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ASSET PURCHASE AGREEMENT
BY AND BETWEEN
X.X. XXXXXX, INC.
AND
CAPEWELL COMPONENTS COMPANY, LLC
Closing Date December 1, 2000
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TABLE OF CONTENTS
PAGE
1 . DEFINITIONS...............................................................1
2. SALE OF ASSETS; CLOSING...................................................3
2.1. Sale of Assets.....................................................3
2.2. Consideration......................................................3
2.3. Buyer's Assumption of Liabilities..................................3
2.4. Closing............................................................3
2.5. Deliveries by Seller at Closing....................................3
2.6. Deliveries by Buyer at Closing.....................................4
2.7. Allocation of Purchase Price.......................................5
3. REPRESENTATIONS AND WARRANTIES OF SELLER..................................5
3.1. Organization and Power.............................................5
3.2. Authorization......................................................5
3.3. No Conflict........................................................5
3.4. Title to Purchased Assets..........................................6
3.5. Condition of Purchased Assets......................................6
3.6. Inventories........................................................6
3.7. Pre-Xxxx...........................................................6
3.8. Litigation.........................................................6
3.9. Compliance: Business Practices.....................................6
3.10. Absence of Undisclosed Liabilities.................................6
3.11. Absence of Certain Changes.........................................7
3.12. Contracts..........................................................7
3.13. Intellectual Property..............................................8
3.14. Environmental Matters..............................................8
3.15. Taxes..............................................................9
3.16. Insurance..........................................................9
3.17. Powers of Attorney.................................................9
3.18. Brokers............................................................9
3.19. Statements not Misleading.........................................10
3.20. Product Warranties................................................10
3.21. Labor Matters.....................................................10
4. REPRESENTATIONS AND WARRANTIES OF BUYER..................................10
4.1. Organization and Power of Buyer...................................10
4.2. Authorization.....................................................10
4.3. No Conflict.......................................................10
4.4. Litigation........................................................11
4.5. Brokers...........................................................11
5. COVENANTS................................................................11
5.1. Covenants not to Compete..........................................11
5.2. Use of Name X.X. Xxxxxx, Inc......................................13
5.3. Transfer of Goodwill and Business.................................14
5.4. Expenses; Transfer Taxes..........................................14
5.5. Taxes.............................................................14
5.6. Public Announcements..............................................14
5.7. Accounts Payable..................................................14
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6. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS..............................14
6.1. Representations and Warranties Accurate...........................14
6.2. Opinion of Counsel to Seller......................................15
6.3. Litigation Affecting Closing......................................15
6.4. Instruments of Sale, Etc..........................................15
6.5 Consents..........................................................15
6.6 No Material Adverse Effect........................................15
6.7. Deliveries at Closing.............................................15
6.8. Due Diligence.....................................................15
6.9. Disclosure Schedules..............................................15
6.10. Maintenance of Inventory..........................................15
6.11. Advance Recording of Sales........................................15
6.12. Execution by Owosso...............................................16
6.13. Termination of Sales Representative Agreements....................16
7. CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS.............................16
7.1. Representations and Warranties Accurate...........................16
7.2. Litigation Affecting Closing......................................16
7.3. Consents..........................................................16
7.4. Deliveries at Closing.............................................16
7.5. Release of Assumed Liability......................................16
8. INDEMNIFICATION..........................................................17
8.1. Indemnification...................................................17
8.2. Procedures for Indemnification....................................17
8.3. Limitations on Indemnification....................................18
8.4. Survival..........................................................18
8.5. Bulk Sales Laws...................................................19
8.6. Exclusive Remedy..................................................19
9. TERMINATION..............................................................19
9.1. Termination Events................................................19
9.2. Effect of Termination.............................................19
10. MISCELLANEOUS............................................................20
10.1. Notices...........................................................20
10.2. Entire Agreement..................................................20
10.3. Counterparts......................................................20
10.4. Further Assurances................................................20
10.5. Parties in Interest; Assignment...................................21
10.6. Governing Law.....................................................21
10.7. Schedules and Headings............................................21
10.8. Amendment.........................................................21
10.9. Waiver............................................................21
10.10. Confidentiality...................................................21
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EXHIBITS AND SCHEDULES
Exhibit A -- Opinion of Counsel to Seller
Exhibit B -- Assignment and Assumption Agreement
Exhibit C -- Xxxx of Sale, Assignment and Conveyance
Schedule 1A -- Assumed Liabilities
Schedule 1B -- Excluded Assets
Schedule 1C -- Purchased Assets
Schedule 2.7 -- Allocation of Purchase Price
Schedule 3.3 -- Consents, Etc.
Schedule 3.4 -- Title to Purchased Assets
Schedule 3.5 -- Condition of Purchased Assets
Schedule 3.8 -- Litigation
Schedule 3.10 -- Liabilities
Schedule 3.11 -- Absence of Certain Changes
Schedule 3.14 -- Environmental Matters
Schedule 3.20 -- Product Warranties
Schedule 5.1 -- Territory
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is executed as of
December 1, 2000, by and between X.X. Xxxxxx, Inc., a Delaware corporation (a
subsidiary of Owosso Corporation) ("Seller"), and CAPEWELL COMPONENTS COMPANY,
LLC, a Connecticut limited liability company ("Buyer" and together with Seller,
the "parties").
RECITALS
WHEREAS, Buyer wishes to purchase from Seller, and Seller wishes to
sell to Buyer, certain of the assets, properties, rights and business of Seller
relating to its timer and switch product line (the "Business") upon the terms
and conditions of this Agreement. Buyer also wishes to assume from Seller, and
Seller wishes to assign to Buyer, certain liabilities of Seller, but only to the
extent specifically set forth in Section 2.3 hereof.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements hereinafter set forth, and intending to be
legally bound, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following meanings:
"Assumed Liabilities" shall mean only the duties, liabilities or
obligations of Seller arising after the Closing Date in connection with the
items identified on Schedule 1A except as otherwise noted on Schedule 1A, and
shall specifically exclude, among other things, (i) any liabilities for
employment, income, sales, property or other Taxes incurred or accrued by
Seller, including without limitation as a result of this transaction; (ii) any
fees or expenses incurred by Seller in connection with this transaction; (iii)
any liabilities for sums borrowed from banks or other Persons, including any
interest thereon or expenses related thereto; (iv) any debt, payables or other
liabilities to Related Persons; (v) except as specifically set forth on Schedule
1A, any liabilities related to any employee benefit plan, including, without
limitation, any 401(k), profit sharing or pension plan, whether or not sponsored
by Seller; and (vi) any claims or litigation pending against Seller.
"Closing" shall mean the consummation of the purchase and sale
transaction described herein.
"Closing Date" shall mean the date on which the Closing occurs, as
specified in Section 2.4.
"Environmental Law" shall mean any applicable federal, state or local
law, statute, ordinance, rule, regulation, code or common law and any license,
permit, authorization or order, judgment, decree or injunction related to
pollution, waste, contamination, environmental conditions or the protection of
the environment (including, without limitation, the use, storage, recycling,
treatment, generation, transportation, processing, handling, labeling,
production, release or disposal of any hazardous substances), including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act, as amended, 42 U.S.C. Section 9601, et seq.; the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. Section 6901, et seq.; the Clean Air Act, as
amended, 42 U.S.C. Section 7401, et seq.; the Federal Water Pollution Control
Act, as amended, 33 U.S.C. Section 1251, et seq.; the Toxic Substances Control
Act, as amended, 125 U.S.C. Section 1251, et seq.; the Emergency Planning and
Community Right to Know Act, 42 U.S.C. Section 11001, et seq.; and the Safe
Drinking Water Act, 42 U.S.C. Section 300f, et seq.
