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Exhibit 10.17
ASSET PURCHASE AGREEMENT
among
B-W ACQUISITION CORP.
WATERLINK, INC.,
BLUE WATER SERVICES, INC.
and
XXXXXXXX X. XXXXXX
April 26, 1996
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TABLE OF CONTENTS
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ARTICLE I TRANSFER OF ASSETS AND ASSUMPTION OF
LIABILITIES............................................................................... 1
1.1 Transfer of Assets............................................................... 1
1.2 Assumption of Liabilities........................................................ 1
1.3 Method of Conveyance and Transfer................................................ 2
1.4 Further Assurances............................................................... 2
ARTICLE II PAYMENT OF PURCHASE PRICE................................................................. 2
2.1 Payment by Purchaser............................................................. 2
2.2 Allocation of Purchase Price..................................................... 2
2.3 Transfer Taxes................................................................... 2
ARTICLE III REPRESENTATIONS, WARRANTIES AND
AGREEMENTS OF SELLER
AND SHAREHOLDER........................................................................... 3
3.1 Organization and Standing........................................................ 3
3.2 Authority of Seller and Shareholder;
Consents......................................................................... 3
3.3 Business Relations............................................................... 4
3.4 Investments in Other Entities.................................................... 4
3.5 Title to and Condition of Subject Assets......................................... 4
3.6 Financial Statements............................................................. 4
3.7 Absence of Certain Changes....................................................... 5
3.8 Absence of Undisclosed Liabilities............................................... 6
3.9 Taxes............................................................................ 6
3.10 Indebtedness to Officers, Directors
and Shareholders................................................................. 7
3.11 Articles of Incorporation and By-Laws............................................ 7
3.12 Corporate Minutes................................................................ 7
3.13 Brokerage and Finder's Fees...................................................... 7
3.14 Accounts Receivable.............................................................. 7
3.15 Employment Matters............................................................... 8
3.16 No Defaults...................................................................... 8
3.17 Non-Trade Accounts Receivable.................................................... 8
3.18 Material Contracts............................................................... 8
3.19 Purchase Orders.................................................................. 9
(i)
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3.20 Indebtedness..................................................................... 9
3.21 Litigation....................................................................... 9
3.22 Insurance........................................................................ 9
3.23 Transactions with Officers, Etc.................................................. 10
3.24 Employees/Independent Sales Representatives...................................... 10
3.25 Trademarks, Copyrights and Similar Matters....................................... 10
3.26 Employee Benefit Plans and Other Plans........................................... 11
3.27 Environmental Matters............................................................ 12
3.28 Bank Accounts.................................................................... 14
3.29 Compliance with Laws............................................................. 14
3.30 Powers of Attorney............................................................... 14
3.31 Licenses and Rights.............................................................. 14
3.32 Schedule of Government Reports................................................... 14
3.33 Products [sic]................................................................... 14
3.34 Casualty Occurrences............................................................. 15
3.35 Inventory........................................................................ 15
3.36 Material Misstatements or Omissions.............................................. 15
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF
PURCHASER AND WATERLINK................................................................... 16
4.1 Organization and Good Standing of Purchaser
and Waterlink.................................................................... 16
4.2 Authority of Purchaser and Waterlink............................................. 16
ARTICLE V CONDITIONS PRECEDENT TO OBLIGATIONS OF
PURCHASER AND WATERLINK .................................................................. 16
5.1 Representations True............................................................. 16
5.2 All Consents Obtained............................................................ 17
5.3 Performance and Obligations...................................................... 17
5.4 Receipt of Documents by Purchaser................................................ 17
5.5 No Litigation.................................................................... 18
5.6 Delivery of Books and Records.................................................... 19
5.7 Instruments of Transfer.......................................................... 19
5.8 Confidentiality and Non-Compete Agreements....................................... 19
5.9 Absence of Changes............................................................... 19
5.10 Sublease for Property............................................................ 19
5.11 Aero-Mod/Resi-Tech Transaction................................................... 19
5.12 Non-Compete Agreement.............................................................19
(ii)
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ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF
SELLER AND SHAREHOLDER.................................................................... 20
6.1 Representations True............................................................. 20
6.2 All Consents Obtained............................................................ 20
6.3 Performance of Obligations....................................................... 20
6.4 Receipt of Documents by Seller
and Shareholder.................................................................. 20
6.5 No Litigation.................................................................... 21
6.6 Assumption of Liability.......................................................... 21
6.7 Sublease for Property............................................................ 21
6.8 Aero-Mod/Resi-Tech Transaction................................................... 21
ARTICLE VII CLOSING................................................................................... 21
ARTICLE VIII TERMINATION OF AGREEMENT.................................................................. 22
ARTICLE IX SURVIVAL OF REPRESENTATIONS
AND WARRANTIES; INDEMNIFICATION; DISPUTES................................................. 22
9.1 Survival of Representations and Warranties....................................... 22
9.2 Seller's and Shareholder's Indemnification....................................... 23
9.3 Defense of Claim................................................................. 23
9.4 Purchaser's and Waterlink's Indemnification...................................... 24
9.5 Limitations on Indemnification................................................... 24
ARTICLE X CONDUCT PRIOR TO CLOSING DATE............................................................. 25
10.1 Continuation of Business......................................................... 25
10.2 Preservation of Business......................................................... 26
10.3 Consents and Approvals........................................................... 26
ARTICLE XI ASSIGNMENT, THIRD PARTIES, BINDING EFFECT................................................. 26
ARTICLE XII EXPENSES.................................................................................. 27
ARTICLE XIII NOTICES................................................................................... 27
ARTICLE XIV REMEDIES NOT EXCLUSIVE.................................................................... 28
(iii)
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ARTICLE XV NON-COMPETITION........................................................................... 28
15.1 Non-Competition Agreement........................................................ 28
15.2 Disclosure of Confidential Information........................................... 30
ARTICLE XVI MISCELLANEOUS............................................................................. 30
16.1 Counterparts..................................................................... 30
16.2 Captions and Section Headings.................................................... 30
16.3 Possession of Acquired Assets.................................................... 30
16.4 Waivers.......................................................................... 30
16.5 Right of Inspection.............................................................. 30
16.6 Amendments, Supplements or Modifications......................................... 31
16.7 Entire Agreement................................................................. 31
16.8 Governing Laws................................................................... 31
16.9 Knowledge........................................................................ 31
16.10 Press Releases................................................................... 31
(iv)
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LIST OF EXHIBITS
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Exhibit A Sublease.................................................. 19
Exhibit B Non-Compete Agreement..................................... 19
(v)
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LIST OF SCHEDULES
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1.2 Assumed Liabilities.............................................................................1
2.2 Allocation of Purchase Price....................................................................2
3.2 Consents ...................................................................................3, 17
3.7 Absence of Certain Changes .....................................................................5
3.8 Undisclosed Liabilities ........................................................................6
3.15 Employment Matters ............................................................................ 8
3.17 Accounts Receivable ............................................................................8
3.18 Contracts ............................................................................. 8, 18, 25
3.19 Purchase Orders ................................................................................9
3.20 Indebtedness ...................................................................................9
3.22 Insurance ..................................................................................9, 10
3.23(a) Transactions with Officers, Etc............................................................... 10
3.23(b) Transactions with Officers, Etc............................................................... 10
3.24(b) Transactions With Officers, Etc. ............................................................. 10
3.24(a) Independent or Outside Sales Representatives of Seller.........................................10
3.25 Trademarks, Service Marks, Trade Names
and Copyrights ................................................................................11
3.26 Employee Benefit and Other Plans ..............................................................12
3.27(h) Environmental Matters .........................................................................13
3.28 Bank Accounts .................................................................................14
3.31 Licenses and Rights ...........................................................................14
(vi)
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3.33 Products and Services......................................................................... 15
3.34 Casualty Occurrences.......................................................................... 15
(vii)
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ASSET PURCHASE AGREEMENT
------------------------
THIS AGREEMENT ("Agreement") is made this 26th day of April, 1996,
among B-W ACQUISITION CORP., a Delaware corporation ("Purchaser"), BLUE WATER
SERVICES, INC., a Kansas corporation ("Seller"), WATERLINK, INC., a Delaware
corporation ("Waterlink"), and XXXXXXXX X. XXXXXX, sole shareholder of Seller
("Shareholder").
R E C I T A L:
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Purchaser desires to purchase, and Seller and Shareholder desire to
sell to Purchaser, all of the business, assets, and goodwill of Seller, except
as otherwise provided in this Agreement,
NOW, THEREFORE, Purchaser, Waterlink, Seller and Shareholder agree as
follows:
ARTICLE I
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TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES
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1.1 TRANSFER OF ASSETS. On the terms and subject to the conditions in
this Agreement, except as set forth below, Seller will convey, transfer, assign
and deliver to Purchaser on the Closing Date (defined below) all of the
business, assets, and goodwill owned or used by Seller on the Closing Date in
the conduct of business of Seller (the "Business") of every kind and
description, wherever located, known or unknown, tangible or intangible,
including, without limitation, all property, real, personal or mixed, cash on
hand and in accounts, accounts receivable, securities, deposits on contractual
obligations or otherwise, claims and rights under contracts and leases,
licenses, customer lists, trade secrets, tax refund claims and all other pending
claims and other choses in action, exclusive rights to use the name Blue Water
Services, Inc. any derivative or combination thereof and all other names or
slogans used by Seller in connection with the Business or its products, all
contracts, all product catalogs and other advertising materials, all files,
books and records of Seller relating to the Business, and all computer programs,
all as the same exist on the Closing Date (collectively, the "Subject Assets").
