
"Third Party Claim") or whether the Claim does not so arise (a "Direct Claim"),
and shall also specify with reasonable particularity (to the extent that the
information is available) the factual basis for the Claim and the amount of the
Claim, if known. Failure by the Indemnified Party to give notice to the
Indemnifying Party pursuant to this Section 11.4 shall not be a waiver of or
release the Indemnifying Party from any obligation to indemnify the Indemnified
Party except and only to the extent that the Indemnifying Party is materially
prejudiced as a result of the failure to receive such notice.
Section 11.6 Direct Claims. With respect to any Direct Claim,
following receipt of notice from the Indemnified Party of the Claim, the
Indemnifying Party shall have sixty days to make such investigation of the Claim
as is considered necessary or desirable. For the purpose of such investigation,
the Indemnified Party shall make available to the Indemnifying Party the
information relied upon by the Indemnified Party to substantiate the Claim,
together with all such other information as the Indemnifying Party may
reasonably request. If both parties agree at or prior to the expiration of such
sixty-day period (or any mutually agreed upon extension thereof) to the validity
and amount of such the Indemnifying Party shall immediately pay to the
Indemnified Party
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the full agreed upon amount of the Claim, failing which the matter shall be
referred to binding arbitration in accordance with the rules of the American
Arbitration Association.
Section 11.7 Third Party Claims. With respect to any Third
Party Claim, the Indemnifying Party shall have the right, at its expense, to
participate in or assume control of the negotiation, settlement or defense of
the Claim and, in such event, the Indemnifying Party shall reimburse the
Indemnified Party for all the Indemnified Party's out-of-pocket expenses as a
result of such participation or assumption. If the Indemnifying Party elects to
assume such control, the Indemnified Party shall have the right to participate
in the negotiation, settlement or defense of such Third Party Claim and to
retain counsel to act on its behalf, provided that the fees and disbursements of
such counsel shall be paid by the Indemnified Party unless the Indemnifying
Party consents to the retention of such counsel or unless the named parties to
any action or proceeding include both the Indemnifying Party and the Indemnified
Party and representation of both the Indemnifying Party and the Indemnified
Party by the same counsel would be inappropriate due to the actual or potential
differing interests between them (such as the availability of different
defenses). If the Indemnifying Party, having elected to assume such control,
thereafter fails to defend the Third Party Claim within a reasonable time, the
Indemnified Party shall be entitled to assume such control and the Indemnifying
Party shall be bound by the results obtained by the Indemnifying Party with
respect to such Third Party Claim. If any Third Party Claim is of a nature such
that the Indemnified Party is required by applicable Law to make a payment to
any Person (a "Third Party") with respect to the Third Party Claim before the
completion of settlement negotiations or related legal proceedings, the
Indemnifying Party may make such payment and the Indemnifying Party shall,
forthwith after demand by the Indemnified Party, reimburse the Indemnified Party
for such payment. If the amount of any liability of the Indemnified Party under
the Third Party Claim in respect of which such payment was made, as finally
determined, is less than the amount that was paid by the Indemnifying Party to
the Indemnified Party, the Indemnifying Party shall, forthwith after receipt of
the difference from the Third Party, pay the amount of such difference to the
Indemnifying Party.
Section 11.8 Settlement of Third Party Claims. If the
Indemnifying Party fails to assume control of the defense of any Third Party
Claim, the Indemnified Party shall have the exclusive right to contest, settle
or pay the amount claimed. Whether or not the Indemnifying Party assumes control
of the negotiation, settlement or defense of any Third Party Claim, the
Indemnified Party shall not settle any Third Party Claim without the written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld or delayed; provided, however, that the liability of the Indemnified
Party shall be limited to the proposed settlement amount if any such consent is
not obtained for any reason.
Section 11.9 Cooperation. The Indemnified Party and the
Indemnifying Party shall cooperate fully with each other with respect to Third
Party Claims, and shall keep each other fully advised with respect thereto
(including supplying copies of all relevant documentation promptly as it becomes
available).
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Section 11.10 Exclusivity. The provisions of this Article
shall apply to any Claim for breach of any covenant, representation, warranty or
other provision of this Agreement or any agreement, certificate or other
document delivered hereto or any provision hereof or thereof providing an
indemnity to one party from another party or parties (other than a Claim for
fraud, specific performance or injunctive relief) with the intent that all such
Claims shall be subject to the limitations and other provisions contained in
this Article XI. Notwithstanding the foregoing provisions of this Section 11.9,
the provisions of Sections 11.7 and 11.8 shall not apply to any Third Party
Claim against the Purchaser arising pursuant to Section 4.3.
Section 11.11 Survival of Indemnification by the Seller. The
indemnification provisions provided by the Seller in this Agreement and any
Contract, instrument, certificate or other document executed and delivered
pursuant hereto shall survive the closing of the transactions contemplated
hereby and, notwithstanding such closing and any investigation made by or on
behalf of the Purchaser, shall continue in full force and effect for the benefit
of the Purchaser until the fifth anniversary of the Closing Date.