"Excluded Assets" shall mean those assets of Seller (other than the
Purchased Assets) of any kind or nature, including without limitation, those
items listed on Schedule 1B hereto.
"Governmental Entity" shall mean any court, administrative agency,
commission, state, municipality or other governmental authority or
instrumentality, domestic or foreign, national or international.
"Known to Seller" or "to Seller's Knowledge" means any matter that was
known, or would become known in the exercise of reasonable care and after
reasonable inquiry, by Xxxxxxx Xxxxxxx and Xxxxx Xxxxxx, both of whom are
employed by Seller.
"Liens" shall mean, with respect to the Purchased Assets, all
liabilities, claims, liens, charges, pledges, security interests, options,
restrictions or other encumbrances of any kind.
"Material Adverse Effect" shall mean a material adverse effect on the
results of operations, financial condition or prospects of the Business.
"Person" shall be construed broadly and shall include an individual, a
partnership, a corporation, a limited liability company, an association, a joint
stock company, a trust, a joint venture, an unincorporated organization or a
Governmental Entity (or any department, agency or political subdivision
thereof).
"Purchase Price" shall mean the aggregate amount to be paid by Buyer to
Seller for the Purchased Assets.
"Purchased Assets" shall mean all of the assets of any kind or nature
used in the Business and identified on Schedule 1C, but excluding the Excluded
Assets.
"Reference Date" shall mean the date hereof.
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"Related Person" shall mean any officer, director, employee or
consultant of Seller or any holder of five percent (5%) or more of any class of
capital stock of Seller or any member of the immediate family of any such
officer, director, employee, consultant or any Person controlled by any such
officer, director, employee, consultant or a member of the immediate family of
any such officer, director, employee or consultant.
"Taxes" (or "Tax" where the context requires) shall mean all federal,
state, county, city, local, foreign and other taxes (including, without
limitation, premium, excise, value added, sales, use, occupancy, gross receipts,
franchise, ad valorem, severance, capital levy, production, transfer,
withholding, employment, unemployment compensation, payroll-related and property
taxes, import duties and other governmental charges and assessments), whether or
not measured in whole or in part by net income, including deficiencies,
interest, additions to tax or interest or penalties with respect thereto.
ARTICLE 2
SALE OF ASSETS; CLOSING
Section 2.1. Sale of Assets. At the Closing, Seller shall sell, assign,
transfer, convey and deliver to Buyer, free and clear of all Liens, good and
marketable title to all of the Purchased Assets.
Section 2.2. Consideration. In addition to the assumption by Buyer of
the Assumed Liabilities, the Purchase Price shall be Two Million Dollars
($2,000,000). Buyer shall pay the Purchase Price by delivery of $2,000,000 in
cash by wire transfer of immediately available funds at Closing to Seller.
Section 2.3. Buyer's Assumption of Liabilities. On the terms and
subject to the conditions set forth in this Agreement, and in further
consideration of the transfer of the Purchased Assets, at the Closing Buyer
shall assume only those duties, liabilities or obligations of Seller included in
the Assumed Liabilities.
Section 2.4. Closing. The Closing shall take place (both in person and
via facsimile, telephone, mail and other mutually acceptable means of
communication and delivery) at the offices of Buyer's counsel, Xxxxxxx & Xxxxxxx
LLP, in Hartford, Connecticut on December 1, 2000 or at such other time and
location as the parties hereto shall agree in writing.
Section 2.5. Deliveries by Seller at Closing. At the Closing, Seller
shall deliver to Buyer:
(a) A certificate of Seller, dated as of the Closing Date, certifying
in such detail as Buyer may specify to the fulfillment of the conditions
specified in Section 6.1;
(b) An opinion of Seller's counsel, dated the Closing Date, to the
effect and substantially in the form of Exhibit A to this Agreement;
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(c) Evidence of authorization to change Seller's name and documents
sufficient to effectuate such change and to convey all rights in Seller's name
to Buyer;
(d) Xxxx of Sale in the form of Exhibit C, and such assignments and
other instruments of transfer as may be reasonably satisfactory to Buyer's
counsel, and with such consents to the conveyance, transfer and assignment
thereof as may be necessary to effect the conveyance, transfer, assignment and
delivery of the Purchased Assets and to vest in Buyer good and marketable title
thereto and to assure to Buyer the full benefit of the Purchased Assets,
including without limitation:
(i) the transfer of all registered Intellectual Property rights of
the Business (as the term Intellectual Property is defined in Section
3.13 hereof) and applications therefor;
(ii) consent from Yosemite Investment, Inc. to the assignment by
Seller for the license to use U.S. Patent No. 4,697,932 to make, use
and sell Seller's Marktime Electronic Signaltron Model EB timer/beepers
contained in that certain Settlement Agreement dated October 31, 1994
by and between Seller and Yosemite Investment, Inc.; and
(e) A commitment to release any security interest, Lien or other
encumbrance on any Purchased Assets from any third party, including (i) Bank
One; (ii) PNC Bank; and (iii) the Connecticut Department of Economic and
Community Development;
(f) Good standing certificate of recent date for Seller from the
Secretary of State of the State of Delaware and a certificate of existence from
the Secretary of the State of Connecticut; and
(g) A certificate of the Secretary of Seller, dated as of the Closing
Date, enclosing copies of Seller's existing Certificate of Incorporation, Bylaws
and the resolutions of Seller's Board of Directors authorizing the transactions
completed hereby.
Simultaneously with the deliveries referred to in this Section, Seller
shall take or cause to be taken all such actions as may reasonably be required
to put Buyer in actual possession and operating control of the Purchased Assets.
Section 2.6. Deliveries by Buyer at Closing. At the Closing, Buyer
shall deliver to Seller:
(a) Assignment and Assumption Agreement in the form attached hereto as
Exhibit B, fully executed by Buyer, pursuant to which Buyer assumes, as of the
Closing Date, the future payment and performance of the Assumed Liabilities;
(b) A certificate of Buyer, dated the Closing Date, certifying in such
detail as Seller may specify to the fulfillment of the conditions specified in
Section 7.1;
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(c) A certificate of existence of recent date for Buyer from the
Secretary of the State of Connecticut;
(d) In accordance with Section 2.2 of this Agreement, an amount equal
to the Purchase Price;
(e) A certificate of the President of Buyer, dated as of the Closing
Date, enclosing copies of Buyer's existing Articles of Organization and the
resolutions of Buyer's Board of Managers authorizing the transactions completed
hereby; and
(f) Such other documents and instruments as are reasonably necessary to
be delivered to Seller by Buyer in order to effect the transaction contemplated
by this Agreement in accordance with the terms and conditions hereof.
Section 2.7. Allocation of Purchase Price. The Purchase Price as
determined for federal income tax purposes shall be allocated among the
Purchased Assets and Seller's covenant not to compete as set forth on Schedule
2.7 to be prepared jointly by Buyer and Seller and attached to this Agreement.