1.2 ASSUMPTION OF LIABILITIES. Subject to the conditions in this
Agreement, on the Closing Date, Purchaser will deliver an undertaking in form
and substance reasonably satisfactory to Shareholder, Seller and its counsel
pursuant to which Purchaser will assume and agree to pay, perform and discharge
(i) all obligations and liabilities of Seller to the extent reflected or
reserved against in Seller's balance sheet as of December 31, 1995, included in
the Financial Statements (defined below), (ii) all obligations and liabilities
of Seller arising after the Closing Date under any contracts, agreements,
instruments and arrangements listed on SCHEDULE 1.2 to this Agreement and (iii)
all current liabilities of Seller arising after the date of such balance sheet
in the ordinary course of business and not in violation of this Agreement
PROVIDED, HOWEVER, that Purchaser will not assume any liability of Seller
incurred or arising in connection with (i) any tax obligations of Seller or
Shareholder of any nature whatsoever (including penalties, interest and
additions to tax); (ii) any
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product liability claims related to services rendered or products shipped or in
finished goods inventory as of the close of business on the Closing Date; (iii)
any liabilities related to any violation of any Environmental Laws (defined
below) arising prior to the close of business on the Closing Date; (iv) any
liabilities related to Seller's Benefit Plans (defined below); and any workers
compensation or related claims made or to be made by Xxxx Xxxxx. Any of the
foregoing notwithstanding, Purchaser will not assume any other obligations or
liabilities of Seller or Shareholder, including, without limitation, those
arising out of or in connection with the negotiation and preparation of this
Agreement or the consummation of the transactions provided for in this Agreement
which shall be borne personally by Shareholder. The liabilities to be assumed by
Purchaser hereunder are collectively referred to as the "Assumed Liabilities."
1.3 METHOD OF CONVEYANCE AND TRANSFER. The conveyance, transfer and
delivery of the Subject Assets will be effected by bills of sale, endorsements,
assignments and other instruments of transfer, all in such form as Purchaser
reasonably requests, vesting in Purchaser good and marketable title to the
Subject Assets, free and clear of all covenants, conditions, easements, liens,
charges, security interests, adverse claims, encumbrances, demands or other
title defects or restrictions of any kind.
1.4 FURTHER ASSURANCES. Seller and Shareholder, at any time and from
time to time after the Closing Date, upon request of Purchaser, will do,
execute, acknowledge and deliver, all such further acts, deeds, assignments,
transfers, conveyances, powers of attorney and assurances as may be reasonably
required for the better conveying, transferring, assigning, and delivering to
Purchaser, or to its successors and assigns, and for aiding and assisting in
collecting and reducing to possession, all the Subject Assets.
ARTICLE II
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PAYMENT OF PURCHASE PRICE
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2.1 PAYMENT BY PURCHASER. At the Closing, Purchaser will pay to Seller
by certified or bank check in immediately available funds or by wire transfer to
an account designated by Seller, One Hundred Thousand Dollars ($100,000) payable
to Seller in full payment for the Subject Assets.
2.2 ALLOCATION OF PURCHASE PRICE. The parties agree to allocate the
purchase price, including the Assumed Liabilities and all other capitalizable
costs, among the Subject Assets for all purposes (including Financial accounting
and tax purposes) in accordance with the individual fair market value of the
Subject Assets as set forth on SCHEDULE 2.2, which schedule shall be prepared by
Purchaser and agreed to by Seller prior to the Closing Date. Purchaser and
Seller shall file an IRS Form 8594 in accordance with SCHEDULE 2.2 as required
by Section 1060 of the Internal Revenue Code of 1986, as amended. Seller's tax
identification number is ___________ [sic] and Purchaser's tax identification
number is 00-0000000.
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2.3 TRANSFER TAXES. All applicable sales and transfer taxes of any
nature whatsoever, if any, arising by reason of the transfer of the Subject
Assets under this Agreement will be borne by Seller or Shareholder, as the case
may be.
ARTICLE III
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REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF SELLER
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AND SHAREHOLDER
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Seller and Shareholder, jointly and severally, represent and warrant
to, and agree with, Purchaser and Waterlink as follows:
3.1 ORGANIZATION AND STANDING.
(a) Seller is a corporation duly organized, validly existing
and in good standing under the laws of the state of Kansas. Seller does
not own any voting stock or other capital stock of any other
corporation, directly or indirectly, nor is Seller directly or
indirectly a partner in any general partnership. Seller has full power
and authority to carry on its business as and where now conducted and
to own or lease and operate its properties at and where now owned or
leased and operated by it, and is duly qualified to do business and is
in good standing in every jurisdiction in which the property owned,
leased or operated by it, or the nature of the business conducted by
it, makes such qualification necessary.
(b) Seller is not qualified to do business as a foreign
corporation or partnership in any foreign jurisdiction and does not do
business or own or leases property in any foreign jurisdiction.
3.2 AUTHORITY OF SELLER AND SHAREHOLDER; CONSENTS. The execution,
delivery and consummation of this Agreement by Seller has been duly authorized
by the board of directors and the shareholder(s) of Seller in accordance with
all applicable laws and the Articles of Incorporation and By-Laws of Seller, and
at the Closing Date no further corporate action will be necessary on the part of
Seller or Shareholder to make this Agreement valid and binding on Seller and
Shareholder and enforceable against Seller and Shareholder in accordance with
its terms. The execution, delivery and consummation of this Agreement by Seller
and Shareholder (as applicable) (i) is not contrary to the Articles of
Incorporation or By-Laws of Seller, (ii) does not now and will not, with the
passage of time, the giving of notice or otherwise, result in a violation or
breach of, or constitute a default under, any term or provision of any
indenture, mortgage, deed of trust, lease, instrument, order, judgment, decree,
rule, regulation, law, contract, agreement or any other restriction to which
Seller or Shareholder is a party or to which Seller or Shareholder or any of its
or his assets are subject or bound, (iii) will not result in the creation of any
lien or other charge upon any assets of Seller, and (iv) will not result in any
acceleration or termination of any loan or security interest agreement to which
Seller is a party or to which Seller or any of its assets is subject or bound.
Except as may be listed on SCHEDULE 3.2, no approval or consent of any person,
firm or other entity or governmental body (including in connection with any
customer bids or proposals) is or was required to be obtained
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by Seller or Shareholder for the authorization of this Agreement or the
consummation by either Seller or Shareholder of the transactions contemplated in
this Agreement.
3.3 BUSINESS RELATIONS. Seller is not required, in the ordinary course
of business, to provide any bonding or any other financial security arrangements
in connection with any transactions with any customers or suppliers. Seller has
not received any notice of any disruption (including, without limitation,
delayed deliveries or allocations by suppliers) in the availability of any
materials or products used in its business and has no reason to believe that any
such disruption will occur. There are no sole source suppliers of goods,
equipment or services used by Seller (other than public utilities) with respect
to which practical alternative sources of supply are unavailable.
3.4 INVESTMENTS IN OTHER ENTITIES. Seller does not have any direct or
indirect equity interest, or debt convertible into any equity interest, in any
entity, corporation or otherwise, or any right, warrant or option to acquire any
such interest.
3.5 TITLE TO AND CONDITION OF SUBJECT ASSETS. Seller owns and possesses
and will own and possess as of the Closing Date all right, title and interest in
and to the Subject Assets, including, without limitation, good and merchantable
title to the Subject Assets, in each case free and clear of all conveyances,
conditions, easements, liens, charges, security interests, adverse claims,
encumbrances, encroachments, reservations, easements, limitations, servitudes,
other title defects or restrictions of any nature. Seller has and will have as
of the Closing Date the right, power and authority to convey, transfer, lease,
assign and deliver the Subject Assets free and clear of any title defect or
restriction, including, without limitation, those enumerated in this SECTION
3.5. All tangible Subject Assets are in Seller's possession or under its
control, and all equipment included in the Subject Assets is in good operating
condition and repair, subject only to routine maintenance and ordinary wear and
tear consistent with the age and use thereof, and is fit and adequate for the
purposes intended. Seller enjoys peaceful and quiet possession of the Subject
Assets pursuant to or by all of the deeds, bills of sale, leases, licenses and
other agreements under which it is operating its business. The Subject Assets
comprise all assets of any kind or character necessary for the operation of
Seller's business as it is presently conducted.
3.6 FINANCIAL STATEMENTS. Prior to the date of this Agreement, Seller
provided Purchaser with the following financial statements of Seller and will
provide to Purchaser monthly financial statements for the months after December
31, 1995 (the "New Monthly Financial Statements") as soon as practicable after
the end of each month, to wit: __________________ [sic] (the "Seller's Financial
Statements").
The Seller's Financial Statements each respectively (i) have been (and,
with respect to the New Monthly Statements, when delivered, will have been)
prepared in accordance with generally accepted accounting principles applied on
a consistent basis during the periods, (ii) present fairly (and, with respect to
the New Monthly Statements, when so delivered, will present fairly), in all
material respects, each Seller's financial position, results of its operations
and cash flows at and for
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the periods therein specified, (iii) are (and, with respect to the New Monthly
Statements, when so delivered, will be) true and complete, (iv) are (and, with
respect to the New Monthly Statements, when so delivered, will be) consistent
with the books and records of Seller, and (v) with respect to all of the
unaudited Seller's Financial Statements, include (and, with respect to the New
Monthly Statements, when so delivered, will include) all adjustments, consisting
only of normal recurring adjustments, required for a fair presentation. The
Seller's Financial Statements will be deemed to include any accompanying notes
and schedules.
3.7 ABSENCE OF CERTAIN CHANGES. Since December 31, 1995, Seller has
actively conducted its business in the ordinary and regular course consistent
with past practice. Since such date, there has not been any material adverse
change in the business, condition (financial or otherwise), assets, liabilities,
results of operations or prospects of Seller. To Seller's knowledge, there has
not occurred any event or governmental regulation or order which could cause
such a change, nor to Seller's knowledge, is the occurrence of any such event,
regulation or order threatened. Except as set forth on SCHEDULE 3.7, without
limiting the generality of the foregoing, since December 31, 1995, there has not
been:
(a) Any increase made or promised in the compensation or other
remuneration payable or to become payable by Seller to any of its
employees, agents or partners;
(b) Any mortgage or pledge of, or any other lien, charge or
encumbrance of any kind, on any of the assets, tangible or intangible,
of Seller, except in the ordinary course of business;
(c) Any sale or transfer of any assets, except for sales of
inventory in the ordinary course of business, or settlement,
cancellation or release of any indebtedness owing to Seller or of any
other claims of Seller, except in the ordinary course of business;
(d) Any sale, license, assignment or transfer by Seller or
Shareholder of any patents, trademarks, trade names or other similar
intangible assets;
(e) Any amendments or termination of any material contract,
agreement or license to which Seller is a party or to which Seller or
any of its assets is subject or bound;
(f) Any commitment made (through negotiations or otherwise) or
any liability incurred to any labor organization by Seller;
(g) Any payment, declaration or setting aside by Seller of
dividends or a return of capital or any distribution by Seller of any
cash or other assets to any of its shareholders in redemption of or as
the purchase price for any of its capital stock or in discharge or
cancellation in whole or in part of any indebtedness owing (whether in
payment of principal, interest or otherwise) to any of its
shareholders;
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(h) Any discharge or satisfaction by Seller of any lien,
encumbrance, obligation or liability (accrued, absolute, fixed or
contingent), other than those shown on the December 31, 1995 balance
sheet of the Seller's Financial Statements that have been discharged or
satisfied in the ordinary course without acceleration and other than
those incurred and discharged in the ordinary course of business
consistent with past practice;
(i) Any transaction entered into by Seller other than in the
ordinary course of business consistent with past practice;
(j) Any institution by Seller of a bonus, stock option,
profit-sharing, pension plan or similar arrangement or any changes in
any such existing plans;
(k) Any incurrence (whether discharged or not) of any
obligation or liability (whether accrued, absolute, fixed or
contingent) other than current liabilities incurred, and obligations
entered into, in the ordinary course of business consistent with past
practice;
(l) Any adverse change in collection loss experience;
(m) Any material loss, damage or destruction to any of
Seller's properties (whether or not covered by insurance) or any labor
trouble; or
(n) Any change in accounting principles or practices from
those utilized in the preparation of the Seller's Financial Statements.
