EXHIBIT 2.4
ASSET PURCHASE AGREEMENT
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THIS ASSET PURCHASE AGREEMENT (this "Agreement") dated December 27, 2001,
and effective January 1, 2002 (the "Effective Date") by and between STS
OPERATING INC., its successors and assigns (the "Seller") and XXXXXXX
HYDRAULICS, INC., its successors and assigns (the "Purchaser").
WITNESSETH:
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WHEREAS, the Seller desires to sell, transfer and assign to the
Purchaser, and the Purchaser desires to purchase and acquire from the Seller,
all of the assets of the distribution, installation and sales of industrial and
mobile hydraulic components and systems, filtration, pneumatics, lubrication,
engineering services located in California (the "Business") on the terms as set
forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and certain other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. PURCHASE AND SALE OF ASSETS
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1.1 Purchase and Sale of Assets. Subject to the terms and conditions and
in reliance upon the representations and warranties of Seller and Purchaser
contained in this Agreement, at the Closing (as hereinafter defined) the Seller
shall assign, transfer, convey and deliver to the Purchaser, and the Purchaser
shall purchase from the Seller, all of the right, title and interest in and to
each and all of the following assets of the Seller whether used or acquired
during the operation of the Business (collectively the "Assets"), together with
replacements thereof and additions thereto, whether or not included in the books
and records of the Seller in existence at the Closing Date:
(a) All of the Fixed Assets of the Seller, and all agreements and documents
related thereto, as set forth on Schedule 1.1(a), including but not limited to
all machinery, equipment, fixtures, and other items customarily referred to as
"Fixed Assets" used in or owned by the Business;
(b) All of the Seller's inventory relating to the Business, as set forth on
Schedule 1.1(b), including but not limited to manufacturing supplies, consigned
inventory, packaging materials, raw materials, work-in-process, any and all
hydraulic components and or systems sold in Seller's ordinary course of business
(the "Inventory"): and
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(c) All of Seller's Receivables (as defined below) which are identified by
debtor, amount and age on Schedule 1.1(c) (for purposes herein, "Receivables"
shall mean Seller's accounts receivable arising from Seller's services or sales
related to the Business.
1.2 Assumption of Liabilities. Upon the terms and subject to the
conditions contained herein, at the Closing Purchaser shall assume the
liabilities which are listed on Schedule 1.2 attached hereto (collectively, the
"Assumed Liabilities"). Schedule 1.2 also shall contain, where available by
Seller, copies of all agreements that constitute Assumed Liabilities.
1.3 Assumption of Employees. Upon the terms and subject to the conditions
contained herein, at the Closing Purchaser shall become the employer to the
employees set forth on Schedule 1.3 attached hereto.
1.4 Excluded Liabilities. Except for the Assumed Liabilities, the
Purchaser has not agreed to pay, shall not be required to assume and shall have
no liability or obligation whatsoever with respect to any debt, obligation,
responsibility or liability of the Business, the Seller, or any claim against
any of the foregoing, whether known or unknown, contingent or absolute, or
otherwise arising at any time (the "Excluded Liabilities") and the Seller agrees
to take all actions and do all things reasonably necessary to ensure that the
Purchaser is not liable for any Excluded Liabilities. Without limiting the
generality of the foregoing, the Excluded Liabilities include all of the
following: liabilities or obligations arising out of any breach by the Seller
prior to the Closing Date of any of the contracts, agreements or documents
entered into in connection with the Assumed Liabilities, including, but not
limited to, liabilities or obligations arising out of penalties, late charges or
the Seller's failure to perform any such Assumed Liability, in each case prior
to the Closing Date;
(a) any federal, state or local income or other tax payable with respect to
the Business or Assets of the Seller or any of its affiliates for any period
prior to the Closing Date;
(b) any liabilities, damages, costs, expenses and fees arising out of and
any lawsuit or proceeding or product liability claim related to the Business or
Assets and based on claims or causes of action arising prior to the Closing
Date;
(c) liabilities for payment of all accounts payable accrued, outstanding,
or resulting from, the operation of the Business prior to the Closing Date; and
(d) liabilities related to any former or current employee, or agent of the
Seller, including any liabilities related to accrued vacation, holiday, sick
leave or under or associated with Seller's employee benefit plan, and any claims
under any insurance policies of the Sellers related to its employees or agents
through December 31, 2001;
(e) liabilities related to any former or current employee, or agent of the
Seller, for any claims for wages, bonuses, commissions or other forms of
compensation earned through
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December 31, 2001; however Purchaser shall not be responsible for any severance
payments to any former employee, and
(f) liabilities related to payroll taxes or any other employee payroll or
benefit related reserves or accruals as of December 31, 2001.
1.5 General Assignment and Xxxx of Sale. At the Closing, the Seller shall
execute and deliver a general assignment and xxxx of sale substantially in
the form of Exhibit "A" attached hereto and incorporated herein (the "Xxxx
of Sale").
