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EXHIBIT 6.2
ASSET PURCHASE AGREEMENT
by and among
TrucTech, Inc.
as "Seller"
and
NuPro Innovations Inc.
as "Buyer"
December 1, 1998
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ASSET PURCHASE AGREEMENT
TABLE OF CONTENTS
Page
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Article I DEFINITIONS ................................................. 1
1.1 Defined Terms .............................................. 1
1.2 Other Defined Terms ........................................ 4
Article II PURCHASE AND SALE OF ASSETS ................................ 5
2.1 Transfer of Assets ......................................... 5
2.2 Assumption of Liabilities .................................. 5
2.3 Excluded Liabilities ....................................... 5
2.4 Purchase Price ............................................. 6
Article III Closing; LIQUIDATION OF SELLER ............................ 6
3.1 Closing .................................................... 6
3.2 Conveyances at Closing ..................................... 6
3.3 Liquidation of Seller ...................................... 7
Article IV REPRESENTATIONS AND WARRANTIES OF SELLER ................... 7
4.1 Organization of Seller ..................................... 7
4.2 Authorization .............................................. 7
4.3 No Changes to the Assets ................................... 8
4.4 Assets ..................................................... 8
4.5 Facilities ................................................. 8
4.6 Contracts and Commitments .................................. 9
4.7 Permits and Consents ....................................... 10
4.8 No Conflict or Violation ................................... 10
4.9 Financial Statements ....................................... 10
4.10 Books and Records .......................................... 10
4.11 Litigation ................................................. 10
4.12 Labor Matters .............................................. 10
4.13 Compliance with Law ........................................ 10
4.14 No Brokers ................................................. 10
4.15 No Other Agreements to Sell the Assets ..................... 10
4.16 Proprietary Rights ......................................... 10
4.17 Tax Matters ................................................ 10
4.18 Inventory .................................................. 10
4.19 Employees .................................................. 10
4.20 Compliance With Environmental Laws ......................... 10
4.21 Liabilities ................................................ 10
Article V REPRESENTATIONS AND WARRANTIES OF BUYER ..................... 10
5.1 Organization of Buyer ...................................... 10
5.2 Authorization .............................................. 10
5.3 No Conflict or Violation ................................... 10
5.4 Consents and Approvals ..................................... 10
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Page
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Article VI COVENANTS OF SELLER AND BUYER .............................. 10
6.1 Further Assurances ......................................... 10
6.2 No Solicitation ............................................ 10
6.3 Notification of Certain Matters ............................ 10
6.4 Access to Information ...................................... 10
6.5 Conduct of Business ........................................ 10
6.6 Employee Matters ........................................... 10
Article VII CONDITIONS TO SELLER'S OBLIGATIONS ........................ 10
7.1 Representations, Warranties and Covenants .................. 10
7.2 No Proceedings, Litigation or Laws ......................... 10
Article VIII CONDITIONS TO BUYER'S OBLIGATIONS ........................ 10
8.1 Representations, Warranties and Covenants .................. 10
8.2 Consents ................................................... 10
8.3 No Proceedings or Litigation ............................... 10
8.4 Certificates ............................................... 10
8.5 Conveyancing Documents; Release of Encumbrances ............ 10
8.6 Material Changes ........................................... 10
8.7 Corporate Documents ........................................ 10
8.8 Due Diligence Review ....................................... 10
8.9 Permits .................................................... 10
Article IX CONSENTS TO ASSIGNMENT ..................................... 10
9.1 Consents to Assignment ..................................... 10
Article X ACTIONS BY SELLER AND BUYER AFTER THE CLOSING ............... 10
10.1 Books and Records; Payment of Liabilities .................. 10
10.2 Survival of Representations, Etc ........................... 10
10.3 Indemnifications ........................................... 10
10.4 Taxes ...................................................... 10
10.5 Further Action ............................................. 10
Article XI MISCELLANEOUS .............................................. 10
11.1 Termination ................................................ 10
11.2 Assignment ................................................. 10
11.3 Notices .................................................... 10
11.4 Choice of Law .............................................. 10
11.5 Entire Agreement; Amendments and Waivers ................... 10
11.6 Multiple Counterparts ...................................... 10
11.7 Expenses ................................................... 10
11.8 Invalidity ................................................. 10
11.9 Titles ..................................................... 10
11.10 Publicity; Confidentiality ................................. 10
11.11 Cumulative Remedies ........................................ 10
11.12 Arbitration ................................................ 10
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EXHIBITS
Exhibit
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1.1 Financial Statements
2.1 Asset Listing
2.4 Allocation of Purchase Price
2.4.1 Offering Memorandum
3.2.1.1 Xxxx of Sale
3.2.1.2 Assignment of Contract Rights
3.2.1.3 Assignment of Proprietary Rights
SCHEDULES
Schedule 4.2 - Authorization
Schedule 4.6 - Contracts
Schedule 4.6.1 - Assumed Contracts
Schedule 4.7 - Permits and Consents
Schedule 4.16 - Proprietary Rights
Schedule 4.17 - Taxes
Schedule 4.18 - Inventory
Schedule 4.19 - Employees
Schedule 4.19.1 - Liability Assumed for Accrued Vacation Due Certain
Employees
Schedule 4.20 - Environmental Issues
Schedule 5.4 - Buyer's Consents
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") executed on June ___, 1999,
and made effective as of December 1, 1998, is by and among NuPro Innovations
Inc., a Delaware corporation ("Buyer"), and TrucTech, Inc., a Georgia
corporation ("Seller").
RECITALS
WHEREAS, Seller owns certain assets which it uses in its conduct of the
Business (as defined below).
WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell
to Buyer, such assets upon the terms and subject to the conditions of this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree, subject to
the adoption by the stockholders of Seller of a plan of complete liquidation and
dissolution of Seller in compliance with Georgia law, as provided in Section 3.3
of this Agreement, as follows:
AGREEMENT
ARTICLE I
DEFINITIONS
1.1 Defined Terms. As used herein, the terms below shall have the
following meanings. Any of such terms, unless the context otherwise requires,
may be used in the singular or plural, depending upon the reference.
"Assets" shall mean all of the right, title and interest of Seller in and
to the business, properties, assets and rights of any kind, whether tangible or
intangible, and constituting, or used or useful in connection with, or related
to, the Business, including without limitation all of Seller's right, title and
interest in the following:
(a) all rights of Seller under the Assumed Contracts listed on
Schedule 4.6.1;
(b) all Equipment related to the Business as listed on Exhibit 2.1;
(c) all Inventory related to the Business;
(d) all Books and Records related to the Business;
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(e) all Proprietary Rights related to the Business;
(f) to the extent transferable, all Permits related to the Business;
(g) all computers and, to the extent transferable, software used in
the Business;
(h) all available supplies, sales literature, promotional
literature, customer, supplier and distributor lists, display units,
telephone and facsimile numbers and purchasing records related to
the Business;
(i) all rights under or pursuant to all warranties, representations
and guarantees made by suppliers in connection with the Assets or
services furnished to Seller pertaining to the Business or affecting
the Assets, to the extent such warranties, representations and
guarantees (i) are not required by Seller to fulfill its obligations
under this Agreement and (ii) are assignable;
(j) all claims, causes of action, choses in action, rights of
recovery and rights of set-off of any kind, against any person or
entity, including without limitation any liens, security interests,
pledges or other rights to payment or to enforce payment in
connection with products delivered by Seller on or prior to the
Closing Date;
(k) all accounts receivable as adjusted at the Closing; and
(l) all cash and bank accounts.
"Asset Listing" shall mean the asset listing provided to Buyer by Seller
and attached as Exhibit 2.1 hereto, listing all assets as of November 30, 1998,
but not including any Excluded Assets listed therein.
"Balance Sheet" shall mean the balance sheet of Seller as of November 30,
1998, together with the notes thereon, audited by an independent certified
public accountant.
"Books and Records" shall mean (a) all records and lists of Seller
pertaining to the Assets, (b) all records and lists pertaining to the Business,
customers, suppliers or personnel of Seller, (c) all product, business and
marketing plans of Seller and (d) all books, ledgers, sub-ledgers, trial
balances, files, reports, plans, drawings and operating records of every kind
maintained by Seller, but excluding the originals of Seller's minute books,
stock books, tax returns and accounting ledgers (provided that Buyer will be
provided copies of tax returns and accounting records if it so requests).
"Business" shall mean Seller's business, operating under the "TrucTech"
and "TracTop" names or otherwise.
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"Closing Date" shall mean such date no later than June 30, 1999, in which
all the obligations by the parties to this Agreement are fulfilled to the
complete satisfaction of each of the parties; [provided that either party may
elect to change the Closing Date to a date after or prior to June 30, 1999
(which date shall be a date which is reasonably satisfactory to both parties) if
necessary to complete] the Closing.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and the
rules and regulations thereunder.
"Contract" shall mean any agreement, contract, note, loan, evidence of
indebtedness, purchase order, letter of credit, franchise agreement,
undertaking, covenant not to compete, employment agreement, license, instrument,
obligation or commitment to which Seller is a party or is bound and which
relates to the Business or the Assets, whether oral or written.