3.8 ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth on the
December 31, 1996 balance sheet of the Seller's Financial Statements, or on
SCHEDULE 3.8, Seller is not obligated for, nor are any of its assets or
properties subject to, any liabilities or adverse claims or obligations,
absolute or contingent, except those incurred in the ordinary course of business
since December 31, 1995, and Seller is not in default with respect to any terms
or conditions of any material liability or obligation. There are no facts known
to Seller that might reasonably serve as a basis, in whole or in part, for any
material liabilities or obligations not disclosed in this Agreement, in the
Seller's Financial Statements or in the Schedules.
3.9 TAXES.
(a) Seller has filed on a timely basis (or will file when due)
all income, franchise, sales, withholding and other tax returns and
reports of every nature required by law to be filed by it accurately
reflecting all taxes owing to (including any taxes required to be
withheld and paid over to) the United States or any other government or
any government subdivision, state or local, or any other taxing
authority, and has paid in full, or in the case of taxes not yet due
and payable, made adequate provision for the payment of, all taxes
(including penalties, interest and additions to tax) for which it has
or may have liability,
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including, without limitation, withholding taxes and taxes payable to
any jurisdiction by reason of the transfer of the Subject Assets
pursuant to this Agreement. Seller has no knowledge of any unassessed
tax deficiency proposed or threatened against Seller as a result of the
operation of its business or otherwise. There are no liens on the
Subject Assets as a result of any tax liabilities except for taxes not
yet due and payable. There are, and after the date of this Agreement
will be, no tax deficiencies (including penalties, interest and
additions to tax) of any kind assessed against or relating to Seller
with respect to any taxable periods ending on or before, or including,
the Closing Date of a character or nature that would result in liens or
claims on any of the Subject Assets or on Purchaser's title to or use
of the Subject Assets, or that would result in any claim against
Purchaser.
(b) There are no outstanding agreements or waivers extending
the statutory period of limitations applicable to any federal, state,
local, or foreign tax return of any nature whatsoever of Seller for any
period. The federal income tax returns of Seller have never been
audited by the Internal Revenue Service. No state, local or foreign
taxing authority has audited any tax return or report filed by Seller
for any taxable period. Seller has furnished to Purchaser complete and
correct copies of all federal, state and foreign tax returns filed by
Seller for each of its fiscal years beginning after January 1, 1990.
Seller has furnished to Purchaser complete and correct copies of all
audit reports received by Seller from the U.S. Treasury Department, or
from any state, local or foreign taxing authority, with respect to the
audit of any federal, state, local or foreign tax return for any
taxable period beginning after January 1, 1990.
3.10 INDEBTEDNESS TO OFFICERS, DIRECTORS AND SHAREHOLDERS. Seller is
not indebted to any of its current or former shareholders, officers or directors
(or to members of their immediate families) in any amount whatever other than
for salaries payable or for expenses incurred on behalf of Seller in the
ordinary course of business.
3.11 ARTICLES OF INCORPORATION AND BY-LAWS. True, accurate and complete
copies of the Articles of Incorporation and By-laws of Seller, together with all
amendments thereto, have been delivered to Purchaser or its counsel.
3.12 CORPORATE MINUTES. Seller has furnished or made available to
Purchaser and its counsel the corporate record books of Seller and the same are
accurate and complete and reflect all resolutions adopted and all actions taken,
authorized or ratified by the shareholders and directors of Seller. Copies of
all corporate minutes of meetings held and of all written actions taken after
the date of this Agreement will be furnished to Purchaser promptly, and in all
events, prior to the Closing Date.
3.13 BROKERAGE AND FINDER'S FEES. No shareholder, officer, director or
agent of Seller has incurred any liability to any broker, finder or agent for
any brokerage fees, finder's fees, or commissions with respect to the
transactions contemplated by this Agreement.
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3.14 ACCOUNTS RECEIVABLE. Seller has previously delivered to Purchaser
an aging schedule as of a date not more than thirty (30) days prior to the date
of this Agreement, which is true, correct and complete, of the accounts
receivables of Seller as of that date. Seller will update the list as of a date
not more than five (5) days prior to the Closing Date. The reserves for doubtful
receivables and uncollectible accounts that will be reflected on the books of
Seller as of the Closing Date will not exceed ____ percent (__%) [sic] of the
then aggregate accounts receivable, and will be sufficient to provide for any
losses that may arise in connection with the collection of the accounts
receivable. The accounts receivable as reflected on the books of Seller as of
the Closing Date, net of such reserves, will be fully collectible in the
ordinary course of business within ninety (90) days after the Closing Date,
without resort to legal proceedings. All of such accounts receivable will
represent valid claims that have arisen in the ordinary course of business.
3.15 EMPLOYMENT MATTERS.
(a) Seller is not a party to, participant in, or bound by, any
collective bargaining agreement, union contract or employment, bonus,
deferred compensation, insurance, pension, profit sharing or similar
personnel arrangement, any stock purchase, stock option or other stock
plans or programs or any employee termination or severance arrangement.
(b) The employment by Seller of any person (whether or not
there is a written employment agreement) may be terminated for any
reason whatsoever not inconsistent with current law, without penalty or
liability of any kind.
(c) There are no administrative or judicial proceedings
against Seller active, pending or, to the best of Seller's and
Shareholder's knowledge, threatened under Title VII of the Civil Rights
Act of 1964, the Age Discrimination in Employment Act, the Fair Labor
Standards Act, the Occupational Safety and Health Act, the National
Labor Relations Act or any other foreign, federal, state or local law
(including common law), ordinance or regulation relating to employees
of either Seller.
(d) Except as set forth on SCHEDULE 3.15 the relation of
Seller with its respective employees is good and there are no pending
or, to the best of Seller's and Shareholder's knowledge, threatened
labor difficulties.
3.16 NO DEFAULTS. Seller is not in default (nor is any such default
alleged to exist) under the terms of any written or oral contract, agreement,
lease, license, mortgage, deed of trust, note, guaranty, instrument or
understanding (collectively, "Contracts") to which it is a party or to which any
of its assets, business or operations is subject, nor has any condition or event
occurred, nor, to Seller's knowledge is any condition or event threatened,
which, after notice or the passage of time, or both, would constitute a default
under any Contract. To Seller's knowledge, no such default, condition or event
exists or is alleged to exist with respect to the performance of any obligation
of any other party to any of the Contracts.
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3.17 NON-TRADE ACCOUNTS RECEIVABLE. SCHEDULE 3.17 is a true and correct
list of all of Seller's accounts receivable (other than trade accounts
receivable).
3.18 MATERIAL CONTRACTS. SCHEDULE 3.18 is a true and correct list of
each Contract to which each Seller is a party or by which any of its assets,
businesses or operations is bound or affected. SCHEDULE 3.18 includes a
description of any consents or approvals required of third parties under the
terms of such Contracts for the consummation of the transactions contemplated by
this Agreement. SCHEDULE 3.18 excludes any Contract that may be cancelled by
Seller on thirty (30) days' notice or less without incurring a liability or
obligation on the part of Seller for such cancellation and which is not material
to its business, condition (financial or otherwise), assets, liabilities,
results of operations or prospects. A true, correct and complete copy of each
written, and a description of each oral, Contract, so listed has been delivered
to Purchaser or its counsel.
3.19 PURCHASE ORDERS. SCHEDULE 3.19 is a true and correct list of all
purchase orders under which each Seller is or will become obligated to pay any
particular vendor an aggregate sum in excess of One Thousand Dollars ($1,000).
3.20 INDEBTEDNESS. SCHEDULE 3.20 is a true and complete list of all
indebtedness, including, without limitation, trade accounts payable in excess of
One Thousand Dollars ($1,000) owed or to be owed by Seller, including a
description of the terms of payment, and, if such indebtedness is secured, a
description of all properties or other assets pledged, mortgaged or otherwise
hypothecated (voluntarily or involuntarily) as security.
3.21 LITIGATION. There are no administrative or judicial proceedings to
which Seller or Shareholder is a party or, to the best of Seller's and
Shareholder's knowledge, to which it or he is threatened to be made a party
which relate, directly or indirectly, to any of the Subject Assets, including,
without limitation, proceedings that could affect title to or interests in the
Subject Assets. There is no action, suit, claim, demand, arbitration or other
proceeding or investigation, administrative or judicial, pending or, to the best
of Seller's and Shareholder's knowledge, threatened against or affecting Seller
or any of its assets, including, without limitation, any relating to so-called
product liability, which, if adversely determined or resolved, would have an
adverse effect on the Business, Subject Assets, condition (financial or
otherwise), results of operations or prospects of any Seller, or any provisions
of, or the validity of, or rights under, any leases or other operating
agreements, licenses, permits or grants of authority of Seller. Neither Seller
nor Shareholder have received notice that it or he is the subject of any
governmental investigation and neither Seller nor Shareholder is subject to, nor
is he or it in default with respect to, any order, writ, injunction or decree of
any court, or of any federal, state, local or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign.