Each party agrees that it shall not take any position that varies from or is
inconsistent with such allocation in any filing made by such party with the
Internal Revenue Service ("IRS") or any other governmental or regulatory
authority, except to the extent an adjustment to the allocation is required by
the IRS subsequent to an IRS audit. The allocation shall be prepared in a manner
consistent with Section 1060 of the Internal Revenue Code of 1986, as amended
(the "Code"), and the income tax regulations promulgated thereunder. Buyer and
Seller shall timely file IRS Form 8594 based on the allocation of the Purchase
Price provided under this Section 2.7.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
Section 3.1. Organization and Power. Seller is a corporation duly
organized and validly existing under the laws of the State of Delaware. Seller
has full power and authority to own its properties and conduct the business
presently being conducted by it. Seller has full legal power, authority and
capacity to execute this Agreement and to consummate the transactions
contemplated by this Agreement.
Section 3.2. Authorization. The execution, delivery and performance of
this Agreement by Seller have been duly authorized and approved by all requisite
action on the part of its Board of Directors. This Agreement constitutes the
valid and binding obligation of Seller and is enforceable against Seller in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium, and other similar laws
relating to or limiting creditors' rights generally and by equitable principles.
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Section 3.3. No Conflict. Except as set forth on Schedule 3.3, the
execution and delivery of this Agreement do not, and the consummation of the
transactions contemplated hereby and the compliance with the terms hereof will
not, (a) violate any law, judgment, order, decree, statute, ordinance, rule or
regulation applicable to Seller, or any permit, license or approval of any
Governmental Entity, the violation of which would have a Material Adverse
Effect, (b) conflict with any provision of Seller's certificate of incorporation
or by-laws, (c) result in any violation of, and will not conflict with, or
result in a breach of any terms of, or constitute a default under, any mortgage,
instrument or agreement to which Seller is a party or by which Seller or any of
the Purchased Assets is bound, or create any Lien upon any of the Purchased
Assets, or (d) require any notice to, or consent, approval, order or
authorization of, or the registration, declaration or filing with, any
Governmental Entity or other third party.
Section 3.4. Title to Purchased Assets. Except as stated on Schedule
3.4, Seller has good, valid and marketable title to the Purchased Assets, free
and clear of all Liens. No other party has any rights or claims to possession of
any of the Purchased Assets. Except as set forth on Schedule 3.4, none of the
Purchased Assets are subject to any option, contract, arrangement or
understanding that would restrict Seller's ability to transfer the Purchased
Assets to Buyer as contemplated herein.
Section 3.5. Condition of Purchased Assets. Except as stated on
Schedule 3.5, the Purchased Assets currently used in the Business are in good
operating condition, ordinary wear and tear excepted, and in the state of
maintenance and repair appropriate for the use thereof in the ordinary and usual
course of business by Seller. Schedule 3.5 also lists those Purchased Assets not
currently used in the Business and no representation or warranty as to the
operating condition or state of maintenance or repair is given with respect to
such assets.
Section 3.6. Inventories. Seller has good and marketable title to the
inventories included in the Purchased Assets free and clear of all Liens. The
inventories included in the Purchased Assets consist of items of a quality and
quantity that are saleable or useable in the ordinary course of the Business
consistent with past practice.
Section 3.7. Pre-Xxxx. Seller has not pre-billed or received prepayment
for products to be sold, services to be rendered, or expenses to be incurred
with respect to the Business subsequent to the Closing Date.
Section 3.8. Litigation. Except as set forth on Schedule 3.8, there is
no suit, action or proceeding pending against or affecting Seller or the
employees of Seller relating to the Business, the Purchased Assets, or the
transactions contemplated hereby, nor to Seller's Knowledge is there any such
suit, action or proceeding threatened against Seller, or any of the employees of
Seller. Seller is not subject to any order of a Governmental Entity which could
reasonably be expected to adversely affect the ability of Seller to consummate
the transactions contemplated hereby and the Business is not subject to any
order of any Governmental Entity.
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Section 3.9. Compliance: Business Practices. Seller has all necessary
licenses, permits and other approvals of Governmental Entities necessary to
operate the Business as now conducted, each of which is in good standing, and
Seller has conducted the Business and properly filed all necessary reports in
accordance with applicable laws and regulations, other than in any case with
respect to the foregoing, the failure of which would not individually or in the
aggregate, have a Material Adverse Effect.
Section 3.10. Absence of Undisclosed Liabilities. Except as set forth
on Schedule 3.10, the Business does not have any material liabilities or
obligations, either accrued, contingent or otherwise, which are not reflected in
this Agreement or the Schedules hereto, except as have been incurred in the
ordinary course of business.
Section 3.11. Absence of Certain Changes. Except as set forth on
Schedule 3.11, since the Reference Date, neither the Business (nor the Seller
with respect to the Business) has or will have as of the Closing:
(a) suffered any change in the Purchased Assets or the Business that,
either individually or in the aggregate, has had a Material Adverse Effect;
(b) suffered any damage, destruction or loss, whether or not covered by
insurance, which could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect or materially adversely affect the
Purchased Assets;
(c) declared or made or agreed to declare or make any distributions of
any of the Purchased Assets to any stockholder;
(d) pledged, hypothecated or otherwise encumbered any of the Purchased
Assets;
(e) sold or transferred any of the Purchased Assets except in the
ordinary course of business consistent with past practices;
(f) suffered any material adverse change in its relationships with
customers or its Contracts (as defined in Section 3.12);
(g) entered or agreed to enter into any agreement or arrangement
granting any preferential rights to purchase any of the Purchased Assets except
in the ordinary course of business consistent with past practices;
(h) placed any orders for materials, merchandise or supplies in
exceptional or unusual quantities based upon past operating practices or
accepted orders from customers under conditions relating to price, terms of
payment, time of delivery, or like matters materially different from the
conditions regularly and usually specified on acceptance of orders for similar
merchandise from customers similarly situated except in the ordinary course of
business consistent with past practices; or
(i) entered into any other transaction other than in the ordinary
course of business consistent with past practices, or been involved in any event
or experienced any condition of any character, that, either individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect or
materially adversely affect the Purchased Assets.
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Section 3.12. Contracts. The contracts portion of Schedule 1C lists all
of the material contracts, leases, arrangements and understandings (written or
oral) including, without limitation, sales orders, purchase orders and
distribution agreements, which relate to the Business as it is conducted by
Seller (the "Contracts"). All Contracts have been entered into in the ordinary
course of business, and they are all part of the Purchased Assets. Seller has
complied, and all other parties to the Contracts have complied, with the
provisions of the Contracts in all material respects. Neither Seller nor, to
Seller's Knowledge, the other Persons who are a party to such Contracts,
arrangements and understandings are in default thereof and all Contracts are
valid and in effect. Seller has not received notice of default under any
Contract, and to Seller's Knowledge, no event has occurred or is expected to
occur which (after notice and lapse of time or both) would become a breach or
default under, or otherwise permit unilateral modification, cancellation,
acceleration or termination of any such Contract. No customer, supplier or
vendor of the Business has given any notice to Seller or, to Seller's Knowledge,
made any threat or otherwise revealed an intent to cancel or otherwise terminate
its relationship with Seller, to materially and adversely change its
relationship with Seller, to substantially reduce the volume of business it
currently does with Seller or to refuse to renew any Contract when it expires.