"Encumbrance" shall mean any claim, lien, pledge, option, charge,
easement, security interest, deed of trust, mortgage, right-of-way,
encroachment, building or use restriction, conditional sales agreement,
encumbrance or other right of third parties, whether voluntarily incurred or
arising by operation of law, and includes, without limitation, any agreement to
give any of the foregoing in the future, and any contingent sale or other title
retention agreement or lease in the nature thereof.
"Equipment" shall mean all of the furniture, fixtures, furnishings,
machinery, automobiles, trucks, spare parts, tools, supplies, equipment and
other tangible personal property owned by Seller and used in connection with the
Business, including without limitation all items listed on the Asset Listing
(but not including any Excluded Assets listed thereon).
"Facilities" shall mean the stores, offices, maintenance and storage
facilities, warehouses, improvements, other structures, and all real property
and related facilities which are used (or will be used) in the conduct of the
Business, and which are located at 0000 Xxxxxx Xxxxxxxxxx Xxxxxxxxx, in the city
of Vidalia, Georgia.
"Financial Statements" shall mean the Balance Sheet of Seller dated as of
November 30, 1998, and the Statement of Operations for the year ended November
30, 1998, together with the notes thereon, which Financial Statements are
included in Exhibit 1 hereto.
"Inventory" shall mean all of Seller's inventory held for resale and all
of Seller's new repair or replacement parts, supplies and packaging items and
similar items with respect to the Business, in each case wherever the same may
be located.
"Material Adverse Effect" or "Material Adverse Change" shall mean with
respect to the Business or the Assets any significant and substantial adverse
effect or change in the condition (financial or other), business, results of
operations, prospects, assets, liabilities or operations of the Business and/or
the Assets or on the ability of Seller to consummate the transactions
contemplated hereby, or any event or condition which would, with the passage of
time, constitute a "Material Adverse Effect" or "Material Adverse Change."
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"Permits" shall mean all licenses, permits, franchises, approvals,
authorizations, consents or orders of, or filings with, any governmental
authority, whether foreign, federal, state or local, or any other person,
necessary or desirable for the past, present or anticipated conduct of, or
relating to the operation of, the Business.
"Representative" shall mean any officer, director, principal, attorney,
agent, employee or other representative.
"Tax" shall mean any federal, state, local, foreign or other tax, levy,
impost, fee, assessment or other government charge, including without limitation
income, estimated income, business, occupation, franchise, property, payroll,
personal property, sales, transfer, use, employment, commercial rent, occupancy,
franchise or withholding taxes, and any premium, including without limitation
interest, penalties and additions in connection therewith.
1.2 Other Defined Terms. The following terms shall have the meanings
defined for such terms in the Sections set forth below:
Term Section
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Action 4.11
Assumed Contracts 4.6
Assumed Liabilities 2.2
Assumption Document 3.2.2
CERCLA 4.20.2
Claim 10.3.4
Claim Notice 10.3.4
Closing 3.1
Damages 10.3.1
Employee Plans 4.19
Environmental Conditions 4.20.11
Environmental Laws 4.20.2
Excluded Liabilities 2.3
Hazardous Substance 4.20.1.3
Proposed Acquisition Transaction 6.2.1
Proprietary Rights 4.16.1
Purchase Price 2.4.1
RCRA 4.20.2
Release 4.20.1.2
Retained Employees 6.6
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ARTICLE II
PURCHASE AND SALE OF ASSETS
2.1 Transfer of Assets. Upon the terms and subject to the conditions
contained herein, at the Closing, Seller will sell, convey, transfer, assign and
deliver to Buyer, and Buyer will acquire from Seller, the Assets listed in the
Asset Listing attached hereto in Exhibit 2.1.
2.2 Assumption of Liabilities. Upon the terms and subject to the
conditions contained herein, at the Closing, Buyer shall assume all obligations
and liabilities reflected in the Balance Sheet and all those obligations and
liabilities accruing, arising out of, or relating to events or occurrences
happening after the Closing Date, but not including any obligation or liability
for any breach of any Contract occurring on or prior to the Closing Date (the
"Assumed Liabilities").
2.3 Excluded Liabilities. Notwithstanding any other provision of this
Agreement, except for the Assumed Liabilities expressly specified in Section
2.2, Buyer shall not assume, or otherwise be responsible for, any of Seller's
liabilities or obligations, whether actual or contingent, matured or unmatured,
liquidated or unliquidated, known or unknown, or related or unrelated to the
Business or the Assets, whether arising out of occurrences prior to, at or after
the date hereof (collectively, "Excluded Liabilities"), which Excluded
Liabilities include, without limitation:
2.3.1 Any liability or obligation to or in respect of any employees
or former employees of Seller including without limitation (i) any employment
agreement, whether or not written, between Seller and any person, (ii) any
liability under any Employee Plan at any time maintained, contributed to or
required to be contributed to by or with respect to Seller or under which Seller
may incur liability, or any contributions, benefits or liabilities therefor, or
any liability with respect to Seller's withdrawal or partial withdrawal from or
termination of any Employee Plan and (iii) any claim of an unfair labor
practice, or any claim under any state unemployment compensation or worker's
compensation law or regulation or under any federal or state employment
discrimination law or regulation, which shall have been asserted on or prior to
the Closing Date or is based on acts or omissions which occurred on or prior to
the Closing Date;
2.3.2 Any liability or obligation of Seller in respect of any Tax;
2.3.3 Any liability arising from any injury to or death of any
person or damage to or destruction of any property, whether based on negligence,
breach of warranty, strict liability, enterprise liability or any other legal or
equitable theory arising from defects in products sold or services performed by
or on behalf of Seller or any other person or entity on or prior to the Closing
Date, or arising from any other cause, including without limitation any
liabilities arising (on a date of occurrence basis or otherwise) on or prior to
the Closing Date relating to the use or misuse of Equipment or to traffic
accidents;
2.3.4 Any liability or obligation of Seller arising out of or
related to any Action against Seller or any Action which adversely affects the
Assets and which shall have been
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asserted on or prior to the Closing Date or to the extent the basis of which
shall have arisen on or prior to the Closing Date;
2.3.5 Any liability or obligation of Seller resulting from entering
into, performing its obligations pursuant to or consummating the transactions
contemplated by, this Agreement (including without limitation any liability or
obligation of Seller pursuant to Article X hereof); and
2.3.6 Any liability or obligation arising out of CERCLA, any
equivalent state statute, or any other Environmental Law.
2.4 Purchase Price.
2.4.1 Purchase Price. At the Closing, upon the terms and subject to
the conditions set forth herein, Buyer shall pay to Seller in consideration for
the Assets and subject to the Assumed Liabilities, by issuing 7,333,333 shares
of Buyer's common stock, $.001 par value ("Buyer's Stock"), valued $0.75 per
share, for an aggregate amount of Five Million Five Hundred Thousand Dollars
($5,500,000) (the "Purchase Price"). The Purchase Price shall be allocated among
the Assets in the manner required by Section 1060 of the Code and regulations
thereunder. Exhibit 2.4 attached hereto sets FORTH THE AMOUNT OF THE PURCHASE
PRICE allocable to the various Assets. Buyer and Seller agree to each prepare
and file on a timely basis with the Internal Revenue Service substantially
identical initial and supplemental Internal Revenue Service Forms 8594 "Asset
Acquisition Statements Under Section 1060" consistent with Exhibit 2.4. The
offering and issuance of the Buyer's Stock is being made pursuant to an offering
memorandum and ancillary documents ("Offering Memorandum") in compliance with
Rule 506 of Regulation D under the Securities Act of 1933 in substantially the
same form as the Offering Memorandum attached hereto as Exhibit 2.4.1.
ARTICLE III
CLOSING; LIQUIDATION OF SELLER
3.1 Closing. The closing of the transactions contemplated herein (the
"Closing") shall be held at the Buyer's address on the Closing Date at 10:00
a.m. or at a time and place as the parties shall mutually agree.
3.2 Conveyances at Closing.
3.2.1 Instruments and Possession. To effect the sale and transfer
referred to in Section 2.1 hereof, Seller will, at the Closing, execute and
deliver to Buyer:
3.2.1.1 one or more bills of sale, each in the form of Exhibit
3.2.1.1 attached hereto, conveying in the aggregate all of Seller's owned
personal property included in the Assets, free and clear of all Encumbrances,
except the Assumed Liabilities;
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3.2.1.2 subject to Section 9.1, Assignments of Contract
Rights, each in the form of Exhibit 3.2.1.2 attached hereto, with respect to the
Assumed Contracts;
3.2.1.3 assignments of patents, trademarks, service marks and
other Proprietary Rights, each in the form of Exhibit 3.2.1.3 attached hereto,
in recordable form to the extent necessary to assign such rights; and
3.2.1.4 such other instruments as shall be requested by Buyer
to vest in Buyer title in and to the Assets in accordance with the provisions
hereof.