3.22 INSURANCE. SCHEDULE 3.22 is a true and correct list of all the
policies of insurance covering the business, properties and assets of Seller
presently in force (including as to each (i) risk insured against, (ii) name of
carrier, (iii) policy number, (iv) amount of coverage, (v) amount of premium,
(vi) expiration date and (vii) the property, if any, insured, indicating as to
each whether it insures on an "occurrence" or a "claims made" basis. The
insurance described on SCHEDULE 3.22
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does and will, on the Closing Date, insure Seller in the amounts and against
such perils as are generally maintained for comparable businesses. All of the
insurance policies set forth on SCHEDULE 3.22 are in full force and effect and
all premiums, retention amounts and other related expenses due have been paid,
and Seller has not received any notice of cancellations with respect to any of
the policies. Seller has not been refused any insurance by any insurance carrier
to which it has applied for insurance during the last five (5) years. There are
no circumstances existing which would enable any insurer to avoid liability
under any of Seller's policies.
3.23 TRANSACTIONS WITH OFFICERS, ETC.
(a) Except for certain relationships with Aero-Mod more fully
described on SCHEDULE 3.23(a) hereto, Seller or Shareholder does not
have any ownership interest in any entity that has any existing
contractual relationship, oral or written, or other business
relationship with Seller or Shareholder.
(b) SCHEDULE 3.23(b) is a true and correct list of all
Contracts (oral or written), including, but not limited to, any loans
or leases, to which Seller is a party and to which any of the officers,
directors or other employees or shareholders of Seller, or members of
their immediate families or other corporations, partnerships or other
entities in which any of them has a material interest, is also a party.
SCHEDULE 3.23(b) includes a list of indebtedness of any such person or
entity to Seller.
(c) Neither Seller nor any officer, director, employee or
shareholder of Seller, or members of their immediate families or other
corporations, partnerships or other entities in which any of them has a
material interest, has any direct or indirect interest in any
competitor, supplier or customer of Seller or in any person, firm or
entity from whom or to whom Seller leases any property (other than the
property subject to the Sublease (as defined in Section 5.10) or in any
other person, firm or entity with whom Seller transacts business of any
nature.
3.24 EMPLOYEES/INDEPENDENT SALES REPRESENTATIVES.
(a) SCHEDULE 3.24(a) is a true and correct list of all
employees of Seller (as used in this Agreement, the term "employees"
includes employees, salespersons, consultants, agents, and all other
persons associated with the Seller), their accrued vacation and sick
pay, the nature of their duties and the date and amount of their last
increase in compensation. A true, correct and complete copy of each
written employment contract and a description of each oral employment
agreement with any employee has been delivered to Purchaser or its
counsel.
(b) SCHEDULE 3.24(b) is a true and correct list of all
independent or outside sales representatives of Seller ("Independent
Sales Representatives"), the length of time they have been acting in
such capacity and the amount of sales attributable to each Independent
Sales Representative for each of the last three years (or such shorter
period of time if acting in such
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capacity for less than three years). A true, correct and complete copy
of each written agreement and a description of each oral agreement with
respect to each Independent Sales Representative has been delivered to
Purchaser or its counsel.
3.25 TRADEMARKS, COPYRIGHTS AND SIMILAR MATTERS.
(a) Seller has never been charged with infringement or
violation of any patent, trademark, service xxxx, trade name or
copyright. Seller is not using nor has in any way made use of any
patentable or unpatentable invention, or any confidential information
or trade secret, of any former employer of any present or past employee
of Seller. All patents, trademarks, service marks, trade names and
copyrights (the "Specified Items"), and all applications or
registrations (including those whose use is limited to one or more
states of the United States), owned or used by Seller (in connection
with the Business or Subject Assets) are listed on SCHEDULE 3.25 and,
to the extent indicated, have been duly registered in, filed in or
issued by the United States Patent Office or the corresponding agency
or office of each of such states. Except as indicated on SCHEDULE 3.25,
which Schedule shall include, without limitation, the Exclusive License
(as defined below) Seller is the sole and exclusive owner of, or has
the sole and exclusive rights to use, the Specified Items except for
the rights of licensees (whose names are listed on SCHEDULE 3.25) or as
specified on such Schedule. Except as set forth on SCHEDULE 3.25,
Seller does not use any of the Specified Items by consent of any other
party and the same are free and clear of any attachments, liens,
claims, encumbrances or agreements. Except as listed on SCHEDULE 3.25,
there are no claims or demands of any other person, firm or corporation
pertaining to any of the Specified Items, and no proceedings have been
instituted, are pending or, to the knowledge of Seller or Shareholder,
are threatened which challenge the right of Seller in respect of any of
the Specified Items. None of the Specified Items infringes on, or, to
the knowledge of Seller or Shareholder, is being infringed on by
others, and none of the Specified Items is subject to any outstanding
order, decree, judgment, stipulation or agreement restricting the scope
of its use.
(b) Seller is the sole and exclusive owner, and has the full
right, power and authority to transfer to Purchaser the exclusive use
of, the name "Blue Water Services, Inc." Seller does not use the name
by consent of any other person or entity, and Seller owns its name free
and clear of any attachments, liens, claims, encumbrances or
agreements. There are no claims or demands of any other person or
entity pertaining to the use of the name and no proceedings have been
instituted or, to the knowledge of Seller or Shareholder, are
threatened, which challenge the right of Seller in respect of its name;
and the use by each Seller of its name does not infringe on or, to the
knowledge of Seller, is not being infringed on by others, and is not
subject to any outstanding order, decree, judgment, stipulation or
agreement restricting the scope of its use.
(c) True, correct and complete copies of all patents,
trademarks, service marks, trade names and copyrights, and of all
related applications or registrations, that are listed on SCHEDULE 3.25
have been delivered to Purchaser or its counsel.
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3.26 EMPLOYEE BENEFIT PLANS AND OTHER PLANS.
(a) For purposes of this Section 3.26, the following
definitions apply:
(i) "Benefit Plan" means each deferred compensation,
equity compensation, pension, profit-sharing, retirement and
welfare plan, each plan, arrangement or policy for the
provision of bonuses and/or severance benefits, each "employee
benefit plan" (as defined in ERISA Section 3(3)) and each
fringe benefit plan that a Controlled Group Member maintains,
contributes to, has liability with respect to, or has an
obligation to contribute to;
(ii) "Controlled Group Member" means Seller and each
other person or entity required to be aggregated with Seller
under Code Section 414(b), (c), (m) or (o); and
(iii) "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
(b) No Controlled Group Member has directly or indirectly
acted in any manner or incurred any obligation or liability, and will
not directly or indirectly act in any manner in the future or incur any
obligation or liability in the future with respect to any Benefit Plan
which has or could give rise to any liens on any of the Subject Assets,
or which could result in any liability or obligation to Purchaser,
whether arising out of the establishment, operation, administration or
termination of such Benefit Plans or the transactions contemplated by
this Agreement.
(c) No Controlled Group Member directly or indirectly
maintains, sponsors, contributes to, has an obligation to contribute to
or has liability with respect to, and has not directly or indirectly
maintained, sponsored, contributed to or had an obligation to
contribute to at any time within the ten (10) year period ending on the
Closing Date, any Benefit Plan which is subject to Title IV of ERISA
(including, without limitation, any multi employer plan subject to the
requirements of Subtitle E of such Title).
(d) SCHEDULE 3.26 is a true and correct list of all Benefit
Plans that Seller, directly or indirectly, sponsors, maintains or
contributes to or has, directly or indirectly, sponsored, maintained,
or had an obligation to contribute to at any time within the five (5)
year period ending on the Closing Date.
(e) Each Controlled Group Member has timely provided or will
timely provide all notices and any continuation of health benefit
coverage (including, without limitation, medical and dental coverage)
required to be provided to employees, former employees or the
beneficiaries or dependents of such employees or former employees,
under Part 6 of Subtitle B of Title I of ERISA or Code Section 4980B to
the extent such notices and continuation of health benefit coverage are
required to be provided by reason of the events
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occurring prior to or on the Closing Date or by reason of the
transactions contemplated by this Agreement.
3.27 ENVIRONMENTAL MATTERS.
(a) There have been no actual or threatened "releases" of
"hazardous substances" "hazardous or infectious wastes," hazardous
materials," toxic substances," pollutants, contaminants, asbestos or
petroleum or petroleum-based products ("Hazardous Substances") into the
"environment" at any real property "owned" or "operated," in whole or
in part, by Seller or Shareholder as those terms are used in any
federal, state or local law, regulation, permit, agreement, rule or
order relating to the environment or health and safety matters,
including, but not limited to, the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. Section 9601, ET
SEQ. ("CERCLA") Resource Conservation and Recovery Act (42 U.S.C.
Section 6901 ET SEQ.) ("RCRA"), the Clean Water Act (33 U.S.C. Section
1251 ET SEQ.), the Federal Water Pollution Control Act (33 U.S.C.
Section 1251 ET SEQ.), the Clean Air Act (42 U.S.C. Section 7401 ET
SEQ.), the Toxic Substances Control Act (15 U.S.C. Section 2601 ET
SEQ.), the Emergency Planning and Community Right-to-Know Act (42
U.S.C. Section 11001 ET SEQ.) anD the Occupational Safety and Health
Act (29 U.S.C. Section 651 ET SEQ.), all as amended (collectively,
"Environmental Laws");
(b) There has been no "disposal" of "solid waste" as those
terms are used in RCRA at any real property owned or operated by Seller
or Shareholder;
(c) No real property owned or operated by Seller or
Shareholder poses an "imminent and substantial endangerment to health
or the environment" within the meaning of Sections 7002 and 7003 of
RCRA or to the public health and safety within the meaning of common
law and statutory provisions relating to nuisances;
(d) Seller nor Shareholder has arranged with another for
disposal or treatment, or arranged with a transporter for transport for
disposal or treatment of Hazardous Substances generated by it at a site
in violation of Environmental Laws where there has been an actual or
threatened release of Hazardous Substances into the environment;
(e) Neither Seller nor Shareholder is presently in violation
of, and have not previously violated, any Environmental Laws;
(f) Seller and Shareholder has obtained all permits,
registrations, plan approval and other governmental authorizations
("Governmental Authorizations") necessary under Environmental Laws to
transact its business at all locations and in the manner such business
is presently conducted and all such Governmental Authorizations are
unexpired and in good standing, and Seller or Shareholder is in full
and complete compliance with all of the terms and conditions of such
Governmental Authorizations;
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(g) Except as disclosed on Schedule 3.27(h), Seller or
Shareholder has not, during the past five (5) years violated or failed
to comply with any governmental authorizations or permits, and, except
as set forth on Schedule 3.27(h) there have been no fines, penalties or
levies imposed on Seller or Shareholder for any such violation or
failure to comply.
