AGREEMENT OF SALE AND
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT made as of February 12, 1998 among MOUND LASER & PHOTONICS
CENTER, INC., an Ohio corporation ("Seller"), XXXXX X. XXXXXX of Centerville,
Ohio ("LRD"), XXXX X. XXXXXXXX of Dayton, Ohio ("CJK") (LRD and CJK being
individually referred to as a "Shareholder" and together as the "Shareholders"),
and MOUND ACQUISITION, INC., an Ohio corporation ("Buyer").
RECITALS
A. Seller is engaged in the business of laser applications, welding,
photonics applications and materials processing (collectively, "Seller's
Business").
B. Shareholders own all of the issued and outstanding capital
stock of Seller;
C. Buyer desires to purchase substantially all of the business and assets
of Seller's Business and Seller and Shareholders desire that Seller sell such
business and assets to Buyer as provided below.
NOW, THEREFORE, in consideration of the mutual promises contained in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Definitions as used in this Agreement, the following terms shall have
the following meanings unless the context expressly otherwise requires:
1.1 "Seller's Business" shall have the meaning set forth in the
recitals to this Agreement.
1.2 "Assets" shall mean all of the business and assets of Seller
relating to Seller's Business, including::
(a) all personal property used or usable in Seller's Business,
including machinery, equipment, tools, dies, molds, drawings, furniture and
fixtures, inventories of raw materials and supplies, work-in-process and
finished goods, customer lists, customer purchase orders, and goodwill;
(b) all rights, title and interests in and to Seller's
intellectual properties associated with Seller's Business, such as (without
limitation) know-how, trade secrets, trademarks, trade names, copyrights,
patents and other rights or registrations, including the name "Mound Laser &
Photonics Center";
(c) all accounts receivable of Seller;
(d) all forms, labels, shipping material, art work and
advertising matter pertaining to Seller's Business; and
(e) all records relating to the Seller's Business or any of
the assets referred to in clauses (a) through (d) such as operating records,
property records, and purchasing and sale records.
The term "Assets" shall exclude notes receivable, investment securities, any
personal property not used or relating to Seller's Business and any records not
relating to Seller's Business.
2. Sale of Assets.
2.1 Seller has conveyed, granted, bargained, sold, transferred, set
over, assigned, delivered and confirmed, and by this agreement does hereby
convey, grant, bargain, sell, transfer, set over, assign, deliver and confirm
unto Buyer, its successors and assigns forever, all of the right, title and
interest of Seller in, to and under the Assets.
TO HAVE AND TO HOLD the same to Buyer, its successors and assigns,
forever. Seller and Shareholders, jointly and severally, agree to warrant and
defend the same and title thereto against the claims of all parties.
2.2 Seller, for itself and for its successors and assigns does
hereby constitute and appoint Buyer, its successors and assigns, the true and
lawful attorney for Seller, with full power of substitution in the name of
Seller or in the name of Buyer, but for the benefit and at the expense of Buyer
(a) to institute and prosecute all proceedings which Buyer may deem proper in
order to assert or enforce any claim, right or title of any kind in or to the
Assets, to defend or compromise any and all actions, suits or proceedings in
respect of any of the Assets, and to do all such acts and things in relation
thereto as Buyer shall deem advisable; and (b) to take all action which Buyer,
its successors or assigns, may deem proper in order to provide for Buyer, its
successors or assigns, the benefits of any contracts, licenses, leases or
commitments where any required consent of another party to the assignment
thereof to Buyer pursuant to this Agreement shall not have been obtained. Seller
acknowledges that the foregoing powers are coupled with an interest and shall be
irrevocable by Seller. Seller, for itself and for its successors and assigns,
for the consideration aforesaid, hereby covenants with Buyer, its successors and
assigns, to execute, acknowledge, deliver and perform or to authorize Buyer or
any officer of Buyer as the agent and attorney of Seller to execute,
acknowledge, deliver or perform, any and all further deeds, instruments and acts
which may be reasonably required to convey, transfer and
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assign to Buyer all of the Purchased Assets or to accomplish the intent and
purposes hereof.
3. Representations and Warranties.
To induce Buyer to enter into this Agreement and to purchase the Assets,
Seller and Shareholders, jointly and severally, represent and warrant to Buyer
that:
3.1 Seller is a corporation duly organized and validly existing in
good standing under the laws of Ohio with full corporate power and authority to
conduct its business as now conducted, to own its assets and enter into and
perform its obligations under this Agreement. Seller's execution, delivery and
performance of this Agreement and the sale to Buyer of the Assets have been duly
authorized by all requisite corporate action on the part of Seller. This
Agreement constitutes Seller's legal, valid and binding obligations, enforceable
against Seller in accordance with their respective terms.