3.2.2 Form of Instruments. To the extent that a form of any document
to be delivered hereunder is not attached as an Exhibit hereto, such documents
shall be in form and substance, and shall be executed and delivered in a manner,
reasonably satisfactory to the recipient.
3.2.3 Certificates; Opinions. Seller shall deliver to Buyer the
certificates, and other documents described in Article VIII.
3.2.4 Consents. Subject to Section 9.2, Seller shall deliver all
Permits and any other third party consents required for the valid transfer of
the Assets as contemplated by this Agreement.
3.3 Liquidation of Seller. As soon as practicable after the Closing Date
Seller will take such steps as may be required under the laws of Georgia to
dissolve and terminate its corporate existence, except to the extent that under
the laws of Georgia such corporate existence continues for the purpose of
settling and winding up their affairs, and, prior to June 30, 1999, shall
distribute to its shareholders, against surrender of its stock certificates, the
Buyer's Common Stock on a pro rata basis.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows, which
representations and warranties are, as of the date hereof, and will be, as of
the Closing Date, true and correct:
4.1 Organization of Seller. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Georgia.
Copies of the Articles of Incorporation and Bylaws of Seller, and all amendments
thereto, heretofore delivered to Buyer are accurate and complete as of the date
hereof. Seller has no direct or indirect stock or other equity or ownership
interest (whether controlling or not) in any corporation, association,
partnership, joint venture or other entity which engages in the manufacturing of
plastic composite products business.
4.2 Authorization. Seller has all requisite corporate power and authority,
and has taken all corporate action necessary, to own, lease and operate the
Assets, to conduct the
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Business as it is presently being conducted, to execute and deliver this
Agreement, to consummate the transactions contemplated hereby and thereby and to
perform its obligations hereunder and thereunder. A copy of the resolutions of
Seller's board of directors and shareholders authorizing this Agreement and the
related transactions is attached hereto as Schedule 4.2. This Agreement has been
duly executed and delivered by Seller and is a legal, valid and binding
obligation of Seller enforceable against it in accordance with its terms.
4.3 No Changes to the Assets. Since the Balance Sheet Date:
4.3.1 Except for the loss of $71,841, on January 28, 1999, in
connection with the sale of the facilities there has been no actual or
threatened adverse change in the financial condition or results of operation,
the Business or the Assets or any event, condition or state of facts, in either
case that is, or would result in a Material Adverse Change in the Assets or the
Business or the prospects for the Business, including without limitation the
loss of any material customers;
4.3.2 Except with respect to the sale of the Facilities, there has
not been any sale or other disposition, except in the ordinary course of
Seller's business, of any of the Assets, or any Encumbrance placed on the
Assets;
4.3.3 Seller has operated the Business in the ordinary course
consistent with Seller's past practice so as to preserve the Business intact, to
keep available to the Business the services of Seller's employees, and to
preserve the Business and the goodwill of Seller's suppliers, customers,
distributors and others having business relations with it; and
4.4 Assets. Seller has and will transfer good and marketable fee simple
title to the Assets and upon the consummation of the transactions contemplated
hereby, Buyer will acquire good title to all of the Assets, free and clear of
any Encumbrances, except for any Encumbrance that Buyer, in its sole discretion,
specifically accepts in writing. The Assets reflected in the Balance Sheet and
all of the Assets acquired after such date are or will be valued at the lower of
actual cost or market less an adequate and proper depreciation charge. The
Assets include without limitation all assets necessary for the conduct of the
Business as presently conducted.
4.5 Facilities. The Seller Stockholders enjoy peaceful and undisturbed
possession of the Facilities. There are no leases, subleases, licenses,
occupancy agreements, options, rights, concessions or other agreements or
arrangements, written or oral, granting to any person the right to purchase, use
or occupy the Facilities or any portion thereof.
4.5.1 Improvements, Fixtures and Equipment. The Facilities and the
improvements thereon, including without limitation all Equipment (including all
fixtures) and other tangible assets owned, leased or used by Seller at the
Facilities are in conformity, in all material respects, with all applicable
laws, ordinances, orders, regulations and other requirements relating thereto
currently in effect.
4.5.2 Conformity. All Facilities have received all required
approvals of governmental authorities required in connection with the operation
thereof. To the best of
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Seller's knowledge, the Facilities are (and have been) operated and maintained
in accordance with applicable laws, rules, regulations and state, county,
municipal or other local ordinances, and conform to all other conditions
necessary for the lawful conduct of the Business as currently conducted at each
such Facility.
4.6 Contracts and Commitments.
4.6.1 Contracts. Schedule 4.6 sets forth a complete and accurate
list of all Contracts of the following categories:
4.6.1.1 Contracts not made in the ordinary course of Seller's
conduct of the Business;
4.6.1.2 Employment contracts and severance agreements;
4.6.1.3 Distribution, franchise, license, technology
licensing, sales or commission contracts related to the Assets or the Business;
4.6.1.4 Contracts involving expenditures or liabilities,
actual or potential, in excess of $1,000 or otherwise material to the Business
or the Assets, and not cancelable (without liability) within 30 calendar days;
4.6.1.5 Contracts or commitments relating to commission
arrangements with others;
4.6.1.6 Promissory notes, loans, agreements, evidences of
indebtedness, letters of credit, guarantees, or other instruments relating to an
obligation to pay money, whether Seller shall be the borrower, lender or
guarantor thereunder or whereby any Assets are pledged (excluding credit
provided by Seller in the ordinary course of the Business to its customers);
4.6.1.7 Leases of personal property not cancelable (without
liability) within 30 calendar days; and
4.6.1.8 Contracts containing covenants limiting the freedom of
Seller or any officer, director or shareholder of Seller to engage in any line
of business or compete with any person.
For purposes of this Agreement, the "Assumed Contracts" are the Contracts listed
as such on Schedule 4.6.1. Seller has delivered to Buyer true, correct and
complete copies of all of the Contracts listed on Schedule 4.6.1, including all
amendments and supplements thereto, whether or not such Contracts are Assumed
Contracts.
4.6.2 Absence of Breaches or Defaults. All of the Contracts are
valid and in full force and effect. Seller has duly performed all of its
obligations under the Contracts to the extent those obligations to perform have
accrued, and no violation of, or default or breach under
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any Contracts by Seller or any other party has occurred and neither Seller nor
any other party has repudiated any provisions thereof.
4.7 Permits and Consents. Seller has all Permits required to conduct the
Business, except where the failure to obtain such Permits would not have a
Material Adverse Effect on the Assets or the Business. All Permits of Seller
related to the Business are valid and in full force and effect and are listed on
Schedule 4.7. Except as disclosed on Schedule 4.7, no notice to, declaration,
filing or registration with, or authorization, or consent or approval of, or
Permit from, any governmental or regulatory body or authority (including without
limitation the U.S. Small Business Administration), or any other person or
entity, is required to be made or obtained by Seller in connection with the
execution, delivery or performance of this Agreement and the consummation of the
transactions contemplated hereby and thereby. Schedule 4.7 sets forth all
consents required for the assignment by Seller to Buyer of the Assumed
Contracts. All of the Assumed Contracts will be enforceable by Buyer after the
Closing to the same extent as if the transactions contemplated by this Agreement
had not been consummated.
4.8 No Conflict or Violation. After giving effect to consents and lien
releases that have been obtained from third parties or will be so obtained prior
to the Closing Date, neither the execution and delivery of this Agreement by
Seller, nor the consummation of the transactions contemplated hereby or thereby,
nor compliance by Seller with any of the provisions hereof or thereof, will (a)
violate or conflict with any provision of the Articles of Incorporation or
Bylaws of Seller, (b) violate, conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or result in a right of
termination or acceleration under, or result in the creation of any Encumbrance
upon any of the Assets under, any of the terms, conditions or provisions of any
Contract, Permit, agreement, or other instrument or obligation (i) to which
Seller is a party or (ii) by which the Assets are bound, (c) violate any
statute, rule, regulation, ordinance, code, order, judgment, ruling, writ,
injunction, decree or award or (d) impose any Encumbrance, restriction or charge
on the Assets, the Facilities or the Business.
4.9 Financial Statements. Seller has heretofore delivered to Buyer the
Financial Statements. The Financial Statements (a) are in accordance with the
underlying books and records of Seller, (b) have been prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods covered thereby and (c) fairly and accurately present the assets,
liabilities (including all reserves) and financial position of the Business as
of the respective dates thereof and the results of operations and changes in
cash flows for the periods then ended (subject, in the case of the Interim
Financial Statements, to normal year-end adjustments). At the respective dates
of the Financial Statements, there were no liabilities of Seller, which, in
accordance with generally accepted accounting principles, should have been shown
or reflected in the Financial Statements or the notes thereto, which are not
shown or reflected in the Financial Statements or the notes thereto.
4.10 Books and Records. Seller has made and kept (and given Buyer access
to) Books and Records and accounts, which, in reasonable detail, fairly reflect
the activities of Seller. The minute books of Seller previously delivered to
Buyer fairly reflect all action previously taken by
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the shareholders, board of directors and committees of the board of directors of
Seller. The copies of the stock book records of Seller previously delivered to
Buyer are true, correct and complete, and accurately reflect all transactions
effected in Seller's stock through and including the date hereof.