(h) Seller nor Shareholder has received an order, complaint,
claim, notice of violation, citizen suit demand or other communications
("Violation"), oral or written, asserting that he or it is in violation
or has violated any provisions of Environmental Laws, and Seller nor
Shareholder knows of any pending or threatened investigation for any
such alleged Violation; and
(i) Seller and Shareholder do not and have not permitted any
third party to use, manufacture, generate, treat, dispose of, transport
or otherwise manage or handle Hazardous Substances on or off-site of
any of the real property.
3.28 BANK ACCOUNTS. SCHEDULE 3.28 is a true and correct list of the
name of each bank, savings and loan, or other financial institution in which
Seller has an account or safe deposit box, the names of all persons authorized
to draw on each account or to have access to each box, the number of signatures
required to be given for a withdrawal, a description of the type of account and
the balance of each account as of the most recent statement.
3.29 COMPLIANCE WITH LAWS. To the best of Seller's knowledge, Seller
has complied in all material respects with all laws, regulations, rules and
orders of any governmental department or agency or any other commission, board,
agency or instrumentality, federal, state or local, or other requirements of law
affecting the Business and operations and is not in default under or in
violation of any provision of any federal, state or local law, regulation, rule
or order.
3.30 POWERS OF ATTORNEY. Seller has not given any power of attorney
(irrevocable or otherwise) to any person or entity for any purpose.
3.31 LICENSES AND RIGHTS. Seller possesses all franchises, licenses,
easements, permits and other authorizations from governmental or regulatory
authorities and from all other persons or entities that are necessary to permit
it to engage in the Business as presently conducted in and at all locations and
places where it is presently operating, except where the failure to possess such
would not have a material adverse effect on the Business, Subject Assets or
financial condition of Seller. Such franchises, licenses, permits and other
authorizations are listed on SCHEDULE 3.31.
3.32 SCHEDULE OF GOVERNMENT REPORTS. Seller has furnished to Purchaser
or its counsel complete copies of all reports, if any, filed since December 31,
1992, by Seller with the Department of Labor, Equal Employment Opportunity
Commission, Federal Trade Commission, Department of Justice, Occupational Safety
and Health Administration, Internal Revenue Service (other than tax returns and
standard forms relating to compensation or remuneration of employees),
Environmental Protection Agency, Securities and Exchange Commission or Pension
Benefit Guarantee Corporation, or any similar state agency.
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3.33 PRODUCTS AND SERVICES.
(a) The services rendered and/or the products sold by Seller
conforms to and meet or exceed the standards required by all applicable
laws, ordinances and regulations now in effect and, to Seller's
knowledge, there is no pending legislation, ordinance or regulation
which if adopted or enacted would have a material adverse effect on
such products or Seller's business.
(b) SCHEDULE 3.33 contains a written statement accurately
describing Seller's warranties and customer service policies and any
recurring warranty problems. Seller does not have any outstanding
contracts or proposals that depart from the warranty and customer
service policy and practice described in such Schedule. To the extent
transferrable, Seller will convey to Purchaser all its rights in
manufacturers' warranties for products sold by Seller (which will be
deemed a part of the Subject Assets). Except as may be listed on
SCHEDULE 3.33, no claims of customers or others based on an alleged or
admitted defect of material, workmanship or design or otherwise in or
in respect of any of Seller's services or products are presently
pending or, to the best of Seller's and the Shareholder's knowledge,
threatened.
3.34 CASUALTY OCCURRENCES. SCHEDULE 3.34 is a true and correct list of
occurrences during the last five (5) years of damages to persons or property
involving any defects or alleged defects in any of Seller's services or products
or their design. All such occurrences are fully and adequately covered by
paid-for insurance.
3.35 INVENTORY. The inventory of Seller consists only of items of a
quality and quantity usable and saleable in the ordinary course of business,
consistent with past practice, within Seller's normal inventory "turn"
experience and does not include any item of inventory which has previously been
written off by Seller. Items of below-standard quality and items not previously
readily saleable in the ordinary course of business have been written down in
value in accordance with generally accepted accounting principles to estimated
net realizable market values. The value at which the inventory is carried on
Seller's books reflects the lower of cost (on a FIFO basis) or estimated net
realizable market value, and is based on quantities determined by physical
count.
3.36 MATERIAL MISSTATEMENTS OR OMISSIONS. No representations or
warranties made by Seller or Shareholder in this Agreement or in any document,
statement, certificate, Schedule, chart, list, letter, compilation or other
document furnished or to be furnished to Purchaser or its counsel pursuant to
this Agreement, or in connection with the transactions contemplated under this
Agreement (collectively, the "Documents"), contain or will contain any untrue
statement of a material fact, or omit or will omit to state a material fact
necessary to make the statements of fact contained therein not misleading.
References in any Document, or in any Contract, a copy of which has been
provided to Purchaser or its counsel, to any other Document or Contract that
prior to the date of this Agreement has not been provided to Purchaser or its
counsel will not be deemed for any purposes of this Agreement to be a disclosure
of any term, provision or statement of fact of, or relating to, such other
Document or Contract.
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ARTICLE IV
----------
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND WATERLINK
---------------------------------------------------------
Purchaser and Waterlink, jointly and severally, warrant and represent
to, and agree with, Seller and the Shareholder as follows:
4.1 ORGANIZATION AND GOOD STANDING OF PURCHASER AND WATERLINK. Each of
Purchaser and Waterlink is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Each of Purchaser and
Waterlink has full power and authority to carry on its business as and where now
conducted and to own or lease and operate its properties at and where now owned
or leased and operated by it, and is duly qualified to do business and is in
good standing in every jurisdiction in which the property owned, leased or
operated by it, or the nature of the business conducted by it, makes such
qualification necessary, except where the failure to qualify would not have a
material adverse effect on the business or financial condition of Purchaser or
Waterlink, as the case may be. Other than actions taken in connection with its
organization, Purchaser has conducted no business since its organization.
4.2 AUTHORITY OF PURCHASER AND WATERLINK. The execution, delivery and
consummation of this Agreement by Purchaser and Waterlink has been or will be
duly authorized by their respective boards of directors of Purchaser in
accordance with all applicable laws and the Certificates of Incorporation and
By-laws of Purchaser and Waterlink, as the case may be, and at the Closing Date
no further corporate action will be necessary on the part of Purchaser or
Waterlink to make this Agreement valid and binding on Purchaser and Waterlink
and enforceable against Purchaser and Waterlink in accordance with its terms.
Except as has been or will be obtained from Purchaser's secured lender, no
approval or consent of any person, firm or other entity or governmental body is
or was required to be obtained by Purchaser or Waterlink for the authorization
of this Agreement or the consummation by Purchaser or Waterlink of the
transactions contemplated in this Agreement.
ARTICLE V
---------
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER AND WATERLINK
--------------------------------------------------------------
The obligations of Purchaser and Waterlink under this Agreement are, at
their option, subject to satisfaction of the following conditions at or prior to
the Closing Date:
5.1 REPRESENTATIONS TRUE. The representations and warranties of Seller
and Shareholder contained in this Agreement are true, complete and accurate in
all material respects on and as of the Closing Date to the same extent and with
the same force and effect as if made on such date, except as affected by the
transactions contemplated under this Agreement.
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5.2 ALL CONSENTS OBTAINED. All necessary approvals or consents required
to be obtained by Purchaser and Waterlink have been obtained from all local,
state and federal departments and agencies, from all other commissions, boards,
agencies and from any other person or entity whose approval or consent is
necessary to consummate the transactions contemplated under this Agreement
including, without limitation, such consents as may be listed or required to be
listed on SCHEDULE 3.2.
5.3 PERFORMANCE AND OBLIGATIONS. Seller and Shareholder have duly
performed all obligations, covenants and agreements undertaken by Seller or
Shareholder in this Agreement and have complied with all terms and conditions
applicable to them under this Agreement to be performed and complied with on or
before the Closing Date.
5.4 RECEIPT OF DOCUMENTS BY PURCHASER. Purchaser has received:
(a) a certificate executed by the President and Secretary of
Seller certifying as to the fulfillment of the matters contained in
Sections 5.1, 5.2, 5.3 and 5.5.
(b) a true and correct copy of Seller's Articles of
Incorporation, certified by the Secretary of State of Kansas as of a
date not more than five (5) days prior to the Closing Date, and a true
and correct copy of Seller's By-Laws certified by the Secretary of
Seller as of the Closing Date.