Section 3.13. Intellectual Property. (a) The intellectual property
portion of Schedule 1C (the "Intellectual Property Schedule") attached hereto
contains a description of all U.S. and foreign patents, pending patent
applications, trademarks, trademark registrations, pending applications for
trademark registration, service marks, service xxxx registrations, pending
applications for service xxxx registration, trade names, registered copyrights,
pending copyright applications and any other intellectual property rights or
licenses (collectively, the "Intellectual Property") owned or licensed by Seller
for use in the Business. The Intellectual Property Schedule separately discloses
all Intellectual Property under license, all of which licenses are assignable to
Buyer except as noted on the Intellectual Property Schedule. No Intellectual
Property rights not described on the Intellectual Property Schedule are
necessary in connection with the conduct of the Business. Except as provided on
the Intellectual Property Schedule, Seller owns the entire right, title and
interest in and to, and has the exclusive perpetual royalty-free right to use,
the Intellectual Property, free and clear of all Liens. There are no pending or,
to Seller's Knowledge, threatened claims against Seller by any Person with
respect to any Intellectual Property, or its use. To Seller's Knowledge, no
Person is infringing upon nor has any Person misappropriated the Intellectual
Property, and to Seller's Knowledge, Seller is not infringing upon the
Intellectual Property rights of any other Person.
(b) Seller owns and has the unrestricted right to use all trade
secrets, including know-how, inventions, designs, processes, computer software
and documentation for such software and technical data required for or incident
to the development, manufacture, operation and sale of all products sold or
proposed to be sold by Seller with respect to the Business, free and clear of
any Liens, including without limitation, all claims of current and former
employees, consultants, officers, and directors of Seller. Xxxxxxx Xxxxxxx and
Xxxxx Xxxxxx, who are employees of Seller, have executed acknowledgements
regarding confidentiality and proprietary information with respect to the
Intellectual Property.
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Section 3.14. Environmental Matters. Except as set forth on Schedule
3.14:
(a) There are no outstanding or to Seller's Knowledge, threatened
actions, claims, proceedings, determinations or judgments by any party,
including but not limited to any Governmental Entity, against or involving the
Business or the Purchased Assets in any manner arising under any Environmental
Law. Seller has not received any notice of, nor to Seller's Knowledge are there
any outstanding or threatened orders, determinations or notices of violation
issued by any Governmental Entity administering any Environmental Law in
connection with ownership of or operation by Seller of the Business or the
Purchased Assets which have not been complied with or resolved to the
satisfaction of such Governmental Entity.
(b) The Business is being and has been operated in compliance with all
Environmental Laws including, but not limited to, laws relating to all
discharges into or onto the soil and/or the ground or surface water, emissions
into the ambient air, and generation, accumulation, labeling, transportation,
handling, treatment, storage and disposal of waste material or process
by-products (including solid, hazardous or toxic waste or hazardous materials or
substances, if any) or removal of any existing condition, material or substance.
Seller has complied with all notice, record keeping and reporting requirements
imposed by any Governmental Entity and any informational requests or demands
arising under any Environmental Law with respect to the Business or the
Purchased Assets.
(c) Seller has not released, disposed of or caused or permitted the
disposal of any solid waste, hazardous waste, hazardous material or hazardous
substance, as such terms are defined by any Environmental Law (the "Controlled
Substances") generated by the Purchased Assets or resulting from the operation
of the Business upon any of the real properties from which Seller has conducted
the Business. Seller has not, directly or indirectly, disposed of Controlled
Substances generated by the Purchased Assets or resulting from the operation of
the Business off-site in violation of any Environmental Law.
(d) There are no pending or to Seller's Knowledge, threatened actions,
claims, proceedings or judgments against Seller by any present or former
officers, agents or employees of Seller alleging or involving personal injury or
damage as a result of the violation of any Environmental Law or otherwise
involving environmental conditions caused by the Purchased Assets or resulting
from the operation of the Business under which such persons were employed nor is
there a basis for commencing any such action, claim or proceeding.
(e) Each of the Purchased Assets has not generated, and is free of all
asbestos, asbestos-containing materials, polychlorinated biphenyls, oil and
petroleum products, and all Controlled Substances.
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(f) The transactions contemplated by this Agreement are not subject to
any environmental transfer act in any jurisdiction in which Seller maintains any
tangible personal property or fixtures, or owns, leases, rents or occupies any
real property, nor are there any permits or approvals or the transfer of any
permits or approvals required by a Governmental Entity for the transactions
contemplated by this Agreement.
Section 3.15. Taxes. With respect to the Purchased Assets or the
Business, Seller has paid all Taxes it is required to pay. There are (and as of
immediately following the Closing there will be) no Liens on the Purchased
Assets relating to or attributable to Taxes.
Section 3.16. Insurance. The Purchased Assets are insured for Seller's
benefit and will continue to be so insured through the Closing, in amounts and
against risks that are commercially reasonable.
Section 3.17. Powers of Attorney. No Person has any power of attorney
to act on behalf of Seller in connection with the Business other than such
powers to so act as normally pertain to the officers of Seller.
Section 3.18. Brokers. There are no claims for brokerage commissions,
finder's fees or similar compensation arising out of or due to any act of or on
behalf of Seller in connection with the transactions contemplated by this
Agreement.
Section 3.19. Statements not Misleading. No representation or warranty
of Seller or document furnished by Seller hereunder is false or inaccurate in
any material respect or contains or will contain any untrue statement of a
material fact or omits or will omit to state any fact necessary to make the
statements contained herein or therein not misleading.
Section 3.20. Product Warranties. Schedule 3.20 sets forth a summary
description of the product warranty policies of the Business for the benefit of
its customers and distributors for damaged or defective products or any other
matter covered by the warranty policies of the Business, along with the product
warranty claims experience of the Business for fiscal years 1998, 1999 and 2000.
The warranty policies described on Section 3.20 are consistent with the past
business practices of the Business and Seller has not made any modifications to
such policies within six (6) months of the date hereof.
Section 3.21. Labor Matters. Seller and Lodge # 354 of District Lodge
No. 170 of the International Association of Machinists and Aerospace Workers
(the "Union") have executed a settlement agreement dated November 28, 2000 that
resolves the Union's claims with respect to the sale of the Purchased Assets.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
Section 4.1. Organization and Power of Buyer. Buyer is a limited
liability company duly organized and validly existing under the laws of the
State of Connecticut. Buyer has all necessary power and authority to own its
properties and conduct the business presently being conducted by it, to execute
this Agreement and the other agreements and instruments to be executed and
delivered by it in connection with this Agreement, to perform its obligations
hereunder and under the other agreements and instruments to be executed and
delivered in connection with this Agreement, and to consummate the transactions
contemplated by this Agreement.
Section 4.2. Authorization. The execution, delivery and performance of
this Agreement and the other agreements and instruments to be executed and
delivered in connection with this Agreement by Buyer have been duly authorized
and approved by all requisite action on the part of Buyer, and this Agreement
and the other agreements and instruments to be executed and delivered in
connection with this Agreement constitute the valid and binding obligations of
Buyer and are enforceable against Buyer in accordance with their terms, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, and other similar laws relating to or limiting creditors' rights
generally and by equitable principles.
Section 4.3. No Conflict. The execution and delivery by Buyer of this
Agreement or the other documents, agreements or instruments to be executed by
Buyer pursuant hereto do not, and the consummation of the transactions
contemplated hereby and the compliance with the terms hereof will not, (a)
violate any law, judgment, order, decree, statute, ordinance, rule or regulation
applicable to Buyer, or any permit, license or approval of any Governmental
Entity, (b) conflict with any provision of Buyer's articles of organization or
operating agreement, (c) result in any violation of, and will not conflict with,
or result in a breach of any terms of, or constitute a default under, any
mortgage, instrument or agreement to which Buyer is a party or by which Buyer is
bound, or (d) require any notice to, or consent, approval, order or
authorization of, or the registration, declaration or filing with, any
Governmental Entity or other third party, which, in the case of clause (c) or
(d), would have a material adverse effect on Buyer's ability to consummate the
transactions contemplated by this Agreement.