4.11 Litigation. There is no action, order, writ, injunction, judgment or
decree outstanding or any claim, suit, litigation, proceeding, labor dispute,
arbitral action, governmental audit or investigation (collectively, "Actions")
pending, or to the best of Seller's knowledge, threatened or anticipated (a)
against, related to or affecting Seller, the Business or the Assets or (b)
seeking to delay, limit or enjoin the transactions contemplated by this
Agreement. Seller is not in default with respect to or subject to any judgment,
order, writ, injunction or decree of any court or governmental agency, and there
are no unsatisfied judgments against Seller, the Business or the Assets.
4.12 Labor Matters. Seller is not a party to any labor agreement with
respect to its employees with any labor organization, union, group or
association and there are no employee unions (nor any other similar labor or
employee organizations) under local statutes, custom or practice. Seller has not
experienced any attempt by organized labor or its representatives to make Seller
conform to demands of organized labor relating to its employees or to enter into
a binding agreement with organized labor that would cover the employees of
Seller.
4.13 Compliance with Law. Seller, the conduct of the Business and the
operation of the Facilities have not violated and are in compliance with all
laws, statutes, ordinances, regulations, rules and orders of any foreign,
federal, state or local government and any other governmental department or
agency, and any judgment, decision, decree or order of any court or governmental
agency, department or authority, including without limitation Environmental
Laws, relating to the Assets, Facilities or Business or operations of Seller,
except where the violation or failure to comply, individually or in the
aggregate, would not have a Material Adverse Effect on the Facilities, the
Assets or the Business. Seller and the conduct of the Business and the operation
of the Facilities are in conformity with all energy, public utility, zoning,
building and health codes, regulations and ordinances, OSHA and Environmental
Laws and all other foreign, federal, state, and local governmental and
regulatory requirements, except where any nonconformity would not have a
Material Adverse Effect on the Facilities, the Assets or the Business. Seller
has not received any notice to the effect that, or otherwise been advised that,
it is not in compliance with any such statutes, regulations, rules, judgments,
decrees, orders, ordinances or other laws, and Seller has no reason to
anticipate that any existing circumstances are likely to result in violations of
any of the foregoing, which non-compliance or violation could, in any one case
or in the aggregate, have a Material Adverse Effect on the Facilities, the
Assets or the Business.
4.14 No Brokers. Neither Seller nor any of its respective officers,
directors, employees, shareholders or Affiliates has employed or made any
agreement with any broker, finder or similar agent or any person or firm which
will result in an obligation to pay any finder's fee, brokerage fees or
commission or similar payment in connection with the transactions contemplated
hereby.
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4.15 No Other Agreements to Sell the Assets. Neither Seller nor any of its
respective officers, directors, shareholders or Affiliates have any commitment
or legal obligation, absolute or contingent, to any other person or firm other
than the Buyer to sell, assign, transfer or effect a sale of any of the Assets
(other than inventory in the ordinary course of business), to sell or effect a
sale of a majority of the capital stock of Seller or to effect any merger,
consolidation, liquidation, dissolution or other reorganization of Seller.
4.16 Proprietary Rights.
4.16.1 Proprietary Rights. Schedule 4.16 lists all of Seller's
federal, state and foreign registrations of trademarks, service marks and other
marks, trade names or other trade rights, patents and all pending applications
for any such registrations, all other trademarks and other marks, trade names,
patents and other trade rights in which Seller has any interest whatsoever, and
all other trade secrets and other proprietary rights, whether or not registered,
created or used by or on behalf of Seller, in each case relating to the Business
(collectively, "Proprietary Rights"). The Proprietary Rights listed in Schedule
4.16 are all those used by Seller in connection with the Business.
4.16.2 Royalties and Licenses. Except as set forth in Schedule 4.16,
no person has a right to receive a royalty or similar payment in respect of any
Proprietary Rights. Seller has no licenses granted, sold or otherwise
transferred by or to it or other agreements to which it is a party, relating in
whole or in part to any of the Proprietary Rights.
4.16.3 Ownership and Protection of Proprietary Rights. Seller owns
and has the sole right to use each of the Proprietary Rights. None of the
Proprietary Rights is involved in any pending or threatened litigation. Seller
has not received any notice of invalidity or infringement of any rights of
others with respect to such Proprietary Rights. Seller has taken all reasonable
and prudent steps to protect the Proprietary Rights from infringement by any
other firm, corporation, association or person. Seller's use of the Proprietary
Rights is not infringing upon or otherwise violating the rights of any third
party in or to such Proprietary Rights, nor has such infringement been alleged
by any third party. All of the Proprietary Rights are valid and enforceable
rights of Seller, will be quit-claimed to Buyer and will not cease to be valid
and in full force and effect by reason of the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated by this Agreement.
4.17 Tax Matters.
4.17.1 Filing of Tax Returns. Seller has filed with the appropriate
taxing authorities all returns (including without limitation information returns
and other material information) in respect of Taxes required to be filed through
the date hereof and will file any such returns required to be filed on or prior
to the Closing Date. The returns and other information filed are complete and
accurate in all material respects. Neither Seller, nor any group of which Seller
is now or was a member, has requested any extension of time within which to file
returns (including without limitation information returns) in respect of any
taxes.
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4.17.2 Payment of Taxes. All Taxes, in respect of periods beginning
before the Closing Date, have been timely paid, or will be timely paid, or an
adequate reserve has been established therefor, as set forth in the Financial
Statements, and Seller does not have any material liability for Taxes in excess
of the amounts so paid or reserves so established.
4.17.3 Audits, Investigations or Claims. There are no pending or, to
the best of Seller's knowledge, threatened audits, investigations or claims for
or relating to any material additional liability in respect of Taxes, and there
are no matters under discussion with any governmental authorities with respect
to Taxes that in the reasonable judgment of Seller, or its counsel, is likely to
result in a material additional liability for Taxes. Seller has not been
notified that any taxing authority intends to audit a return for any period. No
extension of a statute of limitations relating to Taxes is in effect with
respect to Seller.
4.17.4 Lien. There are no liens for Taxes (other than as could be
asserted for current Taxes not yet due and payable) on the Assets.
4.17.5 No Withholding. The transaction contemplated herein is not
subject to the tax withholding provisions of Section 3406 of the Code, or of
Subchapter A of Chapter 3 of the Code or of any other provision of law.
4.17.6 Tax-Exempt Use Property. None of the Assets is a "tax-exempt
use property" within the meaning of Section 168(h) of the Code.
4.18 Inventory. All the Inventory is located at Buyer's facilities. The
values at which the Inventory is shown on the Balance Sheet have been determined
at lower of cost or market in accordance with generally accepted accounting
principles, each consistently applied throughout the periods covered by the
Financial Statements, with adequate provisions or adjustments for excess
Inventory, slow-moving Inventory and Inventory obsolescence and shrinkage.
Schedule 4.18 sets forth a complete and accurate list of all Inventory as of the
date hereof.
4.19 Employees. Schedule 4.19 (i) contains a list of all employees of
Seller, and their wage rates or salaries, as of the date of this Agreement, (ii)
sets forth the dates of employment for such employees, and (iii) contains a list
of each contract, plan, arrangement, policy, program or commitment, whether oral
or written, providing for insurance coverage (including without limitation any
self-insured arrangements), workers' compensation, disability benefits,
supplemental unemployment benefits, vacation benefits, retirement benefits,
life, health, disability or accident benefits or for deferred compensation,
pension, profit-sharing, bonuses, stock options, stock appreciation rights,
stock purchases or other forms of incentive compensation or post-retirement
insurance, compensation or benefits (collectively, "Employee Plans ").
4.19.1 Liability Assumed for Accrued Vacation Due Certain Employees.
Schedule 4.19.1 (i) contains a list of those employees of Seller for which Buyer
is assuming liability for accrued vacation due, (ii) sets forth the dates of
employment for such employees and (iii) provides the amount of accrued vacation
due.
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4.20 Compliance With Environmental Laws.
4.20.1 Definitions. The following terms, when used in this Section
4.20, shall have the following meanings. Unless the context otherwise requires,
any of these terms may be used in the singular or the plural depending on the
reference.
4.20.1.1 "Seller". For purposes of this Section 4.20 only, the
term "Seller" shall include (i) all Affiliates of Seller, including without
limitation the Seller Stockholders, (ii) all partnerships, joint ventures and
other entities or organizations in which Seller was at any time or is a partner,
joint venturer, member or participant and (iii) all predecessor or former
corporations, partnerships, joint ventures, organizations, businesses or other
entities, whether in existence as of the date hereof or at any time prior to the
date hereof, the assets or obligations of which have been acquired or assumed by
Seller or to which Seller has succeeded.
4.20.1.2 "Release" shall mean and include any spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
migrating, leaching, dumping or disposing into the environment or the workplace
of any Hazardous Substance, and otherwise as defined in any Environmental Law.