(c) a written opinion from counsel for Seller and Shareholder,
dated as of the Closing Date, addressed to Purchaser, satisfactory to
Purchaser and its counsel in form and substance, to the effect that:
(i) Seller is duly incorporated, validly existing and
is in good standing under the laws of its state of
incorporation, has full corporate power and authority to carry
on its business as and where now conducted, and to own or
lease and operate its properties at and where now owned or
leased and operated by it, and is qualified to do business as
a foreign corporation and is in good standing in every
jurisdiction in which the property owned, leased or operated
by it, or the nature of the business conducted by it, makes
such qualification necessary;
(ii) Seller has full right and lawful authority to
convey, transfer and assign the Acquired Assets to Purchaser
as provided in this Agreement, and the instruments of transfer
delivered by Seller to Purchaser at the Closing are sufficient
to transfer to Purchaser all right, title and interest of
Seller in and to the Subject Assets;
(iii) Seller has all requisite corporate power to
execute, deliver and carry out its obligations under this
Agreement and the execution, delivery and performance of this
Agreement and the other agreements to be executed, delivered
and performed pursuant to this Agreement by Seller have been
duly authorized by all requisite corporate action, including,
without limitation, the requisite authorization by the
shareholders of Seller;
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(iv) This Agreement and the other agreements to be
executed, delivered and performed pursuant to this Agreement
constitute the legal, valid and binding obligation of Seller
that is a party thereto, and are enforceable against each
Seller that is a party thereto in accordance with their
respective terms with appropriate bankruptcy exceptions;
(v) This Agreement and the other agreements to be
executed, delivered and performed pursuant to this Agreement
to which Shareholder is a party constitute the legal, valid
and binding obligation of Shareholder, and are enforceable
against Shareholder in accordance with their respective terms
with appropriate bankruptcy exceptions;
(vi) Except as set forth in this Agreement or in any
Schedule, the execution and delivery of this Agreement and the
consummation of the transactions contemplated under this
Agreement by Seller or Shareholder, as applicable (a) are not
in conflict with the Articles of Incorporation or By-Laws of
Seller, (b) do not (with or without notice or the passage of
time or both) constitute a default under, and are not in
conflict with, any Contract listed on SCHEDULE 3.18 to this
Agreement, (c) do not violate any order, judgment or decree or
any rule, regulation or law, or any other restriction known to
such counsel to which Seller or Shareholder is a party or to
which any of its or his assets are subject and (d) will not
(with or without notice or the passage of time or both) result
in the creation of any lien or any charge on or any loss of
any assets of Seller, or in the acceleration or termination of
any loan, security interest or other agreement known to such
counsel to which Seller is a party or to which any of its
assets are subject;
(vi)[sic] Except with respect to those matters as may be
disclosed in any Schedule, such counsel has no knowledge of
any action, suit, claim, demand, arbitration or other
proceeding or investigation, administrative or judicial,
pending or threatened against or affecting Seller or any of
its assets at law or in equity, or before or by any federal,
state, municipal or other governmental department or by any
other commission, board, agency or instrumentality, domestic
or foreign, that can reasonably be expected to have any
adverse effect on the business, assets, condition (financial
or otherwise), results of operations or prospects of Seller;
(vii) Such other material matters which Purchaser or its
counsel reasonably requests;
(d) certified copies of resolutions duly adopted by the
shareholders and board of directors of Seller approving this Agreement
and the transactions contemplated under it.
5.5 NO LITIGATION. No suit, action, or other proceeding is threatened
or pending before any court or governmental agency in which it will be or it is
sought to restrain or prohibit or to obtain material damages or relief in
connection with this Agreement or the consummation of this
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Agreement, or which is likely to materially and adversely affect the value of
the business or assets of Seller or of the Patents.
5.6 DELIVERY OF BOOKS AND RECORDS. Seller has delivered or made
available to Purchaser all books and records of Seller relating to or reasonably
required for the operation of the business of Seller, including, without
limitation, copies of all Contracts, financial and accounting records, files and
records relating to employees, and all related correspondence.
5.7 INSTRUMENTS OF TRANSFER. Seller and Shareholder have executed and
delivered to Purchaser good and sufficient instruments of transfer transferring
to Purchaser title to all of the Subject Assets as required pursuant to Section
1.3. The instruments of transfer must be in form and substance reasonably
satisfactory to Purchaser and its counsel, which form is usual and customary for
transferring the type of property involved under the laws of the jurisdictions
applicable to such transfer. All of such instruments must contain general
warranties of title and good right to convey.
5.8 CONFIDENTIALITY AND NON-COMPETE AGREEMENTS. Shareholder and Seller
have (i) assigned to Purchaser any and all rights of Seller under any
confidentiality agreement covering confidential information concerning Seller's
business or the Subject Assets and under any non-compete or similar agreement in
favor of Seller restricting activities competitive with those of Seller's
business, (ii) provided Purchaser with a list of such agreements and (iii)
delivered copies of such agreements of Purchaser.
5.9 ABSENCE OF CHANGES. There has been no material adverse change in
the business (financial or otherwise), assets, liabilities, results of
operations or prospects of Seller since the date of this Agreement.
5.10 SUBLEASE FOR PROPERTY. Seller shall have entered into a sublease
(the "Sublease") with Purchaser for certain real property containing
approximately five percent (5%) of thetotal [sic] square feet in that certain
building, known for street numbering purposes as 0000 X.X. Xxxxxxx 00,
Xxxxxxxxx, Xxxxxx, substantially in the form of EXHIBIT A to this Agreement.
5.11 AERO-MOD/RESI-TECH TRANSACTION. Seller and Shareholder shall have
entered into that certain Asset Purchase Agreement among A-M Acquisitions Corp.,
Waterlink, Aero-Mod Incorporated ("Aero-Mod"), Resi-Tech Inc. ("Resi-Tech"), and
Shareholder (the "Aero-Mod Purchase Agreement") and all agreements in connection
therewith and the transactions contemplated thereby shall have been consummated.
5.12 NON-COMPETE AGREEMENT. Shareholder shall have entered into a
non-compete agreement with Purchaser substantially in the form of EXHIBIT B
attached hereto.
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ARTICLE VI
----------
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER AND SHAREHOLDER
-------------------------------------------------------------
The obligations of Seller and Shareholder under this Agreement are, at
their option, subject to satisfaction of the following conditions at or prior to
the Closing Date:
6.1 REPRESENTATIONS TRUE. The representations and warranties of
Purchaser and Waterlink contained in this Agreement are true, complete and
accurate in all material respects on and as of the Closing Date to the same
extent and with the same force and effect as if made on such date, except as
affected by the transactions contemplated under this Agreement.
6.2 ALL CONSENTS OBTAINED. All necessary approvals or consents required
to be obtained by Seller and Shareholder have been obtained from all local,
state and federal departments and agencies, from all other commissions, boards,
agencies and from any other person or entity whose approval or consent is
necessary to consummate the transactions contemplated by this Agreement.
6.3 PERFORMANCE OF OBLIGATIONS. Purchaser and Waterlink have duly
performed all obligations, covenants and agreements undertaken by Purchaser or
Waterlink in this Agreement and have complied with all the terms and conditions
applicable to them under this Agreement to be performed or complied with on or
before the Closing Date.
6.4 RECEIPT OF DOCUMENTS BY SELLER AND SHAREHOLDER. Seller and
Shareholder have received:
(a) the purchase price for the Subject Assets as provided in
Section 2.1;
(b) a certificate executed by the President or CFO of
Purchaser certifying as to the fulfillment of the matters contained in
Sections 6.1, 6.2 and 6.3 of this Article;
(c) a written opinion from counsel for Purchaser and
Waterlink, dated as of the Closing Date, addressed to Seller and
Shareholder, satisfactory to Seller and Shareholder and their counsel
in form and substance, to the effect that:
(i) Each of Purchaser and Waterlink is duly
incorporated, validly existing and is in good standing under
the laws of the State of Delaware. Each of Purchaser and
Waterlink has full corporate power and authority to carry on
its business as and where now conducted, and to own or lease
and operate its properties at and where now owned or leased
and operated by it;
(ii) Each of Purchaser and Waterlink has all requisite
corporate power to execute, deliver and carry out its
obligations under this Agreement and the execution, delivery
and performance of this Agreement by Purchaser and Waterlink
have been duly authorized by all requisite corporate action;
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(iii) The execution and delivery of this Agreement and
the consummation of the transactions contemplated under this
Agreement by Purchaser and Waterlink are not in conflict with
the Certificate of Incorporation or By-laws of Purchaser and
Waterlink; and
(iv) This Agreement constitutes the legal, valid, and
binding obligation of Purchaser and Waterlink, and is
enforceable against Purchaser and Waterlink in accordance with
its terms;
(d) certified copies of resolutions duly adopted by the Board
of Directors of Purchaser and Waterlink approving this Agreement and
the transactions contemplated under it.
6.5 NO LITIGATION. No suit, action, or other proceeding is threatened
or pending before any court or governmental agency in which it will be or it is
sought to obtain material damages from Seller in connection with this Agreement
or the consummation of this Agreement.
6.6 ASSUMPTION OF LIABILITY. Purchaser shall have entered into an
Assumption Agreement, more particularly described in Section 1.2 of this
Agreement.
6.7 SUBLEASE FOR PROPERTY. Purchaser shall have entered into the
Sublease.
6.8 AERO-MOD/RESI-TECH TRANSACTION. Purchaser shall have entered into
the Aero-Mod Purchase Agreement and all agreements in connection therewith and
the transactions contemplated thereby shall have been consummated.
ARTICLE VII
-----------
CLOSING
-------
The closing of the transactions contemplated by this Agreement (the
"Closing") will take place at the offices of Benesch, Friedlander, Xxxxxx &
Aronoff P.L.L., 000 Xxxxxx Xxxxxx, 0000 XX Xxxxxxx Xxxxxxxx, Xxxxxxxxx, Xxxx
00000 on April 26, 1996, at 10:00 A.M. Cleveland, Ohio Time or such other date
mutually agreeable to the parties (the "Closing Date"). If the Closing has not
taken place by such date by reason of failure of fulfillment of any condition or
conditions contained in this Agreement, then the non-breaching party may, by
written notice to the other party, extend the Closing Date for a period of
thirty (30) days to permit fulfillment of such condition or conditions. Unless
the parties otherwise agree in writing, if the Closing has not occurred by May
31, 1996, then this Agreement will be deemed to have been terminated and
abandoned, subject to the legal rights and remedies of either party arising out
of the other party's breach of any of the provisions of this Agreement. The
parties will in good faith use all reasonable efforts to achieve the Closing.
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ARTICLE VIII
------------
TERMINATION OF AGREEMENT
------------------------
This Agreement and the transactions contemplated under it may be
terminated and abandoned at any time prior to the Closing Date:
(a) by mutual consent in writing of Purchaser, Seller and
Shareholder;
(b) by Purchaser if there has been a material
misrepresentation or breach of warranty in the representation and
warranties of Seller and Shareholder made under this Agreement or by
Seller and Shareholder if there has been a material misrepresentation
or breach of warranty in the representations and warranties of
Purchaser made under this Agreement;
(c) by Purchaser if all or a material portion of the Subject
Assets have been materially damaged or destroyed before the Closing;
(d) by Purchaser, if any of the conditions contained in
Article V, or by Seller and Shareholder, if any of the conditions
contained in Article VI, respectively, have not been fulfilled in all
material respects.