Section 4.4. Litigation. There is no suit, action or proceeding pending
against or affecting Buyer, or the transactions contemplated hereby, nor, to
buyer's knowledge, is there any such suit, action or proceeding threatened
against Buyer, or any of the employees of Buyer which could reasonably be
expected to have a material adverse effect on Buyer. The Buyer is not subject to
any order of a Governmental Entity which could materially adversely affect the
ability of Buyer to consummate the transactions contemplated hereby.
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Section 4.5. Brokers. There are no claims for brokerage commissions,
finder's fees or similar compensation arising out of or due to any act of or on
behalf of Buyer in connection with the transactions contemplated by this
Agreement.
ARTICLE 5
COVENANTS
Section 5.1. Covenants not to Compete.
(a) Non-Competition. For the Non-Compete Period (as that term is
defined below), within the territories in which Buyer conducts its business at
Closing, which territories are identified on Schedule 5.1 (the "Territory"),
Seller and Owosso Corporation ("Owosso"), along with their respective
successors, assigns, parents, subsidiaries, subdivisions and affiliated or
related entities (together "Affiliates") shall not, directly or indirectly,
without the written authorization of Buyer, engage in competition with Buyer or
an Affiliate thereof, in any manner or capacity (e.g., as an advisor, principal,
agent, partner, member, officer, director, stockholder, employee, member of any
association, or otherwise), in the Business (including the manufacture and sale
of timing devices, xxxx ringing timers, electric time switches and coin meters)
as was engaged in by Seller on the Closing Date, including the design,
development, manufacture, distribution, marketing, leasing or selling of
products, services or systems which are competitive with the products, services
or systems being sold, marketed or produced by, or which are under development
by, the Business at the time of the Closing or during the Non-Compete Period;
provided however, that nothing in this Section 5.1 shall limit (i) Seller from
engaging in any other business Seller is engaged in on the Closing Date, or (ii)
Owosso or its Affiliates from engaging in any business it or they are engaged in
on the Closing Date. Seller, Owosso or its Affiliates shall not own, participate
in the ownership of, lend money, guarantee loans, make gifts of money or other
property, or otherwise lend financial or other assistance in any form to any
Person which is engaged in, or will within the Non-Compete Period engage in, any
of the activities prohibited by this Section 5.1.
(b) Limitation on Covenant. Ownership by Seller, Owosso or its
Affiliates, as a passive investment, of less than one percent (1%) of the
outstanding shares of capital stock of any corporation listed on a national
securities exchange or publicly traded in the over-the-counter market shall not
constitute a breach of this Section 5.1.
(c) Employees. During the Non-Compete Period, Seller, Owosso or its
Affiliates shall not, either on its own account or in conjunction with or on
behalf of any other Person employ, solicit, entice away or attempt to employ,
solicit or entice away from Buyer any Person who is an officer, manager,
consultant or employee of Buyer.
(d) Confidentiality. Seller, Owosso or its Affiliates will not at any
time hereafter make use of or disclose or divulge to any Person (other than to
officers or employees of Buyer whose province it is to know the same) any
information (other than any information properly available to the public or
disclosed or divulged pursuant to an order of a court of competent jurisdiction)
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relating to Buyer or the Business, the identity of the customers and suppliers
of Buyer or the Business, or the products, finances, contractual arrangements,
business or methods of business of Buyer or the Business and shall use its best
endeavors to prevent the publication or disclosure of any such information.
Seller and Owosso acknowledge that many of the Purchased Assets are trade
secrets which Buyer has purchased and which Seller and Owosso are forever
restricted from using or disclosing. If, in connection with the Business,
Seller, Owosso or its Affiliates shall have obtained trade secrets or other
confidential information belonging to any third party under an agreement which
contained restrictions on disclosure by Seller or Owosso, Seller or Owosso will
not at any time infringe such restrictions.
(e) Injunctive Relief. Seller and Owosso acknowledge that any violation
of any provision of this Section 5.1 will cause irreparable harm to Buyer, that
damages for such harm will be incapable of precise measurement and that, as a
result, Buyer will not have an adequate remedy at law to redress the harm caused
by such violations. Therefore, in the event of a violation of Section 5.1 by
Seller, Owosso or its Affiliates, in addition to its other remedies, Buyer shall
be entitled, without the necessity of either proof of actual damage or the
posting of a bond, to injunctive relief, including but not limited to an
immediate temporary injunction, temporary restraining order and/or preliminary
or permanent injunction to restrain or enjoin any such violation. Seller and
Owosso acknowledge that any violation of this Section 5.1 will cause Buyer
irreparable harm at its principal place of business in the State of Connecticut,
and, therefore, Seller and Owosso hereby submit, exclusively for purposes of
this Section 5.1 and for no other section of this Agreement, to jurisdiction
before any court of record in the State of Connecticut, at Buyer's election, and
Seller and Owosso hereby waive any right to raise the question of jurisdiction
and venue in any action that Buyer may bring in any such court against Seller or
Owosso.
(f) Severability. Buyer, Seller and Owosso understand and agree that
the covenant set forth in this Section 5.1 shall be construed as a series of
separate covenants not to compete, one covenant for each country, state and
province within the Territory and one for each month of the non-competition
period. Should any clause, portion or paragraph of this Section 5.1 be
unenforceable or invalid for any reason, such unenforceability or invalidity
shall not affect the enforceability or validity of the remainder of this Section
5.1. Should any particular covenant or restriction, including but not limited to
the covenants and restrictions of Section 5.1(a), 5.1(c) and 5.1(d), be held to
be unreasonable or unenforceable for any reason, including without limitation
the time period, geographical area and scope of activity covered by such
covenant, then a court may modify any such covenant or restriction in order to
give it effect and allow it to be enforced to the greatest extent that would be
reasonable and enforceable.
(g) Acknowledgment. Seller and Owosso acknowledge that this covenant
not to compete is a mandatory condition precedent to the Closing of the
transactions contemplated by this Agreement, and that, in the absence of the
preceding covenant not to compete, Buyer would not have consummated the Closing.
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(h) Non-Compete Period.
(i) The Non-Compete Period shall be five (5) years after the
Closing Date or, if five years is deemed unreasonable by a court of
competent jurisdiction, then one of the periods of time listed in
clause (ii), as ordered by such court.
(ii) If ordered by a court of competent jurisdiction, the
Non-Compete Period for Seller and Owosso shall be one of the following
periods of time as deemed reasonable by such court:
(A) four (4) years and six (6) months from the Closing
Date;
(B) four (4) years from the Closing Date;
(C) three (3) years and six (6) months from the Closing
Date;
(D) three (3) years from the Closing Date;
(E) two (2) years and six (6) months from the Closing
Date;
(F) two (2) years from the Closing Date;
(G) one (1) year and six (6) months from the Closing Date;
(H) one (1) year from the Closing Date; or
(I) six (6) months from the Closing Date.