4.20.1.3 "Hazardous Substance" shall mean any quantity of
asbestos in any form, urea formaldehyde, PCBs, radon gas, crude oil or any
fraction thereof, all forms of natural gas, petroleum products or by-products,
any radioactive substance, any toxic, infectious, reactive, corrosive, ignitable
or flammable chemical or chemical compound and any other hazardous substance,
material or waste (as defined in or for purposes of any Environmental Law),
whether solid, liquid or gas.
4.20.2 Compliance With Environmental Laws. Except as set forth on
Schedule 4.20, the Facilities have been owned, leased, operated and maintained
in compliance with all federal, state, local or foreign laws, statutes,
ordinances, regulations, rules, judgments, orders, notice requirements, court
decisions, agency guidelines or principles of law, restrictions or licenses,
which (i) regulate or relate to the protection or clean-up of the environment,
the use, treatment, storage, transportation, handling or disposal of hazardous,
toxic or otherwise dangerous substances, wastes or materials (whether gas,
liquid or solid), the preservation or protection of waterways, groundwater,
drinking water, air, wildlife, plants or other natural resources, or the health
and safety of persons or property, including without limitation protection of
the health and safety of employees or (ii) impose liability with respect to any
of the foregoing, including without limitation the Federal Water Pollution
Control Act (33 U.S.C. Section 1251 et seq.), Resource Conservation & Recovery
Act (42 U.S.C. Section 6901 et seq.) ("RCRA"), Safe Drinking Water Act (21
U.S.C. Section 349, 42 U.S.C. Sections 201, 300f), Toxic Substances
Control Act (15 U.S.C. Section 2601 et seq.), Clean Air Act (42 U.S.C. Section
7401 et seq.), the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601 et seq.) ("CERCLA"), or any other similar
federal, state or local law of similar effect, each as amended (collectively,
"Environmental Laws").
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4.20.3 Facilities. The Facilities are, and at all times have been,
owned, leased and operated in compliance with all Environmental Laws and in a
manner that will not give rise to any liability under any Environmental Laws.
4.20.4 Permits. Seller has, and at all times has had, all Permits
required under any Environmental Law and the Facilities are, and at all times
have been, in compliance with all such Permits.
4.20.5 Permits Required. The consummation of any of the transactions
contemplated by this Agreement will not require an application for issuance,
renewal, transfer or extension of, or any other administrative action regarding,
any Permit required under any Environmental Law.
4.20.6 Notice of Violation. Seller has not received any notice at
any time that it or the Facilities is or were claimed to be in violation of the
provisions of any Environmental Law or in noncompliance with the conditions of
any Permit, and there is no pending or threatened lawsuit, governmental or other
legal action to that effect.
4.20.7 Pending Actions. There is not now pending or threatened, nor
any basis for, nor has there ever been, any Action against Seller, nor any basis
for any Action, under any Environmental Law or otherwise with respect to any
Release or mishandling of any Hazardous Substance.
4.20.8 Judgments. There are no consent decrees, judgments, judicial
or administrative orders or agreements with, or liens by, any governmental
authority or quasi-governmental entity relating to any Environmental Law which
regulate, obligate, bind or in any way affect Seller or the Facilities.
4.20.9 Hazardous Substances. There is not and has not been any
Hazardous Substance used, generated, treated, stored, transported, disposed of,
handled or otherwise existing on, under, about or from any Facility, except for
quantities of any such Hazardous Substances stored or otherwise held on, under
or about any such Facility in full compliance with all Environmental Laws and
necessary for the operation of the Business.
4.20.10 Handling of Hazardous Substances. Seller has at all times
used, generated, treated, stored, transported, disposed of or otherwise handled
its Hazardous Substances in compliance with all Environmental Laws and in a
manner that will not result in liability of Seller or Buyer under any
Environmental Law. Schedule 4.20 sets forth a complete list of all contractors
and other third parties who at any time have hauled, handled, stored,
transported or disposed of any Hazardous Substance (i) on behalf of Seller or
the Business, or (ii) generated by Seller or the Business, together with a
complete list of all dumpsites; and other off-site locations at which such
Hazardous Substances have been disposed of.
4.20.11 Environmental Conditions. There are no present or past
Environmental Conditions (as defined below) in any way relating to the Business
or Facilities. "Environmental Conditions" means the introduction into the soil,
groundwater or environment of
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the Facilities (through leak, spill, release, discharge, escape, emission,
dumping, disposal or otherwise) of any pollution, including without limitation
any contaminant, irritant or pollutant or Hazardous Substance (whether or not
upon the property of the Business and whether or not such pollution constituted
at the time thereof a violation of any Environmental Law) as a result of which
either Seller or, after the Closing, Buyer has or may become liable to any
person or by reason of which any of the Assets may suffer or be subjected to any
lien.
4.20.12 CERCLA or RCRA. No current or past use, generation,
treatment, transportation, storage, disposal or handling practice of Seller with
respect to any Hazardous Substance has or will result in any liability under the
CERCLA or RCRA or any state or local law of similar effect.
4.20.13 Storage Tank or Pipeline. Except as set forth on Schedule
4.20, there is not now and has not been at any time in the past any underground
or above-ground storage tank or pipeline at any Facility where the installation,
use, maintenance, repair, testing, closure or removal of such tank or pipeline
was not in compliance with all Environmental Laws and there has been no Release
from or rupture of any such tank or pipeline, including without limitation any
Release from or in connection with the filling or emptying of such tank.
4.20.14 Environmental Audits or Assessments. True, complete and
correct copies of the written reports, and all parts thereof, including any
drafts of such reports if such drafts are in the possession or control of
Seller, of all environmental audits or assessments which have been conducted at
any Facility within the past five years, either by Seller or any attorney,
environmental consultant or engineer engaged for such purpose, have been
delivered to Buyer and a list of all such reports, audits and assessments and
any other similar report, audit or assessment of which Seller has knowledge is
included on Schedule 4.20.
4.20.15 Indemnification Agreements. Seller is not a party, whether
as a direct signatory or as successor, assign or third party beneficiary, or
otherwise bound, to any lease or other Contract under which Seller is obligated
by or entitled to the benefits of, directly or indirectly, any representation,
warranty, indemnification, covenant, restriction or other undertaking concerning
Environmental Conditions.
4.20.16 Releases or Waivers. Seller has not released any other
person from any claim under any Environmental Law or waived any rights
concerning any Environmental Condition.
4.20.17 Notices, Warnings and Records. Seller has given all notices
and warnings, made all reports, and has kept and maintained all records required
by and in compliance with all Environmental Laws.
4.21 Liabilities. Seller has no liabilities or obligations (absolute,
accrued, contingent or otherwise) except (i) liabilities which are reflected on
the Balance Sheet or which are not required under generally accepted accounting
principles to be reflected on the Balance Sheet, (ii) liabilities incurred in
the ordinary course of the Business and consistent with past practice
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since the Balance Sheet Date, and (iii) liabilities arising under Contracts
identified in Schedule 4.6 to which Seller is a party.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows, which
representations and warranties are, as of the date hereof, and will be, as of
the Closing Date, true and correct:
5.1 Organization of Buyer. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
5.2 Authorization. Buyer has all requisite corporate power and authority,
and has taken all corporate action necessary, to execute and deliver this
Agreement, to consummate the transactions contemplated hereby and thereby and to
perform its obligations hereunder and thereunder. This Agreement has been duly
executed and delivered by Buyer and is (and following their execution and
delivery by Buyer and Seller, as applicable, will be) a legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
5.3 No Conflict or Violation. Neither the execution, delivery or
performance of this Agreement nor the consummation of the transactions
contemplated hereby, nor compliance by Buyer with any of the provisions hereof,
will (a) violate or conflict with any provision of the Certificate of
Incorporation or Bylaws of Buyer, or (b) violate any statute, rule, regulation,
ordinance, code, order, judgment, ruling, writ, injunction, decree or award
binding upon Buyer.
5.4 Consents and Approvals. No notice to, declaration, filing or
registration with, or authorization, consent or approval of, or permit from, any
governmental or regulatory body or authority, or any other person or entity, is
required to be made or obtained by Buyer in connection with the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, except (a) as may be required by Buyer to
operate the Business after the Closing, (b) as has been obtained on or prior to
the date hereof or (c) as set forth in Schedule 5.4.
ARTICLE VI
COVENANTS OF SELLER AND BUYER
Buyer and Seller each covenant with the others as follows:
6.1 Further Assurances. Upon the terms and subject to the conditions
contained herein, each of the parties hereto agrees, both before and after the
Closing, (i) to use all reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by this
Agreement, (ii) to execute any documents, instruments or conveyances of any kind
which may be reasonably necessary or advisable to carry out any of the
transactions
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contemplated hereunder, and (iii) to cooperate with each other in connection
with the foregoing, including using their respective best efforts (A) to obtain
all necessary waivers, consents and approvals from other parties to the
Contracts to be assumed by Buyer; provided, however, that Buyer shall not be
required to make any payments, commence litigation or agree to modifications of
the terms thereof in order to obtain any such waivers, consents or approvals,
(B) to obtain all necessary Permits as are required to be obtained under any
federal, state, local or foreign law or regulations, (C) to effect all necessary
registrations and filings, including without limitation submissions of
information requested by governmental authorities, and (D) to fulfill all
conditions to this Agreement.