2. PURCHASE PRICE; ADJUSTMENTS; CLOSING
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2.1 Purchase Price. The purchase price shall equal the book value of the
Fixed Assets, Inventory, and identified and verified Account Receivables, less
One Hundred Fifty Thousand Dollars ($150,000.00)(the "Purchase Price") (subject
to any adjustment as provided for in Sections 2.4, or payments made by Purchaser
pursuant to Section 8.3, hereof, payable by Purchaser upon the execution of this
Agreement, by wire transfer of immediately available funds in accordance with
the wiring instructions set forth in Section 13
2.2 The Closing. The closing of the sale and purchase of the Assets and
assumption of the Assumed Liabilities (the "Closing") shall take place at the
offices of Xxxxxxx Hydraulics, Inc. located at 00000 Xxxxxxxxxx Xxxxxxx,
Xxxxxxxxxx, Xxxx, 00000, at 10:00 A.M. local time, on December 27, 2001 (the
"Closing Date").
2.3 Closing Dates
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(a) Pre-Closing. On the day which is one (1) business day prior to the
Closing Date, the parties shall have a telephonic conference as a pre-Closing
(the "Pre-Closing") in order to (i) examine and approve, to the extent
practicable, all of Seller's Closing Documents (as defined in Section 8.1 below)
and all of Purchaser's Closing Documents (as defined in Section 8.2 below),
copies of which shall be exchanged prior to the Pre-Closing, (ii) agree to any
adjustments in the Purchase Price in accordance with Sections 2.4, and 8.3, and
(iii) settle such other matters as are customarily determined in advance of
closing. At least one (1) business day prior to the Pre-Closing, Seller shall
deliver or cause to be delivered to Purchaser a draft of the settlement
statement, together with reasonably supporting back-up information supporting
the calculations set forth therein.
(b) Closing. On the Closing date the Buyer shall remit to the Seller an
amount equal to the Purchase Price based on the definition included in Section
2.1, and based on the value of the assets included in Schedules 1.1(a), 1.1(b)
and 1.1 (c).
(c) Post Closing On a date not to exceed five (5) business days from the
closing date, Seller shall submit to Buyer a final valuation and listing of the
assets included in Schedules 1.1(a), 1.1(b) and 1.1(c). Based on the final
Schedules an adjustment to the Purchase Price shall
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be determined at which time the Seller shall remit to buyer the difference
between the Purchase Price at Closing and the Purchase Price at Post Closing, if
any; or the Buyer shall remit to Seller the difference between the Purchase
Price at Closing and the Purchase Price at Post Closing, if any.
2.4 Pre-Closing Balance Sheet and Purchase Price Adjustments.
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(a) On the Pre-Closing date Seller shall deliver to Purchaser a schedule
certified as to accuracy by its chief financial officer, which shall set forth
the following as of a day within three (3) business days of the Pre-Closing
Date: (i) the inventory, (ii) the accounts receivable, and (iii) the Fixed
Assets.
(b) Post Closing Adjustment in the form of a monetary award shall be
credited to Purchaser if the Inventory quantity, as determined by a physical
inventory preformed by Purchaser within Fifteen (15) days of the Effective Date,
is found to be lesser than the quantity included in the financial statements
submitted by Seller at Pre-Closing. Purchaser shall have the right to submit a
claim only if the amount of the claim shall be greater than Twenty-Five Thousand
Dollars (USD $25,000). Purchaser shall have Thirty (30) days in which to file
any claim. Any such claim shall describe, in detail, the discrepancy in the
Inventory quantity that Purchaser deems valid. Purchaser shall submit its
written claim to the Seller. If within thirty (30) days both parties cannot
agree on a monetary award to Purchaser, Purchaser is entitled to file a lawsuit
in any jurisdiction lawfully allowed to preside over the matter. Purchase may
also choose to have the matter handled through arbitration, at its sole
discretion.
(c) Nothing contained in this Section 2.4 shall in anyway limit the rights
and remedies of Purchaser or Seller as contained elsewhere in this Agreement.
This Section 2.4 is in addition to and not in limitation or replacement of the
representations and warranties made by Seller pursuant to Section 3 hereof.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER: The Seller represents and
warrants to the Purchaser that as of the Effective Date and through the Closing
Date:
3.1 Organization; Good Standing. The Seller is a corporation, duly
incorporated, validly existing and in good standing under the laws of the state
of its incorporation and has all requisite corporate power and authority to own,
sell and lease the Assets. The Seller is duly qualified and licensed to do
business and is in good standing in all jurisdictions where the nature of its
business makes such qualification necessary.
3.2 Due Authorization, Execution and Delivery. The Seller has full power
and authority to enter into and perform this Agreement, and to carry out the
transactions contemplated thereby. The Seller has taken all requisite action, to
approve the execution and delivery of this Agreement and the transactions
contemplated thereby. This Agreement constitutes the legal, valid and binding
obligations of the Seller enforceable against it in accordance with the terms
thereof. Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated thereby will: (a) conflict with or
result in a breach of the certificate of
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incorporation or bylaws of the Seller, (b) violate any statute, law, rule or
regulation or any order, writ, injunction or decree of any court or governmental
authority, which violation, either individually or in the aggregate, could have
an material adverse effect on the Purchaser's ownership of the Assets; (c)
violate or conflict with or constitute a default under (or give rise to any
right of termination, cancellation or acceleration under), or result in the
creation of any lien on the Assets pursuant to any agreement, indenture,
mortgage or other instrument to which the Seller is a party or by which its
assets may be bound or affected or (d) increase the amount of any of the Assumed
Liabilities.