Section 5.2. Use of Name "X.X. Xxxxxx, Inc.". From and after the
Closing Date, Seller shall cease to use the name "X.X. Xxxxxx, Inc." or any
similar name in connection with the Business without the prior written consent
of Buyer, except that Seller may continue to use the X.X. Xxxxxx, Inc. name on
Seller's existing stock of business forms and checks for a transition period not
to exceed nine (9) months from the Closing Date.
Section 5.3. Transfer of Goodwill and Business. From and after the
Closing Date until March 31, 2001, Seller shall, when requested to do so by
Buyer, provide commercially reasonable good faith assistance to effectuate a
smooth transfer of the Business and goodwill related thereto to Buyer. Such
assistance shall include, but not necessarily be limited to, providing Buyer on
commercially reasonable terms Seller's computerized data and computer files
relating to the operation of the Business in a format that can be utilized by
Buyer in its computer system.
Section 5.4. Expenses; Transfer Taxes. All costs and expenses incurred
in connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such expense. Any sales, use, franchise,
conveyance or other transfer Tax which becomes payable by any of the parties to
this Agreement as a result of the conveyance and transfer from Seller to Buyer
of the Purchased Assets or otherwise as a result of the transactions
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contemplated hereby and any other transfer or documentary Taxes or any filing or
recording fees applicable to such conveyance and transfer shall be paid by
Seller, and Seller shall promptly provide Buyer with proof of payment of such
Taxes.
Section 5.5. Taxes. Seller shall be responsible for all Taxes with
respect to the Purchased Assets or the Business that accrue or relate to the
operation of the Business prior to the Closing Date and Buyer shall be
responsible for all Taxes that accrue or relate to the operation of the Business
from and after the Closing Date.
Section 5.6. Public Announcements. Buyer and Seller shall mutually
agree on any announcement or correspondence with or to the public or customers,
suppliers or employees of Seller about the terms and conditions of this
Agreement or the transactions contemplated hereby unless such announcement is
required by law in the good faith opinion of counsel and in such a case, the
announcing or corresponding party shall notify the other party and provide it in
advance with a copy of the public disclosure and a reasonable opportunity to
comment on such proposed disclosure.
Section 5.7. Accounts Payable. Within 45 days of the Closing Date, the
Business shall have no outstanding accounts payable liabilities to its trade
creditors.
ARTICLE 6
CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
All obligations of Buyer under this Agreement are subject to the
fulfillment, prior to or at the Closing Date, of each of the following
conditions, provided that Buyer may waive in writing any condition contained in
this Article 6 prior to or on the Closing Date:
Section 6.1. Representations and Warranties Accurate. All
representations and warranties of Seller contained in this Agreement shall be
true and correct in all material respects with respect to those representations
and warranties qualified as to materiality, and in all respects as to those
representations and warranties not so qualified, on and as of the Closing with
the same effect as though such representations and warranties had been made on
and as of the date of the Closing, except as otherwise specifically contemplated
by this Agreement. Seller shall have complied with all covenants and conditions
required to be performed or complied with by it prior to or at the Closing Date.
Seller shall furnish Buyer with an appropriate certificate to the foregoing
effect as of the Closing Date.
Section 6.2. Opinion of Counsel to Seller. Buyer shall have been
furnished with an opinion of counsel to Seller, dated the Closing Date and
addressed to Buyer, on the matters set forth in Exhibit A.
Section 6.3. Litigation Affecting Closing. No action, suit or
proceeding shall be pending or, to Seller's Knowledge, threatened by or before
any court or Governmental Entity in which it is sought to restrain or prohibit
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or to obtain damages or other relief in connection with this Agreement or the
consummation of the transactions contemplated hereby.
Section 6.4. Instruments of Sale, Etc. Seller shall have executed and
delivered to Buyer such instruments of sale, conveyance, transfer and assignment
satisfactory to counsel for Buyer as are necessary or desirable to vest in Buyer
title to all of the Purchased Assets or to confirm the status of title to the
Purchased Assets, including, without limitation, documents sufficient to
effectuate the change in Seller's corporate name as required by Section 2.5(c)
and the assignment of the Purchased Assets as required by Section 2.5(d).
Section 6.5. Consents. All authorizations, approvals, permits or
consents of any Governmental Entity or third Person necessary for the
consummation of the transactions contemplated by this Agreement shall have been
duly obtained by Seller in writing, shall be effective on the Closing Date, and
shall have been delivered to Buyer, other than authorizations, approvals,
permits or consents the failure of which to obtain would not have a Material
Adverse Effect.
Section 6.6. No Material Adverse Effect. There shall not have occurred
any event listed in Section 3.11 that would have a Material Adverse Effect or
materially adversely affect the Purchased Assets or the Assumed Liabilities.
Section 6.7. Deliveries at Closing. Seller shall have delivered to
Buyer, fully executed by all applicable parties, each of the items specified in
Section 2.5 of this Agreement.
Section 6.8. Due Diligence. Buyer shall have completed a due diligence
review of the Purchased Assets and the Business to its reasonable satisfaction.
Section 6.9. Disclosure Schedules. Seller shall have provided true and
accurate disclosure schedules hereto as of the Closing Date, which shall not
contain any material adverse change from the disclosure schedules previously
delivered to Buyer, if any.
Section 6.10. Maintenance of Inventory. Seller shall have maintained
its inventory related to the Business, including raw materials, work-in-process
and finished goods, at levels consistent with its historical business practices.
Section 6.11. Advance Recording of Sales. Seller shall not have
solicited or accepted advance payments from customers for services or goods
which are to be performed or delivered by Buyer subsequent to the Closing Date.
Section 6.12. Execution by Owosso. This Agreement shall have been
executed by Owosso.
Section 6.13. Termination of Sales Representative Agreements. Seller
shall have provided written notice to all of the existing sales representatives
of the Business, for which Seller has sales representative agreements currently
in force, terminating such agreements within 30 days of the date of such notice.
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ARTICLE 7
CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
All obligations of Seller under this Agreement are subject to the
fulfillment, prior to or at the Closing, of each of the following conditions,
provided that Seller may waive in writing any condition contained in this
Article 7 prior to or on the Closing Date:
Section 7.1. Representations and Warranties Accurate. All
representations and warranties of Buyer contained in this Agreement and the
other agreements and instruments executed and delivered by Buyer in connection
with this Agreement, shall have been true when made and shall be true in all
material respects at and as of the Closing Date, except as otherwise
specifically contemplated by this Agreement. Buyer shall have performed and
complied in all material respects with all covenants and conditions required to
be performed or complied with by it prior to or at the Closing Date. Buyer shall
furnish Seller with an appropriate certificate to the foregoing effect dated the
Closing Date.
Section 7.2. Litigation Affecting Closing. No action, suit or
proceeding shall be pending or threatened by or before any court or Governmental
Entity in which it is sought to restrain or prohibit or to obtain damages or
other relief in connection with this Agreement or the consummation of the
transactions contemplated hereby.
Section 7.3. Consents. All authorizations, approvals, permits or
consents of any Governmental Entity or third Person necessary for the
consummation of the transactions contemplated by this Agreement shall have been
duly obtained by Buyer in writing, shall be effective on the Closing Date, and
shall have been delivered to Seller.
Section 7.4. Deliveries at Closing. Buyer shall have delivered to
Seller, fully executed by Buyer, each of the items specified in Section 2.6 of
this Agreement, including an amount equal to the Purchase Price.