Any termination pursuant to this Article VIII will not affect the obligations of
the parties under Article XII or Section 16.5, and will be without prejudice to
the terminating party's legal rights and remedies by reason of any breach of
this Agreement occurring prior to such termination. Notwithstanding anything in
this Agreement to the contrary, if, on the Closing Date, Purchaser (i) has
complied with all of the conditions to Closing contained in Article VI, (ii) has
notified Seller and Shareholder of its intention to consummate the transactions
contemplated under this Agreement, and (iii) is ready and able to pay Seller and
Shareholder the purchase price and furnishes evidence to that effect to Seller
and Shareholder, and if the Closing does not then occur due to the refusal of
Seller and Shareholder to so consummate the transactions contemplated under this
Agreement, Purchaser will be entitled to specifically enforce the terms of this
Agreement in a court of competent jurisdiction, it being acknowledged that
monetary damages due Purchaser in such case cannot be adequately determined at
law.
ARTICLE IX
----------
SURVIVAL OF REPRESENTATIONS
---------------------------
AND WARRANTIES; INDEMNIFICATION; DISPUTES
-----------------------------------------
9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Notwithstanding the
Closing of the transactions contemplated under this Agreement, or any
investigation made by or on behalf of any party to this Agreement, the
representations and warranties of Seller, Shareholder, Purchaser and
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Waterlink contained in this Agreement or in any certificate, Schedule, chart,
list, letter, compilation or other document furnished or to be furnished
pursuant to this Agreement, will survive the Closing for a period of three (3)
years, except that the representations and warranties of Seller and Shareholder
contained in Sections 3.9, 3.26 and 3.27 will survive for so long as any
applicable statute of limitations has not expired, been suspended or been waived
or extended, and for thirty (30) days after. However, as to any breach of, or
misstatement in, any such representation or warranty as to which the
non-breaching party as given notice to the breaching party on or prior to the
expiration of the applicable period, as above set forth, the same will continue
to survive beyond said period, but only as to the matters contained in such
notice.
9.2 SELLER'S AND SHAREHOLDER'S INDEMNIFICATION. Seller and Shareholder,
jointly and severally, will indemnify and save harmless Purchaser and Waterlink
and their respective subsidiaries, shareholders, directors, officers, employees
and agents from any and all costs, expenses, losses, damages and liabilities
incurred or suffered, directly or indirectly, by any of them (including, without
limitation, reasonable legal fees and expenses) (collectively, the "damages")
resulting from or attributable to (a) the breach of, or misstatement in, any one
or more of the representations or warranties of Seller or Shareholder made in or
pursuant to this Agreement, (b) any claims, demands, suits, investigations,
proceedings or actions by any third party containing or relating to allegations
that, if true, would constitute a breach of, or misstatement in, any one or more
of the representations or warranties of Seller or Shareholder made in or
pursuant to this Agreement, (c) Seller's treatment, transport, recycling,
storage or disposal, or any arrangement for any of same, done or made prior to
the Closing, of any Contaminant generated and transported off-site from any
facility owned or operated by Seller or any of its predecessors, (d) any and all
obligations, debts or other liabilities of Seller not expressly assumed by
Purchaser pursuant to this Agreement, or (e) any and all obligations of
Purchaser to withhold a portion of the purchase price to satisfy the
requirements of any applicable laws of any jurisdiction, federal, state or
local.
9.3 DEFENSE OF CLAIM. In case Purchaser or Waterlink has received
actual notice of any claim asserted or any action or administrative or other
proceeding commenced in respect of which claim, action or proceeding indemnity
properly may be sought against Seller and/or Shareholder pursuant to this
Agreement, Purchaser will give notice in writing to Seller and Shareholder.
Within ten (10) days after the earlier of (i) receipt of such notice or (ii)
receipt of actual notice by Seller or Shareholder from sources other than
Purchaser, Seller and Shareholder may give Purchaser written notice of their
election to conduct the defense of such claim, action or proceeding at its own
expense. If Seller or Shareholder have given Purchaser such notice of election
to conduct the defense, Seller and Shareholder may conduct the defense at its
expense, but Purchaser will nevertheless have the right to participate in the
defense, but such participation will be solely at the expense of Purchaser,
without a right of further reimbursement. If Seller and Shareholder have not so
notified Purchaser in writing (within the time above provided) of their election
to conduct the defense of such claim, action or proceeding, Purchaser may (but
need not) conduct (at Seller's and Shareholder's expense) the defense of such
claim, action or proceeding. Purchaser may at any time notify Seller or
Shareholder of Purchaser's intention to settle, compromise or satisfy any such
claim, action or proceeding (the defense of which Seller or Shareholder have not
previously elected to conduct) and may make such settlement, compromise or
satisfaction (at Seller's and Shareholder's expense) unless
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Seller and Shareholder notify Purchaser in writing (within five (5) days after
receipt of such notice of intention to settle, compromise or satisfy) of their
election to assume (at its sole expense) the defense of any such claim, action
or proceeding and promptly take appropriate action to implement such defense.
Any settlement, compromise or satisfaction made by Purchaser, or any such final
judgment or decree entered in, any claim, action or proceeding defended only by
Purchaser, regardless of the amount or terms, will be deemed to have been
consented to by, and will be binding on, Seller and Shareholder as fully as
though they alone had assumed the defense and a final judgment or decree had
been entered in such proceeding or action by a court of competent jurisdiction
in the amount of such settlement, compromise, satisfaction, judgment or decree.
If Seller and Shareholder have elected under this Section 9.3 to conduct the
defense of any claim, action or proceeding, then Seller and Shareholder will be
obligated to pay the amount of any adverse final judgment or decree rendered
with respect to such claim, action or proceeding. If Seller and Shareholder
elect to settle, compromise or satisfy any claim, action or proceeding defended
by them, the cost of any such settlement, compromise or satisfaction will be
borne entirely by Seller and Shareholder and may be made only with the consent
of Purchaser, which consent will not be unreasonably withheld. Purchaser, Seller
and Shareholder will use all reasonable efforts to cooperate fully with respect
to the defense of any claim, action or proceeding covered by this Section 9.3.
9.4 PURCHASER'S AND WATERLINK'S INDEMNIFICATION. Purchaser and
Waterlink covenant and agree to indemnify and save harmless Seller and
Shareholder from any and all costs, expenses, losses, damages and liabilities
incurred or suffered by Seller or Shareholder (including reasonable legal fees
and costs) (collectively, the "damages") resulting from or attributable to the
breach of, or misstatement in, any one or more of the representations or
warranties of Purchaser or Waterlink made in or pursuant to this Agreement to
the same extent as provided in Clauses (a) and (b) of Section 9.2, and in the
same manner as provided in Section 9.3, of this Article IX.
9.5 LIMITATIONS ON INDEMNIFICATION. Any of the foregoing
notwithstanding, no party will have any right to indemnification under Section
9.2(a) or (b) or Section 9.4 hereof unless and until the aggregate damages
indemnifiable by the indemnifying party exceed Twenty Thousand Dollars ($20,000)
and thereafter, will be entitled to the full extent of the damages and in no
event will the aggregate liability of Seller and Shareholder, on the one hand,
or Purchaser and Waterlink, on the other hand, exceed Two Million Dollars
($2,000,000).
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ARTICLE X
---------
CONDUCT PRIOR TO CLOSING DATE
-----------------------------
10.1 CONTINUATION OF BUSINESS. Until the Closing Date, Seller will
continue to conduct its business in the ordinary and usual course consistent
with past practice, and, without limiting the generality of this undertaking,
Seller will not do or suffer to be done any of the following, whether or not in
the ordinary and usual course, without the prior written consent of Purchaser:
(a) Dispose or contract to dispose of, or acquire or contract
to acquire, any Real Property or other assets, or any interest in any
Real Property or other capital assets;
(b) Borrow any money;
(c) Enter into any lease;
(d) Encumber any assets;
(e) Enter into any contract, commitment or arrangement of the
type required by Section 3.18 above to be listed on SCHEDULE 3.18;
(f) Declare or pay any dividend or declare or make any other
distribution to shareholders;
(g) Purchase or redeem any shares, notes or other securities;
(h) Increase the rate or amount of compensation or the amount
or type of other remuneration to any of its directors, officers,
employees, agents or other representatives, or agree to do so;
(i) Form or cause to be formed, or dispose or contract to
dispose of, any Subsidiary, or any interest in any Subsidiary;
(j) Reclassify, split or combine its shares, or issue, sell,
distribute or dispose of any shares, notes or other securities, or
commit itself to do so;
(k) Make any new commitments or agree to make commitments for
capital improvements or significantly alter standing commitments for
capital improvements;
(l) Make any single expenditure or agree to make any single
expenditure, or series of expenditures in excess of One Thousand
Dollars ($1,000) in the aggregate;
(m) Negotiate with anyone other than Purchaser for, or
participate with anyone other than Purchaser in, the acquisition of all
or any part of the Acquired Assets;
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(n) Amend, or permit to be amended, in any way, its Articles
or By-Laws; or
(o) Make any material change in accounting methods.
(p) Award any bonus compensation or enter into other bonus
arrangements with any employees or shareholders.
10.2 PRESERVATION OF BUSINESS. Seller will (i) preserve intact its
present business organization and personnel, (ii) preserve its business, actual
and potential, and its advantageous relationships with all persons having
business dealings with it, and (iii) preserve and maintain in force all its
licenses, certificates, leases, contracts, permits, registrations, franchises,
confidential information, patents, trademarks, trade names, service marks and
copyrights, and applications for any of the same, and other similar rights.
Seller will maintain in force all property, casualty, crime, life, directors,
officers and other forms of insurance and bonds which it presently carries.
10.3 CONSENTS AND APPROVALS. Seller and Shareholder will use all
reasonable efforts to obtain all necessary consents and approvals of all
persons, firms, entities and governmental authorities to the consummation of the
transactions contemplated by this Agreement.
ARTICLE XI
----------
ASSIGNMENT, THIRD PARTIES, BINDING EFFECT
-----------------------------------------
The rights under this Agreement are not assignable nor are the duties
delegable by a party without the written consent of the other party first having
been obtained, and any attempted assignment or delegation without such consent
will be null and void; provided, however, that Purchaser and Waterlink may
assign their respective rights hereunder to their principal lenders, subject to
any defenses that Seller and Shareholder may have hereunder against Purchaser
and Waterlink. Nothing contained in this Agreement is intended to convey upon
any person or entity, other than the parties and their successors in interest
and permitted assigns, any rights or remedies under or by reason of this
Agreement unless expressly stated. All covenants, agreements, representations
and warranties of the parties contained in this Agreement are binding on and
will inure to the benefit of Purchaser, Waterlink, Seller and Shareholder,
respectively, and their respective successors and permitted assigns.