6.2 No Solicitation. From the date hereof through the Closing or the
earlier termination of this Agreement, Seller shall not, and shall cause its
Representatives (including without limitation investment bankers, attorneys and
accountants) not to, directly or indirectly, enter into, solicit, initiate or
continue any discussions or negotiations with, or encourage or respond to any
inquiries or proposals by, or participate in any negotiations with, or provide
any information to, or otherwise cooperate in any other way with, any
corporation, partnership, person or other entity or group, other than Buyer and
its Representatives concerning any sale of all or a portion of the Assets or the
Business, or of any shares of capital stock of Seller, or any merger,
consolidation, liquidation, dissolution or similar transaction involving Seller
(each such transaction collectively being referred to herein as a "Proposed
Acquisition Transaction"). Seller shall not, directly or indirectly, through any
Representative or otherwise, solicit, initiate or encourage the submission of
any proposal or offer from any person or entity relating to any Proposed
Acquisition Transaction or participate in any negotiations regarding, or furnish
to any other person any information with respect to the other party for the
purposes of, or otherwise cooperate in any way with, or assist or participate
in, facilitate or encourage, any effort or attempt by any other person to seek
or effect a Proposed Acquisition Transaction. Seller hereby represents that it
is not now engaged in discussions or negotiations with any party (other than
Buyer) with respect to any of the foregoing. Seller shall promptly notify Buyer
(orally and in writing) of any offer, inquiry or contact with any person with
respect to a Proposed Acquisition Transaction, including the terms thereof and
the identity of the prospective purchaser or soliciting party.
6.3 Notification of Certain Matters. From the date hereof through the
Closing, Seller shall give prompt notice to Buyer of (a) the occurrence, or
failure to occur, of any event which occurrence or failure would be likely to
cause any representation or warranty contained in this Agreement or in any
exhibit or schedule hereto to be untrue or inaccurate in any material respect
and (b) any failure of Seller, or any of its Affiliates, shareholders or
Representatives, to comply with or satisfy any covenant, condition or agreement
to be complied with or satisfied by it under this Agreement or any exhibit or
schedule hereto; provided, however, that such disclosure shall not be deemed to
cure any breach of a representation, warranty, covenant or agreement or to
satisfy any condition.
6.4 Access to Information. From the date hereof through the Closing,
Seller shall, and shall cause its Representatives to, afford the Representatives
of Buyer and its Affiliates complete access at all reasonable times to the
Assets and the Facilities for the purpose of inspecting and conducting
appropriate tests upon the same, and to the officers, employees,
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agents, attorneys, accountants, properties, Books and Records and Contracts of
Seller, and shall furnish Buyer and its Representatives all financial, operating
and other data and information as Buyer or its Affiliates, through their
respective Representatives, may reasonably request, including but not limited to
data relating to operating procedures, workers' compensation history, legal, tax
and environmental, zoning and other legal compliance.
6.5 Conduct of Business. From the date hereof through the Closing, Seller
shall, except as contemplated by this Agreement or as consented to by Buyer in
writing, operate the Business in the ordinary course of the Business and
substantially in accordance with past practice and will not take any action
inconsistent with this Agreement or with the consummation of the Closing.
Without limiting the generality of the foregoing, Seller shall not, except as
specifically contemplated by this Agreement:
6.5.1 enter into, extend, materially modify, terminate or renew any
Contract, except in the ordinary course of the Business;
6.5.2 sell, assign, transfer, convey, lease, mortgage, pledge or
otherwise dispose of or encumber any of the Assets, or any interests therein,
except in the ordinary course of the Business; or
6.5.3 fail to pay its accounts payable and any debts owed or
obligations due by it, or pay or discharge when due any liabilities, in the
ordinary course of the Business.
6.6 Employee Matters. Buyer shall hire all employees of the Business who
meet Buyer's customary criteria for employment, and Seller shall reasonably
cooperate with Buyer in retaining all such employees (the "Retained Employees").
Buyer agrees to give Retained Employees credit for their time of employment with
Seller with respect to their seniority as an employee of Buyer. Seller shall be
and remain solely responsible for the payment of all benefits due to its
employees at any time under its Employee Plans, including without limitation all
severance, accrued vacation, health care continuation coverage and other
benefits to which its employees may be entitled as a result of the transactions
contemplated hereby, whether or not such employees are hired by Buyer. All
Retained Employees will be at-will employees of Buyer and may be terminated by
Buyer in its sole discretion, subject to the requirements of applicable laws
governing employers and employees.
ARTICLE VII
CONDITIONS TO SELLER'S OBLIGATIONS
The obligations of Seller to consummate the transactions provided for
hereby are subject, in the discretion of Seller, to the satisfaction, on or
prior to the Closing Date, of each of the following conditions, any of which may
be waived by Seller:
7.1 Representations, Warranties and Covenants. All representations and
warranties of Buyer contained in this Agreement shall be true and correct in all
material respects at and as of the date of this Agreement and at and as of the
Closing Date, except as and to the extent that the
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facts and conditions upon which such representations and warranties are based
are expressly required or permitted to be changed by the terms hereof, and Buyer
shall have performed and satisfied all agreements and covenants required hereby
to be performed by it prior to or on the Closing Date.
7.2 No Proceedings, Litigation or Laws. No Action by any governmental
authority or other person shall have been instituted or threatened which
questions the validity or legality of the transactions contemplated hereby and
which could reasonably be expected to materially damage Seller if the
transactions contemplated hereunder are consummated.
ARTICLE VIII
CONDITIONS TO BUYER'S OBLIGATIONS
The obligations of Buyer to consummate the transactions provided for
hereby are subject, in the discretion of Buyer, to the satisfaction, on or prior
to the Closing Date, of each of the following conditions, any of which may be
waived by Buyer:
8.1 Representations, Warranties and Covenants. All representations and
warranties of Seller contained in this Agreement shall be true and correct in
all material respects at and as of the date of this Agreement and at and as of
the Closing Date, except as and to the extent that the facts and conditions upon
which such representations and warranties are based are expressly required or
permitted to be changed by the terms hereof, and Seller shall have performed and
satisfied all agreements and covenants required hereby to be performed by it
prior to or on the Closing Date.
8.2 Consents. All Permits and waivers necessary to the consummation of the
transactions contemplated hereby and for the operation of the Business by Buyer
shall have been obtained.
8.3 No Proceedings or Litigation. No Action by any governmental authority
or other person shall have been instituted or threatened which questions the
validity or legality of the transactions contemplated hereby and which could
reasonably be expected to damage Buyer materially if the transactions
contemplated hereby are consummated, including without limitation any Material
Adverse Effect on the right or ability of Buyer to own, operate, possess or
transfer the Assets after the Closing. There shall not be any statute, rule or
regulation that makes the purchase and sale of the Business or the Assets
contemplated hereby illegal or otherwise prohibited.
8.4 Certificates. Seller shall furnish Buyer with such certificates of its
officers and others to evidence compliance with the conditions set forth in this
Article VIII as may be reasonably requested by Buyer.
8.5 Conyeyancing Documents; Release of Encumbrances. Seller shall have
executed and delivered each of documents described in Section 3.2 hereof so as
to effect the transfer and assignment to Buyer of all right, title and interest
in and to the Assets and Seller shall have filed
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(where necessary) and delivered to Buyer all documents necessary to release the
Assets from all Encumbrances (except for Encumbrances specifically accepted by
Buyer under Section 4.4), which documents shall be in a form reasonably
satisfactory to Buyer's counsel.
8.6 Material Changes. Since the Balance Sheet Date, there shall not have
been any Material Adverse Change with respect to the Business or the Assets.
8.7 Corporate Documents. Buyer shall have received from Seller resolutions
adopted by its board of directors and shareholders approving the subject matter
of this Agreement, and the transactions contemplated hereby.
8.8 Due Diligence Review. Buyer and its Representatives shall have
conducted a due diligence review of Seller's Books and Records, Financial
Statements, and other records and accounts of the Business, and in the sole
discretion of Buyer, Buyer shall be satisfied on the basis of such review that
there has been no breach of the representations and Warranties or the
pre-closing covenants of Seller made pursuant to this Agreement. Such review
shall have no effect whatsoever on the liability of Seller to Buyer under this
Agreement or otherwise for breach of any representations, warranties, or
covenants of Seller or hereunder.
8.9 Permits. Buyer shall have obtained or been granted the right to use
all Permits necessary to its operation of the Business.