3.3 Title to Assets. At the Closing, Seller will transfer to the
Purchaser all of Seller's rights, title and interest in and to all of the
Assets, free and clear of any claim, tax claim, lease, mortgage, security
agreement, conditional sale agreement or other title retention agreement,
restriction, lien or encumbrance of any kind or nature whatsoever (collectively
"Encumbrances").
3.4 Condition of Assets. All of the Assets, equipment, furniture,
fixtures, and all other inventory will be maintained in good repair consistent
with and as maintained in the ordinary course of business of Seller.
3.5 Taxes. All tax reports and returns required to be filed by or
relating to the Assets and the Business (including sales, use, income, proper,
franchise and employment taxes), that are due to be filed at the Closing Date,
have been filed with the appropriate federal, state and local governmental
agencies. All taxes, penalties, interest deficiencies, assessments or other
charges, including without limitation those that are reflected on such reports
and returns, that relate to the Assets or the business and are or have been
claimed to be due and payable prior to the Closing Date by any taxing authority
have been paid by the Seller. To Seller's knowledge, there are no examinations
or, audits pending or unresolved examinations or audit issues with respect to
Seller's federal, state or local tax returns. All additional taxes, if any,
assessed as a result of such examinations or audits have been paid. To the
Seller's knowledge, there are no pending claims or proceedings relating to, or
asserted for, taxes, penalties, interest, deficiencies or assessments against it
which could have a material adverse effect on the Business or the Purchaser's
ownership of the Assets. No waiver or extension of any statute of limitation is
in effect with respect to the taxes or tax returns of the Seller.
3.6 Litigation. There is no order of any court, governmental agency or
authority and no action, suit, proceeding, arbitration or investigation,
judicial, administrative or otherwise, that is pending or threatened against or
affecting the Assets or the Business which, if adversely determined, might
materially affect the Business or which challenges the validity or propriety of
this Agreement.
3.7 Reports and Governmental Compliance. Seller has duly filed all
reports required to be filed by law or applicable rule, regulation, order, writ
or decree of any court, governmental commission, body or instrumentality and has
made payment of all charges and other payments, if any, shown by such reports to
be due and payable with respect to the Seller's operation and/or ownership of
the Business and the Assets.
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3.8 Agreements.
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(a) Schedule 1.2 contains a list, complete and accurate in all respects, of
all of agreements ("Assumed Agreements") that constitute Assumed Liabilities.
(b) Up to the Effective Date all of the Assumed Agreements are valid,
binding and enforceable against the Seller and the other parties thereto in
accordance with their respective terms.
(c) Except as disclosed on Schedule 1.2, neither the Seller nor, any other
party thereto is in breach of, or default under, any Assumed Agreement. No event
or action has occurred, is pending, or is threatened, which after giving of
notice, or the lapse of time, or both, would constitute or result in a breach or
default by the Seller or, to Seller's knowledge, any other party thereto.
(d) The Seller has not given any revocable or irrevocable power of attorney
that relates to the Business to any person for any purpose whatsoever.
3.9 Receivables. Except as set forth on Schedule 1.2, all of the
Receivables reflected on Schedule 1.2 represent valid claims against the account
debtors that were generated by Seller in the ordinary course of Seller's
Business and represent fully completed bona fide transactions.
3.10 Leases.
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(a) Schedule 3.10 contains a list, complete and accurate in all respects,
of all of the leases, including the leases of Seller's Sacramento and Anaheim
facilities.
(b) All of the leases are valid, binding and enforceable against the Seller
and the other parties thereto in accordance with their respective terms.
(c) Except as disclosed on Schedule 3.10, neither the Seller nor, to
Seller's knowledge, any other party thereto is in breach of, or default under,
any leases. No event or action has occurred, is pending, or is threatened, which
after giving of notice, or the lapse of time, or both, would constitute or
result in a breach or default by the Seller or any other party thereto.
3.11 FIRPTA. Seller is not a "foreign person" as defined in Section 1445 of the
United States Internal Revenue Code.
3.12 Compliance with Law. Seller is in compliance with all applicable laws,
statutes, ordinances and regulations, whether federal, state or local and
whether foreign or domestic. Seller has not received any written notice to the
effect that, or otherwise been advised that it is not in compliance with any of
such statutes regulations, orders, ordinances or other laws.
3.13 No Brokers. Neither Seller nor any affiliate of Seller has entered
into or will enter into any agreement, arrangement or understanding with any
person or firm which will result in the
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obligation of Purchaser to pay any finder's fee, brokerage commission or similar
payment. Seller has not directly or indirectly paid or delivered any fee,
commission or other sum of money or item or property, however characterized, to
any finder, agent, government official or other party, in the United States or
any other country, which is in any manner related to the Business, which Seller
knows or has reason to believe to have been illegal under any federal, state or
local laws of the United States or any other country having jurisdiction.