Section 7.5. Release of Assumed Liability. Seller shall have received
an unconditional release, in form and substance satisfactory to Seller, executed
by Xxxxxx Xxxxxxx ("Xxxxxxx") and his spouse with respect to the retirement
benefits set forth on Schedule 1A hereto as granted by Seller to Xxxxxxx in that
certain employment agreement between Seller and Xxxxxxx dated July 1, 1998.
ARTICLE 8
INDEMNIFICATION
Section 8.1. Indemnification. Seller and Buyer shall hold harmless and
indemnify one another from and against any and all liability, loss or damage,
including reasonable attorneys' fees and other expenses, resulting from the
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breach by the indemnifying party of its representations, warranties and
covenants under this Agreement or any documents or instruments furnished in
connection with the transactions contemplated hereby. Seller shall hold harmless
and indemnify Buyer from and against any and all liability, loss or damage,
including reasonable attorneys' fees and other expenses, resulting from any
activities, occurrences, conditions or obligations of Seller or the Business as
operated by Seller that took place or existed on or prior to the Closing Date
(other than the Assumed Liabilities), including any liability, loss or damages
based upon (a) alleged injuries to persons, property or business by reason of
alleged defectiveness, improper design, improper manufacture, malfunction or
otherwise, of any product manufactured by the Business, whether known or
unknown, currently asserted or arising hereafter, if such claims are based upon
or arise out of injuries or other events occurring, or products manufactured,
prior to or on the Closing Date; and (b) any liability arising under any
Environmental Law whether or not such liability or obligation was disclosed to
Buyer. Buyer shall hold harmless and indemnify Seller from and against any and
all liability, loss or damage, including reasonable attorneys' fees and other
expenses, resulting from any activities, occurrences, conditions or obligations
of Buyer or the Business as operated by Buyer that took place or existed after
the Closing Date including any liability, loss or damages based upon (i) alleged
injuries to persons, property or business by reason of alleged defectiveness,
improper design, improper manufacture, malfunction or otherwise, of any product
manufactured by the Business, whether known or unknown, currently asserted or
arising hereafter, if such claims are based upon or arise out of injuries or
other events occurring, or products manufactured, after the Closing Date, (ii)
any liability or obligation of the Business with respect to the repair and
replacement of products of the Business shipped to customers or distributors
prior to the Closing Date, consistent with Seller's warranty policies in
existence on the Closing Date, and (iii) any other Assumed Liabilities.
Section 8.2 Procedures for Indemnification.
(a) Third Party Claims. Promptly after receipt by Buyer or Seller, as
the case may be, of notice of (i) any claim, or (ii) the commencement of any
suit, action, investigation or proceeding, Buyer or Seller, as the case may be
(the "Indemnified Party"), will, if a claim with respect thereto is to be made
against the Seller or Buyer, as the case may be, due to its obligation to
provide indemnification hereunder (the "Indemnifying Party"), give the
Indemnifying Party written notice of such claim or the commencement of such
suit, action, investigation or proceeding, but the failure to provide such
notice shall not relieve the Indemnifying Party of any of its obligations
hereunder, except to the extent that the Indemnifying Party demonstrates that
the defense of such claim, suit, action, investigation or proceeding is
materially prejudiced by the Indemnified Party's failure to give such notice.
The Indemnifying Party shall have the right, at its option, unless so relieved,
to compromise or defend, at its own expense by its own counsel, any such matter
involving the asserted liability of the Indemnified Party. In the event that the
Indemnifying Party shall undertake to compromise or defend any such asserted
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liability, it shall promptly notify the Indemnified Party of its intention to do
so. The Indemnified Party shall, at the cost and expense of the Indemnifying
Party for Indemnified Party's out-of-pocket expenses, cooperate fully with the
Indemnifying Party and its counsel in the compromise of, or defense against, any
such asserted liability. The Indemnified Party shall have the right to
participate in any such defense, contest or other action (x) at its own cost and
expense if the Indemnifying Party has assumed and continued the defense thereof
and (y) at the cost and expense of the Indemnifying Party if the Indemnifying
Party shall have failed to assume or abandoned such defense. The Indemnifying
Party shall have the right to control the defense of any such proceeding unless
it is relieved of its liability hereunder with respect to such defense by the
Indemnified Party. The Indemnified Party retains the right to relieve the
Indemnifying Party of its obligation hereunder for indemnification in respect of
any claim, suit, action, investigation, or proceeding at any time, including
upon notification of the Indemnifying Party's intent to settle. Under no
circumstances shall the Indemnified Party compromise or settle any asserted
liability without the written consent of the Indemnifying Party (which may not
be unreasonably withheld). Under no circumstances shall the Indemnifying Party
compromise or settle any asserted liability without the written consent of the
Indemnified Party (which may not be unreasonably withheld) unless (1) there is
no finding or admission of any violation of any federal, state, local or
municipal law, including constitutions, statutes, regulations, administrative
orders, court orders or any principle of common law, or any violation of the
rights of any Person and no effect on any other claims that may be made against
the Indemnified Party, and (2) the sole relief provided is monetary damages that
are paid in full by the Indemnifying Party.
(b) Other Claims. A claim for indemnification for any matter not
involving a third-party claim may be asserted by notice to the party from whom
indemnification is being sought.
Section 8.3 Limitations on Indemnification. Notwithstanding any
provision in this Article 8 to the contrary, no claim for indemnification may be
made under any indemnification obligation under this Article 8 unless and until
the aggregate of all identifiable claims suffered by the potential indemnified
parties exceeds $20,000 and thereafter only for amounts in excess of said
$20,000 threshold, except that claims based upon Sections 3.13 and 8.5 of this
Agreement shall not be subject to such $20,000 threshold or the limitation
contained in the next sentence of this Section 8.3. Notwithstanding the
foregoing, except as otherwise specifically provided for in this Section 8.3,
neither Buyer nor Seller shall have any indemnification obligation under this
Article 8 that exceeds the Purchase Price.
Section 8.4. Survival. Except for (a) the covenant contained in Section
5.1 hereof (which shall survive for a period of five (5) years), and (b) the
representation and warranty contained in Section 3.21 hereof (which shall not
survive the Closing), the representations, warranties and covenants of
indemnification contained in this Agreement shall survive the Closing for a
period of eighteen (18) months; provided, however, that notwithstanding the
foregoing, the representations and warranties under (i) Sections 2.3, 3.2 and
4.2 shall survive the Closing until the expiration of the applicable statute of
limitations and (ii) Section 5.5 shall survive the Closing until the expiration
of the applicable statute of limitations and six (6) months beyond any extension
of the statute of limitations applicable to Section 5.5 agreed to by the
taxpayer, regardless of any investigation or due diligence inquiry that may have
been made on behalf of the party for whose benefit the representations,
warranties and covenants were made.
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Section 8.5 Bulk Sales Laws. Buyer hereby waives compliance by Seller
with the provisions of any bulk sales or bulk transfer laws of any jurisdiction
in connection with the transaction contemplated hereby and Seller agrees to
indemnify Buyer and hold it harmless against any liability, loss or damage
arising from claims or demands of whatever nature, including reasonable
attorneys' fees incurred in contesting the same, asserted by any present or
future creditor of Seller or other Person (including, without limitation, a
trustee in bankruptcy or debtor in possession under the U.S. Bankruptcy Code)
against Buyer or the Purchased Assets for noncompliance with bulk transfer or
sale laws or similar laws which may be applicable to the sale or transfer of the
Purchased Assets, including claims made by the State of Connecticut Department
of Revenue Services for unpaid sales and use taxes pursuant to Connecticut
General Statutes ss. 12-424.