ARTICLE IX
CONSENTS TO ASSIGNMENT
9.1 Consents to Assignment. Anything in this Agreement to the contrary
notwithstanding, this Agreement shall not constitute an agreement to assign any
Contract, lease, license, sales order, purchase order or any claim or right or
any benefit arising thereunder or resulting therefrom if an attempted assignment
thereof, without the consent of a third party thereto, would constitute a breach
thereof or in any way adversely affect the rights of Buyer thereunder. If such
consent is not obtained, or if an attempted assignment thereof would be
ineffective or would affect the rights thereunder so that Buyer would not
receive all such rights, Seller will cooperate with Buyer, in all reasonable
respects, to provide to Buyer the benefits under any such Contract, lease,
license, sales order, purchase order, claim or right including without
limitation enforcement for the benefit of Buyer of any and all rights of Seller
against a third party thereto arising out of the breach or cancellation by such
third party or otherwise.
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ARTICLE X
ACTIONS BY SELLER AND BUYER
AFTER THE CLOSING
10.1 Books and Records; Payment of Liabilities.
10.1.1 Books and Records. Each party agrees that it will cooperate
with and make available to the other party, during normal business hours, all
Books and Records, information and employees (without substantial disruption of
employment) retained and remaining in existence after the Closing which are
necessary or useful in connection with any tax inquiry, audit, investigation or
dispute, any litigation or investigation or any other matter requiring any such
Books and Records, information or employees for any reasonable business purpose.
10.1.2 Cooperation and Records Retention. Seller and Buyer shall (i)
each provide the other with such assistance as may reasonably be requested by
any of them in connection with the preparation of any return, audit, or other
examination by any taxing authority or judicial or administrative proceedings
relating to liability for Taxes, (ii) each retain and provide the other with any
records or other information that may be relevant to such return, audit or
examination, proceeding or determination, and (iii) each provide the other with
any final determination of any such audit or examination, proceeding, or
determination that affects any amount required to be shown on any tax return of
the other for any period. Without limiting the generality of the foregoing,
Buyer and Seller shall each retain, until the applicable statutes of limitations
(including any extensions) have expired, copies of all tax returns, supporting
work schedules, and other records or information that may be relevant to such
returns for all tax periods or portions thereof ending on or before the Closing
Date and shall not destroy or otherwise dispose of any -such records without
first providing the other party with a reasonable opportunity to review and copy
the same.
10.1.3 Payment of Liabilities. Following the Closing Date, Seller
shall pay promptly when due all of the debts and liabilities of Seller relating
to the Business, other than Assumed Liabilities, including without limitation
any accounts payable not assumed by Buyer and any liability of Seller for Taxes;
provided, however, this covenant shall not apply to that portion (or all) of any
debt that Seller is disputing in good faith and gives prompt notice to Buyer of
such dispute.
10.2 Survival of Representations, Etc. All statements contained in any
certificate, schedule, exhibit, instrument or conveyance delivered by or on
behalf of the parties pursuant to this Agreement or in connection with the
transactions contemplated hereby shall be deemed to be representations and
warranties by the parties hereunder. The representations, warranties, covenants
and agreements of Seller and Buyer contained herein shall survive the
consummation of the transactions contemplated hereby and the Closing Date,
without regard to any investigation made by any of the parties hereto. Except as
provided in this sentence, all such representations and warranties and all
claims and causes of
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action with respect thereto (other than the provisions of Sections 4.17, 4.20
and this Section 10.2, and all claims and causes of action with respect thereto)
shall terminate upon expiration of two years after the Closing Date. The
representations and warranties in Sections 4.17 and 4.20 shall survive until the
expiration of the applicable statute of limitations (with extensions) with
respect to the matters addressed in such sections. The termination of the
representations and warranties provided herein shall not affect the rights of a
party in respect of any Claim made by such party in a writing received by the
other party prior to the expiration of the applicable survival period provided
herein.
10.3 Indemnifications.
10.3.1 By Seller. Regardless of Seller's knowledge of the existence
of an Indemnifiable Event, as defined below, Seller shall indemnify, defend,
save and hold harmless Buyer, its Affiliates and subsidiaries, and its
respective Representatives, from and against any and all claims, damages, costs,
losses (including without limitation diminution in value), Taxes, liabilities,
judgments, penalties, fines, obligations, lawsuits, deficiencies, demands and
expenses (whether or not arising out of third-party claims), including without
limitation interest, penalties, costs of mitigation, losses in connection with
any Environmental Law (including without limitation any clean-up or remedial
action), lost profits and other losses resulting from any shutdown or
curtailment of operations, damages to the environment, attorneys' fees, experts'
fees and all amounts paid in investigation, defense or settlement of any of the
foregoing (herein, "Damages"), incurred in connection with, arising out of,
resulting from or incident to (i) any breach of any representation or warranty,
or the inaccuracy of any representation or warranty, made by Seller in or
pursuant to this Agreement; (ii) any breach of any covenant or agreement made by
Seller in or pursuant to this Agreement; (iii) any Excluded Liability; (iv) any
liability imposed upon Buyer by reason of Buyer's status as transferee of the
Business or the Assets; (v) any liability arising under any Environmental Law on
account of the conduct of Seller or prior owners or users of the Facilities or
other persons, or on account of the operation of the Business or the Facilities,
or related to any Environmental Condition existing, in each case on or at any
time prior to the Closing Date; or (vi) any Post-Closing Environmental Liability
(collectively, the "Indemnifiable Events"). Without limiting the generality of
the foregoing, the indemnification provided herein, insofar as it relates to any
Environmental Law or Environmental Condition, shall specifically cover costs
incurred in connection with any investigation of site conditions (excepting the
cost of the Environmental Assessments) or any clean-up, remedial, removal or
restoration work required by any federal, state or local governmental agency or
political subdivision.
10.3.2 By Buyer. Buyer shall indemnify and save and hold harmless
Seller, its Affiliates and its Representatives from and against any and all
Damages incurred in connection with, arising out of, resulting from or incident
to (i) any breach of any representation or warranty, or the inaccuracy of any
representation or warranty, made by Buyer in or pursuant to this Agreement; (ii)
any breach of any covenant or agreement made by Buyer in or pursuant to this
Agreement; or (iii) any Assumed Liability insofar as such Assumed Liability
arises from and after the Closing.
10.3.3 Cooperation. The indemnified party shall cooperate in all
reasonable respects with the indemnifying party and such attorneys in the
investigation, trial and defense of such lawsuit or action and any appeal
arising therefrom; provided, however, that the indemnified
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party may, at its own cost, participate in the investigation, trial and defense
of such lawsuit or action and any appeal arising therefrom. The parties shall
cooperate with each other in any notifications to insurers.
10.3.4 Defense of Claims. If a claim for Damages (a "Claim") is to
be made by a party entitled to indemnification hereunder against the
indemnifying party, the party claiming such indemnification shall, subject to
Section 10.2, give written notice (a "Claim Notice") to the indemnifying party
as soon as practicable after the party entitled to indemnification becomes aware
of any fact, condition or event which may give rise to Damages for which
indemnification may be sought under this Section 10.3. If any lawsuit or
enforcement action is filed against any party entitled to the benefit of
indemnity hereunder, written notice thereof shall be given to the indemnifying
party as promptly as practicable (and in any event within fifteen (15) calendar
days after the service of the citation or summons). The failure of any
indemnified party to give timely notice hereunder shall not affect rights to
indemnification hereunder, except to the extent that the indemnifying party
demonstrates actual damage caused by such failure. After such notice, if the
indemnifying party shall acknowledge in writing to the indemnified party that
the indemnifying party shall be obligated under the terms of its indemnity
hereunder in connection with such lawsuit or action, then the indemnifying party
shall be entitled, if it so elects, (i) to take control of the defense and
investigation of such lawsuit or action, (ii) to employ and engage attorneys of
its own choice (which shall be reasonably acceptable to the indemnified party)
to handle and defend the same, at the indemnifying party's cost, risk and
expense unless the named parties to such action or proceeding include both the
indemnifying party and the indemnified party and the indemnified party has been
advised in writing by counsel that there may be one or more legal defenses
available to such indemnified party that are different from or additional to
those available to the indemnifying party, and (iii) to compromise or settle
such claim, which compromise or settlement shall be made only with the written
consent of the indemnified party, such consent not to be unreasonably withheld;
provided, however, if the remediation or resolution of any such Claim will occur
on or at any Facility or is reasonably expected to have a Material Adverse
Effect on the indemnified party's business operations, then, notwithstanding the
foregoing, the indemnified party shall be entitled to control such remediation
or resolution, including without limitation to take control of the defense and
investigation of such lawsuit or action, to employ and engage attorneys of its
own choice to handle and defend the same, at the indemnifying party's cost, risk
and expense, and to compromise or settle such Claim. If the indemnifying party
fails to assume the defense of such claim within fifteen (15) calendar days
after receipt of the Claim Notice, the indemnified party against which such
claim has been asserted will (upon delivering notice to such effect to the
indemnifying party) have the right to undertake, at the indemnifying party's
cost and expense, the defense, compromise or settlement of such claim on behalf
of and for the account and risk of the indemnifying party. In the event the
indemnified party assumes the defense of the claim, the indemnified party will
keep the indemnifying party reasonably informed of the progress of any such
defense, compromise or settlement. The indemnifying party shall be liable for
any settlement of any action effected pursuant to and in accordance with this
Section 10.3 and for any final judgment (subject to any right of appeal), and
the indemnifying party agrees to indemnify and hold harmless an indemnified
party from and against any Damages by reason of such settlement or judgment.