3.2 Seller has no subsidiaries and no other equity investments in
any other corporation, partnership or other business entity. Seller is not
required to qualify to transact business. All outstanding shares of Seller's
capital stock have been duly authorized for issuance, have been validly issued
and are outstanding, are fully paid and non-assessable, and are owned of record
and beneficially by Shareholders.
3.3 Seller's execution and delivery of this Agreement and
performance of its obligations hereunder will not (a) conflict with, violate or
result in any breach or default or, with notice or lapse of time constitute a
default, under (i) Seller's Articles of Incorporation or Bylaws, or (ii) any
mortgage, indenture, agreement, instrument or other contract to which Seller is
a party or by which Seller or its property is bound, (b) result in the creation
of any mortgage, pledge, lien, encumbrance or charge upon any assets or
properties of Seller, or (c) violate any judgment, order, decree, law, statute,
regulation or other judicial or governmental restriction to which Seller or any
of its assets is subject or by which it is bound. Seller's execution and
delivery of this Agreement and performance of its obligations hereunder,
including the sale of the Assets, will not require the consent of, or any prior
filing with or notice to, any governmental authority, lender or other third
party.
3.4 The financial statements of Seller (collectively, the "Financial
Statements") attached hereto as Exhibit A (i) are true and correct (ii) present
fairly the financial position of Seller at the periods then ended and the
results of its operations and cash flows for the periods then ended, (iii) have
been prepared in accordance with generally accepted accounting
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principles ("GAAP") consistently applied, (iv) show all material liabilities,
absolute and contingent, of Seller required to be shown by GAAP and (v) contain
no misrepresentations, misstatements or omissions of material facts.
3.5 Since the date of the most current Balance Sheet included in the
Financial Statements, there has not been any material adverse change in the
financial position of Seller or in Seller's Business or in the results of its
operations or any material liability incurred by Seller contingent or otherwise.
3.6 The rights of Seller under all agreements included in the Assets
are valid and enforceable by Seller and have validly assigned to and are
enforceable by Buyer, in each case in accordance with their respective terms.
Neither Seller nor any of the other parties thereto is in default in any
material respect, and the assignment by Seller of its rights thereunder to Buyer
will not violate the terms thereof. Seller has good and marketable title to the
Assets, free and clear of all liens, claims, security interests and encumbrances
and has the right to convey the Assets to Buyer.
3.7 All of the machinery, equipment, tools, dies, molds and similar
property included in the Assets is currently operating and is in good condition
and repair. All of the inventory of Seller is in good condition, is not obsolete
or defective, and is usable or salable in the usual and ordinary course of
business at prevailing market prices without discount.
3.8 There are no claims, actions, suits or other proceedings
pending, or to the knowledge of Seller threatened, against Seller, Shareholders
or any of the Assets before any court, agency or other judicial, administrative
or other governmental body or arbitrator, and to Seller's or Shareholders'
knowledge, no state of facts exists which would be likely to give rise to any
such claim, action, suit or other proceeding.
3.9 Seller has complied with, and is in compliance with, all laws,
statutes, regulations, rules and other requirements of any governmental
authority applicable to Seller, its assets and properties and the conduct of its
business.
3.10 Seller has not caused or permitted any of its assets or
property, including property owned or occupied by Seller under leases or other
agreements, to be used to generate, manufacture, refine, transport, treat,
store, handle, dispose, transfer, produce or process Hazardous Substances (as
defined below), or other dangerous or toxic substances, or solid waste, except
in compliance with all Environmental Laws, and has not caused or permitted and
has no knowledge of the Release (as defined below) of any Hazardous Substances
on or off-site of
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Seller's property (including property leased by Seller). "Hazardous Substances"
include any pollutants, dangerous substances, toxic substances, hazardous
wastes, hazardous materials, or hazardous substances as defined in or pursuant
to the Resource Conservation and Recovery Act 942 U.S.C. Section 6901, et seq.,
as amended ("RECRA"), the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 6901, et seq., as amended ("CERCLA"), the Clean
Air Act, as amended, the Clean Water Act, as amended, the Toxic Substances
Control Act, as amended, or any other Environmental Law. "Release" means
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, disposing or dumping. Seller has complied with
all applicable Environmental Laws and rules and regulations pertaining to
Hazardous Substances or protection of environmental quality. Neither the leasing
of real property and improvements by Buyer pursuant to the Lease included in the
Assumed Obligations (defined below) nor the acquisition of the Assets will
subject Buyer to, or give rise to any claim against or liability of Seller under
or on account of any Environmental Laws. For purposes of this Agreement, the
term "Environmental Laws" means federal, state or local laws, rules,
regulations, ordinances, standards or judicial decisions relating to or
regulating human safety or the condition of the environment, or the use,
handling or disposal of any Hazardous Substance including, without limitation,
RCRA, CERCLA, and other federal laws referred to in this Section 3.10.