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ARTICLE XII
-----------
EXPENSES
--------
Purchaser and Waterlink will bear their own expenses, and Shareholder
will bear his and Seller's expenses, including, without limitation, counsel and
accountants' fees, in connection with the preparation and negotiation of, and
transactions contemplated under, this Agreement.
ARTICLE XIII
------------
NOTICES
-------
All notices, requests, demands and other communications under this
Agreement must be in writing and will be deemed duly given, unless otherwise
expressly indicated to the contrary in this Agreement, (i) when personally
delivered, (ii) upon receipt of a telephonic facsimile transmission with a
confirmed telephonic transmission answer back, (iii) three (3) days after having
been deposited in the United States mail, certified or registered, return
receipt requested, postage prepaid, or (iv) one (1) business day after having
been dispatched by a nationally recognized overnight courier service, addressed
to the parties or their permitted assigns at the following addresses (or at such
other address or number as is given in writing by either party to the other) as
follows:
To Purchaser or Waterlink: Waterlink, Inc.
------------------------- 000 Xxxxxx Xxx., X.X.
Xxxxxx, Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxxxx,
Chairman
With a copy to: Benesch, Friedlander,
Xxxxxx & Xxxxxxx P.L.L.
0000 XX Xxxxxxx Xxxxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Facsimile No.: 000-000-0000
Attention: Xxx X. Xxxxxx
To Seller or the Shareholder: Blue Water Services, Inc.
---------------------------- 0000 X.X. Xxxxxxx 00
Xxxxxxxxx, Xxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxx
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With a copy to: Arthur, Green, Arthur, Conderman,
Xxxxxxxx & Xxxxxxxx
Commerce Xxxx Xxxxx
Xxxxxxxxx, Xxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxx
ARTICLE XIV
-----------
REMEDIES NOT EXCLUSIVE
----------------------
No remedy conferred by any of the specific provisions of this Agreement
is intended to be exclusive of any other remedy, and each and every remedy will
be cumulative and will be in addition to every remedy given under this Agreement
or now or subsequently existing, at law or in equity, by statute or otherwise.
The election of any one or more remedies by Purchaser, Seller or Shareholder
will not constitute a waiver of the right to pursue other available remedies.
ARTICLE XV
----------
NON-COMPETITION
---------------
15.1 NON-COMPETITION AGREEMENT.
(a) For a period of five (5) years from and after the Closing
Date, but as to clauses (iv) and (v) at any time after the Closing
Date, Seller and Shareholder will not, directly or indirectly (and
Seller will cause all Subsidiaries, now or subsequently existing, other
than Subsidiaries that constitute part of the Acquired Assets, not to,
directly or indirectly):
(i) engage in, carry on or have any interest in a
business substantially similar to the business as carried on
by Seller on the Closing Date and being acquired by Purchaser,
(ii) enter into, engage in, or be employed by or consult
with any business in, competition with Purchaser on matters
substantially similar to the business as carried on by Seller
on the Closing Date and being acquired by Purchaser,
(iii) employ, assist in employing or otherwise associate
in business with any present, former or future employee of
Purchaser or any of its Subsidiaries now or subsequently
existing until a period of at least two (2) years has expired
since such employee was employed by Purchaser or any
Subsidiary,
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(iv) induce any person who is a present or future
employee, officer, agent, affiliate or customer of Purchaser
or any of its Subsidiaries now or subsequently existing to
terminate the relationship, and
(v) induce any customer or supplier of Seller to refuse
to do business with Purchaser on as favorable terms as
previously done with Seller.
The prohibitions in clauses (i) and (ii) will apply to any place or
location in the world in any state in the United States or any
countries outside the United States where Purchaser or Waterlink has
done business or is actively contemplating doing business. Seller and
Shareholder acknowledge that the length of time and geographic
restriction pertaining to all prohibitions in this Subsection (a) both
are reasonable and necessary for the legitimate protection of
Purchaser's business and interests.
(b) Seller and Shareholder expressly agree and understand that
the remedy at law for any breach by Seller of this Article XV will be
inadequate and that the damages flowing from such breach are not
readily susceptible to being measured in monetary terms. Accordingly,
it is acknowledged that upon adequate proof of Seller's or
Shareholder's violation of this Article XV, Purchaser will be entitled,
among other remedies, to immediate injunctive relief and may obtain a
temporary restraining order restraining any threatened or further
breach. Nothing in this subsection (b) will be deemed to limit
Purchaser's remedies at law or in equity for any breach by Seller or
Shareholder of any of the provisions of this Agreement which may be
pursued or availed of by Purchaser.
(c) In the event any court of competent jurisdiction
determines that the specified time period or geographical area set
forth in this Section 15.1 is unreasonable, arbitrary or against public
policy, then a lesser time period or geographical area that is
determined by the court to be reasonable, non-arbitrary and not against
public policy may be enforced.
(d) In the event Seller or Shareholder violates any legally
enforceable provision of this Section 15.1 as to which there is a
specific time period during which Seller or Shareholder are prohibited
from taking certain actions or engaging in certain activities, then, in
such event the violation will toll the running of the time period from
the date of the violation until the violation ceases.
(e) The prohibitions set forth in this Section 15.1 shall
automatically terminate upon expiration of the applicable grace period
in the event of non-payment of or any material non-performance by A-M
Acquisitions Corp. under any of (i) that certain Convertible
Subordinated Note of A-M Acquisitions Corp. in favor of Shareholder in
the principal amount of $400,000; (ii) that certain Subordinated
Promissory Note of A-M Acquisitions Corp. in favor of Aero-Mod
Incorporated in the principal amount of $150,000; or (iii) that certain
Subordinated Promissory Note of A-M Acquisitions Corp. in favor of
Resi-Tech, Inc. in the principal amount of $150,000.
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15.2 DISCLOSURE OF CONFIDENTIAL INFORMATION. Except as may be required
by law or necessary in connection with any dealings with any public agency or
authority, from and after the Closing Date, Seller and Shareholder will not (and
Seller will cause all Subsidiaries, now or subsequently existing, not to),
disclose, disseminate, divulge, discuss, copy or otherwise use or suffer to be
used, in competition with, or harmful to the interests of, Purchaser or
Waterlink, any information (written or oral), documents, lists or other data of
or respecting any aspect of the Acquired Assets or the business being acquired
by Purchaser from Seller or Shareholder under this Agreement.
ARTICLE XVI
-----------
MISCELLANEOUS
-------------
16.1 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original but all of which
together will constitute one and the same document.
16.2 CAPTIONS AND SECTION HEADINGS. Captions and section headings are
for convenience only, are not a part of this Agreement and may not be used in
construing it.
16.3 POSSESSION OF ACQUIRED ASSETS. Possession of the Subject Assets
will be given to Purchaser on the Closing Date. Purchaser will not acquire any
title to the Subject Assets until possession has been given to it in accordance
with this Section 16.3, and, accordingly, all risk and loss with respect to the
Acquired Assets will be borne by Seller and Shareholder until possession has
been given to Purchaser. For purposes of this Section 16.3, possession will be
deemed to have been given to Purchaser when Seller or Shareholder, as the case
may be, deliver or cause to be delivered to Purchaser good and sufficient
instruments of transfer and conveyance as provided in this Agreement.
16.4 WAIVERS. Any failure by any of the parties to comply with any of
the obligations, agreements or conditions set forth in this Agreement may be
waived by the other party or parties, but any such waiver will not be deemed a
waiver of any other obligation, agreement or condition contained herein.
16.5 RIGHT OF INSPECTION. From and after the date of this Agreement to
the Closing Date, Seller will give to Purchaser and its counsel, accountants and
other representatives, full access during normal business hours to its offices,
properties, agreements, records and affairs, and will furnish copies of all
Contracts and other instruments as Purchaser or its counsel may reasonably
request. Such investigation will not affect the warranties and representations
of Seller under this Agreement. All such information will be treated
confidentially and will be used only for the purposes intended. If the
transactions contemplated under this Agreement do not take place, all documents
and other property of Seller will be returned and all disclosures and
information given to Purchaser as contemplated under this Agreement will be
treated as confidential and not disclosed to others unless
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disclosed publicly by Seller or other third parties without fault on the part of
Purchaser, or unless otherwise required by law.
16.6 AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS. Each of the parties
agrees to cooperate in the effectuation of the transactions contemplated under
this Agreement and to execute any and all additional documents to take such
additional action as is reasonably necessary or appropriate for such purposes.
16.7 ENTIRE AGREEMENT. This Agreement, including any certificate,
schedule, exhibit or other document delivered pursuant to its terms, constitutes
the entire agreement between the parties. There are no verbal agreements,
representations, warranties, undertakings or agreements between the parties, and
this Agreement may not be amended or modified in any respect, except by a
written instrument signed by the parties to this Agreement.
16.8 GOVERNING LAWS. This Agreement is to governed by and construed in
accordance with the internal laws of the State of Ohio.
16.9 KNOWLEDGE. All references to "knowledge" or "best knowledge" of a
party means the actual knowledge of a party after reasonable investigation and
due diligence. Failure to so investigate or exercise due diligence may result in
the imputation of knowledge to a party if the circumstances, in the opinion of a
trier of the facts, so warrants. Actual knowledge of any officer, director or
supervisory employee of a party will be imputed to, and deemed to be actual
knowledge of, that party.
16.10 PRESS RELEASES. Prior to the Closing, no party will issue or
cause the publication of any press release or other public announcement with
respect to this Agreement or the transactions contemplated under this Agreement
without the prior consent of the other party first obtained; provided, however,
that nothing in this Agreement will prohibit any party from issuing or causing
publication of any press release or public announcement to the extent that such
party determines, on advice on counsel, that such action is required by law, in
which case the party
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making such determination will, if practicable under the circumstances, use
reasonable efforts to allow the other parties reasonable time to comment on such
release or announcement in advance of its issuance.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the date first above written.
WATERLINK, INC
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------------
Its: Vice President and Chief Financial Officer
B-W ACQUISITION CORP.
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------------
Its: Secretary
BLUE WATER SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------------
Its: Secretary
/s/ Xxxxxxxx X. Xxxxxx
-------------------------------------------------
XXXXXXXX X. XXXXXX
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