3.14 No Other Agreements to Sell the Assets of the Business. Seller does
not have any legal obligation, absolute or contingent, to any other person or
firm to sell the Assets, or to effect any sale of the Business or to enter into
any agreement with respect thereto that would affect the Business or the Assets.
3.15 Purchase Commitments and Outstanding Bids. Schedule 3.15 contains a
list of unfulfilled agreements, commitments and orders, whether oral or written,
for the performance of services or sale of products including products in
Inventory by Seller for which Seller is responsible to fulfill. All of such
agreements, commitments and orders were made in the ordinary course of the
business of the Business and at prices and on terms, which are consistent with
Seller's past practices. As of the date of this Agreement, no customer of Seller
has requested that services to be performed or products to be sold by Seller
under any material agreement be delayed for any material period of time. There
is no material outstanding purchase or other commitment of Seller presently in
excess of the normal, ordinary and usual requirements of the Business. There is
no outstanding bid, proposal, contract or unfilled order of Seller which will or
would, if accepted, individually or in the aggregate, have a material adverse
effect on the transactions contemplated herein. Payments received by the Seller
for any open Accounts Receivables as of the Closing Date will be reimbursed by
Seller to Purchaser.
3.16 Compliance With Legislation Regulating Environmental Quality. There
are no known toxic wastes or other toxic or hazardous substances or materials
being stored or otherwise held in or on either the Sacramento or Anaheim
facilities occupied or leased by Seller, or which have migrated from the
facilities, whether contained in ambient air, surface water, groundwater, land
surface or subsurface strata. To the best knowledge of the Seller the facilities
and all products including the Inventory sold by Seller or used in servicing
Seller's clients have been maintained in material compliance with all federal,
state and local environmental protection, occupational, health and safety or
similar laws, ordinances, restrictions, licenses, and local environmental
protection, occupational, health and safety or similar laws ordinances,
restrictions, licenses and regulations. Seller also represents that it has not
received, from any federal or state agency, any notification that they are not
in compliance with any statutes governing environmental legislations.
3.17 Financial and Other Statements. Seller has previously delivered to
Purchaser the Accounts Receivable aging of the Business as of September 2001, a
detailed Inventory list of the Business as of September, 2001, and a detailed
list of the Fixed Assets of the Business as of September 2001. Seller has also
previously delivered to Purchaser a summary of Benefits currently in force for
the Assumed Employees as described in Section 3.18.
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3.18 Employees. Schedule 3.18 lists the names, title or job description of
each employee that will become an employee of Purchaser ("Assumed Employees")
and total annual base compensation, and, bonuses paid, accrued, or granted
through the Closing Date to each.
(a) Termination. Except as provided by law, the employment of all persons
presently employed or retained by Seller is terminable at will.
(b) Litigation. Seller is not party to any litigation relating to or
seeking benefits under Seller's health insurance plan.
(c) Severance Arrangements. Seller has not entered into any severance or
similar arrangement in respect of any present or former personnel that will
result in any obligation (absolute or contingent) of Purchaser to make any
payment to any Assumed Employee .
3.19 Customers. Schedule 3.19 lists the names, addresses and contact information
of all current customers of the Business.
3.20 No Material Changes. Seller represents that from the date of
execution of this Agreement through the effective date, there has been no
material change in the Business, any of the Assets, or the Assumed Liabilities.
Seller represents and warrants that the information contained in The Financial
and Other Statements as described in Section 3.17 are accurate and complete.
3.21 Non-Compete; Non-Solicitation.
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(a) For a period of Three (3) years from the Closing Date the Seller shall
not directly, indirectly or otherwise, whether for itself or on behalf of any
other person, canvass or solicit or, directly or indirectly, cause or authorize
to be solicited, any Assumed Employees of Purchaser.
(b) For a period of Two (2) years from the Closing Date the Seller shall
not enter into any transactions to sell or lease any products, or perform any
services, to or for any past or present customers of the Business from any of
its existing Michigan based operations. Seller shall not enter into any
transactions with third parties, either directly or indirectly, to sell or lease
any current products or services of the Business, to any customers of the
Business.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER
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The purchaser represents and warrants to the Seller as follows:
4.1 Due Authorization, Execution and Delivery and Enforceability. The
Purchaser has full power and authority to execute, deliver and perform this
Agreement and to consummate the transactions contemplated thereby. The Purchaser
has taken all requisite action to approve the Agreement. This Agreement will
constitute legal, valid and binding obligation of the Purchaser, enforceable
against it in accordance with its terms. The execution and delivery by the
Purchaser of this Agreement will not: (i) conflict with or result in a breach of
the articles of incorporation
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or bylaws of the Purchaser, (ii) violate any law, statute, rule or regulation or
any order, writ, injunction or decree of any court or governmental authority,
which violation, either individually or in the aggregate, could have a material
adverse effect on the business or operations the Purchaser; or (iii) violate or
conflict with or constitute a default under (or give rise to any right of
termination, cancellation or acceleration under) any indenture, mortgage, lease,
contract or other instrument to which the Purchaser is a party or by which it is
bound or affected.