3.11 All Federal, state and local income, excise or franchise tax
returns, real estate and personal property tax returns, sales and use tax
returns and all other tax returns required to be filed on or prior to the date
hereof by Seller with all taxing authorities have been filed. All amounts shown
to be due and payable on such returns, all other taxes, duties and other
governmental charges payable by Seller or imposed upon any of the Assets and for
the payment of which there may arise any lien upon the Assets sold hereunder
subsequent to such sale, and all deficiencies, assessments, penalties and
interest with respect thereto, in each case due and payable on or before the
date hereof, have been paid. All sales, use and excise taxes collectible with
respect to all transactions connected with Seller's Business have been
collected, all amounts due in connection therewith to state and local revenue
authorities have been remitted to the appropriate authorities, and no lien or
claim with respect thereto will be asserted by such authorities. There has been
withheld or collected from each payment made to each employee of Seller the
amount of all taxes (including without limitation federal income taxes, Federal
Insurance Contributions Act taxes, and state and local income, payroll and wage
taxes) required to be withheld or collected and the same have been paid to the
proper tax depositories or collecting authorities. Buyer, by reason of the
transactions contemplated by this Agreement, will
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not incur any claims, losses, damages, costs, and expenses with respect to or in
connection with any pension, welfare, fringe, or other employee benefit plan
maintained or contributed to by Seller or any predecessor that provides or
provided benefits to any current or former employees or other parties who
performed services for Seller (or their beneficiaries or dependents).
3.12 There are no orders, decrees, statements, citations or
decisions by any court or governmental or regulatory body, or other claim
pending or threatened that any product sold or distributed by Seller within the
last five (5) years is defective or fails to meet in any material respect any
standards promulgated by any such governmental or regulatory body. There have
been no recalls ordered by any such governmental or regulatory body with respect
to any such product.
3.13 The representations and warranties of Seller and Shareholders
in this Agreement do not contain any untrue statement of a material fact or omit
to state any material fact necessary to make the statements made therein not
misleading.
4. Consideration. (a) As consideration for the sale of the
Assets to Buyer, Buyer:
(i) assumes and will be responsible for the contractual obligations
of Seller incurred in the ordinary course of business, in existence on the date
hereof, not in default and requiring Seller to supply customers with products or
services within the Seller's Business at prices consistent with prior practices
and also assumes the obligations listed on Exhibit B hereto (collectively, the
"Assumed Obligations"); and
(ii) assume, subject to the terms hereof, Seller's obligations under
two (2) certain promissory notes of Seller to the Shareholders copies of which
are attached hereto (the "Notes").
(b) Concurrently with the execution and delivery of this Agreement, Buyer
and each of the Shareholders shall execute and deliver an endorsement or allonge
to each of the Notes setting forth Buyer's rights pursuant to Section 15 of this
Agreement.
5. Other Liabilities. Apart from the Assumed Liabilities, Buyer will
neither assume nor have any responsibility for any obligations, liabilities or
indebtedness of Seller or to which any of its assets or properties may be
subject, of whatever nature or kind, whether fixed, contingent, ascertainable or
unascertainable and whether or not classifiable as a current liability under
generally accepted accounting principles. All such obligations, liabilities and
indebtedness of Seller, except the Assumed Liabilities, are referred to as the
"Excluded Liabilities", and
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Seller and Shareholders, jointly and severally, agree to defend and indemnify
Buyer against, and hold Buyer harmless from all loss cost, expense and
liability, including reasonable attorneys' fees, arising from or in connection
with the Excluded Liabilities.
6. Change of Name. Within ten (10) days of the date hereof, Seller will
take all action necessary to enable Buyer exclusively to use the name "Mound
Laser & Photonics Center" as a corporate name in Ohio and shall deliver to Buyer
all documents necessary to accomplish the foregoing.
7. Maintenance of Records. Buyer and Seller agree that they shall each
maintain for at least four (4) years after the date hereof (or for such longer
period as may be required by applicable law) the respective books, records and
documents sold or retained hereunder. During such period, representatives of
Buyer shall be permitted to inspect and make copies of said books, records and
documents retained by Seller during normal business hours and upon reasonable
notice for purposes related to the continuation by Buyer of Seller's business;
and representatives of Seller shall be permitted to inspect and make copies of
said books, records, and documents sold to Buyer during normal business hours
and upon reasonable notice for purposes related to winding up its affairs.