Section 8.6. Exclusive Remedy. Except for the rights and remedies based
on fraud and the remedy of specific performance in the case of the covenant in
Section 5.1 of this Agreement, the indemnification provided pursuant to this
Article 8 shall be the sole and exclusive remedy under this Agreement for any
liabilities, losses or damages as a result of, with respect to or arising out of
any breach of this Agreement.
ARTICLE 9
TERMINATION
Section 9.1. Termination Events. This Agreement may by notice given
prior to or at the Closing be terminated:
(a) by Buyer if a material breach of any provision of this Agreement
has been committed by Seller, and by Seller if a material breach of any
provision of this Agreement has been committed by Buyer, provided that the other
party has not waived such breach in writing;
(b) (i) by Buyer if any of the conditions in Section 6 have not been
satisfied as of the Closing Date or if satisfaction of such a condition is or
becomes impossible (other than through the failure of Buyer to comply with its
obligations under this Agreement) and Buyer has not waived such condition on or
before the Closing Date or (b) by Seller if any of the conditions in Section 7
have not been satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure of Seller to
comply with its obligations under this Agreement) and Seller has not waived such
condition on or before the Closing Date;
(c) by mutual written consent of Buyer and Seller; or
(d) by Buyer or Seller if the Closing has not occurred (other than
through the failure of any party seeking to terminate this Agreement to comply
fully with its obligations under this Agreement) on or before December 8, 2000,
or such later date as the parties may agree upon in writing.
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Section 9.2. Effect of Termination. Each party's right of termination
under Section 9.1 is in addition to any other rights it may have under this
Agreement or otherwise and the exercise of a right of termination will not be an
election of remedies. If this Agreement is terminated pursuant to Section 9.1,
all further obligations of the parties under this Agreement will terminate
except that the obligations in Sections 5.4 and 10.10 shall survive; provided,
however, that if this Agreement is terminated by a party because of the breach
of the Agreement by another party or because one or more of the conditions to
the terminating party's obligations under this Agreement is not satisfied as a
result of another party's failure to comply with its obligations under this
Agreement the terminating party's right to pursue all legal remedies will
survive such termination unimpaired.
ARTICLE 10
MISCELLANEOUS
Section 10.1. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and delivered personally or sent by
overnight delivery, postage prepaid to the addresses set forth below:
To Buyer:
Capewell Components Company, LLC
000 Xxxxxx Xxxx Xxxxx
Xxxxx Xxxxxxx, XX 00000
Attention: President
To Seller or Owosso:
Owosso Corporation
The Triad Building
0000 Xxxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxx xx Xxxxxxx, XX 00000
Attention: Chief Financial Officer
Section 10.2. Entire Agreement. This Agreement (including the schedules
and exhibits hereto) constitutes the sole understanding of the parties with
respect to the subject matter hereof.
Section 10.3. Counterparts. This Agreement may be executed in two or
more counterparts, including by facsimile signature, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
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Section 10.4. Further Assurances. Each party shall, at the request of
the other party, do and perform or cause to be done or performed all such
further acts and furnish, execute and deliver such other documents, instruments,
certificates, notices or other further assurances as counsel for the requesting
party may reasonably request, from time to time after the Closing Date, to
consummate more effectively the transactions contemplated by this Agreement or
to vest in Buyer all of Seller's right, title and interest in the Acquired
Assets or the Business.
Section 10.5. Parties in Interest; Assignment. This Agreement shall
inure to the benefit of, and be binding upon, the parties hereto and their
respective successors and permitted assigns. This Agreement may not be assigned
by either party without the prior written consent of the other party, except
that after the Closing Date, each party may, without the consent of the other
party, assign this Agreement and its rights hereunder to an affiliate or related
party of such party. No assignment of this Agreement shall relieve the assigning
party of responsibility for the performance of any of its obligations hereunder.
Nothing herein is intended to, nor shall it, create any rights in any Person
other than the parties hereto and their respective successors and permitted
assigns.
Section 10.6. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Connecticut,
without reference to its conflicts of laws principles.
Section 10.7. Schedules and Headings. All of the schedules and exhibits
attached hereto are a part of this Agreement and all of the matters contained
therein are incorporated herein by reference. The descriptive headings of the
several Articles and Sections of this Agreement are inserted for convenience
only and do not constitute part of this Agreement.
Section 10.8. Amendment. This Agreement may be amended only by the
parties hereto by any instrument in writing signed by or on behalf of each of
the parties hereto.
Section 10.9. Waiver. Any term or provision of this Agreement may be
waived only in writing by the party or parties who are entitled to the benefits
being waived.
Section 10.10 Confidentiality. Between the date of this Agreement and
the Closing Date, Buyer and Seller will maintain in confidence and will use
reasonable efforts to cause the directors, officers, partners, employees,
agents, and advisors of Buyer and Seller to maintain in confidence and not use
to the detriment of another party any written oral or other information obtained
in confidence from another party in connection with this Agreement or the
transactions contemplated hereby unless (a) such information is already known to
such party or to others not bound by a duty of confidentiality, or such
information becomes publicly available through no fault of such party, (b) the
use of such information is necessary or appropriate in making any filing or
obtaining any consent or approval required for the consummation of the
contemplated transactions, or (c) the furnishing or use of such information is
required by legal proceedings. If the transactions contemplated by this
Agreement are not consummated, each party will return or destroy as much of such
written information as the other party may reasonably request.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this Annual Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
OWOSSO CORPORATION
Date: February 8, 2001 By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------
Xxxxxx X. Xxxxxx, Xx., President, Chief
Executive Officer, and Director
By: /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx, Executive Vice President -
Finance, Chief Financial Officer and
Treasurer and Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed by the following persons on January 26, 2001, in the
capacities indicated:
Signature Title
/s/ Xxxx X. Xxxxx Chairman of the Board and Director
-------------------------------
Xxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxxx, Xx. President, Chief Executive Officer,
------------------------------- and a Director
Xxxxxx X. Xxxxxx, Xx.
/s/ Xxxx X. Xxxxxxx Executive Vice President - Finance,
------------------------------- Chief Financial Officer and
Xxxx X. Xxxxxxx Treasurer and Secretary
/s/ Xxxxx X. Xxxxxx Director
-------------------------------
Xxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxx Director
-------------------------------
Xxxxx X. Xxxx
/s/ Xxxxxx X. Xxxxxxxxxx Director
-------------------------------
Xxxxxx X. Xxxxxxxxxx
/s/ Xxxxxx X. Xxxxx Director
-------------------------------
Xxxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxxxxxx Director
-------------------------------
Xxxxx X. Xxxxxxxxx
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the date first above written.
X.X. XXXXXX, INC. CAPEWELL COMPONENTS
COMPANY, LLC
By: /s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxxx X. XxxXxxxxx
---------------------------- -------------------------------
Name: Xxxx X. Xxxxxxx Name: Xxxxxxx X. XxxXxxxxx
Title: Secretary/Treasurer Title: President
Owosso Corporation, the sole shareholder of Seller, hereby guarantees all
obligations and performance requirements of Seller hereunder, except with
respect to Seller's obligations in Section 5.3 of this Agreement, and agrees to
be bound by the applicable provisions of Section 5.1 of this Agreement.
OWOSSO CORPORATION
By: /s/ Xxxx X. Xxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President-
Finance, Chief Financial
Officer, Treasurer and
Secretary