4.2 Governmental and Third Party Consents. To the knowledge of the
Purchaser, no approval, authorization, consent, order or other action of, or
filing with, any governmental authority, administrative agency or third party is
required in connection with the execution and delivery by the Purchaser of this
Agreement.
5. OTHER AGREEMENTS
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Each of the Purchaser and the Seller covenants and agrees that from and
after the execution and delivery of this Agreement to and including the Closing
Date (and thereafter as reflected below), it shall comply with the covenants set
forth below to the extent applicable to it.
5.1 Best Efforts; Consents. In the event any consent or approval necessary to
effect the transfer and assignment of any contract or lease, as defined in
Schedule 5.1, is not obtained on or prior to Closing, and such requirement is
waived by the Purchaser, each party will cooperate with each other in any lawful
and reasonable arrangement to provide that the Purchaser shall receive the
benefits under any contract or lease not assigned and transferred at the Closing
by reason of the failure to obtain such consent (a "Non-Transferred
Instrument"). The Seller shall immediately transfer and assign to the Purchaser
any Non-Transferred Instrument for which a consent has been received following
Closing.
5.2 Allocation of Purchase Price. The Purchaser and the Seller (a) mutually
agree on the allocation of the Purchase Price as set forth in Schedule 5.2
hereto and (b) acknowledge that the allocation set forth in Schedule 5.2 was the
result of arms-length negotiations. The Purchaser and the Seller agree that for
income tax purposes, they shall report on Internal Revenue Code Form 8594 (or
any successor Internal Revenue Code Form) the transaction contemplated by this
Agreement in accordance with the allocation set forth in Section 5.2.
5.3 State and Transfer Taxes. All transfer taxes, if any, incurred in connection
with the sale, assignment, transfer and delivery of the Assets to the Purchaser
hereunder will, be borne by the Purchaser, and the Purchaser will, at its own
expense, file all necessary tax returns and other documentation with respect to
all, such transfer taxes.
5.4 Other Agreements of the Seller.
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(a) Seller shall be solely responsible and Purchaser shall have no
obligations whatsoever for any compensation or other amounts payable to any
employee (or former employee) of the Seller, including, without limitation,
accrued bonus, salary, commissions, vacations, fringe, pension or profit sharing
benefits for the period through December 31, 2001.
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(b) The Seller shall remain solely responsible for the satisfaction of all
claims for medical, dental, life insurance, health accident or disability
benefits brought by or in respect of employees (or former employees), or agents
of the Seller, which claims relate to events occurring prior to December 31,
2001. The Seller also shall remain solely responsible for all worker's
compensation claims of any employees (or former employees), or agents of the
Seller, which relate to events occurring prior to December 31, 2001. Seller
shall pay, or cause to be paid, all such amounts to the appropriate persons as
and when due.
(c) Seller agrees to be solely responsible for any payroll taxes or other
employee payroll or benefit related services or accruals with regard to the
Business through December 31, 2001.
5.5 Other Agreements Of Purchaser
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Purchaser agrees to transfer all Assumed Employees to its payroll as of the
Closing Date.
5.6 Merchandise. Immediately prior to the Pre-Closing:
(a) At Closing, Purchaser shall acquire all right, title and interest to
the Inventory, Fixed Assets and Accounts Receivable of Seller.
6. CONDITIONS TO THE PURCHASER'S OBLIGATION TO CLOSE
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All obligations of the Purchaser under this Agreement shall be subject to
the fulfillment at or prior to the Closing of the following conditions, it being
understood that the Purchaser may, in its sole discretion, waive any or all of
such conditions in whole or in part:
6.1 Representations, Etc. The Seller shall have performed in all material
respects, the covenants and agreements contained in this Agreement that are to
be performed by Seller at or prior to the Closing, and the representations and
warranties of the Seller contained in this Agreement shall be true and correct,
as of the Closing Date.
6.2 Consents. All consents and approvals of governmental agencies and from any
other third parties required to consummate the transactions contemplated by this
Agreement, including consents to assignment with respect to the Assets and
Assumed Liabilities, shall have been obtained without cost or other adverse
consequence to the Purchaser.
6.3 No Adverse Litigation. No order or preliminary or permanent injunction shall
have been entered and no action, suit or other legal or administrative
proceeding by any court or governmental authority, agency or other person shall
be pending or, threatened on the Closing Date which may have the effect of (a)
making any of the transactions contemplated hereby
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illegal, (b) adversely affecting the value of the Business or the Assets or (c)
making the Purchaser liable for the payment of any amount of damages to any
person.
6.4 Closing Deliveries. The Purchaser shall have received each of the documents
or items required to be delivered to it pursuant to Section 8.1 hereof.
6.5 No Liens. The Seller shall have discharged or terminated all liens of the
Assets prior to the Closing Date.