8. Fees, Expenses and Sales Taxes. Seller, Buyer, and Shareholders shall
each pay its or his own fees and other costs or expenses incident to the
negotiation, preparation and execution of this Agreement and the transactions
contemplated hereby. Seller shall pay all sales taxes and transfer taxes imposed
with respect to the sale of the Assets hereunder.
9. No Brokers. Each of Seller and Buyer represents that no broker or
finder has been involved or engaged by it in connection with the transactions
contemplated hereby.
10. Bulk Transfer Compliance. Buyer and Seller hereby mutually agree to
waive compliance with the provision of Article 6 of the Ohio Uniform Commercial
Code and of the corresponding laws of any other jurisdiction, to the extent
applicable to the transactions contemplated hereby. Seller and the Shareholders,
jointly and severally, agree to indemnify and hold harmless Buyer from and
against any and all loss, liability, cost and expense (including reasonable
attorneys' fees) arising out of noncompliance with said Bulk Transfers laws
except to the extent arising out of Buyer's failure to pay, perform and
discharge the Assumed Liabilities.
11. Collection of Assets. Seller agrees that it will promptly transfer or
deliver to Buyer from time to time, any cash or other property that Seller may
receive with respect to any claims, contracts, licenses, leases, commitments,
sales orders,
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purchase orders, receivables of any character or any other items included in the
Assets. Seller shall pay all of the Excluded Liabilities in the ordinary course
of business as they become due.
12. Survival of Representations and Warranties. All representations and
warranties made in this Agreement shall survive the execution and delivery of
this Agreement.
13. Indemnification of Buyer by Seller and Shareholders. Seller and
Shareholders, jointly and severally, shall indemnify and hold Buyer and its
attorneys, affiliates, representatives, agents, officers, directors, successors
or assigns harmless from and against any liability, loss, cost, expense,
judgment, order, settlement, obligations, deficiency, claim, suit, proceeding
(whether formal or informal), investigation, lien or other damage, including,
without limitation, reasonable attorneys' fees and expenses (collectively,
"Damages"), resulting from, arising out of or incurred with respect to (a) a
breach of any representation, warranty, covenant or agreement of Seller or
Shareholders contained herein or (b) the Excluded Liabilities.
14. Indemnification of Seller. Buyer shall indemnify and hold Seller and
its attorneys, affiliates, representatives, agents, officers, directors,
successors or assigns, harmless from and against any Damages resulting from,
arising out of, or incurred with respect to (a) a breach of any representation,
warranty, covenant or agreement by Buyer contained herein or (b) the Assumed
Liabilities.
15. Set-Off. In addition to any other rights or remedies which Buyer may
have, at law or equity, against Seller or the Shareholders, Buyer shall have the
right to set-off the amount of Damages against any amounts due and owing the
Shareholders under the Notes and against any other amounts owing Seller or the
Shareholders by, or rights against, Buyer or any affiliate of Buyer.
16. Miscellaneous.
16.1 This Agreement contains the final, complete and exclusive
statement of the agreement between the parties with respect to the transactions
contemplated herein and all prior or contemporaneous written or oral agreements
with respect to the subject matter hereof are merged herein.
16.2 No change, amendment, qualification or cancellation hereof
shall be effective unless in writing and executed by each of the parties hereto
by their duly authorized officers.
16.3 This Agreement shall be binding upon and shall
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inure to the benefit of the parties hereto and their respective successors and
assigns. Buyer may form a wholly-owned subsidiary or other business entity for
the purpose of assuming all of Buyer's rights and obligations under this
Agreement.
16.4 The captions are for convenience of reference only and shall
not be construed as a part of this Agreement.
16.5. This Agreement shall be construed, interpreted, enforced and
governed by and under the laws of Ohio.
16.6 The invalidity or unenforceability of any one or more phrases,
sentences, clauses or provisions of this Agreement shall not affect the validity
or enforceability of the remaining portions of this Agreement or any part
thereof.
16.7 This Agreement may be executed in any number of counterparts,
all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, Seller, Shareholders and Buyer have each executed this
Agreement or caused this Agreement to be executed by their respective duly
authorized officers as of the day and year first above written.
MOUND LASER & PHOTONICS
CENTER, INC.
By:____________________________
President
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Xxxxx X. Xxxxxx
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Xxxx X. Xxxxxxxx
MOUND ACQUISITION, INC.
By:____________________________
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