Section 11.12 Offset. Purchaser shall have the right to
withhold payments due to Seller by any amounts due to Purchaser, in Purchaser's
reasonable discretion, under this Article XI pending a final determination by a
mutually agreed upon independent accounting firm of the amounts due to the
Purchaser under this Article XI, at which time the excess of the amounts
withheld over the amounts determined to be due shall be paid to Seller.
ARTICLE XII
MISCELLANEOUS
Section 12.1 Notices.
Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be delivered in person,
transmitted by telecopy or similar means of recorded electronic communication,
delivered by Federal Express, Network or other overnight courier delivery
service, or sent by United States mail, first class, certified or registered,
return receipt requested, charges prepaid, addressed as follows:
if to the Seller:
General Analysis Corporation
000 Xxxxx Xxxxxx, Xxx 000
Xxxxx Xxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xxx Xxxx
Telecopier No.: (000) 000-0000
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with copies to:
Xxxxx X. Xxxxxx or (by courier)
X.X. Xxx 000 0 Xxxxxx Xxxx Xx.
Xxxxxxx Xxxxx, Xxxxxxxxxxx 00000 Xxxxxxx, Xxxxxxxxxxx 00000
Telecopier No: (000) 000-0000
if to the Purchaser:
O.I. Corporation
X.X. Xxx 0000
Xxxxxxx Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxx L.L.P.
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 000000
Attention: Xxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
Any such notice or other communication shall be deemed to have been
given and received on the day on which it was delivered or transmitted (or, if
such day is not a Business Day, on the next following Business Day) or, if
mailed, on the third Business Day following the date of mailing.
Any party may change its address for notice from time to time by
giving notice to the other parties in accordance with this Section 12.1.
Section 12.2 Successors and Assignees. This Agreement shall inure to
the benefit of and shall be binding on and enforceable by the parties and, where
the context so permits, their respective successors and permitted assignees. No
party may assign any of its rights or obligations hereunder without the prior
written consent of the other parties.
Section 12.3 Best Efforts. The parties acknowledge and agree that, for
all purposes of this Agreement, an obligation on the part of any party to use
its best efforts to obtain any waiver, consent, approval, permit, license or
other document shall mean commercially reasonable best efforts and shall not
require such party to make any payment to any Person for the purpose of
procuring the same, other than payments for amounts due and payable to such
Person, payments for incidental expenses incurred by such Person and payments
required by any applicable Law.
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Section 12.4 Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original and all of which taken
together shall constitute one and the same instrument.
Section 12.5 Entire Agreement. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersedes all prior agreements, understandings, negotiations and
discussions, whether written or oral. There are no conditions, covenants,
agreements, representations, warranties or other provisions, express or implied,
collateral, statutory or otherwise, relating to the subject matter hereof except
as herein provided.
Section 12.6 Applicable Law. THIS AGREEMENT SHALL BE
CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH, AND THE RESPECTIVE
RIGHTS AND OBLIGATIONS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF THE
STATE OF TEXAS AND/OR CONNECTICUT (WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAWS), AND EACH PARTY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF
THE COURTS OF SUCH STATE AND ALL COURTS COMPETENT TO HEAR APPEALS THEREFROM.
Section 12.7 Severability. If any provision of this Agreement
is determined to be invalid or unenforceable by a court of competent
jurisdiction from which no further appeal lies or is taken, that provision shall
be deemed to be severed here from, and the remaining provisions of this
Agreement shall not be affected thereby and shall remain valid and enforceable;
provided that, in the event that any portion of this Agreement shall have been
so determined to be or becomes invalid or unenforceable (in this Section called
the "Offending Portion"), the Seller and the Purchaser shall negotiate in good
faith such changes to this Agreement as will best preserve for them the benefits
and obligations of such Offering Portion.
Section 12.8 Amendments and Waivers. No amendment or waiver of
any provision of this Agreement shall be binding on any party unless consented
to in writing by such party. No waiver of any provision of this Agreement shall
constitute a waiver of any other provision, nor shall any waiver constitute a
continuing waiver unless otherwise provided.
Section 12.9 No Third Party Beneficiary. This Agreement is for
the benefit of, and may be enforced only by the Seller and the Purchaser and
their respective successors and permitted assignees and their Associates with
respect to Article XI, and is not for the benefit of, and may not be enforced
by, any third party.
Section 12.10 Survival. Notwithstanding anything contained
herein to the contrary Article XI, and Section 12.6 shall survive the closing of
the transactions contemplated hereby and any termination of this Agreement.
* * * * *
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IN WITNESS WHEREOF, this Agreement has been executed in
duplicate originals by the parties.
O.I. CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Xxxxxxx X. Xxxxx
President and Chief Executive Officer
GENERAL ANALYSIS CORPORATION
By: /s/ W. Xxxxx Xxxx
---------------------------------------
W. Xxxxx Xxxx
President
XXXX X. XXXXX, XX.
as to Section 11.2
By: /s/ Xxxx X. Xxxxx, Xx.
--------------------------------------
Xxxx X.Xxxxx, Xx.
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