7. CONDITIONS TO THE SELLER'S OBLIGATION TO CLOSE
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All obligations of the Seller under this Agreement shall be subject to the
fulfillment at or prior to the Closing of the following conditions, it being
understood that the Seller may, in its sole discretion, waive any or all of such
conditions in whole or in part:
7.1 Representations, Etc. The Purchaser shall have performed in all material
respects, the covenants and agreements contained in this Agreement that are to
be performed by Purchaser at or prior to the Closing, and the representations
and warranties of the Purchaser contained in this Agreement shall be true and
correct, as of the Closing Date.
7.2 Consents and Releases. All consents and approvals of governmental agencies
and from any other third parties required to consummate the transactions
contemplated by this Agreement, including consents to assignment with respect to
the Assumed Liabilities, shall have been requested and obtained without cost or
other adverse consequence to the Seller. In addition, each landlord under the
Lease(s) shall have released Seller and its Affiliates, without cost or other
adverse consequence to Seller, from any and all obligations under each of the
Lease(s).
7.3 No Adverse Litigation. No order or preliminary or permanent injunction shall
have been entered and no action, suit or other legal or administrative
proceeding by any court or governmental authority, agency or other person shall
be pending or threatened on the Closing Date which may have the effect of (a)
making any of the transactions contemplated hereby illegal, (b) adversely
affecting the value of the Business or the Assets or (c) making the Seller
liable for the payment of any amount of damages to any person.
7.4 Closing Deliveries. The Seller shall have received each of the documents or
items required to be delivered to it pursuant to Section 8.2 hereof., and the
Purchase Price as defined in Section 2.1.
8. CLOSING DELIVERIES
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8.1 To Purchaser. At the Closing, Seller shall deliver to the Purchaser the
following items (collectively, "Seller's Closing Documents"):
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(a) The Xxxx of Sale;
(b) That certain Lease Assignment and Assumption Agreements in the form
attached hereto as Exhibit B (the "Lease Assignment") executed by the Seller;
(c) That certain Assignment and Assumption Agreements in the form attached
hereto as Exhibit C (the "Contract Assignment") executed by the Seller;
(d) A copy of all consents and approvals referred to in Section 6.2 hereof;
(e) FIRPTA Affidavit. An affidavit executed by Seller to the effect that
Seller is not a "foreign person" within the meaning of Internal Revenue Code
Section 1445 in the form annexed hereto as Exhibit E ("Certification").
(f) A certified copy of the minutes or resolutions adopted by the board of
directors and the shareholders of the Seller, if necessary, approving the
Agreement and all related transactions;
(g) A certificate of good standing issued by the Secretary of State of the
Seller's state of incorporation; and
(h) All other items reasonably requested by Purchaser and reasonably
contemplated hereunder.
8.2 To Seller. At the Closing, Purchaser shall deliver to the Seller the
following items (collectively, "Purchaser's Closing Documents"):
(a) The Purchase Price in accordance with Section 2.1;
(b) The Lease Assignment executed by Purchaser;
(c) The Contract Assignment executed by Purchaser; and
(d) All other items reasonably requested by the Seller and reasonably
contemplated hereunder.
8.3 Rents/Security Deposits. Any rent and other liability or obligation due and
payable under any of the Assumed Lease(s) (collectively, "Rents") shall be
prorated as of the Closing Date on the basis of a thirty (30) day month and/or a
three hundred sixty (360) day year, in order to effect a final determination of
such Rents that is intended to be binding on the parties, and shall be accounted
for as follows:
(a) Rents due and payable under any of the leases in the month of the
Closing Date shall be prorated between Purchaser and Seller.
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(b) Purchaser shall be obligated to pay all Rents and other liability
accruing after the Closing Date, and Seller shall be responsible to pay all
Rents that were due and payable prior to the Closing Date.
9. SURVIVAL
--------
The representations, warranties, covenants and agreements made by Seller
pursuant to this Agreement shall survive the Closing.
10. INDEMNIFICATION OF THE SELLER
-----------------------------
The Purchaser shall indemnify and hold the Seller harmless from, against,
for and in respect of:
(a) any and all damages, losses, demands, settlement payments, obligations,
liabilities, claims, actions or causes of action and Encumbrances suffered,
sustained, incurred or required to be paid by the Seller arising out of or
related in any way to the ownership of the Assets or the Assumed Liabilities or
operations of the Business after the Closing Date; and
(b) all reasonable costs and expenses (including, without limitation,
attorneys' fees, interest and penalties) incurred by the Seller in connection
with any action, suit, proceeding, demand, assessment or judgment incident to
any of the matters indemnified against in this Section 10.
11. INDEMNIFICATION OF PURCHASER
----------------------------
The Seller shall defend, indemnify and hold the Purchaser harmless from,
against, for and in respect of:
(a) any and all damages, losses, demands, settlement payments, obligations,
liabilities, claims, actions or causes of action and Encumbrances suffered,
sustained, incurred or required to be paid by the Purchaser arising out of or
related in any way to the ownership and operation of the Business, the Assets or
the Assumed Liabilities and Excluded Liabilities prior to the Effective Date ,
except to the extent the same arises from any act of the Purchaser;
(b) any breach by Seller of any of the representations and warranties
contained in this Agreement;
(c) any federal, state or local income or other tax payable with respect to
the business, assets, properties or operations of the Seller for any period
prior to the Closing Date; and
(d) all reasonable costs and expenses (including, without limitation,
attorneys' fees, interest and penalties) incurred by the Purchaser in connection
with any action, suit, proceeding, demand, assessment or judgment incident to
any of the matters indemnified against in this Section 11.