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10.3.5 Limitations. Neither Buyer nor Seller shall be liable to the
other under this Section 10.3 for any Damages until the amount otherwise due the
party being indemnified exceeds $20,000 in the aggregate, in which case such
indemnifying party will be liable to the indemnified party for all such amounts,
including the first $20,000. Notwithstanding the preceding sentence, this
limitation shall not apply with respect to Damages arising out of a breach of a
representation or warranty contained in Sections 4.17 or 4.20 or the covenants
contained in Section 10.1.3. Buyer shall give Seller prompt notice of any
Damages that might apply toward the first $20,000.
10.3.6 Liability and Remedies, etc. Except as set forth below, no
individual Representative of any party shall be personally liable for any
Damages under the provisions contained in this Section 10.3. Nothing herein
shall relieve either party of any liability to make any payment expressly
required to be made by such party pursuant to this Agreement. The term "Damages"
as used in this Section 10.3 is not limited to matters asserted by third parties
against Seller or Buyer, but includes Damages incurred or sustained by Seller or
Buyer in the absence of third party claims. Payments by Buyer of amounts for
which Buyer is indemnified hereunder, and payments by Seller of amounts for
which Seller is indemnified, shall not be a condition precedent to recovery.
Seller's obligation to indemnify Buyer, and Buyer's obligation to indemnify
Seller, shall not limit any other rights, including without limitation rights of
contribution which either party may have under statute or common law. The Seller
Stockholders shall be jointly and severally liable with Seller with respect to
all indemnification obligations of Seller under this Section 10.3.
10.4 Taxes. Subject to Section 2.7, Seller shall pay, or cause to be paid,
when due all Taxes for which Seller is or may be liable or that are or may
become payable with respect to all taxable periods ending on or prior to the
Closing Date.
10.5 Further Action. After the Closing, Seller shall take all actions
reasonably necessary to effect the conveyance of the Assets to Buyer free and
clear of all Encumbrances (except for Encumbrances specifically accepted by
Buyer under Section 4.4) and otherwise required by Buyer's lenders.
ARTICLE XI
MISCELLANEOUS
11.1 Termination.
11.1.1 Termination. This Agreement may be terminated at any time
prior to Closing:
11.1.1.1 By mutual written consent of Buyer and Seller;
11.1.1.2 By Buyer if there is a material breach of any
representation or warranty set forth in Article IV hereof or any covenant or
agreement to be complied with or performed by Seller pursuant to the terms of
this Agreement or the failure of a condition set forth
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in Article VIII to be satisfied (and such condition is not waived in writing by
Buyer) on or prior to the Closing Date, or the occurrence of any event which
results or would result in the failure of a condition set forth in Article VIII
to be satisfied on or prior to the Closing Date, provided that Buyer may not
terminate this Agreement prior to the Closing if Seller has not had an adequate
opportunity to cure such failure; or
11.1.1.3 By Seller if there is a material breach of any
representation or warranty set forth in Article V hereof or of any covenant or
agreement to be complied with or performed by Buyer pursuant to the terms of
this Agreement or the failure of a condition set forth in Article VII to be
satisfied (and such condition is not waived in writing by Seller) on or prior to
the Closing Date, or the occurrence of any event which results or would result
in the failure of a condition set forth in Article VII to be satisfied on or
prior to the Closing Date; provided that Seller may not terminate this Agreement
prior to the Closing Date if Buyer has not had an adequate opportunity to cure
such failure.
11.1.2 In the Event of Termination. In the event of termination of
this Agreement:
11.1.2.1 Each party will redeliver all documents, work papers
and other material of any other party relating to the transactions contemplated
hereby, whether so obtained before or after the execution hereof, to the party
furnishing the same; and
11.1.2.2 No party hereto shall have any liability or further
obligation to any other party to this Agreement, except as stated in Sections
11.7, 11.10, 11.1.2.1 or this Section 11.1.2.2, and except for any willful
breach of this Agreement occurring prior to the proper termination of this
Agreement. The foregoing provisions shall not limit or restrict the availability
of specific performance or other injunctive relief to the extent that specific
performance or such other relief would otherwise be available to a party
hereunder.
11.2 Assignment. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by any party without the prior written
consent of the other parties; except that Buyer may, without such consent,
assign all such rights to any lender as collateral security and assign all such
rights and obligations to a wholly-owned subsidiary (or a partnership controlled
by Buyer) or subsidiaries of Buyer or to a successor in interest to Buyer which
shall assume all obligations and liabilities of Buyer under this Agreement.
Subject to the foregoing, this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns, and no other person shall have any right, benefit or obligation under
this Agreement as a third party beneficiary or otherwise.
11.3 Notices. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given when received if personally delivered;
when transmitted if transmitted by telecopy, electronic or digital transmission
method; the day after it is sent, if sent for next day delivery to a domestic
address by recognized overnight delivery service (e.g., Federal Express); and
upon receipt, if sent by certified or registered mail, return receipt requested.
In each case notice shall be sent to:
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If to Seller, addressed to:
TrucTech, Inc.
0000 Xxxx Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxx X.X.X. 00000
Attention: President
If to Buyer, addressed to:
NuPro Innovations Inc.
0000 Xxxx Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxx 00000
Attention: President
with a copy to:
Squire, Xxxxxxx & Xxxxxxx L.L.P.
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Two Renaissance Square
Phoenix, Arizona 85004
Attention: Xxxxxxxx X. Xxxxxxxx, Esq.
or to such other place and with such other copies as either party may designate
as to itself by written notice to the others.
11.4 Choice of Law. This Agreement shall be construed, interpreted and the
rights of the parties determined in accordance with the laws of the State of
Delaware (without reference to the choice of law provisions thereof), except
with respect to matters of law concerning the internal corporate affairs of any
corporate entity which is a party to or the subject of this Agreement, and as to
those matters the law of the jurisdiction under which the respective entity
derives its powers shall govern.
11.5 Entire Agreement; Amendments and Waivers. This Agreement, together
with all exhibits and schedules hereto, constitutes the entire agreement among
the parties pertaining to the subject matter hereof and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto. No
amendment, supplement, modification or waiver of this Agreement shall be binding
unless executed in writing by the party to be bound thereby. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
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11.6 Multiple Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.7 Expenses. Except as otherwise specified in this Agreement, each party
hereto shall pay its own legal, accounting, out-of-pocket and other expenses
incident to this Agreement and to any action taken by such party in preparation
for carrying this Agreement into effect.
11.8 Invalidity. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
11.9 Titles. The titles, captions or headings of the Articles, Sections
and subsections herein are inserted for convenience of reference only and are
not intended to be a part of or to affect the meaning or interpretation of this
Agreement.
11.10 Publicity; Confidentiality. Neither Buyer nor Seller shall issue any
press release or make any public statement regarding, or disclose to any third
party (except as required by law or legal process, and except to each party's
lenders if such lenders so require) any of the terms of, the transactions
contemplated hereby, without prior written approval of the other party, provided
that Buyer and Seller may, if they mutually agree, issue or make an appropriate
press release or public announcement after the Closing Date. In the event that
this Agreement is terminated prior to Closing, Buyer agrees to return to Seller
all correspondence and documents furnished by Seller or its Representatives, and
agrees not to disclose or use for its own purposes any confidential or
proprietary information of Seller that has been furnished to it by Seller or its
Representatives.
11.11 Cumulative Remedies. All rights and remedies of either party hereto
are cumulative of each other and of every other right or remedy such party may
otherwise have at law or in equity, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.
11.12 Arbitration. Any controversy arising after the Closing out of or
relating to this Agreement (including, without limitation, pursuant to Section
2.5 or 10.3, but excluding for purposes of this Section 11.12, the leases,
employment and non-competition agreements attached as Exhibits hereto), or
relating to the breach hereof, shall be settled by arbitration conducted in
Phoenix, Arizona in accordance with the Commercial Arbitration Rules of the
American Arbitration Association then in effect (except as otherwise expressly
provided in this Agreement). The award rendered by the arbitrator(s) shall be
final and judgment upon the award rendered by the arbitrator(s) may be entered
upon it in any court having jurisdiction thereof. The arbitrator(s) shall
possess the powers to issue mandatory orders and restraining orders in
connection with such arbitration. The expenses of the arbitration shall be borne
by the losing party unless otherwise allocated by the arbitrator(s). The
agreement to arbitrate shall be
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specifically enforceable under the prevailing arbitration law. During the
continuance of any arbitration proceedings, the parties shall continue to
perform their respective obligations under this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be duly executed on their respective behalf, by their respective
officers thereunto duly authorized, all as of the day and year first above
written.
NUPRO INNOVATIONS INC.,
a Delaware corporation
By___________________________________
Name: Xxxx Xxxxxxxxxxx
Its: President
TRUCTECH, INC.,
a Georgia corporation
By___________________________________
Name: Xxxx Xxxxxxxxxxx
Its: President
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