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12. GENERAL RULES REGARDING INDEMNIFICATION
---------------------------------------
The obligations and liabilities of each indemnifying party hereunder with
respect to claims resulting from the assertion of liability by the other party
or indemnified third parties shall be subject to the following terms and
conditions:
(i) The indemnified party shall give prompt written notice (which in no
event shall exceed 30 days from the date on which the indemnified party first
became aware of such claim or assertion) to the indemnifying party of any claim,
which might give rise to a claim by the indemnified party against the
indemnifying party based on the indemnity agreements contained in Section 10 or
11 hereof, stating the nature and basis of said claims and the amounts thereof,
to the extent known.
(ii) If any action, suit or proceeding is brought against the indemnified
party with respect to which the indemnifying party may have liability under the
indemnity agreements contained in Section 10 or 11 hereof, the indemnifying
party will have the right at any time to assume and thereafter conduct the
defense of such action, suit or proceeding with counsel of its choice reasonably
satisfactory to the indemnified party; provided, that unless and until an
indemnifying party assumes the defense of an action, suit or proceeding, the
indemnified party may defend such action or proceeding in any manner it
reasonably may deem appropriate subject to Section 12.
(iii) The indemnified party shall make available to the indemnifying party
and its attorneys and accountants all books and records of the indemnified party
relating to such proceedings or litigation, and the parties hereto agree to
render to each other such assistance as they may reasonably require of each
other in order to ensure the proper and adequate defense of any such action,
suit or proceeding.
(iv) In no event shall a party defending an action, suit or proceeding
consent to the entry of any judgment or enter into any settlement of any claims
without the written consent of the other, which consent shall not be
unreasonably withheld or delayed.
(v) All claims for indemnity hereunder shall be net of any tax benefit,
insurance recovery, mitigation of damages or similar benefit. If any claims are
made by third parties against an indemnified party for which an indemnifying
party would be liable, and it appears likely that such claims might also be
covered by the indemnified party's insurance policies, the indemnified party
shall make a timely claim under such policies and to the extent that such party
obtains any recovery from such insurance, such recovery shall be offset against
any sums due from an indemnifying party (or shall be repaid by the indemnified
party to the extent that an indemnifying party has already paid any such
amounts). If the indemnified party files a claim under any insurance policy, the
indemnified party shall waive its rights of subrogation against the indemnifying
party with respect to such claim and shall use its reasonable best efforts to
cause the insured to waive its rights of subrogation against the indemnifying
party. The parties acknowledge, however, that if an indemnified party is self
insured as to any matters, either directly or through an insurance which
assesses retroactive premiums based on loss experience,
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then to the extent that the indemnified party bears the economic burden of any
claims through self insurance or retroactive premiums or insurance ratings, the
indemnifying party's obligation shall only be reduced by any insurance recovery
in excess of the amount paid or to be paid by the indemnified party in insurance
premiums.
13. MISCELLANEOUS PROVISIONS
------------------------
13.1 Expenses. The Purchaser shall pay the fees and expenses incurred by it
in connection with the transactions contemplated by this Agreement, and the
Seller shall pay the fees and expenses incurred by it in connection with the
transactions contemplated by this Agreement.
13.2 Amendment. This Agreement may be amended at any time but only by an
instrument in writing signed by the parties hereto.
13.3 Notices. All notices, demands, consents, approvals, requests and other
communications required or permitted hereby shall be in writing and shall be
deemed to have been duly and sufficiently given only if (a) personally delivered
with proof of delivery thereof (any notice or communication so delivered being
deemed to have been received at the time so delivered), or (b) sent by Federal
Express (or other similar overnight courier) (any notice or communication so
delivered being deemed to have been received only when delivered), (c) sent by
telecopy or facsimile (any notice or communication so delivered being deemed to
have been received if a copy is also delivered by one of the other means of
delivery and shall be deemed to have been received (i) on the Business Day so
sent, if so sent prior to 4:00 p.m. (based upon the recipient's time) of the
Business Day so sent, and (ii) on the Business Day following the day so sent, if
so sent on a non-Business Day or on or after 4:00 p.m. (based upon the
recipient's time) of the Business Day so sent (unless actually received by the
addressee on the day so sent)), or (d) sent by United States registered or
certified mail, postage prepaid, at a post office regularly maintained by the
United States Postal Service (any notice or communication so sent being deemed
to have been received only when delivered), in any such case addressed to the
respective parties as follows:
To Purchaser: DENNISON HYDRAULICS, INC.
00000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: Xx. Xxxxx X. Xxxx, President & CEO
Telephone: 000-000-0000
Fax No.: 000-000-0000
with a copy to: Liner Yankelevitz Sunshine & Regenstreif LLP
0000 Xxxxxxxx Xxxx., 0xx Xxxxx
Xxxxx Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxxxx, Esq.
Telephone: 000-000-0000
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Fax No.: 000-000-0000
E-mail: xxxxxxxxxxxx@xxxxxxxx.xxx
To Seller: STS OPERATING, INC.
0000 Xxxxxxx Xxxxx
Xxxxxxx, Xx 00000
Attn: Xx. Xxxxxx Xxxxxx, President
Telephone: 000-000-0000
Fax No.: 000-000-0000
WIRE INSTRUCTIONS:
-----------------
Bank: Xxxxx Fargo Bank
Location: San Francisco, California
ABA #: 000000000
Account No.: 4171606973
Beneficiary: STS Operating, Inc. Collections
or to such other address or party as either party may have furnished to the
other in writing in accordance herewith, except that notices of change of
address or addresses shall only be effective upon receipt.
13.4 Assignment. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors, heirs and permitted
assigns. Purchaser shall be free to assign this Agreement without the prior
written consent of Seller.
13.5 Counterparts. This Agreement maybe executed in any number of counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
13.6 Headings. The headings of the Sections of this Agreement are inserted for
convenience only and shall not constitute a part hereof.
13.7 Entire Agreement. This Agreement and the documents referred to herein
contain the entire understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises, warranties,
conveyances or undertakings other than those expressly set forth herein. This
Agreement supersedes any prior agreements and understandings between the parties
with respect to the subject matter contained herein.
13.8 Waiver. No attempted waiver of compliance with stay provision or condition
hereof, or consent pursuant to this Agreement, will be effective unless
evidenced by an instrument in writing by the party against whom the enforcement
of any such waiver or consent is sought.
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13.9 Governing Law; Dispute Resolution. The terms of this Agreement are governed
by construed, interpreted and enforced in accordance with the laws of the State
of Ohio without regard to choice of law principles.
13.10 Intended Beneficiaries. The rights and obligations contained in this
Agreement are hereby declared by the parties hereto to have been provided
expressly for the exclusive benefit of such entities as set forth herein and
shall not benefit, and do not benefit, any unrelated third parties.
13.11 Mutual Contribution. The parties to this Agreement and their counsel have
mutually contributed to its drafting. Consequently, no provision of this
Agreement shall be construed against any party on the grounds that such party
drafted the provision or caused it to be drafted or the provision contains a
covenant of such party.
13.12 Number and Gender. When required by the context, each number (singular and
plural) shall include all numbers and each gender shall include the feminine,
masculine and neuter.
13.13 Severability. If any provisions of this Agreement as applied to any part
or to any circumstance shall be adjudged by a court to be invalid or
unenforceable, the same shall in no way affect any other provision of this
Agreement, the application of such provision in any other circumstances or the
validity or enforceability of this Agreement.
13.14 Certain References. The term, "herein, "hereof" or "hereunder" or similar
terms used in this Agreement refer to this entire Agreement and not to the
particular provision in which the term is used. Unless otherwise stated, all
references herein to Articles, Exhibits, Sections, subsections, or other
provisions are references to Articles, Exhibits, Sections, subsections or other
provisions of this Agreement.
13.15 TIME OF THE ESSENCE. Time is of the essence in the performance of this
Agreement and all of its provisions.
13.16 Cooperation-Further Assistance. From time to time, as and when requested
by the Purchaser after the Closing, the Seller will execute and deliver, or
cause to be executed and delivered all such documents, instruments and consents
and will use their reasonable best efforts to take action as may be requested or
necessary to carry out the intent and purposes of this Agreement and to vest in
the purchase good title to, possession of and control of the Assets.
13.17 Entire Agreement; Modifications and Waivers. This Agreement, together with
all exhibits and schedules attached hereto, constitute the entire agreement
between the parties pertaining to the subject matter hereof and supersedes all
prior agreements, understandings, negotiations and discussions, whether oral or
written, of the parties. No supplement, modification or waiver of this Agreement
shall be binding unless executed in writing by the party to be bound thereby. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision hereof (whether or not similar), nor
shall such waiver constitute a continuing waiver unless otherwise expressly
provided.
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13.18 Publicity. Neither party shall issue any press release or make any public
statement regarding the transactions contemplated hereby, without the prior
approval of the other party, except, if after discussion between the parties or
their counsel, in the opinion of any party's counsel, such party is required
under any applicable law or regulation to make a public statement or
announcement, such party shall be permitted to issue the legally required
statement or announcement.
13.19 Confidentiality. In the event the transaction which is the subject of this
Agreement is not consummated, each party hereto agrees that it will return to
the other all records and other documents of such other party then in its
possession, and will not itself use or disclose, directly or indirectly to any
person, any confidential information with respect to such other party received
by it during the period prior to the termination of this Agreement.
[SIGNITURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
SELLER PURCHASER
STS OPERATING, INC. XXXXXXX HYDRAULICS, INC.
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxxxx X. Xxxx
Its: President & CEO Its: President & CEO
Dated: December 27, 2001 Dated: December 27, 2001
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